Controversial Non-Profit Awarded Financial Aid Package From City

NY 1 News/September 14, 2006

The Bloomberg Administration awarded a $12.5 million financial aid package of tax exempt bonds to a controversial non-profit The All Stars Project Tuesday.

It's the latest chapter in the story of a group NY1 first reported on last year.

With little discussion or debate Tuesday morning, The All Stars Project received $12.5-million in tax exempt bonds.

By a vote of 6 to 4, with one abstention, the city's Industrial Development Agency approved the bond deal that will save the youth charity more than $200,000.

All Stars was founded by Lenora Fulani and her psychotherapist mentor Fred Newman, two politically active figures, accused of being anti-Semitic and of being involved in a cult -- accusations both have denied. But the head of the IDA says there was a through review and All Stars came up clean.

"We have determined that the organization is in good standing," said IDA board chairman Joshua Sirefman. "We found no evidence of misconduct of any kind by the organization and we established that the project would benefit the city."

Several elected officials called it an outrage. Representatives for the city comptroller, Bronx, Queens, and Manhattan Borough Presidents voted against the plan.

"It is a real tragedy that we are going to give away millions of dollars to an organization where there are sexual harassment complaints, child abuse complaints. This is a well-known organization that has been run by Lenora Fulani and Fred Newman, known anti-Semites, known bigots," said Manhattan Borough President Scott Stringer.

Despite that criticism, all of Mayor Michael Bloomberg's appointees to the IDA board voted for the bond package. During his two campaigns for mayor, Bloomberg received the backing of Fulani and Newman's Independence Party line.

In return, the mayor has donated hundreds of thousands of dollars to the Party and was a vocal supporter of All Stars. His administration has helped the organization yet again. If not for the deal, one board member says All Stars would probably be in financial trouble.

“If I looked at that financial report, the income was going down, cash flow was going down,” says IDA board member Bernard Haber.

In a statement, All Stars president Gabrielle Kurlander didn't address that claim.

She responded, "This was a case where the politics of destruction threatened to derail sound public policy, but the IDA made its decision on the merits, not the headlines."

But, people who have spent decades tracking Fulani and Newman are stunned the city would support such a group. There is a clear history of Newman exploiting children, teens and their parents as well as naive adult volunteers.

Borough President Scott Stringer says even though the vote didn't go his way, he'll use his position to keep up the fight.