Former NY authority chief sought kickbacks from cannabis deal: lawsuit
A former state authority head tried to score kickbacks as part of a disastrous “predatory” program meant to help disadvantaged people set up cannabis shops, a new lawsuit alleges.
Reuben McDaniel, the ex-chief of the Dormitory Authority of the State of New York, rejected a multimillion-dollar deal to install security cameras in cannabis dispensaries last year — because he and his cronies were upset they wouldn’t be able to siphon off enough taxpayer money from the agreement, an Illinois-based firm claims in its Manhattan Supreme Court suit.
“DASNY Agents determined through internal correspondence that they were unsatisfied with the potential profits that they would be entitled to from the illegal cut of the NY Projects that they were attempting to negotiate,” the lawsuit says.
Reuben McDaniel, the former head of a state construction finance arm, is accused in a new lawsuit of trying to score kickbacks. James Keivom
The lawsuit is tied to the state’s troubled pot legalization program. AFP via Getty Images
The plaintiffs — America Safe Cities and its CEO Thomas Bowling — contend in court documents that McDaniel and “DASNY Agents” said the firm would receive a $100 million no-bid contract to install surveillance systems at more than 300 cannabis dispensaries, as well as SUNY and CUNY campuses.
McDaniel, a former Gov. Andrew Cuomo appointee, quietly left the agency last year.
The authority is the state’s “facilities finance and construction authority,” according to its LinkedIn page — and the lawsuit is only the latest black eye for it.
DASNY and Gov. Kathy Hochul have previously been criticized for signing off on a funding agreement with a private equity firm to help provide financing for people convicted of drug offenses to set up cannabis dispensaries through the state’s Cannabis Social Equity Fund.
The fund ended up charging prospective attendees exorbitantly high, arguably predatory, interest rates on loans backed by the state based on massively overinflated projections on how much income they would generate.
According to bombshell reporting from the CITY, Hochul’s office ignored red flags raised by her own cannabis regulatory agency about the DASNY fund.
The new lawsuit also targets Emory Alexander, a “consultant” who connected McDaniel and Bowling as early as 2021, well over a year before the equity fund’s first dispensary would open.
Gov. Kathy Hochul’s pot program rollout has been plagued by issues. Paul Martinka
It alleges that Alexander worked as McDaniel’s “liaison” and “designated agent” between 2021 and 2023 — at the same time a LinkedIn page appearing to belong to Alexander lists himself as president of America Safe Cities for eight months beginning in October 2022. It’s unclear exactly what role Alexander may have played in the alleged scheme.
“DASNY does not comment on pending litigation,” a DASNY rep wrote in response to questions from The Post.
Bowling did not respond to request for comment.
Alexander could not be reached for comment.
A rep for the state inspector general’s office said he won’t “confirm or deny the existence of any investigations,” as is the office’s protocol.
McDaniel quietly stepped down last year and has since taken over as managing director at the Alice L. Walton foundation.
The foundation did not respond to a query from The Post.