"Lawyer Who Was Hired by Yankees Sues the Team’s Bronx Community Charity" NY Times 4/1/9

Lawyer Who Was Hired by Yankees Sues the Team’s Bronx Community Charity

By FERNANDA SANTOS
Published: March 31, 2009
A lawyer hired by the Yankees to oversee the distribution of hundreds of thousands of dollars given by the team each year to community groups in the Bronx on Tuesday sued the nonprofit organization set up to divide the money, claiming that its chairman had mismanaged the funds.

The lawsuit opens a new chapter in the convoluted history of the new Yankee Stadium, which endured fierce opposition from many residents and neighborhood advocates and continues to face questions over its reliance on public money to finance much of the construction.

In papers filed in State Supreme Court in the Bronx, the lawyer, Michael Drezin, accused the nonprofit fund’s chairman, Serafin U. Mariel, of essentially shortchanging the charity by depositing $800,000 provided by the Yankees last year in a non-interest-bearing account at a bank that he co-founded and where he still works.

In addition, only a fraction of the deposit was insured, the lawsuit says — an “irresponsible and unnecessary risk” at a time of deep economic uncertainty, Mr. Drezin said in an interview.

“In my opinion, there’s absolutely no innocent explanation for this behavior,” he said.

Mr. Mariel hung up on a reporter when reached on his cellphone and did not return subsequent voice mail messages.

His lawyer, Irwin P. Underweiser, did not return calls to his office in White Plains.

The lawsuit also contends that Mr. Mariel awarded a no-bid contract to the company that developed the fund’s Web site, which goes against the organization’s bylaws, according to Mr. Drezin, whom the Yankees hired in December 2006 to incorporate and administer the charity, as well as to draft its rules. Mr. Drezin also says that the charity’s board of directors has never paid him. News of the suit was reported on Tuesday by The Daily News.

In his lawsuit, Mr. Drezin asks for Mr. Mariel’s resignation and financial compensation of at least $35,000 a year, which is what he says the Yankees had agreed to give the board to cover the cost of his services.

Known as the New Yankee Stadium Community Benefits Fund, the charity was created as part of an agreement signed by the team and city officials, including Adolfo Carrión Jr., then the borough president. It was seen as a way to placate opponents and make up for the inconveniences of a massive construction project in a busy swath of the South Bronx.

Under the deal, the group would receive $800,000 a year in grants and $450,000 in free tickets, merchandise and athletic equipment. It was not until several months after Mr. Drezin was hired that Mr. Carrión and three City Council members, Joel L. Rivera, Maria Baez and Maria del Carmen Arroyo, picked the charity’s seven board members, including Mr. Mariel.

The fund received its first $800,000 from the Yankees in February 2008, but there were delays in distribution because it had not yet set the criteria for distribution, Mr. Drezin said.

After about three months of reviewing bank statements showing that the first withdrawals had been made, Mr. Drezin said, he noticed that the account was not collecting any interest and that the funds had all been deposited in the bank Mr. Mariel founded, New York National Bank.

Mr. Drezin did not question the integrity of the distribution process, but he said that Mr. Mariel’s banking choice amounted to “a conflict of interest and a violation of his fiduciary obligations toward the fund.” He also said they had clashed over how the board should respond to reporters; Mr. Drezin said that he pushed for an open-door policy but that Mr. Mariel was against it.

Mr. Mariel is well respected in the Bronx, where he has built a solid reputation as a businessman. His bank opened branches in the South Bronx at the onset of the crack cocaine epidemic, when few others dared to do so.

“Perhaps much of this has unfortunately a lot to do with a clash of personalities,” said Assemblyman Rubén Díaz Jr. of the Bronx, who is running for the borough president seat left vacant by Mr. Carrión, now the White House urban affairs chief.

Mr. Rivera, for his part, described Mr. Mariel as a “sound individual.” Although he had a role in naming Mr. Mariel to the fund’s board, he said he was not familiar with its inner workings.

“I don’t know if there’s any internal conflict in the organization itself,” Mr. Rivera added. “As long as the $800,000 was distributed to the Bronx community, that no one is making money on the side, I’ll leave it up to the lawyers and the judge to decide on the merits of these allegations.”