By Heather Grossmann
DNAinfo News Editor
MANHATTAN — City Comptroller John Liu finished what Mayor Michael Bloomberg started last December when the mayor chastised then-Manhattan District Attorney Robert Morgenthau’s office for a lack of transparency regarding bank accounts holding prosecutorial settlements.
An audit released by Liu’s office Wednesday found that the D.A.’s office had properly accounted for nearly $450 million in settlements since 2007 but needed to implement “a formal policy on the distribution of the funds,” which are divvied up between the city and the state.
The audit found that the D.A.’s office had 58 private bank accounts with a total of $86 million that were not registered with the city. Liu called for the funds to be transferred from the private accounts to the city’s custody.
"There is no good reason for any government entity — including the District Attorney's Office — to tread above scrutiny or have accounts that fly under the radar," Liu said in a statement released Wednesday afternoon.
"A formal policy for future settlements will ensure consistency, and transparency through disclosure and proper controls will help avoid the potential for misuse."
The money in the D.A.’s accounts stems from cases like one last winter in which Morgenthau extracted $536 million from Credit Suisse in a settlement after the investment bank admitted to falsifying business records so that its offices in Iran, Libya and Sudan could sidestep government sanctions to do business with the U.S.
Last year Morgenthau defended his office’s practice of keeping the settlements in various accounts with no formalized distribution, calling Bloomberg’s criticism of the accounts "juvenile combat" and “chicken s--t comments” and adding “this office, like any large agency, has bank accounts, and the city has been fully aware of that all along.”
Morgenthau’s successor, Cyrus Vance Jr., praised the comptroller for his work and said the D.A’s office would accept the recommendations “so long as the procedures do not compromise prosecutorial independence or the confidentiality of investigations,” according to a statement.
Vance said the private accounts would be registered with city-designated banks within 30 days and that his office would upgrade its computer systems to help ensure proper oversight of its finances.
“It is appropriate that today’s audit of the Manhattan District Attorney’s Office includes recommendations to establish transparency, tighten fiscal controls and register all accounts — all of which will help ensure that funds are managed in the best interests of the city and the administration of justice,” Mayor Bloomberg said in a statement.