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De Blasio offices feud over how land deal docs were handled

The office of New York City Mayor Bill

The office of New York City Mayor Bill de Blasio, who was at the Democratic National Convention on Monday, July 25, 2016, has agreed to supply documents sought in a land deal probe. Credit: Getty Images / Drew Angerer

Two de Blasio administration agencies are accusing each other of lying about how the mayor’s lawyers handled secret documents on a suspicious land deal involving one of his top fundraisers.

The dueling claims came a day after news that Mayor Bill de Blasio’s city attorneys had relented and agreed to give thousands of pages to investigators who are probing the city’s lifting of deed restrictions. Doing so let a nonprofit home for AIDS patients be flipped for luxury condos, although the conversion has since been put on hold amid the controversy.

The Department of Investigation, headed by Mark Peters, said Tuesday the mayor’s Law Department attorneys, headed by Zachary Carter, stymied efforts to obtain relevant documents.

For example, a July 29, 2014, memo analyzing the costs and benefits of allowing the lifting of deed restrictions, had been withheld initially as “irrelevant.” DOI has said the memo was turned over only after it was obtained by “other sources.” The Law Department says it was disclosed after its lawyers themselves “flagged it,” a statement said. Carter’s spokesman said DOI’s claims are “false.” The administration had long claimed it had no idea the land would be flipped.

A DOI report released earlier this month blamed “a complete lack of accountability” under de Blasio for the lifting of deed restrictions to allow the home, on Manhattan’s Lower East Side, to be flipped, a deal that netted developers a $72 million profit. The city was paid just $16 million for removing the restrictions. One of the lobbyists involved at one point was de Blasio fundraiser James Capalino.

The DOI found that City Hall “knew or should have known” about the consequences at the location, known as Rivington House.

A footnote in the report lamented that despite an executive order mandating that the DOI gets to decide what was relevant to its probes and what isn’t, de Blasio’s lawyers were refusing to hand over relevant documents.

In recent days, the Law Department relented after the DOI threatened to sue. The mayor’s office also relented to allow investigators access to City Hall computers, a routine step in nearly every other probe done by the agency.

De Blasio this weekend defended the agencies’ fight as “totally normal.” And on Wednesday, de Blasio sarcastically dismissed coverage of the scandal as “probably bigger than Watergate.”

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