NY Attorney General Strikes Again – State Senator and a Puppet Nonprofit

The New York Attorney General and the corrupt use of charitable organizations are in the news again.  The New York Times reports that Attorney General Andrew Cuomo filed a civil suit against New York Senate majority leader Pedro Espada Jr., alleging that he and his family misappropriated funds from a network of nonprofit clinics located in the Bronx that Mr. Espada found several decades ago.  The suit charges Mr. Espada and others with taking more than $14 million from the nonprofit health care network, Comprehensive Community Development Corporation (CCDC), to pay for extravagant meals, vacations, a Mercedes-Benz, and state office campaign expenses.  In addition, the lawsuit alleges that the CCDC board approved a $9 million severance package to Mr. Espada, which is greater than the value of its net assets.  Similar to our previous blog entry on a misutilized New York nonprofit,  CCDC’s board was overflowing with Mr. Espada’s family members and current and former Senate employees, thus lacking any independent oversight.  In the civil lawsuit that names 19 current and former directors of CCDC, Attorney General Cuomo requests removal of Mr. Espada as president as well as the entire board of the nonprofit.  Although CCDC receives millions of dollars annually from federal and state agencies for providing health care to the poor, its failure to pay hundreds of thousands in payroll taxes recently led the state to cancel additional funds to build a new clinic.  The alleged private benefit and private inurement in this nonprofit’s operations have left it in a precarious financial position, potentially resulting in the loss of health care services to numerous needy recipients.

NAM