Volume 17 • Issue 12 / August 13 - 19, 2004

Watchdog group criticizes L.M.D.C.’s allocations

By Elizabeth O’Brien

The Lower Manhattan Development Corporation has failed to allocate its federal 9/11 recovery funds in a transparent way and has given undue preference to big businesses and organizations with ties to its board members, according to a report released this week by a budget watchdog organization.

In its report, the group Good Jobs New York criticized the L.M.D.C. for taking advantage of a waiver from the federal requirement that public hearings be held whenever decisions are made to allocate funds for certain projects. Instead of hearings, the corporation accepts written feedback for 30-day periods.

This kind of process makes it harder for low-and-moderate-income citizens — those who suffered the biggest economic impact from the World Trade Center disaster — to voice their opinions, Good Jobs New York says.

“I can’t imagine Congress and HUD [the Department of Housing and Urban Development] waived the public hearings requirement with the intention that low-and-moderate-income residents can’t voice their opinions,” said Bettina Damiani, director of Good Jobs New York.

A spokesperson for HUD, the federal agency that provided $2.785 billion in post-9/11 grant money to the L.M.D.C., confirmed that the corporation received a “streamlined citizen participation protocol” to ensure that funds could be used as quickly as possible to help Downtown recover from the 9/11 attack. Brian Sullivan, the HUD spokesperson, declined to comment on the Good Jobs New York report, saying he had not seen it.

It is especially important for lower-income New Yorkers to have a say in the distribution of 9/11 aid because the L.M.D.C. has favored big corporations and also organizations with connections to board members, Good Jobs New York says. The L.M.D.C. granted a total of $112.4 million to organizations linked to L.M.D.C. board members, according to the report.

For example, the nonprofit Downtown Alliance, whose president, Carl Weisbrod, sits on the L.M.D.C. board, has received more than $4.8 million for projects, including streetscape improvements and staffed informational kiosks in Lower Manhattan, according to the report. In addition, the Tribeca Film Institute — headed by Madelyn Wils, who sits on the L.M.D.C. board and also serves as chairperson of Community Board 1 — received $3 million from the L.M.D.C.

Good Jobs does not allege any unethical or illegal behavior on Weisbrod’s or Wils’ part, saying that the two are careful to recuse themselves from votes on grants to their organizations.

Weisbrod told Downtown Express that he doesn’t even discuss with his co-workers applications that the Downtown Alliance makes for 9/11 funding.

“I bend over backward to avoid the appearance of conflict of interest,” Weisbrod said.

Damiani said that the L.M.D.C. should make efforts to fill the four vacancies on its board with representatives of low-to-moderate-income residents, such as the chairpersons of Community Boards 2 and 3.

“We don’t have any personal issues with board members — we just want [the L.M.D.C.] to diversity the board,” Damiani said.

L.M.D.C. officials questioned the accuracy of certain facts in the Good Jobs New York report. Joanna Rose, an L.M.D.C. spokesperson, declined to comment in detail.

“Our immediate priority for the remaining funds is the World Trade Center site,” Rose said.

The L.M.D.C. has $868 million in 9/11 cash grants left to allocate. At a monthly board meeting on Aug. 12, L.M.D.C. chairperson John Whitehead said the corporation has made no decisions on how the remaining amount will be paid out.

“It’s not enough to fulfill all the projects we’d like to use it for,” Whitehead said. Whitehead added that the L.M.D.C. does not regret any funding decisions it has made to date.

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