New York City Tax Assessors Run Amok

Corruption Reduces Property Assessments... In this post-Enron ("I'm not an accountant") world, maybe we've all become a little cynical. But I was struck by the chutzpah demonstrated by the fifteen assessors in Manhattan, recently charged with racketeering, bribery and fraud by the U.S. attorney. (New York Times, Feb 26, 2002)

According to the Times, the multi-year investigation of the real estate assessors office "penetrated the clannish and insular world of lifelong bureaucrats bound together ... by millions of dollars of bribes ... working cheek to jowl in a grimy bullpen. ... The scheme reduced the tax rates on some 500 properties corruptly. ... Several investigators likened the closed world to that of an organized crime family, where the bonds are born of years of committing crimes together." This is a real estate story? Oh-oh.

According to the indictment, the ringleader, Albert Schussler, described as a tax consultant, funneled millions of dollars in bribes to assessors "ranging from expensive dinners to thousands of dollars in exchange for desirable assessments. ... Some owners said that Mr. Schussler charged a flat retainer fee for his services, ranging from $200,000 to $400,000 for a portfolio of buildings."

No landlords or managers have been charged. And "The fact that owners willingly paid Mr. Schussler's extravagant fees is not proof that landlords condoned bribery." According to one property owner, "Sometimes we pay lawyers huge amounts of money to speak on our behalf. We pay lobbyists. That's the system we live in." Wow, there sure is a lot of money seeking to influence theoretically objective valuation judgments.

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