News

NEW YORK, NY April 17, 2008 —The indictment of two City Council staffers who allegedly stole $145,000 from a non-profit has exposed serious weaknesses in the Council's financial controls.

But WNYC's Bob Hennelly says the ongoing probe may find the lax controls may extend to city agencies, too.

The practice of Council leadership hiding millions of discretionary dollars is only part of what caught Federal prosecutor’s attention. The Council can't spend money without the signoff of city agencies.

According to the indictment, one city agency, the Department of Aging blocked Council discretionary money from going to a non-profit because it was based in the home of one of the indicted council staffers.

But prosecutors say the alleged conspirators just tried another city agency with far more profitable results. The Department of Youth and Community Development disbursed $356,000 to the same charity. Neither agency would comment, citing the criminal probe.

Prosecutors say in total $145,000, which started out as taxpayer money, was stolen from the non-profit.

For WNYC I am Bob Hennelly.