Proceeding for Final Sentencing Hearing (January 13, 2014)
Defendant Nancy Black’s Response to the Government’s Sentencing Memorandum (January 8, 2014)
Defendant Nancy Black Sentencing Memorandum (December 30, 2013)
Plea Agreement (April 23, 2013)
Indictment (January 4, 2012)
Read the full story: Washington Free Beacon
Cause of Action executive director Dan Epstein said the documents his group obtained, which were shared with the Washington Free Beacon, suggest that TIGTA’s investigation may have been inadequate.
…
“Given that IG George’s examination of tax-exempt applicant reviews at the IRS was conducted over a period of just a few months—was a thorough investigation of the IRS ever possible?” Epstein asked in an emailed statement.
Even the review that did take place lacked the authority to use investigative tools that might have uncovered wrongdoing, Epstein said.
“Given that IG George chose to forego an investigation and pursue an audit, coupled with no evidence of any meetings with the FBI in IG George’s calendars, is it any wonder that the FBI has been unable to find criminal violations?” he asked.
FOR IMMEDIATE RELEASE
CONTACT:
Jamie Morris, 202-499-2425
Report: Forest City Enterprises Profits Despite Legal Violations
Cause of Action calls on Congress to investigate Forest City Enterprises and lax oversight at USCIS, DOJ
WASHINGTON –Cause of Action (CoA), a government accountability organization, today released “Unfair Enrichment: How Forest City Enterprises Acts Above the Law,” the third and final installment of the three-part investigation, “Political Profiteering: How Forest City Enterprises Makes Private Profits at the Expense of America’s Taxpayers,” exposing how New York State manipulated census data to benefit Forest City Enterprises’ (FCE) New York subsidiary Forest City Ratner (FCR) and the New York City Regional Center (NYCRC). With this data, FCR and the NYCRC enticed foreign investors into a cash-for-visas program, all while downplaying the risk of investment and exaggerating job creation predictions. Further, the Department of Justice (DOJ) failed to prosecute FCR executives who bribed city council members to approve another FCR development in project in Yonkers, N.Y.
CoA’s nearly two-year investigation found that executives of FCR played illicit roles in the 2005-2006 bribery scandal that resulted in the federal conviction of two local politicians in Yonkers, N.Y. for securing approval for FCR’s Ridge Hill development project. The DOJ failed to prosecute, despite being alerted by a 2010 letter from Ranking Member of the House Committee on Oversight and Government Reform Darrell Issa (R-CA) and Ranking Member of the House Judiciary Committee Lamar Smith (R-TX) that raised concerns that “political favoritism” guided the DOJ’s decision “not to pursue legal charges against Forest City Ratner and its employees.”
Dan Epstein, Cause of Action’s executive director commented:
“Our investigation uncovered that not only did FCR violate the law and engage in political profiteering, but the DOJ turned a blind eye to FCR’s criminal activity while the USCIS failed to hold New York State accountable. We can’t rely on these federal agencies to properly apply their own rules and protect the interests of taxpayers, which is why Congress should intervene and investigate these practices.”
Findings from the report include:
In light of these findings, CoA wrote to Chairman Issa of the House Oversight and Government Reform Committee urging the committee to examine USCUS’ treatment of states’ TEA designations and determine whether undue political influence affected DOJ’s decision not to prosecute FCE.
To access our letter, click here.
To access Unfair Enrichment: How Forest City Enterprises Acts Above the Law, click here.
To access parts one and two of the investigation, click here.
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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Part III of III:
Unfair Enrichment: How Forest City Enterprises Acts Above the Law
A new neighbor has moved to your community. But it is not someone who shares your backyard, a parking space, or neighborhood watch duties. Rather, this neighbor plans to buy the influence of your mayor, your city council member, and your Senator with campaign contributions. He wants his political cronies to declare your neighborhood blighted, and condemn its homes and businesses, so that he can build luxury apartment buildings, shopping centers, and a basketball arena. He wants to congest your streets with thousands of cars and people. And your new neighbor wants you to pay for it. He plans to get millions of dollars in public subsidies, tax breaks, and tax-exempt financing by spending enormous amounts lobbying your representatives in government. Not long after the ink dries on these deals, and public funding is secured, he will sell the development before it is finished, leaving you and your community without the promised public benefits.
Your new neighbor is Forest City Enterprises (FCE), a publicly-traded real estate development company with over $10 billion in assets. Its business model involves getting unfair deals and making huge profits with the political influence it buys with campaign contributions and, if necessary, bribes.
This third and final report is the culmination of Cause of Action’s (CoA) 18-month investigation of FCE, its business practices, and the influence it wields over communities and public officials through enormous political spending and lobbying. This investigation involved thorough statistical analyses of millions of dollars in public subsidies, gross and net profits, and campaign spending in federal, state, and local races across the country. It also required the review of thousands of pages of documents, including legal filings, legal opinions and transcripts; the filing of Freedom of Information Act requests in New York, Texas and the District of Columbia; and telephone and in-person interviews with individuals with personal knowledge of the events that are described herein.
CoA’s first report in this series showed that FCE has a business model that depends upon political profiteering. FCE consistently uses public money and government influence to reap millions in profit. Using highly-paid lobbyists, political connections, campaign contributions, and strategic hiring of government officials, FCE obtains lavish public subsidies, tax-exempt financing, and eminent domain condemnations of private land. Between 2002 and 2012, FCE, its subsidiaries, and its employees spent $23 million on campaign contributions and lobbying at the federal, state, and local level. In return it received 52 direct and indirect government subsidies or financial benefits totaling at least $2.6 billion. These subsidies amounted to 23% of FCE’s $11.4 billion revenue during that time.
In its second report, CoA exposed FCE’s pattern of promising local governments that its development projects would generate plentiful jobs, housing, economic development, and tax revenues. However, once FCE receives public financial support, it often renegotiates or delays implementation of the benefits that it has promised. FCE promised to create more than 70,000 permanent jobs and 3,750 affordable housing units for projects in Brooklyn and Albuquerque, but has actually produced only 3,000 permanent jobs, in total, and built no affordable housing units. Meanwhile, FCE took in $277.2 million in public subsidies from those communities after contributing $310,450 to local political candidates and spending over $8.6 million on lobbyists. In short, FCE lobbies, profits, and then bilks taxpayers by breaching its promises to the community.
This final report details ways in which FCE violated federal law, took advantage of manipulated census data, and poured hundreds of thousands of dollars into funding ballot initiatives supporting eminent domain for private use. FCE’s New York subsidiary, Forest City Ratner (FCR), appears to have violated federal regulations in order to attract foreign investors to support its $4.9 billion Atlantic Yards development in Brooklyn. It took advantage of a federal immigration program using manipulated unemployment data and misleading advertising. In 2012, when the Department of Justice secured convictions of local politicians involved in a bribery scheme that was hatched to get approval of FCR’s development in Yonkers, N.Y., the evidence at trial clearly showed that at least two FCR executives were also involved. Yet, despite this evidence, no one at FCR was ever prosecuted. Finally, FCE has benefited from, and actively lobbied to expand, the government’s condemnation of property for private development using eminent domain, the power that allows government to take private property for public use. All of these activities show that FCE has ignored or subverted legal norms in order to maximize its profits.
While FCE continually looks for opportunities to expand its enterprise across the country, the company and its executives often employ nefarious schemes in order to secure the land, money, and votes needed to secure multi-million dollar development contracts. In sum, FCE exploits political connections for enormous profits and fails to follow the law—the epitome of political profiteering.
Attracting Investors by Manipulating Unemployment Data: Atlantic Yards And the EB-5 Visa Program
Anatomy of a Bribe: Forest City Ratner and the Ridge Hill Development
Public Seizures for Private Benefits: Atlantic Yards and Eminent Domain
Figure 1: The Atlantic Yards Project Targeted Employment Area for EB-5 violates USCIS regulations by crossing all existing political boundaries
(click to enlarge)
When news of the General Service Administration’s (GSA) Las Vegas blowout broke in April 2012, Cause of Action was as appalled as anyone at the reckless waste of taxpayer dollars. But instead of focusing on mind readers and ritzy sushi receptions, we zeroed in on the unconscionable amount the GSA spent on baubles and trinkets commemorating the conference. Knowing that this kind of spending is all-too-common in the federal government, Cause of Action sent Freedom of Information Act (FOIA) requests to each government agency for all documents related to purchases of commemorative and promotional items over a three-year period.
While some agencies responded relatively quickly, others delayed production for weeks or even months. The Department of Justice (DOJ), in particular, took so long to produce documents that Cause of Action began to suspect the agency of deliberately dragging its feet. In November 2012 we sent another FOIA request to DOJ Interpol, this time asking for any communications regarding our original request sent seven months previously. When we finally received the documents, largely e-mail communications, in late January of this year, they revealed a department in the midst of a FOIA freak-out.
Check out this excerpt from notes taken during a DOJ Executive Officer’s meeting last May:
We’re flattered that DOJ bigwigs felt compelled to discuss Cause of Action’s request along with such important items as the Department’s budget and new management structure, but all that attention shouldn’t be necessary for a routine FOIA request. And what did they mean by commanding components to “stand down?” If they instructed employees already answering requests from FOX News and Bloomberg to stop their work and instead focus their efforts on Cause of Action’s request, that’s a major violation of the agency’s statutory obligations. FOIA regulations dictate that requests be addressed in the order they are received, not the order of their potential to embarrass the agency.
Then there’s this e-mail from DOJ Interpol’s Executive Office:
Call us old-fashioned, but Cause of Action believes agencies should follow the plain language of the law. And the plain language of the Freedom of Information Act states that agencies have 20 business days to respond to a request, even if only on an interim basis. That’s their “responsibility.” When a Director worries about “responding prematurely” after the Department has already sat on a request for three months, one has to wonder about that person’s motive. Is it to ensure that no stone is left unturned in the pursuit of relevant documents? Or is it to prevent damaging coverage of the department’s wasteful spending until the GSA conference scandal recedes from the public consciousness?
Perhaps the next few e-mails can shed some light on this question:
So, Justice Management Division (JMD) was tasked with reviewing all components’ responses before sending them on to Cause of Action. A little unorthodox, perhaps, but not unprecedented in our own experiences with federal FOIA procedures.
By August, DOJ Interpol had completed its document production:
After submitting it’s response to JMD, Interpol waited…and waited…
More than three months after submitting its production, Interpol finally received the long-awaited go-ahead:
In a stunning coincidence, JMD completed its review just one week after Interpol received our second FOIA request for communications regarding our original request. Funny how these things work out.
Although Cause of Action is still waiting on answers from a few more components, the documents we’ve received so far indicate that between January 2009 and June 2012, DOJ spent over $1 million on plaques, lapel pins, commemorative coins, and a whole slew of other trinkets for DOJ employees and contractors. The worst offender by far was JMD itself; in 2009 it spent $80,245 on awards alone for just one event, the Annual Attorney General’s Award Ceremony. In 2010 and 2011, as the rest of the Department scaled back costs in the face of a budget backlash, spending on swag for the Ceremony actually increased, to $160,137 and $172,845, respectively. When one DOJ component spends nearly half a million dollars on awards for three events in as many years, it’s clear that the GSA isn’t the only agency struggling with excessive and irresponsible spending practices.
Cause of Action believes that despite the attempts at transparency by some FOIA officers, Department of Justice leadership deliberately delayed our request rather than provide details on the embarrassing amount the agency spent on swag and trinkets. The high-level meetings, the fear of “responding prematurely,” the delays for a straightforward request; all this points to an agency hypersensitive to any and all reproach, obsessed with protecting its reputation at the expense of accountability and transparency. Rather than spending time and money shielding itself from criticism, perhaps DOJ should focus its resources on complying with FOIA law and serving the American taxpayer.
From the Washington Examiner:
Solyndra was indicative, not exceptional. Just this week, Cause of Action, an activist watchdog nonprofit, said it found a .95 percent correlation between companies that got Energy Department loans and those that made political contributions.
The Justice Department spent $11.4 million on executives’ non-mission aircraft travel from 2006 through 2011, nearly a quarter of which was for personal travel.
The attorneys general and FBI director serving in this period overwhelmingly accounted for the travel, taking 95 percent of the flights, according to the Government Accountability Office. The AGs and FBI director partially reimbursed the government for the personal trips, in accordance with the law, GAO found.
Labor leaders had tough words for the Obama administration and Senate Democrats as they demanded that new members be appointed to the embattled National Labor Relations Board.
Read the full story here. Breitbart
“On November 9, 2011, Cause of Action asked DOJ Inspector General Cynthia Schnedar to investigate the status of the DOJ’s response to the letter Rep. Jason Chaffetz had sent to Eric Holder in March of 2011. On December 28, 2011, the DOJ OIG declined our request, refusing to look into the request from Rep. Jason Chaffetz (R-UT) to Attorney General Eric Holder to clear threats to the safety of Americans presented months earlier…”
