Local Development Corporation (self-dealing? nepotism? improper loans? exorbitant expenses? oh my!)

Just posted on the City’s website is a more detailed look at what the Local Development Corporation (LDC) is about. Included are various memorandums in support of the LDC from the following: The National Center of Suburban Studies at Hofstra University, New York League of Conservation Voters, Long Island Builders Unite, Long Island Contractors Association and The Long Beach Chamber of Commerce – where Chamber President Michael J. Kerr writes that he “fully endorses” the plan (source). I guess that means the Chamber and LDC will work together with:

  1. Supporting local businesses, &
  2. Aiding our community by attracting new businesses here and also encourage new development.

I support this idea of bringing in a Local Development Corporation to Long Beach, even thought I’m still not sure exactly what it is… Yep, even after reading this, I’m still kinda clueless. To me, it seems like it’s either the privatization of our government or a broker. Either way, we definitely need a shot in the arm around here: some new faces with some fresh ideas. With that, I applaud the new gang for trying something new.

That being said…..

I found this Wall Street Journal article regarding LDCs where the first line is: The New York attorney general’s initial review of local development corporations uncovered the potential for self-dealing, nepotism, improper loans and exorbitant expenses at some.

I only bring this up because It was mentioned yesterday on this blog how Tom Suozzi is of counsel to Harris Beach PLLC, the consulting firm that would set up the LDC.  Some folks might say this LDC deal with Harris Beach PLLC is a political favor for the democratic clubhouse, but I just think it’s typical political behavior. Politicians hire people they know; if the Republicans were in office, somebody else would be saying the same thing about them – thus continuing the never-ending cycle of policial arguing (both sides do this so they can point fingers at each other).

Below is a verbatim summary of the Wall Street Journal article, but definitely go ahead and read the entire piece yourself @ The Wall Street Journel, December 26, 2011 – Schneiderman eyes local development corporations.

Attorney General Eric Schneiderman has been reviewing salaries and spending at the more than 200 local development corporations. The nonprofits, which take on development projects and other activities for municipalities, do government work but with fewer restrictions and less oversight. They also are free from state comptroller audits, unlike the state’s industrial development agencies.

….According to the attorney general’s office, the initial review showed potential self-dealing, improper loans between the two nonprofits, some exorbitant occupancy expenses and a potentially improper relationship with a for-profit entity.

……The examination of local development corporations is part of Schneiderman’s public integrity push. Since taking office in January, he has established a taxpayer protection bureau targeting corrupt contractors, tax cheats and public pension frauds; appointed public integrity prosecutors for all his 13 regional officials intended to take reports of local government corruption without fearing political blowback; begun joint investigations with the state comptroller’s auditors; and asked New York’s 932 towns to show his office their ethics codes to try to to bolster self-policing by local government.

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5 thoughts on “Local Development Corporation (self-dealing? nepotism? improper loans? exorbitant expenses? oh my!)”

  1. Once again Anthony, isn’t Harris Beach a Litigation specialist. The
    $15,000.00 only gets a legal LDC set up.(Maybe) The LDC itself can cost hundreds of thousands in staff,etc. That is where the abuse can occur.

  2. Hi Rich, sorry if I didn’t make it clear in my post: Yep, Harris Beach & LDC are two separate things. They would set it up.

    I think my confusion is over what exactly a LDC is.. is it part of our government? a private entity? a Bid? a Broker?

  3. I am presuming it will be a not for profit corporation controlled by our local government.
    It will serve on behalf of the City to promote the City’s interest while being “controlled” by
    the City. The City will decide who runs it, what their rate of pay will be ,etc. hence the opportunity for rampant abuse. Look at NUMC and all the patronage while hardworking blue collar workers are being shown the door.

  4. Question at council meeting was asked: How much witll this cost . The response was a firm “between ten and 15 thousand” Mr S said it is an hourly wage so they can’t say exactly how much but $15,000 max. That’s what he said.

  5. Excuse my ignorance.Does Nassau County return any portion of Sales Tax
    collected by local business to COLB? Maybe you know Goofy.

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