In her evolution from a campus activist nicknamed Mad Dog to the first female speaker of the City Council and a likely candidate for mayor, Christine C. Quinn has taken care to project an image of reform and an openness about the workings of government.
Since taking office in 2006, Ms. Quinn has devised a more public system for reporting pork-barrel spending and has muscled tough new restrictions on lobbyists through a resistant Council.
But Ms. Quinn, facing her first significant embarrassment as speaker, has spent much of the last 48 hours trying to explain how the Council ran what many government experts have called a strange and even disturbing system for stashing away taxpayer dollars. For years, the Council budgeted millions of dollars for dozens of fictitious community organizations and used the money later for grants to favored neighborhood groups.
The Citizens Budget Commission, an independent watchdog organization, was bluntly critical of the practice on Friday: “There is no excuse for fictional items in a budget,” the commission said in a statement. “All elected officials bear responsibility for the budgets that they adopt, and Speaker Quinn, in particular, should be held accountable for the City Council’s fiscal practices.”
Ms. Quinn, despite her reputation as a focused manager with an understanding of the levers of city government, has said she knew nothing of the unorthodox budgeting practice. She and her staff have gone to great lengths to show that she had tried to put an end to it but was stymied by staffers she forced out.
For the moment, no one has stepped forward to contradict her account, and there is no evidence that anything about the system was illegal or that any money was misspent. Mayor Michael R. Bloomberg has expressed confidence in her, calling her “the most honest person I know.”
But Ms. Quinn’s defense hinges largely on her assertion that when she learned about the practice she immediately ordered it to cease, only to learn that her staff disobeyed her and carried it on for several more months.
“There were meetings, there were oral conversations,” Ms. Quinn, a Manhattan Democrat, said Thursday. “There were many people in the numerous meetings with myself and the finance staff during the budget process, with many people in the room who can confirm that.”
On Friday, however, when Ms. Quinn’s office was asked to produce some of the “many people” who could confirm it, only her chief of staff stepped forward, saying he had remembered her noting in one meeting that they would no longer use the reserve system.
And numerous former and current City Council officials said Ms. Quinn had during her tenure taken an unusually active role in overseeing the budget, leaving them wondering how she could not have known or, if she had truly objected to the practice, authoritatively ended it.
“It’s an off-line extra budget slush fund within the city’s budget, and it’s used at the discretion of the speaker,” said Dick Dadey, executive director of the Citizens Union, who joined Ms. Quinn to overhaul the lobbying rules and is now calling for all future Council appropriations to be monitored by an outside agency. “Given the speaker’s drive to create more transparency about the Council’s own budget and member items, it would have been appropriate to go public with this bad practice even if it did shine a bad light on the Council.”
Indeed, the revelations have been particularly troubling for Ms. Quinn, consultants said, in part because she has made open government a mantra of her tenure as speaker.
“She’s no Eliot Spitzer,” said Kellyanne Conway, a Republican political consultant, “but we have a very recent example in the governor’s precipitous fall from grace that the more you crusade as someone having a transparent budget, open to the public, governing according to ethics, then the higher those accountability standards will be.”
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