All posts by Kevin Connor

Buffalo Billion developer flouted New York State disclosure laws

Buffalo developer Paul Ciminelli was legally required to file annual financial disclosure statements with New York State during his four-year tenure on the public authority controlling Buffalo Billion spending, Empire State Development (ESD). But Ciminelli’s forms are extremely deficient for the first two years he served on the board and missing for the second two. And New York State’s ethics watchdog appears to have done nothing to compel Ciminelli to file an accurate statement.

The statements require disclosure of income, contracts, assets, and other financial interests and in Ciminelli’s case could have shed some light on the nature and scale of his interests – and conflicts of interest – as a major Buffalo developer and ESD board member. As we reported last week, Ciminelli has benefited significantly from the Buffalo Billion, which is now under federal investigation (LPCiminelli, run by his brother Louis, has received a subpoena in that investigation). In his position on ESD’s board, Ciminelli recused himself from Buffalo Billion funding votes but never disclosed the nature of his conflicts.

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Hedge funds may need to find another astroturf group to help them attack Puerto Rico

A hedge-fund backed front group opposing bankruptcy in Puerto Rico is in disarray. Board members of the group, the 60 Plus Association, are suing the group’s president, Amy Frederick, for secretly funneling payments to companies controlled by her husband.

Hedge funds recruited 60 Plus to form a group, Main Street Bondholders, that pretends to represent retirees opposing bankruptcy for the island. The hedge funds have been trying to prevent bankruptcy and promote austerity on the island in order to ensure higher payouts on their debt holdings. They’ve been using a range of legal and advocacy strategies to promote their agenda, which comes at a great cost to Puerto Ricans.

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Ferguson prosecutor has deep family ties to police brutality cases

Following the Ferguson grand jury’s decision not to indict Darren Wilson, critics observed that prosecutor Bob McCulloch acted more like a defense attorney than a prosecutor seeking an indictment. In doing so, he may have been channeling his younger brother.

LittleSis has learned that Joe McCulloch, who is an attorney, has represented several Missouri cops in high-profile police brutality cases. In at least two cases, he worked alongside current members of Darren Wilson’s legal team, and he takes legal referrals from Wilson’s union. Additionally, the McCullochs’ cousin, Thomas Moran, was at the center of a major police brutality case in the 1990s – he was charged in the beating of a 19-year-old developmentally-disabled black man, and acquitted by an all-white jury in Kansas City.

Critics calling for McCulloch’s recusal have previously pointed to his ties to the police through family members and the killing of his police officer father by a black robbery suspect. But his personal ties to police brutality cases raise additional questions about whether he was inappropriately biased in his handling of the Ferguson case.

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Introducing Oligrapher: power mapping on LittleSis

The Endless Chain

A single example will illustrate the vicious circle of control–the endless chain–through which our financial oligarchy now operates:

J.P. Morgan (or a partner), a director of the New York, New Haven, & Hartford Railroad, causes that company to sell to J.P. Morgan & Co. an issue of bonds. J.P. Morgan & Co. borrow the money with which to pay for the bonds from the Guaranty Trust Company, of which Mr. Morgan (or a partner) is a director. J.P. Morgan & Co. sell the bonds to the Penn Mutual Life Insurance Company, of which Mr. Morgan (or a partner) is a director. The New Haven spends the proceeds of the bonds in purchasing steel rails from the United States Steel Corporation, of which Mr. Morgan (or a partner) is a director. The United States Steel Corporation spends the proceeds of the rails in purchasing electrical supplies from the General Electric Company, of which Mr. Morgan (or a partner) is a director. The General Electric sells supplies to the Western Union Telegraph Company, a subsidiary of the American Telephone and Telegraph Company; and in both Mr. Morgan (or a partner) is a director…

– from Other People’s Money and How the Bankers Use It, published by Louis Brandeis in 1914

The “endless chain” of power elite relationships that we track on LittleSis can be challenging to represent in the space of a paragraph. Reading through a list of relationships is often a confusing and mind-numbing exercise; writing such a list can have a similar effect on the author. It is, however, extremely important that we find effective methods of representing these relationships and informing the public about them. Stories of power, corruption, and undue influence revolve around relationships and networks, and exposing this information can have significant policy impact.

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Schumer recusal raises questions about conflicted role in Ticketmaster deal

Last week, Senator Chuck Schumer recused himself from further oversight of the Comcast-Time Warner Cable merger after we reported that his brother had played a key role in the deal. Schumer had initially called the merger “a good deal for New York.” His office later claimed that the Senator had not known that his brother was involved.

Schumer’s recusal raises an important question: as a powerful Senator, a member of the antitrust subcommittee, and the brother of a top M&A attorney, is this the first time he recused himself from oversight of a merger deal? His brother has been a key dealmaker on many mergers which required antitrust approval, and several have triggered regulatory action – in the US and abroad. Schumer’s office has not responded to multiple requests for information about past recusals. A Senate Judiciary Committee official turned up no past recusals in a review, but suggested that Schumer’s office would be a better source.

In any case, Robert Schumer did not put together the merger that really caught our eye – his wife did. Pamela Seymon, the Senator’s sister-in-law, was Ticketmaster’s lead outside counsel on its 2009 merger with Live Nation, a $2.5 billion deal which drew the ire of consumer groups, musicians, and lawmakers. Initially, Schumer opposed the merger. Then he seemed to have a change of heart, and began lauding Ticketmaster for collaborating with him on legislation targeting the ticket resale market. On the antitrust implications of the deal, he went silent.

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Schumer recuses himself from Comcast deal, claims no knowledge of brother’s role

Yesterday we reported that Senator Chuck Schumer, who called the Comcast-Time Warner Cable “a good deal” for New York, has ties to one of the key dealmakers involved – his brother, Robert Schumer, was Time Warner Cable’s lead outside attorney on the deal.

Our report prompted Senator Schumer, who sits on the antitrust subcommittee, to recuse himself from further consideration of the deal. Schumer’s communications director, Matt House, provided this statement to the Huffington Post:

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Schumer reassures New York about Comcast-Time Warner Cable deal, doesn’t mention his brother was the dealmaker

Following news of the Comcast-Time Warner Cable deal, key members of Congress promised to take a close look at the merger. Some, like Senator Al Franken, sharply criticized the deal and what it would mean for consumers. Senator Amy Klobuchar, the chair of the antitrust subcommittee, announced plans for a hearing to “scrutinize the details of this merger and its potential consequences for both consumers and competition.”

All it took to reassure Senator Chuck Schumer that the deal was a good thing was a quick phone call over to Comcast executives, who were happy to offer vague assurances about continued jobs commitments in New York State.

Schumer is a member of the Senate Judiciary’s antitrust subcommittee, like Franken and Klobuchar, but made no mention of antitrust or consumer issues in a lengthy press release announcing that he had spoken to Comcast executives.

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The Port Authority’s split board and Chris Christie’s downfall

The “Bridgegate” scandal has shone a spotlight on the Port Authority of New York and New Jersey, the public authority responsible for the George Washington Bridge lane closures. Christie political appointees at the Port Authority ordered the closures, apparently as an act of political retribution; now the Daily Beast is referring to the organization as Christie’s Crony Clubhouse and the Washington Post is telling readers “how patronage politics ate the Port Authority.”

Notably, the Port Authority is governed by a split board – 6 members are appointed by the governor of New York, 6 by the governor of New Jersey. The executive director, Patrick Foye, was appointed by Cuomo; his deputy was appointed by Christie (the current deputy is Deborah Gramiccioni; the previous deputy, Bill Baroni, resigned in December over his role in the scandal). Christie had been more aggressive than Cuomo in getting his people appointed to positions at the Port Authority, according to Port Authority historian Jameson Doig. But there is no question that the Port Authority was not under the exclusive control of the Christie gang, and it seems strange that his people were acting like it was.

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Ex-Heinz Endowments president doubles down on oil and gas ties, immediately flunks SEC disclosure test

The departing Heinz Endowments president, Robert Vagt, is doubling down on his oil and gas industry ties and joining Rice Energy, a natural gas production company, as chairman.

Vagt‘s oil and gas ties came under scrutiny last year when we released a report on the Center for Sustainable Shale Development (CSSD), a group hailed in the press as an unlikely partnership between environmental groups and industry. We exposed CSSD as a greenwash, dominated by oil and gas industry insiders — even on the “environmental” side of the equation. The report highlighted the fact that Vagt, at that point the chair of CSSD, is a board member and major shareholder in gas pipeline company Kinder Morgan. His role at Kinder Morgan went unnoted anywhere in the press, on CSSD’s website, or in his Heinz bio. The conflict of interest and Heinz’s involvement in CSSD more generally appears to have led to turmoil at the foundation and Vagt’s resignation as president.

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Invisible REBNY

As if heeding the Pope’s call, the New York Times has published a new series, titled Invisible Child, on inequality and homelessness in New York City, focusing on the story of Dasani, a 12-year-old homeless child. The series is a remarkable piece of reporting, insightful and moving in its portrayal of Dasani and her family, exhaustively researched, and incisive in its analysis of the larger context of economic inequality in New York City. The longform style allows for many illuminating moments that cannot be neatly summarized, so you should read the whole thing for yourself.

The stuff that we usually focus on here at Eyes on the Ties – the power structure and policy implicated by the story – gets relatively minimal treatment in the series. Invisible Child is clearly framed as a commentary on Bloomberg’s New York, from the choice of Dasani, who was born shortly before Bloomberg took office, to anecdotes like the following:

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