"Any NY Freepers with the details?"
http://en.wikipedia.org/wiki/Kiryas_Joel,_New_York
The New Square community does not allow any sub-groups to form that would undermine the homogenity of Skver. It is for that reason that no other schools, synagogues, or even private minyanim are allowed.
In recent years, a number of scandals plagued the community. Government allegations of fraudulent colleges with bogus student bodies set up to extract PELL grants, which would benefit the schools and institutions, bristle the community. Convictions were handed down against four community members, who received prison sentences ranging from two to six years. Charges of anti-Semitism and overzealous prosecution led to an eleventh-hour clemency by President Bill Clinton shortly before the end of his term in office, after he was visited by the community's Rebbe, Rabbi David Twersky.
Media allegations followed, suggesting that a quid-pro-quo was arranged with Hillary Clinton, who subsequently received about 99% of the vote in New Square. Investigations have not uncovered any wrongdoing, and the matter was dropped.