News/Commentary

Trouble brews: Audit finds ex-mayor Bill de Blasio cooked books to hide $224M between 2015-2021

July 7, 2022 | | Print Article

Former New York City Mayor Bill de Blasio’s administration has been accused by the city’s comptroller of using gimmicky accounting tricks to “hide” nearly $250 million in costs for a heavily subsidized ferry system that had reportedly been used primarily by the wealthy.

“We rely on the city to be honest in how much things cost so that we can make clear, shared decisions about where the money is going. When hide-the-ball is played with any amount — certainly with a quarter of a billion dollars — you can’t have confidence that your city is providing the truth,” comptroller Brad Lander said at a press conference Wednesday.

His remarks came after his release of a devastating 50-page audit that outlined issue after issue after issue with the city’s ferry service.

The audit found that the Economic Development Corporation, the agency that runs the ferry network, “did not disclose over $224 million in expenditures as ferry-related in its audited financial statements.”

For instance, the EDC “understated the City’s subsidy for the ferry operations by $2.08, $2.10, $3.98 and $4.29 for Fiscal Years 2018, 2019, 2020, and 2021, respectively.”

In 2020, the city spent $14.57 per every ride, yet reported only spending $10.59. Meanwhile, the mostly wealthy “residents, commuters, tourists, and leisure riders” who used the ferry service paid only $2.75 per ticket.

(Source: NYC Comptroller)

The New York Post notes that despite the ferry service being installed by de Blasio ostensibly to “help poor New Yorkers get around,” it’s become a staple of the wealthy.

“An internal survey taken in July 2017 — two months after the service’s inception — found that the median rider’s income ranges between $100,000 and $150,000, a trend that held as of another poll conducted in the winter of 2018,” the Post reported in early 2020.

The results of the survey had to be obtained through a courtroom battle that lasted months, as the EDC continually refused to reveal anything for obvious reasons.

“The city was being misleading about what information they had, and also didn’t want to give the information because it would prove a point that many of us were already making,” NYC Councilmember Antonio Reynoso, a Democrat, told the Post.

And that point was that de Blasio’s beloved ferry service was helping his rich friends — not the poor.

But it gets worse.

“According to the Citizens Budget Commission, a nonpartisan, nonprofit civic organization, New York’s ferry system is estimated to have one of the nation’s highest transit subsidies per ride at $9.34, compared to $1.05 for the subway,” The New York Times notes.

And so the de Blasio administration was paying out more in subsidies than any other city administration in the country — and it was doing so on behalf of a service utilized primarily by the wealthy.

Lander’s audit also found that “EDC’s financial decisions resulted in over $66 million in unnecessary expenditures” and that “EDC did not maximize shuttle bus services by fully utilizing the fees paid to the Operator and adopted an inefficient process for collecting landing fees from and reimbursing them to the Operator.”

Lastly, it determined that “EDC did not properly enforce agreement terms and conditions or review related documents to ensure that the Operator complied with certain insurance and reporting requirements, that payments made to the Operator were accurate, substantiated, and justified, and that ridership and ticket revenue was accurately reported by the Operator.”

During Wednesday’s press conference, Lander noted that one of his “favorite” findings was how EDC had paid $8.4 million to buy a ferry ship worth only $5.6 million from the private company Hornblower.

“My favorite example of irresponsible expenditures in this case here, EDC ordered and paid Hornblower $8.4 million to buy a rockaway class vessel which would have cost $8.4 million. What Hornblower delivered to New York City, however, was a river class vessel which EDC subsequently valued on its books at $5.6 million,” he said.

“EDC accepted delivery of the $5.6 million dollar river class vessel … but they did not insist that Hornblower refund the $2.8 million difference between the $8.4 million vessel they paid for and the $5.6 million vessel that they received.”

Asked by the Times to comment on Lander’s findings, de Blasio reportedly “said he had not reviewed the full report and its 11 recommendations.”

As recently reported, de Blasio and his wife have, since leaving office, been living at an extremely expensive, upscale Brooklyn hotel as their home undergoes renovations, despite them reportedly being in debt to the tune of millions.

The 667-room hotel reportedly offers a number of lavish amenities, from an indoor pool to a fitness center equipped with Pelotons, two upscale restaurants and what the New York Post describes as “spectacular waterfront views.”

The Post further notes that the hotel is owned by Muss Development, “a Queens-based real estate giant whose owners have been longtime supporters of de Blasio.”

Indeed, the company is “one of the Big Apple’s top landlords who rent city agencies office space, having racked up at least $239 million in city contracts since 2014, when de Blasio became mayor.”

The company is, therefore, another one of de Blasio’s rich friends …

Vivek Saxena
Latest posts by Vivek Saxena (see all)

Comment

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the ∨ icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.

Latest Articles