FOR IMMEDIATE RELEASE
August 6, 2013
Cause of Action Report Exposes Profiteering Scheme Using Taxpayer Funds
“Political Profiteering” Shows How Forest City Enterprises
Makes Private Profits at the Expense of American Taxpayers
WASHINGTON – Today, Cause of Action (CoA), a government accountability organization, released “Political Profiteering: How Forest City Enterprises Makes Private Profits at the Expense of American Taxpayers,” the first installment in a three-part investigation examining how real estate development giant Forest City Enterprises (FCE) uses politics for profit. The report exposes how between 2002 and 2012, FCE secured more than $2.6 billion in direct and indirect government subsidies by spending millions of dollars on campaign contributions. Two of the most high-profile examples of FCE using politics for profit include the Atlantic Yards development in Brooklyn, NY and The Yards project in Washington, D.C.
“We are exposing an enterprise of corruption within one of the largest private real estate developers in the country,” said Dan Epstein, Cause of Action’s executive director. “For far too long, Forest City Enterprises has operated on the model of political profiteering, essentially rigging the marketplace by paying off government officials with lavish campaign contributions and gambling with taxpayer funds for its private profit.”
“Unless there is effective oversight of how government subsidies are granted to companies like Forest City Enterprises, businesses will continue to use American taxpayer dollars to bolster their own private profits.”
CoA’s nearly two-year investigation uncovers how Forest City Enterprises, one of the largest publicly-traded real estate development companies in the United States, runs on the practice of using public money and government influence to reap millions in profit and finance its net worth of nearly $10.6 billion. In its pursuit of land development projects, FCE regularly uses highly paid lobbyists, political connections, campaign contributions, and strategic hiring of government officials to obtain lavish public subsidies, tax-exempt financing and the seizure of private land from eminent domain condemnations.
Among the most blatant examples of FCE’s political profiteering CoA uncovered:
- From 2002 to 2012, FCE and its subsidiaries received or signed agreements for fifty-two direct and indirect subsidies or financial benefits with a total value of at least $2.6 billion.
- FCE, its subsidiaries, and its employees spent $23 million on political spending such as campaign contributions and lobbying at the federal, state, and local level from 2002 to 2012.
- In key election years, eighty-five percent of FCE’s eighty-one federal political contributions were given to candidates in areas where FCE had real estate projects.
- Forest City Washington (FCW) in the District of Columbia (D.C.) used campaign contributions to extract favors from the politicians on the D.C. City Council, the D.C. Mayor, and D.C. Delegate Eleanor Holmes Norton for its Yards project. FCW also hired an employee from the Mayor’s office dealing with development to assist in pushing its project.
In the reports that follow, CoA will show how FCE took public benefits under the premise of providing jobs for minority workers but failed to deliver, as well as how FCE enriched itself through bribery and political graft, without ever being subjected to investigation or oversight.
About Cause of Action:
Cause of Action is a non-profit, nonpartisan government accountability organization that fights to protect economic opportunity when federal regulations, spending and cronyism threaten it. For more information, visit www.causeofaction.org.
To schedule an interview with Cause of Action’s Executive Director Dan Epstein, contact Mary Beth Hutchins, 202-400-2721 or Jamie Morris, jamie.morris@causeofaction.org.
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