Giuliani's businesses grab tax breaks, wage subsidies (meant for poverty-level earners)

Good Jobs New York Releases List of Wage Tax Credits Recipients That Include Giuliani Partners, Ernst & Young, Fox News and News America

Contact: Stephanie Greenwood, Good Jobs New York Bettina Damiani, Good Jobs New York

Companies Certified Prior to the June 2004 Sunset of a Little Known and Badly Misused Tax Break Are Back in the Money

Unpublicized Rider to Empire Zones “Reform” Legislation Allows Firms Certified for Zone Equivalent Area or ZEA Wage Tax Credits Prior to June 2004 to Receive Up to Five (5) Years of Benefits Despite Program’s Expiration

April 1, 2005 – New York, NY – A little-known state subsidy program called the Zone Equivalent Area (ZEA) program has been providing tax breaks to large finance, law, and media firms in Times Square for hiring stock brokers, lawyers, and other high-income employees. The ZEA program sunset in June 2004 but a budget bill was passed yesterday by the State Legislature would allow firms certified prior to June 2004 to receive up to five years of benefits. This is despite the fact the ZEA provision was never mentioned in the Economic Development budget conference subcommittee’s meetings or in its report to the General Budget Conference Committee. A list of recipients as well as a description of the ZEA program is available at www.goodjobsny.org.

Although “Zone Equivalent Area” or ZEA credits were originally meant to help alleviate poverty and unemployment among New York State residents, in practice they often went to finance, law, and media firms for hiring stock brokers, lawyers, and other high-income employees. ZEA benefits have also gone to food and retail employers that offer workers poverty-level wages and few or no benefits. The program did not require companies to hire locally or to provide living wages or health insurance.

“The ZEA program was created to help relieve poverty, but instead it became a poster child for how good economic development intentions can go sour,” said Stephanie Greenwood, Research Analyst for Good Jobs New York. “It’s a disgrace that leaders in Albany would continue to hand out millions in tax-payer dollars to some of the most profitable companies in the in heart of Manhattan with no benefits guaranteed to New Yorkers and no transparency.”

Like many economic development programs, the ZEA program, which began in 1994, started out as an attempt to reduce poverty and unemployment in areas of New York considered blighted by the 1990 census. But the program hasn’t reflected the movement of wealthy firms into the Times Square area or included a requirement that local low-income residents be hired in order to receive benefits. Applications for benefits were accepted until June 13, 2004.

Benefits for firms vary from tax credits worth $1,500 to $3,000 per employee with low-income and hard to employ workers providing the most benefit. Employees such as accountants and lawyers, or “non-targeted” employees can still provide a $1,500 credit to their employer every year for five years. Virtually all of Times Square’s ZEA recipients registered to begin receiving benefits after 2001, when the area’s transition to a major business and tourism center was largely complete.

Recipients in Times Square include Ernst & Young, Morgan Stanley, Lehman Brothers, White & Case, Giuliani Partners, Giuliani Group, Giuliani-Kerik (which was re-named Giuliani Security and Safety, following the recent departure of former Police Commissioner Bernard Kerik from the firm), and Giuliani-Van Essen.

The Giuliani firms are registered to receive benefits at 5 Times Square, a building, which pays no property tax as part of the 42nd Street Redevelopment Project and which is also home to ZEA beneficiary Ernst & Young, which collaborated closely with the former mayor to launch Giuliani Partners in 2002 (below).

While the names of the firms certified to receive ZEA benefits are available through the Freedom of Information Law, information is not available regarding

(3) the number of employees (and the number of “targeted low-income employees for whom firms receive larger benefits under the ZEA program) for whom recipient firms are receiving benefits, or

(4) the range of wages paid to employees for whom firms are receiving ZEA benefits.

Good Jobs New York is a joint project of the Fiscal Policy Institute (www.fiscalpolicy.org) with offices in Albany and New York City and Good Jobs First (www.goodjobsfirst.org), based in Washington, DC. Good Jobs New York promotes accountability to taxpayers in the use of economic development subsidies. Our website, (www.goodjobsny.org) contains the only publicly available database of the city’s large corporate “retention” deals, and last year we released a report Know When to fold `Em: Time to Walk Away from NYC’s “Corporate Retention” Game, detailing the failure of commercial subsidy agreements negotiated by NYC Industrial Development Agency in the 1990s to produce job growth. # # #

LINK Rudy Giuliani and Ernst & Young Announce Strategic Alliance; New firm to offer consulting services and make and manage investments

January 15, 2002 - New York, NY. Rudolph W. Giuliani and Ernst & Young LLP, a global leader in professional services, jointly announced today that they have established an alliance to offer consulting services and to make and manage investments. The first company formed from this alliance, Giuliani Partners LLC, will focus on helping Chief Executive Officers and Boards of Directors secure the future of their firms by advising them on the protection of their companies' financial and physical assets, knowledge, people and brand. --SNIP-- (See press release at http://www.giulianipartners.com/press_ey_011502.aspx)”

January 15, 2002
Press Release

Rudy Giuliani and Ernst & Young Announce Strategic Alliance; New firm to offer consulting services and make and manage investments

January 15, 2002 - New York, NY. Rudolph W. Giuliani and Ernst & Young LLP, a global leader in professional services, jointly announced today that they have established an alliance to offer consulting services and to make and manage investments. The first company formed from this alliance, Giuliani Partners LLC, will focus on helping Chief Executive Officers and Boards of Directors secure the future of their firms by advising them on the protection of their companies’ financial and physical assets, knowledge, people and brand.

Giuliani and his team of senior executives, many of whom served with him during his eight-year tenure as Mayor, will draw upon their experiences in emergency preparedness, public safety, leadership during crises, and financial management—- all of which were instrumental in turning around a City described as unmanageable and ungovernable to a City that is now a worldwide example of good government and effective management. This management expertise, coupled with the broad-based knowledge and global resources of Ernst & Young in the areas of assurance, risk management, information security and financial restructuring, will provide clients with a comprehensive set of solutions addressing critical concerns of major corporations today.

While Giuliani Partners will focus its efforts primarily on advising CEOs, the firm will also advise government leaders on issues of emergency preparedness, management effectiveness, and service improvement.

Rudolph W. Giuliani, who will be Chairman and CEO of Giuliani Partners LLC, said: “I selected Ernst & Young as our strategic partner because of the firm’s impeccable reputation as a trusted business advisor, its credibility as a leader in professional services and its demonstrated ability to bring value to its clients.”

James S. Turley, chairman of Ernst & Young, said: “This timely alliance reflects the firm’s strategic focus on helping clients manage business risk and improve financial performance, especially in the current economic climate.” “We are honored to have the opportunity to work with Rudy Giuliani and his team. We have been impressed with the Giuliani team’s management innovations that were critical in turning around the city of New York—-a $46 billion dollar entity that had been described as unmanageable and ungovernable prior to Rudy’s tenure as Mayor. But in the past eight years, he and his associates have demonstrated that the city can not only be managed, it can be managed effectively and efficiently.”

Turley cited several examples of the Giuliani team’s accomplishments in New York: securing the best bond rating for the city’s debt in over 30 years; managing its budget to create record surpluses for the City, creating the City’s Office of Emergency Management; instituting the innovative Syndromic Surveillance System for monitoring and responding to public health trends; and restoring the city’s health and hospital system, the third largest in the country, to efficiency and full accreditation.

“As a result,” Turley concluded, “we believe that Giuliani Partners LLC has impressive credentials and a track record of achievement to offer the global corporate community.”

The Giuliani team and Ernst & Young will also establish Giuliani Capital Partners to invest in companies in growth industries, particularly those in which the Giuliani
team members can add value by virtue of their experience and background. At the outset, Giuliani Capital Partners will focus on companies in the area of security and protection. Ernst & Young will provide financial advisory, due diligence, and tax consulting services in connection with these investment activities.

E&Y advised Giuliani and his team on the overall strategy of investing and consulting underlying the creation of Giuliani Capital Partners and Giuliani Partners LLC.

The principal offices of Giuliani Partners will be located in the same building as the New York headquarters of Ernst & Young, currently located at 787 Seventh Avenue, and, in the spring, at a new building now under construction at 5 Times Square.

Giuliani said in closing: “By enhancing the security of businesses and governmental organizations and by investing in companies that further those goals, we are confident that we can make a positive difference in the security of the citizens of our country. We are very excited about this venture and fully committed to its success,” Giuliani concluded.

About Giuliani Partners: Giuliani Partners is comprised of leading experts recognized worldwide for their management and problem solving abilities. The members of our firm possess an extensive background in the development of effective crisis communication strategies and preparing for and managing any event. With the availability of these critical resources, Giuliani Partners can provide our services directly to Chief Executive Officers and Board of Directors.

About Ernst & Young: Ernst & Young, a global leader in professional services, understands the business issues that are important to senior executives. With extensive business knowledge and hands-on industry experience, the global Ernst & Young organization can implement a broad array of solutions to help companies capture growth, improve financial performance and manage risk—- anywhere in the world. Its 84,000 people serve as trusted business advisers in more than 130 countries, offering audit, tax, corporate finance and transaction services across all industries to many of today’s leading global corporations as well as emerging growth companies.
http://www.giulianipartners.com/press_ey_011502.aspx

LINK Accountability means measuring results throughout an organization and holding people responsible for their performance. The ability to measure performance accurately is critical to any organization looking to improve efficiency and ensure success. A system of measurement motivates employees and decision-makers alike. Accountability enables leaders to identify problems more effectively and make solutions pervasive throughout an organization. Copyright © 2005 Giuliani Partners LLC. All rights reserved.

http://www.giulianipartners.com/accountability.aspx

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