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Mayor's Private Funding of City Projects Raises Concerns

By Jill Colvin | August 8, 2011 7:09am | Updated on August 8, 2011 7:10am
Mayor Michael Bloomberg has used his personal fortune to fund city projects.
Mayor Michael Bloomberg has used his personal fortune to fund city projects.
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MANHATTAN — As the state and the city struggle to cope with overwhelming budget deficits, billionaire Mayor Michael Bloomberg is ramping up his personal giving — raising eyebrows for some who question if it goes too far.

Last Wednesday the mayor, whose personal wealth is estimated to top $18 billion, announced he would spend $250,000 of his own cash to help reinstate the January 2012 Regents exams, which had been scrapped by the state due to budget constraints.

A day later, he announced an extensive policy package aimed at eliminating the achievement gap between black and Latino young men and their white counterparts. As with the Regents, Bloomberg announced he will be footing a chunk of the $127 million bill himself, contributing $30 million from his philanthropic organization, to be matched by fellow billionaire philanthropist George Soros.

While this is not the first time the mayor has pulled out his checkbook to supplement city services, observers say the magnitude and scope of his latest round of giving is “unprecedented,” especially when it comes to saving the Regents.

“It’s not merely unusual. It’s unique in New York City and, arguably, American history,” said Baruch College professor Doug Muzzio, who said the combination of Bloomberg’s private wealth and public power has likely never been matched.

The mayor’s decision to circumvent the state and city ledgers is unusual, in part because elected officials rarely have access to the sheer depth of Bloomberg’s fortunes.

But while many applaud Bloomberg for “putting his money where his mouth is,” others say his giving raises serious questions about the extent to which private interests should shape government programs.

“It’s not a conflict of interests. It’s just straight-up absurd,” said Common Cause New York Executive Director Susan Lerner, who has long been a critic of the blurring line between the public and private spheres.

She said Bloomberg's money gives him too much power to unilaterally decide what the public needs.

“What type of autocracy is it when public policy is set based on one individual?” she asked, adding that the move sends the message that the mayor, who is supposed to serve as manager of the city's budget and be accountable for government services, believes he is above the process.

"It’s an entirely undemocratic message — that [I] actually know better,” she said. “I don’t want to see the city and state programs at the suffrage of a patron.”

The move also raises concerns that the mayor may be buying political favor from those who support initiatives he's given to, Muzzio said, adding that the public should always be on guard whenever large sums of private money are at stake.

“Most of the stuff that he’s funding is appropriate, if not admirable. But the money buys things,” he said, including stifling dissent from those who might want their programs funded in the future.

Aides to the mayor point out that turning to his personal checkbook is nothing new for Bloomberg.

He created the Mayor’s Fund to Advance New York shortly after taking office, and has been using his money since then to fund efforts ranging from the first commemoration of the 9/11 attacks to the fight against illegal guns.

The mayor’s public and philanthropic work is so ensconced in his administration that Patricia Harris, for instance, serves both as the first Deputy Mayor and chairwoman and chief executive of the mayor’s charity fund.

Unlike now, however, much of his handouts had been used to fund pilot programs and experimental initiatives, such as the Leadership Academy principal training schools and the now-defunct Opportunity NYC–Family Rewards, which paid low-income families cash for things like taking their children to the dentist and holding down full-time jobs.

"Raising and contributing money is something the mayor has been doing throughout his time in office over the last ten years, because it lets us try new and innovative approaches without taking money away from other important public needs,” explained Stu Loeser, the mayor's press secretary.

"The mayor doesn’t ask donors to do what he’s not doing himself — he puts his money where his mouth is and gives his own contributions," he said.

Some say the approach is “win-win” for both the city and the mayor, who gets to be seen as a champion for the disadvantaged while improving public services.

“If the program accomplishes a great civic end, I don’t see any problem at all, especially at times of a tight budget,” said veteran New York political consultant George Arzt, who said the money was desperately needed to save key city services.

Hunter College political science professor Kenneth Sherrill agreed that instead of criticizing the mayor, people should be criticizing the state for forcing him to step up to compensate for its failures.

“To make the government dependent on charity is an incredible statement on the lack of capacity of the political system to solve the most vexing problems that the public has,” he said.

“I think it’s exceedingly embarrassing to the state of New York.”