NEW YORK, NY July 14, 2009 —A federal probe of alleged misuse of City Council discretionary funds has led to the resignation of Councilman Miguel Martinez. WNYC's Bob Hennelly has more.

The single line resignation letter from Councilman Martinez comes a day after his lawyer signaled a plea deal is in the works for Martinez.

At the center of the probe is Martinez's role in getting Council discretionary funds for U-CAN, a Washington Heights non-profit that helps small businesses.

Back in April of 2008 the US Attorney announced the indictment of two City Council staffers for their role in siphoning off tens of thousands of dollars from another Council funded non-profit. Both plead guilty last month to the charges.

That criminal case brought heightened scrutiny to the long standing practice of the City Council bestowing millions of dollars in so-called discretionary City grants to favoured non-profits.

City Council Speaker Quinn and the Bloomberg Administration have since established several vetting requirements to increase transparency for discretionary funds. But the criminal probe into past practices continues.

For WNYC I'm Bob Hennelly.