City documents newly uncovered by the Voice reveal that the New York Yankees billed city tax- payers hundreds of thousands of dollars for the salaries of team execs and high-powered consultants to lobby the city and state, thanks to the team’s sweetheart lease deal engineered by the Giuliani administration.
“You’ve created this weird circular situation where the city is, effectively, paying with taxpayer money to have itself lobbied for potentially more taxpayer money,” says Common Cause’s Megan Quattlebaum, one of several government watchdogs who were dumbfounded when the Voice told them last week about the deal. “Taxpayers would not be pleased at all to hear that the city is subsidizing someone to come back and hold their hand out to lobby for more.”
The Yankees are apparently taking advantage of a clause in their lease with the city that allows “planning costs” of their new $1.3 billion stadium—groundbreaking for which could take place as soon as next week—to be deducted from the team’s rent. The planning deductions date back to a lease renegotiation arranged by Mayor Rudy Giuliani in his final days in office. Under the December 28, 2001, lease deal, both the Yankees and the Mets were allowed to deduct up to $5 million apiece from their annual rent payments to the city, to be used for planning the new stadiums that Giuliani proposed to build, with city aid, across the street from the teams’ existing homes.
One month later, incoming mayor Mike Bloomberg scotched Giuliani’s stadium plans, declaring it was “just not practical this year to go and build stadiums.” But he let the new Giuliani leases stand, even as Comptroller William Thompson insisted they were unnecessary giveaways and demanded they be renegotiated. As a result, according to the city parks department, which oversees the teams’ leases, from 2001 to 2005 the Yankees charged the city $15.97 million under the “planning cost” clause; the Mets, $20.2 million.
Until recently, the city had insisted that it had no details of how the “planning” money was spent. But a review of documents submitted by the Yankees to the parks department—pried from the city only after a Freedom of Information Law filing (a separate request has been made for Mets city documents)—shows that the beneficiaries of the city money include not just those working to design the stadium, but also those trying to extract public approvals for it as well.
For starters, Yankees president Randy Levine (a former deputy mayor under Giuliani) and the team’s chief operating officer, Lonn Trost—the two top Yankee officials working for passage of the stadium deal—received a combined $312,500 in city money in 2004. The Yankees’ justification, according to the documents: The amount totaled 30 percent of Levine’s annual salary and 20 percent of Trost’s, representing the time each spent working on the stadium project.
Even more audaciously, the Yankees in 2004 charged the city $203,055.87 for the services of Powers and Company, the Albany-based lobbying firm headed by former Republican state chair Bill Powers, one of the men who handpicked George Pataki for his successful challenge in 1994 to Governor Mario Cuomo. (Powers was also tight enough with Giuliani to have raised $1 million for his 1993 mayoral campaign.) According to filings with the New York Temporary State Commission on Lobbying, Powers was hired by the Yankees to lobby the state senate and assembly and the governor’s office for permission to use 25 acres of Bronx parkland and $70 million in state money for the stadium— permission that, as the Voice has reported (“Playing Hardball,” March 15–21, 2006), was granted in June 2005 after no discussion or debate in the legislature.
The city even apparently paid the Yankees to lobby the city itself. Another recipient of city money, via the Yankees, was the law firm Fried, Frank, Harris, Shriver & Jacobson, which, according to the New York City clerk’s lobbyist database, has served as a registered lobbyist for both Tishman Speyer, the Yankees’ project managers for the stadium, and the Yankees themselves. (Tishman’s $1.9 million in 2004 was the number one billable item in the stadium planning account.) Working on the Yankee account, the documents show, was land-use lawyer and lobbyist Stephen Lefkowitz: The son of longtime state attorney general Louis Lefkowitz, he has been involved with nearly every major development project in recent city history, including Battery Park City, the Time Warner Center, the attempts to build a new New York Stock Exchange and a Manhattan Jets stadium, and Bruce Ratner’s Metrotech and Atlantic Yards projects.
Most of the $4.1 million that the Yankees charged to the city in 2004, records show, went for legitimate stadium expenses—soil borings in Macombs Dam Park, architectural renderings, and so on. (The biggest recipient after Tishman Speyer: the design firm Hellmuth, Obata & Kassabaum, whose principal architect Earl Santee pulled in $350 an hour in city funds to design George Steinbrenner’s new playpen.) But even here, dubious bills put on the public tab included such items as a $167 meal for three engineering consultants at the Yankees’ own Stadium Club.
And while not itself registered as a lobbyist, Tishman Speyer received city cash for several meetings in 2003 and 2004 with city officials, including Bronx Borough President Adolfo Carrión and Deputy Mayor Dan Doctoroff, both of whom ended up becoming backers of the Yanks’ stadium plans. At one November 1, 2004, meeting to discuss the pending stadium legislation, all the people in the room—Levine and Trost for the Yankees; Valerie Peltier for Tishman Speyer; and Lefkowitz for Fried, Frank, who charged $1,420 for a two-hour meeting—were billing their hours to the city treasury.
Skeezy as all this may be, lobbying experts say it’s unlikely that any of it is illegal. State lobbying commission director David Grandeau explains that as long as the Yankee lobbyists registered with the state (they did) and the city didn’t know ahead of time that its money was going to the likes of Bill Powers, it’s all within the law. Quattlebaum adds, “I’m not sure that the writers of the lobby law would have anticipated exactly this situation.”
While it’s not uncommon for companies to get public money to train their executives in, say, language skills or conflict resolution, says Greg LeRoy of Good Jobs First, a national subsidy-watch group, “I can’t recall any economic development contract specifically providing for executive salaries or lobbyist salaries. Given that the Yankees are expecting almost half a billion dollars in taxpayer subsidies for their new stadium, it’s outrageous to consider that taxpayers may be footing the lobbying bill too.”
Parks officials refused comment on the lobbying figures. Calls to Bloomberg, Quinn, and Thompson weren’t returned.
Giuliani’s lease deal left the door wide-open for the city’s ball clubs to dip into the public treasury by defining “stadium planning” as including “the preparation of studies, surveys, tests, analyses, estimates and designs, [and] architectural, engineering, design, financing, accounting, consulting, planning, surveying, environmental, land use, and legal services”—and specifically including team officials’ prorated time as an allowable expense.
“The lease gives the Yankees an incredible amount of leeway,” says Quattlebaum. “That language is incredibly broad.”
In any case, no one in city government, it appears, was keeping tabs on the Yankees’ spending. The parks department, though it holds the lease on Yankee Stadium, insists that the comptroller was responsible for auditing the planning deductions. Yet Thompson, who issues yearly audits of the team’s maintenance costs—often making headlines when Steinbrenner’s rent bill goes up a few hundred thousand dollars as a result—did not do the same for the planning deductions, and Thompson spokesperson Laura Rivera says the office has no intention of conducting an audit at this time.