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Links roundup—featuring corporate subsidy and corruption concerns

April 24, 2019
24pennstation-ast-13-superJumbo

A view of New York’s old Penn Station, sometime around 1910, from a column in the New York Times.

Federal authorities

  • The federal oversight board that was created to deal with Puerto Rico’s troubled finances is taking a lot of heat for authorizing more than a billion dollars in management restructuring contracts with McKinsey and other private consulting firms. “Already the island is an object lesson in what happens when the logic of capitalism overtakes the structure of government. It is an article of faith at McKinsey that the same management theory that makes businesses run more profitably can be applied to further the public interest…. Of course, that assumes that what advances the modern economy advances the common good — a proposition currently under siege from both the right and the left.” [NY Intelligencer] [see also Nonprofit Quarterly]
  • The Eighth Circuit held in April that the FDIC had authority to create a public-private entity to manage assets from a failed bank. [Reuters] [Radiance Capital Receivables Eighteen, LLC v. Concannon]

New York State

  • The New York State Legislature passed a bill that gives the Authorities Budget Office the power to suspend local authority board members and staff for failing to comply with financial reporting requirements. The legislation has yet to be signed by Gov. Cuomo. [Times Union] [A00220]
  • Also in New York, the state’s Olympic Regional Development Authority is being sued by one of its former financial officers for allegedly refusing to comply with Freedom of Information Law requests in order to cover up various financial misdealings. The same former official doesn’t exactly have clean hands though; while claiming that it’s all part of the same cover up, he just accepted a plea deal related to his allegedly personal use of the authority’s funds. [Adirondack Daily Enterprise]
  • The New York City Housing Authority is facing a lawsuit over its 99-year lease deal with a private developer and the city’s plan to exempt the project from normal zoning requirements. [Patch]

Economic Development 

  • Corporate tax breaks and other economic development financing schemes are facing intense scrutiny in New Jersey following the release of a troubling audit of the state’s Economic Development Authority. As The Nation explains: “Here’s what the state’s audit found: Nearly 3,000 “jobs” were created by the programs that couldn’t be verified as actually existing. At least $179 million was given out via one program that shouldn’t have been according to the program’s own guidelines. One company was a year late filing its necessary follow-up reports for the tax breaks it got, and the state economic-development agency didn’t even know until the auditor pointed it out. Another company received $11.2 million for jobs it didn’t actually create, but no one bothered to check in later to ensure those jobs existed, so the company just kept the money.” [The Nation][NJ Comptroller’s Audit of Selected State Tax Incentive Programs]
  • The City of Charleston, SC and its local development corporation are involved in a legal feud over the repayment of economic development funds. [Nonprofit Quarterly]

Ethics and corruption

  • Prosecutors in Detroit have secured guilty pleas against two of the people allegedly involved in a demolition bid-rigging scheme dating to 2010. The bribery and corruption scandal has embroiled the city’s building authority and landbank, and while the federal criminal investigation appears to be ending, officials continue to press for increased oversight and transparency. [Detroit News]
  • Transparency and ethics reforms have been proposed in Maryland amidst the backlash to revelations of self-dealing among the University of Maryland Medical System board of directors. [Baltimore Sun]
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