Since 1982, Tom Soter has been an editor at Habitat magazine, the definitive publication for boards of cooperatives and condominiums in New York City.
From HABITAT, May 2010
From the Editor 19: Corruption
BY ANY OTHER NAME
Our connection was bad, but I could make out the words “corruption” and “dishonest” and “board” from the voice at the other end of the line.
“Can you ring me back?” I asked my caller, intrigued by his words and feeling as though I were in an episode of Danger Man. When we got a better connection, I didn’t know whether he was telling the truth or just something like the truth. Charges of board corruption are hard to prove and, in my experience reporting on such accusations, there is often more smoke than fire to a lot of these claims. Like the woman who started off her complaint by charging that the board president was more evil than “Rasputin and Stalin combined” (considering that Stalin alone killed thousands of innocent people, this president must really have been some wicked dude).
Sure, there are the blatant examples of theft – shortly before Christmas 2009, Matthew Stoll, the treasurer of a Rockland County condo board, pleaded guilty to stealing $130,345 from the Sussex Condominium III Association – and a number of board directors were actually indicted in 1997 when the Manhattan D.A.’s office went after managers and boards with great gusto.
Still, even when things seem clear-cut, they can become muddy, because the truth can be muddy. Take a story I had written about the Greenhouse Condominium in 2003. As I wrote then: “Depending on who you talk to, the Greenhouse Condominium is the best-run/worst-run, most financially stable/least financially stable property in Queens. Its former board members were a highly efficient/barely competent group of people who only did what was best/did not have a clue about what was best for the 74-unit building.”
And, of course, there were the inevitable charges of self-dealing and corruption hurled at the Greenhouse board and the managing agent, both of which denied any wrongdoing. I spoke to the dissidents, I spoke to the managers, I spoke with the board. All seemed credible. But the bottom line was that money was missing and the finances were a mess.
The kindest explanation is that the board members did the best they could, but that it was too much for them. After all, there is no training for boards – outside of what they get at seminars held by the Council New York Cooperatives & Condominiums and the Federation of New York Housing Cooperatives & Condominiums – and certainly no compensation. Would it be so surprising, considering the hours and effort many board members spend on board matters that they didn’t take a perk here or there? No cash, but maybe accepting a gift from a contractor or two? Not that such gratuities are proper, of course.
I know that I never took a perk as a board president – in fact as an editor of Habitat, I once sent back a fruit basket given me by a source, who probably thought I was a bit fruity to carry objectivity that far – but that didn’t stop a bitter former manager of my co-op from hurling charges of self-dealing at my board when I met him at a conference. Although untrue, the accusation gave me pause: what self-dealing? He never specified (the conversation didn’t last long enough), but it’s the kind of thing that makes you think twice.
Not everyone is introspective, however. The dissidents who wanted to overturn the “Rasputin-Stalin” board had little knowledge of how a cooperative was run, and blamed their lawyer for their failure to oust the board members at a special meeting (they had used an incorrect voting procedure in their get-out-the-vote efforts and then misunderstood what had happened). They hired a new lawyer, and they are now talking about putting a lien on the board members’ apartments, which, of course, the board members will have to fight, using the co-op’s money. But the irony (lost on most dissidents) is that when they are suing the board they are suing themselves.
Such incidents should make us rethink the big issues of board compensation, training, and what a cooperative is all about. If the board members – and would-be board members – had more co-op/condo education, there would probably be fewer silly charges and baseless disputes because (hopefully) everyone would know better.
Then again, at a federal level, education and compensation haven’t spared us from the worst Congress in living memory.
Hmm. On second thought, maybe the volunteer system isn’t so bad after all. At least you get to hold meetings at home.
from HABITAT May 2010