Appeals Court Delays Fines, Jail Terms in Bitter Yonkers Housing Bias Conflict

A federal appeals court panel Tuesday temporarily halted potentially bankrupting fines against Yonkers, N.Y., and the possible jailing this week of four city councilmen who are resisting a court-ordered housing desegregation plan.

By a 2-1 vote, the judges set a hearing on federal contempt charges against the city and the councilmen for Aug. 17. But the panel cautioned that the defense’s oral arguments “barely satisfied the standards for a stay.”

The dissenting judge, Jon O. Newman, went even further. He bluntly warned lawyers for the city and the councilmen who voted to reject the court’s housing plan that they had not “presented any issue with a likelihood of success on appeal.”

In an effort to exert further pressure on the councilmen, who are defying the contempt finding of U.S. District Court Judge Leonard B. Sand, a special state board Tuesday seized control of Yonkers’ expenditures.

“In short, our goal is to save the city from itself,” said Secretary of State Gail S. Shaffer, head of the Yonkers Emergency Financial Control Board, after the stringent measures, including a wage and hiring freeze and the suspension of all discretionary spending, were announced.

‘Enormous Magnitude’

“The control board has taken over all expenditure powers of the city and the city council,” Shaffer said. “ . . . There are still potential consequences of enormous magnitude looming that have an impact on the city’s financial stability. We have taken over all disbursements of all city funds.”

The control board, which was established by Gov. Mario M. Cuomo when Yonkers flirted with bankruptcy earlier in the decade, has broad oversight powers in New York state’s fourth largest city.

However, it cannot pass the zoning changes that would allow the housing plan to go forward, and prevent the fines from mounting.

Yonkers Mayor Nicholas C. Wasicsko was pessimistic that the state’s pressure would work. “The only thing that will make any difference is the threat of removal,” Wasicsko said of the four councilmen who voted at a council meeting this month to disobey Sand.

On Aug. 2, the judge held that Yonkers was in contempt, as were the councilmen. He imposed a $100 fine on the city, and ordered that it would double daily, meaning the penalty would erase the city’s $337-million operating budget after 22 days. The fine for Tuesday, which was due this morning, totaled $12,800. The councilmen were fined $500 a day, with the threat of jail on Thursday.

In 1985, Sand ruled that Yonkers had intentionally segregated schools and housing for four decades and ordered 200 units of low income housing and 800 units of middle income housing be built in white neighborhoods. But three years later, the city continued to ignore his order.

‘Irreparable Injury’

On Tuesday, lawyers for the city and Councilmen Nicholas Longo, Edward Fagan, Peter Chema and Vice Mayor Henry Spallone filed into the 17th-floor courtroom of the U.S. Court of Appeals for the 2nd Circuit in Manhattan.

Michael W. Sculnick, representing the city, argued that Sand’s fine was causing “irreparable injury” to the city and would lead to “drastic cuts” in police, fire and sanitation services.

“We contend the city cannot comply with the order. We contend the contempt is an abuse of discretion,” Sculnick said.

”. . . It is totally unfair to impose bankrupting fines on the city,” he told the judges. “That is devastating.”

Lawyers for the councilmen argued that Sand had violated the Constitution and due process and the separation of powers, when he directed legislators how to vote.

“We see this as a question of individual rights,” said James D. Harmon Jr., the lawyer for Chema. “ . . . We argue there are limits to the federal court and the court’s actions are limited by the Constitution.”

But Judges J. Daniel Mahoney, Newman and Chief Judge Wilfred Feinberg interrupted arguments by the lawyers with a barrage of skeptical statements.

“You talk as if the councilmen are emissaries from some foreign country,” Newman challenged Sculnick. “What is the source of his right to do something that violates the law of the land?”