Politics

Bogus Finances Rock NYC Council Speaker's Office

Quinn: Millions Of Dollars Set Aside For Unexpected Needs

NEW YORK (CBS) ― Some bogus bookkeeping practices have come to light at City Hall.

For years, money has been hidden in fake holding funds, for use later when need arises. It's an embarrassment to the office of Council Speaker Christine Quinn.

Quinn says for 20 years the City Council has set aside millions of dollars in reserve funds, for unexpected needs. She says when she learned of the practice last spring she ordered it stopped. But then, a few months ago, not only was the practice not cancelled by her staff, she says, but the money was funding organizations that didn't exist.

"I was obviously deeply troubled when I found out about the situation, had no knowledge of the practice," Quinn said. "It will no longer go on."

Two budget workers are now gone. Quinn confirmed that a sort of slush-fund of $4.7 million of this year's budget was set aside for 30 phantom organizations, a practice since 2001, with names that included:

*The Immigrant Improvement Project
*The Coalition for a Strong Special Education
*The American Association of Concerned Veterans

The money was really set aside, says Quinn, for errors in the budget or sudden needs, at the speaker's discretion. Quinn said as soon as she learned of the practice, she notified law enforcement. As for her claim that her staff did not follow her directive to cease the practice, Quinn said, "I was obviously shocked and surprised by that."

Former Speaker Peter Vallone said budget transfers are common, like from snow removal to police overtime. He said he can't see the reason for making up fictitious names.

"But even if you made up a name what was the money used for?" Vallone wondered. "Good purposes for people of the City of New York. This is what the investigation is all about."

For a politician who'd like to run for mayor next year, what does this do for Quinn's chances?

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