The city has suspended millions of dollars in funding to the Metropolitan Council on Jewish Poverty following a state criminal probe of its former CEO, William Rapfogel.
The freeze coincides with a separate probe of the social services giant by the city Department of Investigation.
“All pending awards have been put on hold until an investigation by DOI is completed,” said mayoral spokesman Kamran Mumtaz State Attorney General Eric Schneiderman is looking at Rapfogel — a close pal of Assembly Speaker Sheldon Silver — for allegedly accepting kickbacks from Met Council’s insurance agent and directing campaign contributions from the agent to favored politicians.
Sources said Met Council is due “several million” dollars from pending city contracts.
Contracts that haven’t already gone through the final approval process will be frozen, sources said.
Met Council fired Rapfogel — its CEO since 1992 — last week after investigating an anonymous complaint about “financial irregularities and apparent misconduct.”
Rapfogel issued a startling statement of apology for wrongdoing without providing specifics the same day his firing was announced.
The agency is searching for a new CEO — but sources said the damage already done will be devastating.
Met Council gets a lion’s share of its $33 million budget from the federal, state and city governments.
But it also gets millions of dollars in private donations.
Met Council insiders worry about an extensive backlash, which insiders fear will dry up.
Some longtime board members were not even aware that Rapfogel was pulling in more than $400,000 in salary and benefits heading an organization that provides services to the needy, particularly seniors on fixed incomes, insiders said.
“There’s going to be a chilling effect on fundraising,” said one longtime Met Council official. “That’s automatic. People will say there’s a criminal investigation. That’s a problem.”
The Met Council source added, “I knew Willie was making good money. But I didn’t anticipate it was that much. Thjs is supposed to be a charitable organization.”
The council insider said Rapfogel “personally benefitted” — in essence stole or misused agency money — and that’s why he was ousted.
Agency insiders and those within the political world are perplexed why Rapfogel — a well-liked fixture in the political and non-profit worlds
— would siphon funds.
He and his wife, Judy, who is Speaker Silver’s longtime chief of staff, clear more than $500,000 in income between them.
DOI is conducting its own probe to determine if city funds provided to Met Council were stolen or used for fraudulent or corrupt purposes.
That could include any pay-to-play scheme involving city funds in exchange for campaign contributions to pols.
Met Council could not be reached for comment last night.