In light of the troubling financial disclosure inconsistencies detailed in my investigative reports, I’ve filed formal Freedom of Information Law (FOIL) requests with both the New York State Commission on Ethics and Lobbying in Government (COELIG) and the Office of the New York State Attorney General. This post explains why these formal actions are necessary and what they might accomplish.
Legal Disclosure Requirements: A Critical Examination
Under Section 73-a of the New York Public Officers Law, elected officials are required to file sworn annual statements that go far beyond a simple checkbox exercise. The law mandates comprehensive financial transparency, with particular emphasis on real estate holdings and financial obligations.
A crucial and often misunderstood requirement is the disclosure of mortgages and home equity lines of credit (HELOCs), especially for rental properties. Unlike general debt reporting, which typically requires disclosure only for amounts exceeding $10,000, ALL mortgages and HELOCs on income-generating properties must be reported, regardless of the amount.
The financial disclosure guidelines are unambiguous: Any mortgage or HELOC secured by a property generating income must be fully disclosed. This means whether the loan balance is $5,000 or $500,000, and regardless of whether the HELOC is fully drawn or remains unused, it must appear on the official financial disclosure.
The legal consequences for non-compliance are severe. False statements or intentional omissions can constitute a Class A misdemeanor under New York law, punishable by up to one year in jail. The precise language of the statute is clear: “A reporting individual who knowingly and willfully fails to file an annual statement of financial disclosure or who knowingly and willfully with intent to deceive makes a false statement or gives information which such individual knows to be false on such statement of financial disclosure… shall be guilty of a class A misdemeanor.”
Loan Classification: A Murky Landscape
The investigation has revealed a troubling pattern of inconsistent loan classifications. There’s a critical distinction between mortgages and home equity lines of credit (HELOCs) that goes beyond mere semantics:
- Mortgages are typically fixed-amount loans used to purchase a property, with a set repayment schedule.
- HELOCs are revolving lines of credit secured by home equity, allowing borrowers to draw and repay funds as needed.
In James’ disclosures, we’ve observed multiple instances of loans mysteriously changing classification:
- The Citibank loan, recorded in August 2019, was:
- The Citizens Bank loan showed similar irregularities:
These classification changes are not trivial. They represent potential attempts to obscure the true nature of financial obligations, raising serious questions about the accuracy and intent of the disclosures.
The OVM Financial Mortgage: A Mysterious Omission
Perhaps the most glaring inconsistency involves the $109,600 OVM Financial mortgage used to purchase the Norfolk, Virginia property in August 2020. This mortgage is conspicuous by its complete absence from all financial disclosures, despite being a critical component of the property’s purchase.
The original mortgage documents classified the property as a second home, with a specific “Second Home Rider” containing legal attestations about occupancy. Yet James simultaneously reported the property as an investment generating rental income—a contradiction that raises significant questions about the accuracy of her disclosures.
A Pattern of Disclosure Problems by Property
Brooklyn Property (296 Lafayette Avenue, Brooklyn, NY)
- Unreported Rental Income: Failed to disclose rental income from 2007-2011 until exposed by Crain’s in 2013
- Phantom Mortgages: Reports a First Savings Bank loan since 2020 that doesn’t appear in any property records
- Disappearing Debts: A Citibank loan appeared in her 2022 disclosure (three years late) only to vanish in 2023 with no record of satisfaction
- Classification Changes: Loans repeatedly reclassified between mortgages and home equity lines of credit without explanation
- Valuation Contradictions: Reported a 42% value increase in 2022 while NYC’s official assessment showed a 7.58% decrease
Virginia Property (3121 Peronne Avenue, Norfolk, VA)
- Hidden Purchase Mortgage: The $109,600 OVM Financial mortgage used to purchase the property in 2020 never appears in any disclosure
- Mysterious New Mortgages: Two mortgages totaling up to $400,000 suddenly appear in her 2023 disclosure with no corresponding public records
- Vanishing Rental Income: Initially reported as generating $1,000-$5,000 in rental income, now reports $0 despite carrying substantial debt
- Second Home vs. Investment: Signed legal documents classifying it as a second home while simultaneously reporting it as an investment property
The Numbers Don’t Add Up
| Reported Information | Actual Public Records | The Problem |
|---|---|---|
| Property valued at $100K-$150K | Norfolk tax assessment: $187,300 | Even official valuation exceeds her disclosure |
| Freedom Mortgage: $150K-$250K | No record exists | Phantom mortgage? |
| National Mortgage: $100K-$150K | No record exists | Another phantom mortgage? |
| OVM Financial Mortgage: Not disclosed | $109,600 loan confirmed | Required disclosure missing |
| Total potential debt: $509,600 | Property value: $187,300 | Impossible 272% loan-to-value ratio |
This property reportedly generates zero income despite potentially carrying over $500,000 in debt—a financial arrangement that defies standard lending practices and basic economic logic.
Why I’ve Filed FOIL Requests
After multiple attempts to get answers through normal channels, I’ve now filed formal FOIL requests with both the COELIG (which maintains financial disclosure records) and the Attorney General’s office to obtain critical documentation that could shed light on these inconsistencies.
These FOIL requests offer several strategic advantages:
1. Create Legal Obligation to Respond
Unlike media inquiries that can be ignored, these FOIL requests create a legal obligation for both offices to respond within five business days. They must either:
- Provide the requested documents
- Explain why they need more time (with a specific timeline)
- Cite specific legal exemptions for withholding documents
- Deny the request with legal justification (which can be appealed)
2. Establish an Official Record
The FOIL requests and the agencies’ responses (or lack thereof) create an official paper trail that can be referenced in future reporting, legal actions, or ethics complaints. If documents are withheld improperly, this becomes part of the official record.
3. Seek Specific Documentation to Resolve Key Questions
The requests target documents that would directly address the most troubling inconsistencies:
- Where are the public records for the mortgages James reports on her disclosures?
- Why does the mortgage used to purchase the Virginia property never appear in her disclosures?
- Why does rental income from an investment property suddenly drop to zero?
- What explains the changing classifications of loans between different disclosure years?
Double Standards in Financial Transparency
The irony is impossible to ignore: Attorney General James secured a $355 million judgment against former President Trump based largely on allegations of misleading financial statements. That case hinged on the principle that accurate financial disclosures are essential to public trust and legal compliance.
The same standards of transparency should apply to the Attorney General herself. If she has explanations for these apparent inconsistencies, these FOIL requests provide the perfect opportunity to offer them with supporting documentation.
As James herself stated when announcing the Trump case verdict: “No one is above the law” and “there cannot be different rules for different people in this country.”
What Happens Next?
Once the FOIL requests are processed, several outcomes are possible:
- Full Disclosure: The agencies provide all requested documents, resolving the questions raised by my reporting.
- Partial Disclosure: Some documents are provided while others are withheld, potentially offering partial answers while raising new questions.
- Delayed Response: The agencies request extensions, pushing the timeline for resolution further into the future.
- Legal Denial: The requests are denied based on specific exemptions, which would require further analysis and potential appeal.
- Constructive Denial: The agencies fail to respond adequately within legal timeframes, which constitutes a constructive denial that can be appealed.
Why This Matters
Financial disclosure laws exist for a reason: to ensure that public officials operate transparently and free from conflicts of interest. When consistent patterns of disclosure problems emerge—especially from the state’s top legal officer—it raises legitimate questions about adherence to the very laws the Attorney General is sworn to uphold.
This isn’t about politics. It’s about consistent application of transparency standards. The same official who has built a reputation on holding others accountable for their financial disclosures should welcome scrutiny of her own financial reporting.
As this situation develops, I’ll provide updates on the FOIL request process and any responses received. Public officials work for the people, and the people have a right to understand whether their Attorney General is meeting the same standards she enforces on others.
Written by: Sam Antar
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