NYS Charity Compensation Probe: WSJ

WSJ.com reported that New York Gov. Andrew Cuomo's probe of executive pay at nonprofits is bumping up against some of the state's best-known charities with strong ties to the most powerful people in Albany, including the speaker of the Assembly and the governor himself.

Two weeks ago, a state task force named by Mr. Cuomo began asking nonprofits to submit detailed information to the Cuomo administration about their executive pay levels and compensation policies. The task force said it is collecting information on a rolling basis from all nonprofits that receive funding from the state.

But one nonprofit that had not received a request by Wednesday is HELP USA, a homeless housing group founded by Mr. Cuomo in the 1980s. The governor's sister, Maria Cuomo Cole, is the group's chairperson, and its board of directors includes Mr. Cuomo's campaign treasurer Richard Sirota and Jeffrey Sachs, one of his closest health-care advisers, according to HELP's website.

HELP operates homeless shelters and develops low-income housing around the nation and gets most of its $71 million budget from federal, state and city contracts and grants, according to its tax filings.

The nonprofit paid its chief executive, Laurence Belinsky, $546,000 in 2008—including a $157,000 bonus—and $508,000 in 2009, according to IRS filings. His salary is more than 40% higher than the median salary of chief executives of nonprofits based in the Northeast with operating budgets of more than $13 million, according to Charity Navigator, a prominent charity database.

Mr. Belinsky couldn't be reached for comment.

Another powerful group that hasn't received a letter is the Greater New York Hospital Association, which represents many Medicaid-dependent hospitals in the city region and pays its chief executive $2 million a year, according to tax filings.

After a reporter inquired about the status of data requests to HELP and the hospital association, a state official said on Thursday that the task force had mailed letters to the groups.

Meanwhile, one of the first groups to get the request was the Metropolitan Council on Jewish Poverty, a social service group run by William Rapfogel, the husband of the chief of staff to Democratic Assembly speaker, Sheldon Silver. Mr. Rapfogel received a $435,000 pay package in 2009, tax filings show.

A spokesman for the taskforce said all nonprofits that receive government money would eventually receive a request for information.

"There are thousands of not-for-profits that we are looking at, so we are sending the letters in waves on a rolling basis," said the spokesman.

Susan Lerner, the executive director of Common Cause, which advocates for transparent government, said the governor's investigation would be successful only if all charities are treated equally.

"You need an objective standard by which to judge what is or is not excessive compensation. Where are we headed with this?" Ms. Lerner said.

Jeff Stonecash, a Syracuse University political science professor, said Mr. Cuomo's probe was treading on politically sensitive ground. "There are some pitfalls here, but there's a lot of gain if he can get the right headlines," he said.

Josh Vlasto, a spokesman for Mr. Cuomo, said the investigation would be fair.

"Politics never got in the way of investigations before, and it won't now. If you think otherwise, just ask Pedro Espada," Mr. Vlasto said, referring to the former Democratic Bronx state senator whom Mr. Cuomo investigated while attorney general.

Mr. Cuomo's investigative foray into state-subsidized charities has been the object of much interest and anxiety around the nonprofit world. The governor has promised a wide-ranging review, an undertaking that could be handled by Attorney General Eric Schneiderman, whose office regulates charities.

The governor has been praised for drawing more attention to nonprofit executive pay as it has stretched deeper into six and seven figures. But, depending on how Mr. Cuomo navigates those loyalties and rivalries within the nonprofit world, the task force also carries political risk.

"I can't see that he isn't smart enough or ethical enough to see that it would be problematic to target only organizations with whom he has no connection," said Assemblywoman Deborah Glick, a Lower Manhattan Democrat who introduced a bill this year to limit compensation for hospital executives.

Mr. Cuomo assembled the task force in early August in the wake of a New York Times article that scrutinized the executive compensation of a Medicaid-financed nonprofit group that reportedly paid two of its top executives close to $1 million a year. He put two of his most trusted aides on the task force, Financial Services superintendent Benjamin Lawsky and State Inspector General Ellen Biben.

But the inquiry's goal hasn't been defined. The task force may hold hearings and issue a report, leading to potential regulatory changes and legislation.