Mayor 501(c)(4): Why Bill de Blasio became so reliant on nonprofit advocacy groups

Last fall, community board after community board voted against two zoning frameworks that New York City Mayor Bill de Blasio envisioned underpinning his ambitious affordable housing agenda. As the negative headlines accrued, several unions close to the mayor backed the proposals and announced they’d support a new nonprofit advocacy group set up to promote the zoning proposals called United for Affordable NYC Inc.

Four days later, on Feb. 12, the lobbying and consulting firm Metropolitan Public Strategies inked a consulting agreement with United for Affordable NYC. For $20,000, Metropolitan would advise the nonprofit and engage in “grassroots lobbying,” according to the document, including asking the public to contact elected officials. Metropolitan reported in disclosure documents that its efforts targeted City Council members, borough presidents, the public advocate and the city Planning Commission chairman. The Council overwhelmingly passed both zoning proposals on March 22.

But a number of current and former City Council members said they were unsure whether United for Affordable NYC contributed much to the proposals’ passage. Some even said they were not certain why de Blasio felt the need to turn to United for Affordable NYC in the first place: If he sought to start a press campaign to persuade New Yorkers to adopt his point of view, his efforts overlooked the media attention the mayor commands by virtue of being the top official in New York City and the central staff and city agencies prepared to trumpet his agenda. If it was a bid to win over city lawmakers, the officials said it was a circuitous route of negotiating with a crew de Blasio has a good relationship with, quick access to and budgetary leverage over.

The de Blasio administration, however, insists the mayor’s approach was needed to break from other administrations’ years of insufficient resources, attention and solutions for the growing affordable housing crisis.

“Rather than do as every mayor has done and contribute to the intractability of the problem, this mayor chose a different route. Because this mayor had the guts to change the approach, we won a very tough vote and we’re well into implementing the most significant affordable housing plan in city history,” de Blasio’s press secretary Eric Phillips said via email. “The depth of the affordable housing problem is evidence that nobody before us approached it in the right way. If it was an easy problem to solve with traditional resources and strategies, the affordable housing crisis we’re in wouldn’t be a crisis at all. The need for the non-traditional organizing around a government solution is a result of the historic intractability of the problem we are facing.”

Outside of the mayor’s wing at City Hall, some elected officials and consultants said de Blasio may be reflexively drawn to these nonprofit advocacy groups because of his background as a political operative, where building consensus and then trotting out this support is paramount. The mayor’s allies have launched similar groups to trumpet other trademark de Blasio initiatives. Some of his 2013 campaign staff launched the Campaign for One New York to promote his push to get state funding for universal pre-kindergarten. The Campaign for One New York then helped create The Progressive Agenda Committee, which endeavored to provide a platform for de Blasio and allies to advocate for federal policies that address income inequality. Now, all three groups are inactive or in the process of disbanding.

“Mike Bloomberg was a businessman at heart; Rudy Giuliani was a prosecutor at heart – and sometimes those skill sets really enhanced their mayoralty, and other times they got in the way of their being better mayors. This is an example of Mayor de Blasio, who is at his heart a political operative,” said City Councilman Rory Lancman, who is one of several city lawmakers who have said they want to pass legislation regulating what elected officials can do with nonprofit advocacy groups.

United for Affordable NYC, in particular, stands out because it was designed to push the mayor’s policy on a city level, where de Blasio already has influence by virtue of his position. Lobbyists and political strategists not affiliated with the mayor said they didn’t see the need for United for Affordable NYC, but believed it showed the mayor lacked confidence in the traditional governing negotiation process, was simply accustomed to thinking like an operative or sought a way to raise money outside the limits imposed by the city’s campaign finance system. But another public relations professional, who has not worked for the mayor and who also spoke on the condition of anonymity due to concerns about flouting confidentiality clauses regarding clients, said the nonprofit seemed like a wise defensive cover in case an opposition group launched a well-funded counter-campaign.

Following the zoning vote, no Council member or their staff said they could recall United for Affordable NYC appealing to them. The nonprofit reported that most of the $372,500 it raised was spent on television ads, digital media buys and related design, production and printing costs.

The mayor’s struggles to coax community boards to his point of view, some officials say, reflected shortcomings in his zoning plan. Assemblyman Charles Barron, who represents a part of East New York where one of the new zoning frameworks is slated to be implemented first, said he believed the measure passed, despite opposition, because the mayor won over the local Council member – the Council has a tradition of deferring to local council members on land-use and other decisions specific to the community. “(City planning officials) have access to do mailings, to do town hall meetings, to meet with everybody, to do robocalls, to put out slick material – why do you need a 501(c)(4)?” said Barron, referring to a nonprofit class that can engage in a significant amount of lobbying, but where donations are not tax-deductible. “Unless they have a bad plan and they’re desperate – and they feel that the plan wasn’t working.”

Similarly, former City Council member Sal Albanese said during his years at City Hall former Mayors Ed Koch, Rudy Giuliani and David Dinkins got what they wanted from the Council because they had huge leverage over lawmakers. “(De Blasio’s) actually got more clout over this City Council than prior mayors because he actually was a major player in electing the speaker,” Albanese said. “You don’t have to go out and take private money from people that you’re going to be indebted to – and that’s why you’ve got seven investigations going on right now.”

By no means are such advocacy nonprofits unprecedented. Brooklyn Borough President Eric Adams has an organization promoting his agenda, which investigators are reportedly examining for pay-to-play favors. Former Mayor Michael Bloomberg worked with the Campaign for New York’s Future, which promoted a Bloomberg-backed congestion pricing plan intended to reduce traffic that ultimately failed in Albany. He also collaborated with Education Reform Now, which was staffed by some of his former campaign and government staff and which ran ads opposing teacher tenure rules as Bloomberg was asking the state government to change them.

Most of these groups, however, promoted policies that required signoff at the state or federal level; the borough president or mayor could not directly approve them.

Still, Gov. Andrew Cuomo, whom de Blasio worked for when Cuomo ran the U.S. Department of Housing and Urban Development, has used two nonprofit advocacy groups to advance state issues. The Committee to Save New York primarily promoted his economic development agenda through television ads. At the time, the group’s leaders argued the organization was needed to combat the spending of special interest groups in Albany. More recently, The Mario Cuomo Campaign for Economic Justice advocated for Cuomo’s plan to raise the minimum wage, which some Republican legislators expressed reluctance about. Unlike groups promoting de Blasio’s policies, the Committee to Save New York did not always disclose its donors. And while some say de Blasio was able to use advocacy nonprofits to circumvent spending limits tied to a public campaign finance system, Cuomo as a state representative cannot opt into such a system.

Sid Davidoff, a lobbyist who has raised money for de Blasio, said nonprofit advocacy groups are a part of political life now that the internet has ushered in additional channels for consuming news, diminishing the power of the mayor or his counterparts to use the traditional press corp to communicate with New Yorkers. As for the zoning proposal push, Davidoff said the group was likely trying to win over constituents in every corner of the city because the Council is “a creature of local politics and local opinions.” “In this case, where you have a (Uniform Land Use Review Procedure), where every community board gets involved … all expressing their opinions, local press carrying those opinions, it becomes a much larger PR problem,” Davidoff said. “That’s why the mayor felt it necessary to have his message done in this way.”

Despite their growing conventionality, these nonprofit advocacy groups have a history of controversy. State and federal investigators have reportedly been probing whether contributors to de Blasio’s nonprofit advocacy groups received preferential treatment at City Hall. The feds are also reportedly examining whether contribution limits were intentionally flouted when de Blasio and his allies raised money with the goal of delivering the state Senate to Democrats in 2014. De Blasio has repeatedly said he and his team behaved legally and appropriately. Nobody working on his campaign or in his inner circle has been charged with a crime.

Legality aside, these nonprofit advocacy groups have raised concerns that de Blasio’s strategy is weakening the city’s campaign finance system by giving lobbyists and firms who do business with the city a way to support him that doesn’t limit how much de Blasio can spend – or who he can coordinate expenditures with. Good government groups have also expressed unease that some involved with the 501(c)(4) organizations also interact with the mayor in their role as lobbyists or strategists for private clients.

Indeed, United for Affordable NYC’s board and contractors are far from strangers at City Hall. Metropolitan Public Strategies has a retainer to push the New York Hotel and Motel Trade Council’s agenda with the city. Two of United for Affordable NYC’s three board members have ties to organizations with city contracts: Carlo Scissura works as CEO and president of the Brooklyn Chamber of Commerce; and James Freedland, who left Metropolitan Public Strategies shortly before the nonprofit launched, worked at Metropolitan when it had a contract with the Mayor’s Fund to Advance NYC, a nonprofit that has coordinated the city’s public-private collaborations for more than two decades.

Metropolitan Public Strategies declined to discuss its work with the nonprofit on the record, except to say there was no overlap between Freedland’s tenure at the nonprofit and Metropolitan and to describe how the nonprofit spent the $372,500 it raised.

The city has provided varying explanations for how Metropolitan’s contract with the Mayor’s Fund was awarded. City & State began asking the Mayor’s Fund in April about Metropolitan being awarded a $122,000 contract to work with the Mayor’s Office of Immigration Affairs from February 2015 to April 2016 in building a coalition with American cities that shared the de Blasio administration’s vision for immigration reform. City & State wanted to know more about why the city’s Transparency Project Search tool noted that Metropolitan’s contract was awarded by a method described as “determined by legal mandate.” This procurement method refers to contracts that must be given to a specific firm or awarded via a particular process under a law or court ruling, according to the comptroller’s office. This is a rare occurrence. Annual comptroller reports show no contracts were classified as being signed because of a legal mandate in fiscal year 2015; four were in fiscal year 2014.

This spring, a Mayor’s Fund representative said it and the private donor who funded the initiative, The Open Society Foundation, hired Metropolitan to do strategic planning and communications using a process that followed the organization’s procurement guidelines. Asked again in August, a city spokesperson said the “determined by legal mandate” description was an error, and that the agreement came about through a sole source basis. This is a non-competitive contracting process used when officials determine there is only one company that can provide the required goods or services. In this instance, a City Hall spokesperson said Metropolitan’s history of working with various leaders, its commitment to immigration reform and its experience doing strategic communications and building a communications infrastructure in traditional, online and social media uniquely positioned Metropolitan to help launch the Cities for Action coalition.

All this interplay poses a conflict of interest, according to John Kaehny, the executive director of the government watchdog group Reinvent Albany.

“You have a nonprofit controlled by the mayor to advance the mayor’s agenda and it includes board members who are lobbyists, who are promoting the interests of clients, who have paid them. I mean, either they’re lying to their client and they can’t do anything to help them, or they’re trying to help their clients, who are trying to get something from the city, right?” Kaehny said. “There’s a whole lot of fiction there about there being these pretend firewalls. … It’s all based on a lot of legal fiction and wink-wink-nudge-nudge.”

And some critics say that such conflicts may be unavoidable when a mayor relies on advocacy nonprofits to promote his agenda.

“You’re (de Blasio) lobbying other elected officials who are sophisticated and understand the political process,” Lancman said. “You already have at your disposal, again, the biggest bully pulpit in New York City and the greatest ability of anyone or any collection of anyone to get your message out and to persuade the public to support your proposals. (De Blasio’s use of nonprofit advocacy groups is) really unprecedented and completely unnecessary. And it distorts the legitimate governmental process.”