A tech company hired a top NYC official’s brother. A private meeting and $1.4M in contracts followed
NEW YORK (AP) — Ahead of the 2022 school year, the education technology company 21stCentEd was seeking to expand its presence in New York City’s public schools. So they turned to a man, Terence Banks, whose new consulting firm promised to connect clients with top government stakeholders.
Banks wasn’t a registered lobbyist. His day job, at the time, was as a supervisor in the city’s subway system. But he had at least one platinum connection: His older brother, David Banks, is New York City’s schools chancellor, overseeing the nation’s largest school system.
Within a month of the hire, 21stCentEd had secured a private meeting with the schools chancellor. In the two years since that October 2022 meeting, more than $1.4 million in Education Department funds have flowed to the company, nearly tripling its previous total, records show.
The siblings — along with a third brother, Philip Banks, who serves as New York City’s deputy mayor of public safety — are now enmeshed in a sprawling federal probe that has touched several high-ranking members of Mayor Eric Adams’ administration.
Federal investigators seized phones last week from all three brothers and at least three other top city officials, including Police Commissioner Edward Caban, who resigned Thursday.
The exact nature of the investigation — or investigations — has not been disclosed. Among other things, federal authorities are investigating the former police commissioner’s twin brother, James Caban, a former police sergeant who runs a nightclub security business.
On Wednesday, a city operations coordinator was fired after a bar owner in Brooklyn told NBC New York that he had been pressured by the aide into hiring the police commissioner’s brother to make noise complaints against his business go away.
Federal investigators are also scrutinizing whether Terence Banks’ consulting firm, the Pearl Alliance, broke the law by leveraging his family connections to help private companies secure city contracts, according to a person familiar with the matter. The person spoke to The Associated Press on condition of anonymity because they were not authorized to disclose information about the investigations.
All three Banks brothers have denied wrongdoing. David and Terence Banks have said they don’t believe they are the target of the investigation. But government watchdogs say the family’s overlapping work in the private and public sector may have run afoul of conflict of interest guardrails as well as city and state laws on procurement lobbying.
“It has the appearance of Terence Banks using his family connections to help his client and enrich himself,” said Susan Lerner, the executive director of Common Cause New York, a good-government group.
Timothy Sini, an attorney for Terence Banks, did not respond to specific questions about the consulting firm. But he wrote in an email, “We have been assured by the Government that Mr. Banks is not a target of this investigation.”
Speaking at a news conference Friday, David Banks said FBI agents had not returned his phone, and he declined to answer questions about his relationship to his brother’s consulting firm. “We are cooperating with a federal investigation,” he said.
City ethics rules ban relatives from lobbying each other. At minimum, David Banks would be required to secure a waiver from the city’s Conflicts of Interest Board before meeting with a company represented by his brother, according to John Kaehny, the executive director of the good-government group Reinvent Albany.
“It’s surprisingly arrogant or obtuse that David Banks, one of the city’s top government officials, would ignore this basic, commonsense, conflict of interest rule,” Kaehny said in an email.
Neither the Department of Education nor the Conflicts of Interest Board would say whether a waiver was requested.
A spokesperson for the Department of Education, Nathaniel Styer, said all spending linked to 21stCentEd had come from individual schools and districts, which can make purchases of less than $25,000 without the agency’s approval.
The Utah-based company trains teachers and provides curriculums focused on artificial intelligence, robotics, and automation.
Dylan Howard, a spokesperson for the company, said Terence Banks was hired “to help 21stCentEd present our STEM solutions and services to decision makers within New York City public schools.” He said they learned of his consulting firm through a 21stCentEd employee who has since left the company.
The spokesperson could not say how the meeting with the school’s chancellor came about or whether Terence Banks attended. He added that Terence Banks had provided “no value” to the company and that his contract was terminated last December.
21stCentEd was one of several companies with city contracts that hired Terence Banks’ consulting firm, according to a website for the Pearl Alliance that was taken down after news of the federal investigations emerged last week.
Another listed client, SaferWatch, sells panic buttons to schools and police departments. Since August of 2023, it has been awarded more than $67,000 in city contracts, according to city records.
The third Banks brother, Philip Banks, maintains wide influence over the NYPD as deputy mayor for public safety. A spokesperson for SaferWatch, Hank Sheinkopf, declined to comment. The NYPD did not respond to email inquiries.
In total, the Pearl Alliance listed nine clients with millions of dollars in city contracts, including a software business, a grocery delivery start-up, and a company that specializes in concrete. At least seven of the companies have past or current contracts with the city.
It wasn’t clear whether the federal inquiry into the consulting firm run by Terence Banks was part of the investigation into the police commissioner’s brother.
Ray Martin, the city official who was said to have pressured a bar owner to hire James Caban, was “terminated for cause” Thursday after the mayor’s office learned of the allegations, according to Fabien Levy, the deputy mayor for communications.
The bar owner, Shamel Kelly, told WNBC-TV that Martin gave him what felt like an ultimatum last year to either pay James Caban or risk having his business shut down. Kelly said James Caban demanded an upfront fee of $2,500. He said he had been interviewed Thursday by federal investigators and the city’s Department of Investigation. Messages seeking comment were left with those agencies.
Attempts to reach Martin were not immediately successful. A cellphone number listed in his name was no longer working.
A lawyer for James Caban said he “unequivocally denies any wrongdoing” and has cooperated fully with law enforcement. Once the investigation is complete, lawyer Sean Hecker said, “it will be clear that these claims are unfounded and lack merit.”
Both David and Philip Banks remain in their government positions. An attorney for Philip Banks, Benjamin Brafman, declined to comment.
At a press briefing Tuesday, Adams noted his relationship with the Banks family dates back decades, to when he served in the police department under the brothers’ father. He said he never met with Terence Banks about city business.
“I’ve known the Banks families for years,” Adams said. “And my knowing someone, I hold them to the same standard that I hold myself to.”