The Dennis Rivera giveaway has revealed just how far state leaders will go to satisfy a powerful labor leader, with George Pataki, Joe Bruno, and Shelly Silver delivering a billion-dollar bonanza to health care workers literally overnight. Had not a sudden shortfall in state revenues gotten in the way in the last couple of days, this trio was prepared to do much the same for teachers union boss Randi Weingarten.
This is the story of how Pataki and Attorney General Eliot Spitzer handled a thorny controversy involving the leader of the largest private-sector union in the state, Ed Malloy, the head of the 200,000-member Building Construction and Trades Council. Contrary to the Rivera and Weingarten cases, Spitzer and Pataki did nothing for Malloy that will benefit his union workers. It was all about aiding the married, 67-year-old Malloy's traveling companion and apparent intimate friend, Christina Cox, a 49-year-old onetime Playboy bunny who's executive director of a scandal-ridden, multimillion-dollar nonprofit that Malloy chairs. Spitzer's office just reached a curiously compromised settlement with the organization, and the governor's office tried, despite three criminal probes, to find a way to dump $2 million into what can only be described as a Malloy-run sinkhole.
The National Museum of Catholic Art and History, whose financial and, strangely enough, sexual history were detailed in a Voice series last June ("Beauty and the Big Shots"), has raised and spent $7 million in 11 years, but has yet to either open a museum or assemble an art collection. The stories charged that Cox and the museum's ex-associate director sexually manipulated several powerful patrons of the museumfrom Prince Albert of Monaco to Lee Iacocca to Malloyand that Cox drained thousands of dollars out of museum coffers for her personal use. The charges sparked investigations by Spitzer, Manhattan District Attorney Robert Morgenthau, and federal prosecutors.
Over the vigorous objections of lawyers for the Archdiocese of New York, the State Education Department nonetheless granted the museum, which is unconnected to the church, a five-year, provisional charter in July 1995. The group has been raising money without a charter since its license expired almost two years ago, just as it did for years prior to receiving one. Having recently left her elaborate East Harlem headquarters, complete with Jacuzzi and canopy bed, Cox now operates out of a trailer on East 115th Street, next to the former Catholic school that construction crews recruited by Malloy are converting into the long-promised museum. The listed phone numbers for the organization, which has already received $525,000 in government subsidies, no longer work.
Spitzer's settlement requires Cox to repay the museum $86,328 that she took from it in 1999 "for personal expenses for travel, furnishings, and entertainment" that he found "improper." As the Voice articles contended, these expenses ranged from multiple credit card purchases at Saks, Fortunoff, Lord & Taylor, Pier 1, Burlington Coat, Paramus Golf, and Theresa Wigs to $34,312 in her own home rent to $19,108 in non-salary checks she wrote to herself.
The settlement makes no mention of similar expensesspelled out in documents submitted to the AG's officeof $9374 in personal expenses in 1998, including two trips to Pinky Fine Nail. Nor does it refer to another $25,566 in questionable expenditures in 2000 flagged by the AG, including purchases at a second wig store, Tiffany Wigs, as well as $1900 in day-camp charges, presumably for Cox's son.
Not only did Spitzer take no action about these expenditures, the settlement gave Cox four years to repay the 1999 funds, requiring that she "forego" $21,582 in "annual bonuses" she is due to receive under her current contract with the museum. Her contract provides for a $100,000 salary and $25,000 in performance bonuses. Though the museum previously gave her salary increases to cover her excessive personal expenses, the Spitzer accord says it cannot "raise, supplement, or otherwise directly or indirectly increase Ms. Cox's regular annual salary" until she's repaid the full amount. While the agreement says she can't be subsequently compensated for these repayments either, it offers no clear-cut method of preventing that.
Well before the settlement, the museum board, under pressure from Spitzer and Morgenthau, established new cash control and reimbursement procedures, restricting credit and ATM card purchases. In resolutions passed last October, the board also created three new executive positions, including a managing director, who will theoretically report to Malloy and "share executive responsibilities" with Cox. The Spitzer releases salute these changes as reforms, though six months later none of the positions have been filled.
Howard Rubenstein, a spokesman for the museum, says that Arthur Rosenblatt, an architect and board member long associated with the project, will be named the unpaid managing director in the next 30 to 60 days. The museum's outside accountant, who also does Malloy's union books and signed off on Cox's past gambits, will serve as the supposed controller. This transparent new management structure, as well as the changed expense procedures, are designed to appear to protect the organization from the predatory Cox, whom the board is apparently unwilling to fire no matter what the findings against her.
Malloy, who was the grand marshal at the Saint Patty's Day Parade last year, and museum attorney Andrew Maloney personally negotiated the settlement with Spitzer's office, meeting with the AG himself on February 13, and with top staff in the office on February 21. Two statewide Malloy PACs made $1000 contributions to Spitzer on January 11, while a local Malloy committee gave $1000 in 1999. Another Malloy entity donated $5000 to Pataki on November 30, 2001. Malloy, who's taken Cox with him for repeated stays at Donald Trump's Mar-A-Lago in Palm Beach, would not deny having "a sexual or romantic relationship" with the former model and beauty queen during an extended Voice interview, calling her "a very, very good friend."
An internal memo prepared by Spitzer's staff and obtained by the Voice indicates that as recently as January, "the governor's office" was "considering making a substantial grant to the museum through the Empire State Development Corporation (ESDC). Malloy told the Voice last year that he was seeking $4 million from the governor's office, allocated over a two-year period. The Spitzer memo reported that when ESDC contacted the AG's office, they were told "the theoretical range of outcomes" of the probe.
"ESDC did not seem troubled," concluded the memo, "by the prospect of the governor's making a grant and our subsequently determining that the executive director received excessive compensation and improper expense reimbursements and should make restitution and/or be removed." Rubenstein, the museum spokesman, now says that the grant will not be part of this year's budget, though it's unclear when it was deleted.
Having delayed a decision on the museum's application for a charter renewal, the state ed department, according to museum director David Palmquist, is now "reviewing the AG's settlement." Palmquist declined to answer questions about whether the governor's office or ESDC had made inquiries about the status of the charter review, but a decision to stall the state grants might, at least in part, be due to its still uncertain legal status. Palmquist explained that even though the charter lapsed in 2000, the museum remains "a legally incorporated body" and "would be eligible" to receive grants.
But the museum has yet to even answer a long overdue state questionnaire required of all charter applicants. Combined with the AG's findings, that makes it an unlikely election-year recipient of Pataki largesse, though anything can happen after the November election. The last filing the museum did with the state was in August, handwritten by community college dropout Cox, conceding that the facility was still "close" [sic], but asking that the ed department "wait untill [sic] December 2001." Like a decade of other false promises, this deadline too was missed.
Research assistance: Annachiara Danieli, Jen DiMascio, Jesse Goldstein, Lauren Johnston, Peter G.H. Madsen, Jess Wisloski
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