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Attorney General Announces Deal After EDC Found Guilty of Illegal Lobbying

By Jill Colvin | July 3, 2012 2:25pm
Attorney General Eric Schneiderman.
Attorney General Eric Schneiderman.
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NEW YORK CITY — The city’s Economic Development Corporation will undergo a major restructuring after it and two other non-profits admitted to illegally lobbying the city in connection with developments at Willets Point in Queens and Coney Island in Brooklyn, Attorney General Eric Schneiderman announced Tuesday.

The EDC, Flushing-Willets Point-Corona Local Development Corporation and the Coney Island Development Corporation conceded they lobbied the City Council behind the scenes to win approval for their projects in 2008 and 2009, according to the AG’s office.

Lobbying by the not-for-profit groups is not permitted.

"These local development corporations flouted the law by lobbying elected officials, both directly and through third parties, to win approval of their favored projects," Schneiderman said in a statement. "As a result of today’s agreement, these organizations will reform their practices to comply with the law and end lobbying through proxies in the communities they serve."

Under an agreement hammered out between the groups and Schneiderman's office, the groups have agreed to cease lobbying the council or employing lobbyists or government-relation consultants, and their employees will be forced to take "mandatory compliance training."

An EDC spokesman stressed that there had previously been no definition in the anti-lobbying law of "influencing legislation" and that the new agreement clarifies the rules.

"The New York City Economic Development Corporation intends to undertake a restructuring, the primary effect of which will be to allow the company to remain a not-for-profit corporation, but to cease to be a local development corporation," he said.

The restructuring will allow the company to "operate freely and legally in areas that are necessary and appropriate for it to achieve its economic development mission," but is intended to be "seamless from the perspective of third-parties and should have little to no impact on the day-to-day operations of the company," he said.

City Comptroller John Liu praised the ruling and said that the city’s economic development process "is in dire need of greater transparency, accountability, and inclusiveness."

"While these revelations of illegal lobbying are alarming, we cannot say that they come as a surprise. For some time, this mayor has been using the Economic Development Corporation to create ‘Astroturf’ groups to support his agenda, reward allies and dole out welfare to wealthy corporations," he said.

"While New Yorkers fund the EDC to create jobs — those jobs seldom materialize," he said.