07.01.2008 0

Robbing the Blind

  • On: 07/30/2008 12:11:31
  • In: Fiscal Responsibility
  • What happens when you combine pork-barrel spending politicians with unregulated funds? New York City residents are learning the hard way that, when you don’t give a politician funding for their favored projects, they may just find ways to get that money anyway.

    Two New York City council members are the latest casualties of an ongoing exposure of the practice of creating fake nonprofits in order to steal money from the taxpayers. Some of the money has then been used to provide additional funds to organizations or activities without the approval of the mayor, while some has gone to personal interests, as in the case of the two aforementioned council members, who are now facing an indictment after stealing some $145,000.

    Earlier this month, city council speaker Christine Quinn (D) revealed that council members had misappropriated approximately $17.4 million in the past 7 years, sending the money to fraudulent charities. The money could then be used at the discretion of the politician who owned the “nonprofit,” or, as in the case of councilwoman Margarita Lopez, could raise ethical questions when the nonprofit’s supporters send in large campaign donations.

    While at least one of the embezzlers has defended the action, saying it goes to help causes supported by the city council, Quinn disagreed, calling it “inappropriate” and demanding an end to the practice.

    Quinn herself, however, has lost some credibility in the scandal, with some calling for her resignation, claiming that she bore some responsibility – or even knew about the theft. Quinn also received negative press after it was revealed that over $422,000 had been allocated to a non-existent veterans group.

    How far will this scandal reach? Some investigators claim that the two indictments issued Wednesday could be just the beginning.

    Hopefully, this corrupt practice will quickly come to an end, the guilty parties rounded up, and fiscal sanity restored to the City of New York.

    ALG Perspective: The end result of this scandal may hurt genuine nonprofits, as the scandals may lead to action to restrict funding. Sadly, if that is the case, it will be the fault of – you guessed it – Big Government. As Stephen Malanga points out, the “war on poverty,” begun by President Lyndon B. Johnson, transformed nonprofits from being dependent on private donations to relying on the government for the money off which to operate. By taking advantage of loopholes and embezzling taxpayer funds, it would be sadly ironic if government ends up hurting the very organizations they originally intended to help. Then again, that would not be a new thing.

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