6850: Seabrook Is Fishy.

Great. The New York Times is reporting that New York City Councilman Larry Seabrook—a key figure in the diversity drama with Madison Avenue advertising agencies—is now being investigated for shady rental schemes. Let’s hope he’s not involved with the new Ogilvy headquarters.

Subpoenas Issued to Landlords Who Rented to Councilman

By Ray Rivera

Federal investigators have begun issuing subpoenas to landlords who leased space to City Councilman Larry B. Seabrook and several nonprofit groups closely linked to him after a published report last week that the groups had billed New York City more than $100,000 in inflated rent payments.

At least one of the landlords confirmed receiving a subpoena this week from the Justice Department but said he was instructed not to discuss it.

“I got it, that’s all I can say,” said Herb Brooks, who leases a building at 3687 White Plains Road in the Bronx and sublets it to Mr. Seabrook for his City Council district office and for nonprofit groups linked to him.

The New York Times reported last week that in at least two cases, Mr. Seabrook rented buildings from landlords at one price and struck side deals with the landlords to share the space, for an additional fee, with a nonprofit organization he founded. The organization, the African-American Bronx Unity Day Parade Inc., then sublet the space at far higher rates to three other nonprofit groups that were run by the councilman’s associates and funded through his Council discretionary funds, city records and interviews showed. Two of the nonprofit groups also billed the city for a building they did not occupy.

From July 2004 through March 2007, the city paid more than $156,900 in rent reimbursements for space that cost the parade organization only $40,000 to rent, The Times found.

Mr. Brooks, for example, said Mr. Seabrook personally arranged a deal with him in 2005 to rent part of the building at $30,000 a year for his district office to be paid directly by the City Council, and to use the remaining space for nonprofit groups for an additional $10,000 a year.

But city records show that two nonprofit groups, the Northeast Bronx Redevelopment Corporation and the African-American Legal and Civic Hall of Fame, submitted invoices to the city indicating they had paid $72,000 a year, on top of the $30,000 paid by the Council. The invoices listed the African-American Bronx Unity Day Parade as the landlord. Mr. Brooks said he had nothing to do with the city billings and only received the $40,000 he billed directly to Mr. Seabrook.

A lawyer for another landlord said he could not discuss whether his client had been subpoenaed. A third landlord said she had not yet been contacted by the authorities.

The subpoenas appear to be an expansion of an investigation underway by the city’s Department of Investigation and the United States attorney’s office for the Southern District of New York, which have been looking into the spending practices of nonprofit groups that receive money through the City Council and other government agencies. The inquiry has led to the arrests of two Council aides and two nonprofit officials, but has not implicated any council member. Both agencies declined comment on Wednesday, and calls to Mr. Seabrook’s office were not returned.

Russ Buettner contributed reporting.