$hady Rangel zone
Us Rep. Charles Rangel's pet nonprofit, the Upper Manhattan Empowerment Zone, controls hundreds of millions in taxpayer cash but defiantly refuses to explain its spending.
The group's tax forms are incomplete, and it has yet to release its 2009 annual report. Questions are stonewalled.
Asked about its $2.7 million loan to the troubled Alianza Dominicana for its delayed multimillion-dollar Triangle Building headquarters, UMEZ's lawyer said it was "an internal matter."
The note came due Oct. 9, but Blair Duncan would not say whether the loan was paid -- only that the UMEZ "was working with the borrower."
The UMEZ last spring approved a separate $2.6 million grant to Alianza to finish the inside of the Triangle Building, despite the objections of one of its own financial executives. That grant is now held up pending a review by its board.
Alianza CEO Moises Perez was recently forced by the city to take an unpaid leave of absence over allegations of self-dealing and financial mismanagement of the social-services nonprofit.
The Upper Manhattan Empowerment Zone has been in business since 1995 and is one of nine such zones created under legislation written by Rangel (D-Harlem). Their mission is to spur development in inner cities.
The UMEZ was funded with $249 million in federal, state and city money. The group has spent about 80 percent of it.
Among the bigger projects it has helped fund are the Harlem USA mall on 125th Street and the new East River Plaza.
A former UMEZ employee said the organization funds its friends and "friends of Charlie's," calling it "influence-peddling at its most basic level."
Rangel sits on the New York Empowerment Zone board, which has oversight over UMEZ decisions.
Duncan denied any political influence on decisions, saying projects "come from the ground up."
It doles out grants to organizations such as El Museo del Barrio, Studio Museum in Harlem and Apollo Theater Foundation. But a comprehensive list of grant recipients is hard to find. The group did not list them on recent tax returns as required.
The UMEZ also gives out a handful of loans every year through its Business Resources and Investment Services Center.
Several of the loan recipients have stiffed the UMEZ, including the Nubian Heritage beauty-products company, which owes $1 million, and the now-shuttered Ginger Restaurant, which owes $350,000, according to a yearly report filed with the US Department of Housing and Urban Development.
Duncan said the UMEZ was established to provide funding to borrowers shunned by traditional banks. He said that if loans are going bad, it may try to restructure them or take ultimately legal action to recoup its money.
UMEZ President Kenneth Knuckles, a former city commissioner in the Dinkins administration, refused repeated requests for an interview. He earned $216,608 in 2008. He gets an additional $60,000 a year in deferred compensation -- and had amassed $368,998 in those future payments by June 30, 2009.
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