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Mayor Menino reveals donors to city charity

Says he will make fund more transparent

Mayor Thomas M. Menino, seen in Copley Square on March 15, says he will make the city-run charity more transparent. (Wendy Maeda/Globe Staff) Mayor Thomas M. Menino, seen in Copley Square on March 15, says he will make the city-run charity more transparent.
By Andrew Ryan
Globe Staff / March 25, 2012
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Mayor Thomas M. Menino controls a charity at City Hall that some years collects more than $1 million to pay for festivals, a toy drive, and other initiatives important to the mayor. But unlike political contributors, the benefactors who give money to the Fund for Boston Neighborhoods often have remained confidential, shielded by the anonymity of federal tax law.

Donors have given $12.5 million to the city-run charity since Menino took office in 1993, and contributors include large corporations, developers, law firms, contractors, lobbyists, and others with business before the city.

For years, the Menino administration used the nonprofit to collect donations that were akin to rent payments from advertising firms, movie companies, and other commercial entities that used City Hall Plaza and other public land, taking in more than $250,000 in site fees since 2009.

Established by Kevin H. White while he was mayor, the charitable arm of city government is legal, and there is no evidence of wrongdoing. But government watchdogs say there is always the possibility of peril when corporations and other entities - especially those with business before the city - can make unlimited donations out of public view.

“This is an area that cries out for full transparency,’’ said Pamela Wilmot, executive director of Common Cause Massachusetts, a government watchdog. “All donors should be disclosed. This is an entity that is controlled by the city, and by having secret donors, there is a potential for using a contribution as a way of gaining access and influence.’’

After almost six months of records requests and inquiries from the Globe, Menino has released for the first time a comprehensive list of donors and a line-by-line accounting of recent expenses. Looking ahead, he vowed to make significant changes to the nonprofit.

“We’re going to have a website out there that shows where the money is coming from, and where the money is being spent,’’ Menino said last week in an interview. “We’re going to add transparency to it.’’

The fund will no longer collect payments for events and promotions on City Hall Plaza and other public land, said Menino’s spokeswoman, Dot Joyce. Fees will now be paid to the city’s general fund, which is subject to oversight by the City Council. For the first time, city officials plan to establish a set of defined rates for using City Hall Plaza; until now, fees have been negotiated on an individual basis and varied from event to event.

While vowing to overhaul the nonprofit, Menino vigorously defended the charity and said donations do not influence decisions made by his administration.

“If we didn’t have this fund, a lot of events we have in neighborhoods in Boston would not exist,’’ Menino said. “If I were to spend all this money on parties, the headline would be, ‘Mayor spends money on parties.’ But what I’m doing is using private resources to make sure people have a livable city.’’

That translates into victory parades for championship sports teams, turkeys at Thanksgiving, and the Boston Arts Festival. The fund also has paid to bury young victims of violence.

“There’s a wide range of activities’’ financed by the city’s charity, said Wilmot of Common Cause. “Some are clearly aimed at making the mayor a popular person in the community.’’

The fund emerged into the spotlight last fall as competition to build a casino in the Boston area heated up. The Globe reported that the owner of Suffolk Downs, Richard Fields, had donated to the charity. The newly released city records show that from 2007 through 2011, Suffolk Downs and Fields contributed $47,500 to support neighborhood arts and the holiday toy drive.

After the Globe’s report, the charity returned a $5,000 donation from Suffolk Downs because city officials said they wanted to avoid any appearance of impropriety. Menino has been a vocal booster of the racetrack’s push to build a casino in East Boston.

In a statement, Suffolk Downs said it strives “to be a good neighbor and has a longstanding record of contributing to local charities, especially those benefiting neighboring children and families in need.’’

The Fund for Boston Neighborhoods was founded in 1968 to raise money for summertime concerts. As a nonprofit not subjected to City Council oversight, the fund can immediately cut checks for performers and vendors, making it easier, Menino said, to stage events like last year’s parade for the Boston Bruins on short notice.

Over the years, the fund’s mission has expanded to pay for programming at the city-owned Strand Theatre in Dorchester and much of the budget at the Parkman House, a mansion used by the mayor for meetings and official entertaining.

Most of the money comes from tax-deductible contributions, many of which are restricted by the donors for specific purposes. But the fund has other sources of revenue, including ticket sales and registration fees at city-sponsored events.

From July 2010 through June 2011, the charity recorded $1.6 million in revenues; more than $940,000 of that came from charitable contributions.

During that period, the top expenditures included roughly $524,000 for Hub on Wheels, an annual event that administration officials said drew 4,000-plus bike riders to city streets. More than $223,000 was used to pay for the Mayor’s Cup, a professional bike race that officials said attracted over 5,000 spectators.

But 2 1/2 years of expenses provided by the city showed the fund does more than support cultural events.

The charity paid for extras that might be hard to justify with tax dollars, such as $778 worth of gifts for departing city employees. The presents included an engraved weather station for a retiring police captain; $150 charm bracelets from DePrisco Diamond Jewelers; and a $138.13 American Express charge at high-end clothier Thomas Pink with the handwritten note “TMM gift,’’ using Menino’s initials to indicate that the item was for a staff assistant leaving the mayor’s office.

The charity paid $500 to rent a horse-drawn carriage for Menino so he could lead the First Night 2010 parade, shortly after undergoing knee surgery. It allowed his administration to give away roughly $150,000 worth of presents to more than 4,000 needy families each Christmas.

The holiday toy drive began with 30 families when Menino first became mayor, he said. In 2011, the charity raised nearly $127,000 for the effort from donors such as Bank of America, Pipefitters Local 537, building giant Suffolk Construction, developer Boston Properties, and a few dozen individuals, including city department heads and other high-ranking members of Menino’s administration.

“When we deliver [toys], my name isn’t on the bag. Nothing identifies it as the mayor’s office,’’ Menino said. “Government is about helping people.’’

Records show when a 14-year-old boy was gunned down on Bowdoin Street in 2010, the charity paid for burial services ($2,800), food for bereaved relatives ($300.85), and a limousine for the funeral ($250). The fund paid for at least one other funeral for a young person killed by street violence.

“Those families were so desperate,’’ Menino said. “I just said, ‘We’ve got to do something.’ ’’

The nonprofit picked up the $1,539 catering tab on Election Day in November 2010 for food in the mayor’s office, when city department heads, civic leaders, and journalists waited for voting returns.

Other cities have charities that allow elected officials to solicit private money to pay for events that might not be appropriate for taxpayer funds.

The Mayor’s Fund to Advance New York City, for example, has helped preserve portraits in City Hall and expand the number of salad bars in schools. The New York fund reported $28.8 million in contributions in 2009 and has a website where it promotes its accomplishments while also posting a newsletter, annual report, and IRS filings. But the site does not list contributors, and Mayor Michael R. Bloomberg’s office did not respond to inquires about whether donors’ identities are made public.

The Fund for Boston Neighborhoods has not had a website, but it does submit annual reports, audits, and limited financial filings to the state attorney general’s office and the IRS.

Boston’s city-run charity is headquartered on the eighth floor of City Hall. A city employee hired by the mayor, the director of the city’s arts and tourism office, serves as the fund’s president. That gives Menino the power to hire and fire the fund’s chief. Menino also chooses all the other members of the charity’s six-member board.

“It’s fundamentally flawed because the mayor appoints the entire board,’’ said Daniel Borochoff, president of CharityWatch, a nonprofit watchdog. “A fundamental concept of a well-governed nonprofit is to have independent people oversee it.’’

In an interview, Menino rejected the criticism, but said he planned to appoint a board of advisers to help oversee the fund, similar to the structure used in New York.

As a nonprofit, the charity is not subject to the same open record laws as a government agency. Federal law stipulates that charities do not have to make their donors’ identities public.

Earlier this month, the mayor’s office provided accounting ledgers that showed almost all donors dating to 1993, the year Menino took office. Under Menino, contributions grew, hitting a high point of more than $2 million in 2004. That was the year the city hosted the Democratic National Convention and a World Series victory parade for the Red Sox, events that garnered sponsorships made through the fund.

In 2011, the fund received $1.2 million in contributions, an amount that included $445,000 from 14 companies that sponsored the Bruins’ Stanley Cup victory parade. Donors included Dunkin’ Donuts ($50,000), JetBlue ($50,000), Mohegan Sun ($25,000), and Suffolk Construction ($25,000). Expenses showed significant costs for the celebration, which included $128,465 to rent barricades to line the duck boat route, and $19,310.50 for balloons and confetti launchers.

“That’s why I think it still serves a purpose. That’s not an event that should be covered by public funds,’’ said Samuel R. Tyler, president of the Boston Municipal Research Bureau, a fiscal watchdog funded by businesses and nonprofits. “But I think there needs to be public scrutiny to make sure that donors are not companies looking to curry favor with the administration.’’

The records show that The Globe donated a cumulative $60,000 in advertising space in 2004 and 2005.

The largest donor since Menino took office has been John Hancock, contributing more than $527,000 over 14 years for a summer scholars program, a waterfront festival, and other events.

“For decades, John Hancock and its parent Manulife have been supporters of initiatives that improve the lives of Boston’s citizens and make the city great,’’ the company said. “Last year alone, John Hancock contributed nearly $12 million to a wide range of charitable organizations in the city of Boston.’’

The retailer Target began giving in 2004, the year its only Boston store opened. Its donations since then have totaled almost $525,000 and been used to sponsor arts festivals, an annual Martin Luther King Jr. celebration at Faneuil Hall, and literacy efforts.

The big-box chain recently completed a major expansion of its store and has been eyeing new Boston locations. A Target spokeswoman said that “giving in Boston is consistent with Target’s philosophy on giving in every community in which we do business.’’

Target’s main competitor, Walmart, made a $4,000 donation to the Strand Theatre in 2011 but has not made other contributions, according to city records. Menino has opposed Walmart’s efforts to build a store.

His administration rejected the suggestion that donations to the mayor’s charity could influence the awarding of city contracts or approval for development projects.

“A skeptic could say that they are doing business with the city and making contributions,’’ said the city’s chief lawyer, William F. Sinnott, adding that the city recently had been in touch with the State Ethics Commission to make sure the charity was proper. “But what that ignores is Massachusetts has some of the strictest procurement and bidding laws in the nation.’’

Some companies that donated to the fund gave money only once. Wall USA gave $10,000 in 2000, the year after the company won a controversial city contract worth $130 million to build bus shelters. In awarding the work, Menino overruled an advisory panel. The Globe reported at the time that Wall USA had hired consultant Connie Kastelnik, the wife of one of the mayor’s top political advisers.

Wall USA has been purchased by another company, JCDecaux North America, which did not respond to phone messages seeking comment.

Developer Millennium Partners donated $10,000 for Menino’s toy drive in 2009. The Menino administration recently announced that Millennium Partners was taking control of the long-idle Filene’s property in Downtown Crossing to build a 600-foot tower.

Joseph Fallon, the developer building an $800 million headquarters for Vertex Pharmaceuticals Inc. in South Boston, has also been a significant contributor. The project won almost $12 million in city property tax breaks. Fallon and his company have donated $51,125 cumulatively from 2008 to 2009.

In a statement, Fallon said: “The Fund for Boston Neighborhoods has a record of helping those in most need and producing quality events for the enjoyment of many Bostonians and visitors alike. It’s good for the city and helps continue to bring a vitality to our community.’’

Andrew Ryan can be reached at acryan@globe.com Follow him on Twitter @globeandrewryan.

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