How ACORN Profits from New York’s Eminent Domain Abuse

by Damon Root

Last month, New York’s highest court heard oral arguments in the case of Goldstein v. New York State Urban Development Corporation. At issue was the state’s controversial seizure of private property on behalf of a 22-acre development project known as the Atlantic Yards. Situated in central Brooklyn, this taxpayer-subsidized boondoggle was the brainchild of real estate tycoon and New Jersey Nets owner Bruce Ratner, who wants to build an “urban utopia” complete with more than a dozen office and apartment towers, a 180-room hotel, and a fancy new basketball arena for Ratner’s Nets to call home.

Real Estate Tycoon Bruce Ratner and ACORN's Bertha Lewis

Real Estate Tycoon Bruce Ratner and ACORN's Bertha Lewis

To get his way, Ratner turned to his buddies in big government, specifically the Empire State Development Corporation, a controversial state agency with the power to bypass zoning laws and seize private property via eminent domain. In other words, this is a classic case of eminent domain abuse. Ratner isn’t building a bridge or a tunnel or any other legitimate public project that might justify the forceful taking of private property by the state. He wants to build a basketball arena, sell tickets to the games (not to mention broadcast rights, concessions, and luxury boxes), and collect a big fat profit.

So what in the world is ACORN, a self-described champion of “social and economic justice” and “low- and moderate-income people” doing in bed with a shady corporate powerbroker like Bruce Ratner? Let’s follow the money.

In May 2005, ACORN entered into a contract with Ratner “to publicly support the [Atlantic Yards] Project by, among other things, appearing with the Developer before the Public Parties, community organizations and the media as part of a coordinated effort to realize and advance the Project.” As ACORN CEO Bertha Lewis admitted to an interviewer from Regional Labor Review, ACORN provides Ratner with “political cover–let’s face it.”

In exchange for this “political cover,” which has included large numbers of noisy ACORN members present at every Atlantic Yards public hearing, press conference, and media event–including an August 2006 event trumpeting “community support” for the project where Bertha Lewis acted as MC–Ratner pledged to include 2,250 units of “affordable housing” in the project. ACORN in turn plans to market these units, screen applicants, and oversee a housing lottery to fill the vacancies. And as the New York Post has learned, ACORN expects to make a fortune doing so. According to the Post, “Anita MonCrief, a former ACORN official-turned-whistleblower, estimates the anticipated deal could bring the group $5 million to $10 million annually over multiple years.” Not too shabby for providing Ratner with a little “political cover” while his allies in the government seize private property on his behalf.

And the cash doesn’t stop there. In May 2008, the news broke that Dale Rathke, brother of ACORN founder Wade Rathke, had embezzled nearly $1 million from the organization back in 2000. And as the New York Times reported, this crime had been “concealed by senior executives until a whistle-blower told a foundation leader about it in May.” That’s eight years of concealment by senior ACORN executives, a deeply disturbing scandal that scared away donors, dried up support, and, combined with ACORN’s notorious tax troubles, threatened to ruin the organization financially.

Thankfully for ACORN, Bruce Ratner was right there to bail them out. In September 2008, Ratner rescued his “political cover” with a $1 million loan and a $500,000 grant. This desperately-needed cash has allowed ACORN to continue providing bogus “community” support for Ratner’s corporate welfare agenda.

With New York’s highest court set to rule any day now on this shameless act of eminent domain abuse, the folks at ACORN must be getting a little nervous about all those millions they stand to lose. As Bertha Lewis recently told Crain’s New York Business, “I’ll fight to the death to get this project done.” Let’s hope the court spares her the trouble by striking down the Atlantic Yards–and severing ACORN’s lifeline to Bruce Ratner along with it.


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Posted Nov 18th 2009 at 2:02 pm in ACORN, Economics, Justice/Legal, News, Politics | 109 Comments