NYS'close look at one type of nonprofit

Within New York's zoo-like array of public agencies lives an interesting breed known as the local development corporation.

As part of his public-integrity program, state Attorney General Eric Schneiderman has begun paying particular attention to this species. His top aides see the quasi-governmental corporations as potential spawning grounds for self-dealing and nepotism. By their nature, these 200-plus nonprofits have close connections to public officials but draw scarce outside oversight.

Schneiderman -- a former state senator who turns 57 Saturday as he completes his first term -- has his staff reviewing salaries and spending at the entities. Even industrial development agencies, which for decades have drawn their own critical assessments, fall under the auditing power of the state comptroller; local development corporations do not.

The state's Independent Authorities Budget Office lists 210 local development corporations, about a dozen of which are located in Nassau and Suffolk, including in Hempstead, North Hempstead, Huntington, Islip and Brookhaven.

This week The Associated Press reported that the attorney general's office found what it described as potential self-dealing and questionable loans and expenses at two such nonprofits, both upstate. With the review still in progress, there is little said so far about operations in any other regions.

Assemb. James Brennan (D-Brooklyn), chairman of the Corporations, Authorities and Commissions Committee, said Thursday: "The attorney general's review certainly seems appropriate . . . A number of local development corporations [in Central New York] have raised accountability issues -- related to whether or not municipal governments are attempting to circumvent state laws protecting taxpayers, in relation to things like competitive bidding and protecting against excessive debt."

Merely identifying all the development corporations can prove tricky. Generally, they are private not-for-profits incorporated by counties and local governments to undertake projects on behalf of those governments. Often the governments convey real estate or other assets to the corporations, without competitive bidding and sometimes without public notice.

David Kidera, executive director of the independent authorities budget office, said public authorities, by contrast, are easy to pick out. They're established by government resolution, and written into statute. But local development corporations may be lost among the many other nonprofits on file with the state.

Local development corporations are only one subject in Schneiderman's drive for governance reform, which he has made a big rhetorical theme as did his Democratic predecessor, Andrew M. Cuomo.

On Thursday, his office issued an "end-of-the-year review detailing many of its accomplishments for Long Islanders." The "taxpayer protection and public integrity" section touted the appointment of public integrity officers for Nassau and Suffolk, 75 convictions for Medicaid malfeasance, his prodding of the New York Power Authority on "questionable charitable contributions," and the office's exposure of a nonprofit created by state Sen. Shirley Huntley (D-Jamaica) that funneled funds to people associated with it.

Schneiderman also noted that he unveiled an Internet system for tracking the over-prescription of drugs, "in the wake of the prescription drug epidemic on Long Island."