Sunday, August 8, 2010

Charlie Rangel's friends

Rangel fund in furor


With the help of Rep. Charles Rangel, a politically powerful uptown nonprofit is getting a $2.6 million taxpayer-funded grant despite serious concerns about the organization’s finances.

The Upper Manhattan Empowerment Zone, a Rangel-sponsored group that distributes tax money to improve the local community, green-lighted the grant to Alianza Dominicana. The money was OK’d even after one of the zone’s own finance executives refused to sign off on the cash — and questioned the nonprofit’s checkered balance sheet, The Post has learned.

The executive then left the nonprofit over the grant, sources said. The six-member board of the umbrella New York Empowerment Zone, which includes Rangel, unanimously approved the money to Dominicana on June 29 — just weeks before the House charged the embattled Democratic lawmaker with a litany of ethics violations.

CHARLIE: REPUBLICANS KO'D ETHICS DEAL

Rangel introduced the legislation to create both the New York and Upper Manhattan Empowerment Zones and has been long known to exert influence on them. The organizations are funded with $300 million in federal, state and city money.

Alianza Dominicana, a socialservices agency set up in 1985, said it needs the money for its new $19 million headquarters, known as the Triangle Building. The sleek, six-story structure is in its final phase of construction at the intersection of Audubon Avenue, 166th Street and St. Nicholas Avenue.

The nonprofit, which runs a variety of programs including day care and domestic-violence prevention, plans to rent space to commercial tenants and operate a cultural center.

It took out two mortgages totaling $5.3 million to construct the 48,000-square-foot building. Both loans were guaranteed by the Upper Manhattan Empowerment Zone, which also gave the group a $2.7 million loan in 2008. The $2.6 million that was approved in June, to build out the interior of the headquarters, does not need to be paid back.

The nonprofit is banking on rent from commercial tenants to pay off the loans. But the empowerment zone’s finance executive knew of Alianza’s long history of money troubles, and before he departed, argued that it would be irresponsible for the zones to get further immersed in a potential boondoggle. Those troubles include:

* Alianza owed $526,000 in back wages to 200 workers last month, according to the state Labor Department. Alianza — which pays $150,000 annually to its CEO, Moises Perez — said it stiffed employees because its funding was sporadic. It has since paid about $268,000 of what it owes.

* A landlord threatened to kick the group out of its old offices for not paying hundreds of thousands of dollars in rent.

* Public documents show that during the last few years the nonprofit has owed money to the IRS, building suppliers and the state Insurance Fund. It had a whopping $914,671 accounting bill in 2009.

Rangel spokesman Elbert Garcia shrugged off the liens against Alianza, saying, “This is not some fly-by-night operation.” “Of course the congressman supports them. They’ve done a lot of good for the community,” Garcia said.

Rangel and Alianza have long been close. The 40-year Harlem legislator earmarked $250,000 in federal funds to the group on Dec. 8, a month after Alianza founder Perez lauded Rangel on the steps of City Hall. Perez has poured thousands into Rangel’s campaign coffers over the years.

In July, Rangel was charged with 13 violations by the House Ethics Committee and faces a trial this fall.

Among the allegations was Rangel’s failure to disclose an interest-free loan on his beachfront Dominican Republic villa. The loan came from political benefactor and prominent New York labor lawyer Theodore Kheel, a founder and part-owner of the luxury resort in the Punta Cana region, where Rangel has his beach house.

Kheel is also a major donor to Alianza Dominicana, giving it $25,000 in 2006 and another $25,000 in 2007 through a family foundation.

The National Legal and Policy Center, a conservative ethics watchdog group that had filed several of the complaints against Rangel that became part of the Ethics Committee charges against the lawmaker, said it would file a new complaint tomorrow.

“Much of the Rangel ethics case has been about special interest favoritism. This is yet another instance,” said NLPC Chairman Ken Boehm.

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