City stipends, debit cards, city ordinances … city fiscal watchdog John Marshall Lee reminded City Council members Monday night about their responsibilities to taxpayers. His comments follow:
Ordinance–Stipends are considered reimbursements for expenses incurred while pursuing your duties … The big picture as you approved budget items this year …
• 50% of Stipend funds in past two years have not been spent by the 20 Council persons …
• And during the past few years less than 10% of Other Services line item has been spent, legally or illegally by the Council members …
• That has left you with some $150,000 as potential reductions to save taxpayers tax payments and you have failed to do so. Why?
• Just about 100% of revenues that the City has received have been spent by this administration … so your failure to trim your line items shows your wonderful cooperation with the administration … rather than with your fellow taxpayers.
Do you find those troublesome words? Are they harsh on your ears? I am sorry but things are not as easy in many homes or businesses as they are in City Hall obviously. When a question is asked of me in my business, I must supply an answer. A handful of you have on occasion come forward to ask a question of me. That is good. I know there is some listening going on. But as for the rest of you, when the curtain comes down, as it is likely to do, there is no place for you to hide. What do I mean by that?
Ordinance update … Do any of you realize on September 25, 2012 #22-11 Proposed Amendments to the Municipal Code of Ordinances, Chapter 2.06 Common Council, amend Section 2.06.040 Reimbursement of Council Member’s Expenses (stipends) was addressed? Council Member Curwen moved to Table. Council President McCarthy seconded and the motion passed unanimously. Ordinance members present to vote were Paoletto, Marty McCarthy, Curwen, Bonney, and Blunt. The last four are no longer part of the Council. Non-Ordinance members in attendance were Brannelly and Council President McCarthy. In addition past members de Para and Olson were present.
So the matter has been TABLED for nearly two years.
• While a new UNAUTHORIZED system is in place.
• With Debit cards that provide funds before they are expended
• And a reporting system that does not require a statement of purpose for the expenditure by the Council member
• And the newer system does not integrate expenditures for travel, hotel, meals away from home, etc. on trips to municipal meetings.
• And the system seems to therefore be treating all expenses as non-taxable whereas that was not the conclusion of previous operating legal opinion
• And individual Council persons have exceeded the $9,000 ceiling in recent years although that could not happen in a healthy reimbursement program
• And the past Council member who moved to table 22-11 twenty months ago left the Council with over $2,000 owed to the program from such an overage. Has it been returned?
• Do you care about voter funds at all?
And a close look at more than one set of reimbursements over a year provide no reasonable assurance that such stipend provided by a debit card transaction is reimbursing a Council expense. A debit card user signs an acknowledgement that funds cannot be used for charitable or political purpose, but your report does not make it obvious that it is not for personal use either. Why not? Will you clean up this poorly operating mechanism? Whether you are using this or not personally, the public needs to be clear that Council behavior is OPEN, ACCOUNTABLE and TRANSPARENT. Step up and put the item on the Ordinance Committee agenda and eliminate my comments about your negative behavior in taking care of business. Someone may have already referred this to the IRS. The Feds have much more authority, power and interest in securing every last tax dollar that is due than I do. Clean up your act, please, and do so quickly. Time will tell.
John Marshall Lee, you know as usual you are right on point and I wish more people cared about issues like this as much as you. With that said, how do you think the City Council will listen and trust you when you said this, “Someone may have already referred this to the IRS. The Feds have much more authority, power and interest in securing every last tax dollar that is due than I do. Clean up your act, please, and do so quickly?” This is not being critical of you because I agree with you but how are they going to take this?
As briefly as I can, let me respond by the numbers:
1.) I am on point regarding the stipends (and I also wish there were more people standing up and complaining). Can I provide you with a ride to the next Council meeting where you can improve on my style?
2.) The facts are there. I searched them out on the City site. Since the tabling of the Stipend Ordinance, no one has paid attention to this, but because of a new process that, if anything, gets them farther from their own rules, they get into deeper problems each month. (If anyone wants to refute what I am saying they can do so at any time, from the Council or the Finance Office.)
3.) How will the Council listen to me? Good question. Some of them do not. Should I take that as a sign of disrespect? That is a topic that is near and dear to some of my black friends. (For instance I could be greatly offended when certain Council persons come to City Hall and (like the Mayor) retire to the Democratic Chamber until public speaking is gaveled complete. I see it rather as a type of ignorance since I have been speaking TRUTH to their POWER for several years and have no lack of future subjects to continue this five-minute commentary process.
4.) Trust me? You worry about them trusting me? What is there not to trust? Perhaps you mean I should sugarcoat the message? I tried during the first year of my addresses to the Council to look at things as they may. I told them about the info they were not getting (but they weren’t asking for it either, and except for a few of the new members that has not changed). I told them about how understaffed they were with one legislative aide, but a larger budget (and they allowed Council President McCarthy to remove all staff members at the end of that budget session and now the City is handling another court case because of how they pursue getting their way). So I have come around to the impression that being recognized when I attend a senior session, or a food pantry, or a grocery store and someone says, “Keep it up, I have seen you on TV. Thank you!” I am reaching an audience Council persons are supposed to represent. I am telling the Council what others would say if they did the same research I have done and had as few pressure points to get conflicted with when I address the City leaders.
I have become a student of City governance and have been at it long enough to make connections with people, with concepts and about the handling of money, the money of taxpayers: locally, statewide and federally.
Ron, it is interesting to note the newer Council members are more open to comments and feedback. On the whole they may be a bit younger, have a different concept of service than those who elected them, and find what I say not personally threatening because they were not part of the ILLEGAL EXPENDITURE OF OTHER SERVICES FUNDS. They also were not here when the leadership failed to continue to review the Ordinance on Stipends. More truth to power. Can they stand it? Who cares about the IRS or the Feds or being sued in State Court? Only those who are crossing the line with conflicted behavior? Time will tell.
“1.) I am on point regarding the stipends (and I also wish there were more people standing up and complaining). Can I provide you with a ride to the next Council meeting where you can improve on my style?”
You have been following a money trail from a specific source–taxpayers. You’ve lately been on a money trail similar to the one I’ve been on for a little while now–nonprofit money.
Recently, I filed a complaint against a Bridgeport 501(c)(3) nonprofit agency. In 2012 this nonprofit received payments for wages (twice) from a political campaign committee in violation of IRS rules. The total wages were $2,800. You want to talk about “crossing the line” a little too much for me? Before I filed this complaint, I filed a series of complaints with the State Elections Enforcement Commission last month. Two weeks after receiving the complaints, SEEC notified the parties named on the complaint as their normal procedure before the commission hears the complaints and votes to investigate or reject the complaints on its merits. One of the people named on the complaints had the gall to call me and politely ask about the complaint I filed. I knew what game he was playing and I played along and played him back. I told him one important detail of the complaint and even told him who the witness was. As I expected, the next day a woman representing a key target of the complaint called the witness and asked him to provide them with a letter stating he had indeed contributed $100, when in fact this person didn’t know about the alleged contribution until I reached out to him and presented documentation. The witness refused to go along with the request. On 5/14/2014, SEEC voted to investigate all three complaints. Have you guys and gals ever heard of Witness Tampering?
For every action, there is a reaction. Next time I hear of anyone participating in witness tampering, intimidation, bribery or any other means in order to prevent the truth from being exposed, WE will respond appropriately in due time.
Let me give you a weapon that will improve your style, JML.
Ron, who gives a shit how they take it, they are not a group of holy men and women who are above criticism. You have council people in your district who spent my money and your money to pay their cable bill and to pay their grocery bill at Stop&Shop. You have a council president making more than $110,000 who overspent his stipend money.
To make matters worse these big spenders then donate our money to their favorite charities. Just an example here; Marella’s PAL received money as did the drum corps Marella and Vizzo belong to.
Do you really think by being nice to the council members they will say mea culpa let me return the money I took or wrongly spent? Yeah and I believe in the tooth fairy.
Andrew C Fardy, I agree with you but what I was saying is they will think JML has informed the IRS on them and I was asking did he think those members will listen to him because it seems he wants them to take what he is saying and act on it. Look And, you and I wouldn’t gives a shit but I don’t know what JML wants.
Great work and chutzpah, John Marshall Lee.
OIB readers! Note this date in your diaries: The day Ron Mackey offered an olive branch to John Marshall Lee … and JML seemed OK with that.
Will these two join forces to improve the city?
I hope so. The thought of it brings to mind two moments in time we know well:
“Ask not what your country (state, region, city, neighborhood, or neighbor) can do for you; ask what you can do for your country (state, region, city, neighborhood, or neighbor).”–JFK
“I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character.”–MLK
I called the IRS and they told me the city should send out 1099-MISC every January.
They said, if you’ve been doing a little moonlighting as a consultant, you may be a little bit surprised to get one or more IRS forms 1099-MISC in the mail come January. If you thought you weren’t going to have to pay taxes on that “extra” income, think again. The IRS defines gross income as “all income from whatever source derived.” Included in gross income are compensation for services, including fees and commissions. If a business pays you $600.00 or more in a year for your consulting fees, they have to report it to the IRS on form 1099-MISC. You’ll receive a copy of the 1099-MISC too. Don’t throw it away; you’ll need to report that income on your return. I hope I didn’t get anyone in trouble when they asked me for some names.
Thanks Joel, your local masonic lodge is most likely registered under 501(c)(10) as a “fraternal organization.”
But otherwise your point is valid, 501(c)(3) isn’t restricted to charities. It also encompasses religious, scientific, amateur sporting events, arts and animal groups.
However, they should all appear in IRS Form 78 subject to a few exceptions. Sometimes a group is actually listed under a different (parent) name as llworking points out. In addition certain Native American groups and small religious organizations are exempt from filing and won’t appear.
There have been a number of references to getting the Feds involved on the OIB site over the past few years. I have not contacted the IRS personally. That is all I will say.
But if the IRS captures the attention of Council members, why is it? Because they are not paying attention to business? Because they may be using stipends, relying on TAX EXEMPT status that may be questionable, etc.? Well why get upset with the MESSENGER. They have the ability to take the necessary action and “clean up your act” as I said last night. Time will tell.
So let me get this straight, if Shelton Mike Marella and Sue Brannelly donate to PAL, and other City Council members are donating my tax dollars to various charities, then I should receive that same deduction as well on my tax return.
Jim, give it a try. You will be contacted by the IRS. The council, not a chance.
Andy, you’re right! I’d like to see how many of these so-called charities are 501(c)(3)’s.
For your convenience–
When a charity receives $250 or thereabouts in a year they owe them a letter indicating the funds were received with or without any gift of value. Of course it is just plain good marketing and courtesy to thank donors.
Does any one wonder to whom such letters were sent? Did they go to Mayor Finch? Perhaps to Council President McCarthy? Or to each of the Council donors identified on the purchase orders?
And that also raises the question whether any of these funds were used to fund a personal promise or pledge of each respective Council person. The point is the sum of $30,000 of taxpayer money was sent in over 50 checks by 75% of then-sitting Council persons (15 of 20). No services were provided to the City and presumably to the Council persons. I delivered a letter to the Mayor’s office on Friday May 9 with FOI language, but have not received the normal FOI response. Stay tuned. Time will tell.
Does anyone besides me find it odd this serious matter is discussed on a local blog and not covered by the CT Post?