RIOC Is Not a State Agency... According to RIOC

David Stone
RIOC Is Not a State Agency... According to RIOC

On an otherwise quiet Friday afternoon, I read a forwarded email in which RIOC Assistant General Counsel Lada Stasko rejected a Freedom of Information request. Her explanation: “Please note that the Budget Bulletin H-1032-Revised, dated July 16, 2014, applies to State agencies, and RIOC is not a State agency.” (emphasis added)

RIOC Is Not a State Agency?


“Do you stand by this claim that RIOC is not a State agency and therefore, in this context, not bound to compliance with State purchasing guidelines?” I asked General Counsel Jaci Flug and President/CEO Susan Rosenthal in an email.

Turns out, at least Flug does.

“Yes, we stand by this statement,” she replied.

“RIOC is public benefit corporation, not a state agency,” she explained, adding (condescendingly, I felt), “For example, the Department of Motor Vehicles is a state agency under the executive branch. RIOC is a public benefit corporation, not an agency. “

In the same spirit, I offered my own guidance. “Please be advised that this website lists RIOC as a State agency.” 

The website’s header is a smiling photo of Andrew Cuomo, and it has a ny.gov web address. 

“Maybe,” I added, “you need to tell Governor Cuomo about this mistake, so he can release RIOC from the rules.”

The web page is accessible as a hot link on two significant State grant guideline pages: Prequalify for State Grants and Grants Reform.

Each page represents a New York State initiative begun in 2013 and intended to clean up a messy, ineffective process. The new effort “…allows the State to screen nonprofits before they apply, ensuring that the State is only partnering with eligible, responsible nonprofit organizations.”

Stasko and Flug suggest, although neither would answer a direct question, that the requirements do not apply to RIOC.

Flug made a partial concession after I shared the ny.gov website with her.

“You are correct, there are many public benefit corporations listed on this link that are not agencies but rather authorities.”

So, the State Executive’s office, that is, Andrew Cuomo’s, was mistaken.

But she invited a more direct question: “Do you have a specific question for RIOC?”

“Yes,” I answered. “Is RIOC claiming not to be required to follow Prequalification Guidelines?”

In response, Flug wrote, “David- if you’d like to come in and have us really explain the relationship with HCR and who is required to use grants gateway and who is not we can set up some time next week.”

But she never answered the simple, direct question, even after being asked a second time for a simple "Yes" or "No" answer.

What are we talking about here, anyway?

We’re talking about an ambitious effort by the State to do a more responsible job of awarding grants to nonprofits. This matters fundamentally to Roosevelt Island  because RIOC has come under fire for its handling of Public Purpose Funds, specifically giving money to the Roosevelt Island Seniors Association, just months after the nonprofit had its contract for managing the Senior Center terminated for cause.

Not just that, people who researched the RISA grant report that it was awarded even though the group did not meet RIOC’s own guidelines for timing, was not carefully vetted and appeared to rely on preferential treatment not extended to other applicants.

A quick check with the State agency that oversees pre-qualification of nonprofits shows — and would have shown RIOC — that RISA has never applied for or been awarded pre-qualified status.

According to the guidelines: “Grant applications from nonprofits are not evaluated if the nonprofit is not prequalified at the due date and time of the grant opportunity.”

In other words, RISA would not even be evaluated for, let alone awarded, a grant by any State agency that followed the rules.

It seems to us that, even if RIOC is not bound by the Grants Reform effort, a questionable claim at best, due diligence would mean at least checking in before handing over public money — and being prepared to handle questions about it directly.

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