Gov. Paterson has halted $25 million in state contracts due to a Bushwick-based nonprofit affiliated with embattled Assemblyman Vito Lopez — a move that could financially cripple an organization that provides services to more than 6,000 Brooklyn residents.
Paterson last week ordered all his commissioners to hold payments for all “existing and pending contracts” with the Ridgewood Bushwick Senior Citizens Council and its subsidiaries.
Paterson spokeswoman Jessica Bassett said that “there could be a disruption in services [provided by Ridgewood Bushwick], but due to the serious allegations and investigations, we felt it was prudent to put a hold on the contracts.”
The governor’s budget office did not set a timetable for lifting the funding freeze, but said that the contracts would be suspended until the conclusion of two ongoing federal investigations currently probing the relationship between Ridgewood Bushwick, Lopez, and for-profit real estate entities in Brooklyn.
Lopez, who is beginning to undergo treatments for a recurrence of cancer, did not return calls for comment.
The governor’s decision roiled state Sen. Martin Dilan (D–Bushwick), one of Ridgewood Bushwick’s strongest supporters, who called Paterson and demanded an explanation for why the nonprofit was suddenly being forced to jump through “a litany of hurdles” that could further delay much-needed social services to his constituents — not to mention paychecks for its 2,000 employees.
“[If the government] withholds money, it puts the agency in a precarious situation where they have to borrow money to meet payrolls,” said Dilan. “We’re at risk of losing an agency that has provided excellent services and has providing housing to the community. If we lose all this, Bushwick may never ever be able to get these kind of resources again.”
The state’s move comes less than two weeks after the city placed a hold on $12 million worth of contracts to Ridgewood Bushwick pending review of an audit the nonprofit submitted to Attorney General Andrew Cuomo.
Ridgewood Bushwick’s financial records first piqued the attention of city investigators, who found that two employees at a community center falsified attendance records and submitted phony bills to several city agencies earlier this year.
This summer, the city’s Department of Investigation expanded its inquiry into the nonprofit’s activities finding that its board members did not have basic knowledge of its finances but rubber-stamped the enormously high salaries of its top two executives, Angela Battaglia and Christiana Fisher, which increased 182 and 73 percent from the previous year.
Both women have been criticized for pulling down six-figure salaries at a nonprofit whose mission is to “eliminate poverty” in Bushwick.
Lopez, who was not the subject of the investigation but maintains close ties to Ridgewood Bushwick and its employees, has repeated publicly that the nonprofit does good work in the community.
The effects of the investigations and the state’s contract halt on Ridgewood Bushwick’s long-term financial health could be perilous, says Baruch College professor Nicole Marwell.
“If you’re lucky enough to have enough liquidity to dip into, you can cover it in the short term, but nonprofits like Ridgewood Bushwick don’t have a lot of reserves,” said Marwell. “It will have an effect on delivery of programs and jobs in the organization and its ability to deliver programs and jobs in Bushwick in the future.”