Wednesday, August 23, 2006

"Signing Up For Team Carrion" The Bronx Beat 11/8/4

Signing Up For Team Carrion
Rahwa Asmerom

On the night of May 7, 2003, the SkyClub on Manhattan's Park Avenue threw a lavish dinner party where invited guests and affluent ticket- holders could mingle with some of the most influential figures in New York baseball. The organizers and major sponsors of the evening included Yankees president Randy Levine, New York Mets owner Fred Wilpon, YES (Yankees Entertainment and Sports) Network chairman Leo Hindery, Jr. and Howard Rubenstein, the public relations executive whose many clients include Yankees' owner George Steinbrenner.

Those who expected an evening dominated by baseball talk went home disappointed. The party was actually a fundraising event for the 2005 re-election campaign of Bronx Borough President Adolfo Carrion. By night's end, organizers gathered up donations and pledges amounting to $400,000. This single party had managed to raise almost half the entire budget of Mr. Carrion 2001 campaign in one night.

The event offered dramatic proof of the close relationship between the baseball elite and the head politician in the borough that is home to the most historic and contested stadium in the city. And it came at a time when Carrion was devising plans to keep the Yankees in the borough, partly with the infusion of millions of taxpayer dollars.

In December 2001, less than a month before Michael Bloomberg assumed office as mayor and announced that the city's deflated budget could not accommodate paying for new stadiums, the newly-elected Carrion formally announced his Yankee Village Plan. At an estimated cost of $1.5 billion, the plan proposed the city subsidize construction of a stadium for the team and also develop parkland, tourist attractions, and new infrastructure. The proposal was favored by the Yankees but viewed suspiciously by public policy scholars.

Nick DeMause, author of "Field of Dreams," a book about stadium financing, researched the plan and came away dubious. "You have to be generally suspicious of using taxpayer funds for private business," he said. "And you can argue whether that money could have been better spent for something else."

Many other major American cities are currently embroiled in debates over public financing for sports stadiums. Supporters of public financing look to cities like Indianapolis and Cleveland who have successfully used sports stadiums to revitalize specific areas. But opponents say that the Yankees, a team that earns more money than any other sports franchise in the country, should pay for its own stadium.

Carrion insisted that the plan would help revitalize the South Bronx, but the New York Independent Budget Office presented a report which concluded, "Research consistently finds that new stadiums do not produce economic growth in metropolitan areas."

More recently, in October 2004, the city struck a provisional deal with the baseball team in which both parties would essentially split the cost of the total expenses. The Yankees would pay the cost of building the actual stadium -- $700 million to $800 million -- and taxpayers would bear the burden of the cost for construction of nearby facilities such as a new parking lot, a new subway stop and a ferry terminal.

The SkyClub party was held in the midst of the negotiations between the Yankees and the city and the organizers did more than assemble the guest list. In addition to putting the party together, the prominent hosts and their their respective companies gave generous donations to the Carrion campaign. For example, according to filings for that date with the state's campaign finance board, six YES Network executives each wrote out $1,000 checks to Mr. Carrion. YES chairman Leo Hindery gave $3,850; the maximum individual contribution allowed by the state. Richard Friedman also wrote a $3,850 check that day. He is a managing director at Goldman Sachs - the financier for the new Yankee stadium. Additionally, the Goldman Sachs New York PAC separately gave $3,160 to the campaign.

"This is not how public policy should be reached," said Andrew Wolf, editor and publisher of the Bronx Press Review, a weekly newspaper in the borough. "The original stadium was built without a nickel going into politician's pockets."

Six months after the party, the state lobbying commission found that the YES Network failed to disclose that it had given free game tickets to Carrion and other public officials. Three parties were reprimanded for the violation: the YES Network agreed to pay a $150,000 fine, the Yankees paid $75,000 and their lobbying firm, Global Strategy Group, was fined $50,000.

Global Strategy Group founder and CEO, Jonathan Silvan, was another guest at the SkyClub, and he gave Mr. Carrion a $3,290 check. Although his firm ranked number 10 in the 2002 assessment of the New York City's top lobbyists, it made city lobbying history that year for registering the largest single fee of $637,500 when it represented the YES Network. During that venture, Global Strategy Group teamed up with MirRam Group, a political consulting firm headed by Roberto Ramirez, a behemoth in Bronx politics.

Wolf of the Bronx Press Review says that the Bronx political machine is run by Ramirez who, among other things, was the former leader of the Bronx County Democrats. "The influence he has is unbelievable," he said.

The relationship between Ramirez and the borough president is professional and personal. Ramirez enthusiastically endorsed Carrion's campaign in 2001 and Carrion's wife was a partner at Mr. Ramirez's law firm. MirRam has so far racked up more than $60,000 in consulting fees from Carrion's 2005 re-election campaign, according to the state's campaign finance board.

When MirRam joined Global Strategy Group (temporarily renamed MirRam Global) to work for YES in 2002, the network was embroiled in litigation against Cablevision. The two companies could not agree on a price at which Cablevision was willing to carry YES programming. After months of tension, Carrion stepped in and urged both sides to come to an agreement.

Soon after this incident, a memo from MirRam Global to a potential client was published by the New York Sun. In it, the firm bragged about its success in the YES/Cablevision dispute and put in words the overall close-knit relationship between the companies, lobbyists and politicians. It read in part:

"Elected officials have entrusted their careers to us and we have delivered. In turn, we are now able to provide our clients with access and opportunity to an often impenetrable world. Our special relationship with key decision makers mean we can make the necessary introductions with the least amount of delays or confusion, while ensuring the greatest opportunity for successful intervention on our client's behalf."

The Yankees management, the lobbying groups and Bronx politicians make up an iron triangle that continues to frustrate critics like Wolf. "Its really sad that all this corruption is happening in the poorest county in the state," he said. "It's a terrible, terrible problem."


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