William Rapfogel’s Empire at Met Council Extends Deep Into Real Estate
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By Josh Nathan-Kazis October 14, 2013
From his office above Manhattan’s Financial District, William Rapfogel controlled a charitable empire much larger than most understood.
His organization, Metropolitan Council on Jewish Poverty, gave food to poor Jews. But it also cooked up massive real estate deals with powerful for-profit developers, throwing up new low-income housing across the city.
All told, Met Council and its nearly 30 not-for-profit subsidiaries spent $112 million in 2012. That’s far more than the $27 million budget of Met Council itself, which has been cited widely in coverage of the group since Rapfogel’s surprise August departure in connection with a corruption probe.
That makes Met Council one of the dozen or so largest Jewish charities in the United States.
Today, the organization says that its very existence is threatened. Rapfogel was charged in September with stealing $5 million from Met Council; his predecessor, Rabbi Dovid Cohen, is reportedly under investigation for participating in the same scheme. City and state officials have suspended nearly $13 million in pending grants.
“We take these matters extremely seriously and are working as hard as we can to restore the confidence of our government regulators,” a Met Council representative said in a statement. “The freezes on our city and state contracts have the potential to affect the long-term viability of Met Council.”
If Met Council were, indeed, to become unviable, its fall would echo far beyond its Maiden Lane headquarters, and even beyond the soup kitchens and social service outreach centers it supports in the outer boroughs.
Met Council owns and operates 25 low-income housing developments and has two more in the works, plus a large home health care arm. The entire apparatus received $90 million from state, local and federal governments in its 2012 fiscal year. The council has also nurtured close relationships with many of the city’s largest developers, who have collaborated with it on projects and have rubbed shoulders at its galas.
City and state authorities began freezing pending grants in August, when Met Council terminated Rapfogel and Cohen. Those frozen funds represent some $8.2 million on an annualized basis for Met Council, according to a person familiar with Met Council’s state and city contracts. The grants support programs that serve 60,000 people. It’s unclear how long it will be until Met Council runs out of money to operate the programs.
One government-funded Met Council program that helped seniors navigate the Affordable Care Act has been frozen since early October, when a New York Post story revealed that it had been awarded a new contract despite the corruption probe. Seven Met Council employees hired to run the program have been let go.
“Without access to public funding, we simply will not be able to continue delivering the essential services we have been contracted by the city and state to provide,” Met Council said in its statement.
One powerful indication of Met Council’s reach into the world of influential developers could be seen August 15, 2012 — a year before the fraud at Met Council was first uncovered — at a lunchtime gala under the 59th Street Bridge.
The occasion was Met Council’s annual Builder’s Luncheon, a fundraising event that brought in roughly half a million dollars a year for the group. The venue was Guastavino’s, a wedding hall with high-vaulted ceilings and towering windows.
New York developers and contractors, many of whom had done work with Met Council, packed the venue alongside politicians and Jewish communal officials, including Rapfogel and Cohen. It was perhaps the best showcase of Met Council’s immense power and access.
Cohen, whom Met Council fired from his consultant position with the group on the same day this past August that it terminated Rapfogel, organized the luncheon. Joseph Ross, the insurance company executive who reportedly collaborated in Rapfogel and Cohen’s alleged kickback scheme, was a luncheon sponsor.
The general contractor behind Council Towers V, an 11-story development for poor seniors that was built by Met Council in the Bronx, was a luncheon sponsor. So was the firm that manages a handful of Met Council’s other six Council Tower apartment buildings for low-income seniors.
Jeffrey Levine, a developer better known for waterfront luxury high-rises who built a senior residence for Met Council at 171 Lexington Avenue in Manhattan was a sponsor. The managing partner of the architecture firm that designed a Met Council property currently being built in Staten Island was the honoree.
New York City Comptroller John Liu spoke, as did Manhattan District Attorney Cyrus Vance. Fewer boldfaced political names appeared at the Builder’s Luncheon than at Met Council’s Legislative Breakfast the following June, at which Brooklyn DA Charles Hynes, Senator Chuck Schumer, and Congress members Carolyn Maloney, Jerry Nadler and Charlie Rangel all spoke. But at the Builder’s Luncheon, it wasn’t the politicians who were the main attractions.
The Builder’s Luncheon has been held each year in mid-August since at least 2008. Rapfogel’s firing by Met Council was announced August 12. This year, there has been no Builder’s Luncheon.
Contact Josh Nathan-Kazis at [email protected] or on Twitter, @joshnathankazis
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