"Sparks fly over lawsuit in Yankee charity row" Daily News 3/31/9

Sparks fly over lawsuit in Yankee charity row
BY BILL EGBERT
DAILY NEWS STAFF WRITER
Tuesday, March 31st 2009, 4:00 AM

A bench-clearing brawl is brewing behind the scenes at the charity set up by the Yankees for the community affected by construction of the new Yankee Stadium.

Michael Drezin, the lawyer hired by the team to incorporate and administer the New Yankee Stadium Community Benefits Fund, is suing the fund’s chairman, banker Serafin Mariel, over a litany of alleged conflicts of interest.

“I want this fund to succeed,” said Drezin, who was to file a lawsuit today at the Bronx Supreme Court to remove Mariel as chairman, “and to do that, it has to be run properly and transparently.”

Central to Drezin’s complaint is that Mariel shortchanged the fund by depositing the $800,000 provided by the Yankees last year in a non-interest-bearing account at New York National Bank, which Mariel founded.

In addition to being an alleged conflict of interest — amounting to an interest-free loan to Mariel’s bank — a source said only one-third of the charity’s money was protected by federal deposit insurance during the most serious banking crisis since the Great Depression.

Drezin also cited no-bid contracts issued without board approval — including setting up the fund’s Web site at www.bronxyankeefund.org — as examples of the chairman asserting undue personal control over the fund.

Mariel did not respond to repeated calls for comment.

Last week, Drezin said Mariel’s attorney, Irwin Underweiser, informed him that Drezin had been fired by the board, and — according to Drezin — the attorney made him an offer. “He said, ‘Look, we can undo this if you want,’ ” said Drezin.

Underweiser offered Drezin his job back, plus back pay, provided he drop the dispute, according to Drezin, who didn't take the deal.

"It's not about the money," he said. "I filed the papers to create this charity. I wrote the bylaws. If this fund is mismanaged, my reputation as a lawyer will get dragged through the mud."

According to a source close to the fund, Mariel called an emergency board meeting at the close of a grant award ceremony last November, and a quorum of the board voted to remove Drezin, though he was not told of the action until last week.

The same source confirmed that Mariel deposited the cash at NYNB without the board's knowledge.

"We didn't know until Drezin brought it to our attention," said the source, adding that the foundation's cash is now held in separate, interest-bearing accounts and is fully insured.

Drezin said that when he first raised his concerns with the chairman last year, Mariel responded by refusing to pay him for his work with the fund, despite having secured $35,000 outside the fund from the Yankees to pay the administrator's salary.

In addition to seeking his back pay as administrator, Drezin's lawsuit asks the court to remove Mariel from the fund's board, force him to reimburse the fund for the lost interest on the money, and impose punitive damages on Mariel for harming the fund's reputation with his actions.

The suit also seeks to bar the charity from depositing any Yankee funds in New York National Bank.

The New Yankee Stadium Community Benefits Fund was established in 2006 in an agreement between the Yankees, then-Borough President Adolfo Carrión and other local elected officials to smooth over community opposition to the new stadium project, which plowed under many of the public parks in the neighborhood.

Under the agreement, the Yankees will provide the fund with $800,000 in cash and $100,000 in sports equipment, plus hundreds of home-game tickets annually for the next 40 years.

wegbert@nydailynews.com