The stadium land deal penalty

During yesterday’s somewhat heated discussion on the sketcy goings-on surrounding the land deal for the new Yankee Stadium, one of the RAB commenters asked exactly what the penalty could be for any illegal dealings. At the time, I had no idea, but I shot off an e-mail to Neil deMause who I knew would an answer.

The stadium deal guru had just finished his own Village Voice piece on the topic, and it featured an answer in the last paragraph:

So what happens if it turns out the city cooked the books? Kucinich’s subcommittee staffers say the IRS could conduct an audit; if it turns out there were “material misrepresentations” by the city, the bonds could be stripped of their tax-exempt status. (An IRS spokesperson said he’d have to get back to us on this.) And if nothing else, this should make for some fireworks when the IDA considers the Yanks’ request for $259 million in new tax-exempt bonds — now slated for a public hearing on January 15 at 10 am at 110 William Street.

So that’s that. It’s not that much of a big deal for the Yankees or the City. Someone will get slapped with a fine, and they’ll have to pony up the dough. But no one is going to cart Lonn Trost off to jail or anything drastic like that.