The Telegraph
Since 1st March, 1999
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$16-million suit on India’s UN office
- New York mayor demands money from Delhi for Manhattan mission

New York, April 10: When Prime Minister Atal Bihari Vajpayee arrives here in September for the annual meeting of the UN General Assembly, the Big Apple’s administration may no longer view him as the benign, friendly visitor to this city that he has been for over two decades.

New York’s cash-strapped mayor Michael Bloomberg yesterday sued the Indian government for about $16.4 million in what this city’s tabloid Daily News called the mayor’s own “overseas attack”.

Bloomberg says India’s imposing Manhattan property, which houses its permanent mission to the UN, has been used for years to house government staff without the diplomatic credentials that entitle them to tax-exempt housing.

His office has calculated, on the basis of tenancy records since the red granite base 28-storey structure was built more than a decade ago, that the Indian government owes New York’s city administration about $16.4 million in housing tax arrears.

The distinctive building, designed by Charles Correa, has a penthouse porch at its top, which is meant to represent the north Indian barsati.

The mayor’s unprecedented lawsuit against a diplomatic establishment has put him on collision course not only with the state department, but also with his own sister, Marjorie Tiven.

She is New York’s commissioner to the UN, which is a huge source of income for the city. Tiven yesterday sought to blame the state department for the impasse and issued a mild statement that “we would have preferred to resolve these issues without litigation”.

But the state department reacted angrily to her statement that it had “inexplicably declined to assist” New York in resolving the dispute. An official of the department was quoted as saying that “governments don’t tax other governments”.

Along with India, Bloomberg has dragged to the New York state Supreme Court three other governments: Turkey, Mongolia and the Philippines.

The tax dispute with Turkey has come at an extremely delicate time for the state department, which is engaged in a diplomatic circus in Ankara to balance American war needs in northern Iraq and Turkish security compulsions in Kurdish areas of Iraq.

Bloomberg says Turkey owes his administration as much as $70 million, having let out parts of its permanent mission to the UN to the Inter-Parliamentary Union and to Dhaka’s offices at the world body. He wants to collect $17.7 million from the Philippines for having rented its diplomatic premises to Philippines Airlines, the Philippines National Bank and a restaurant, of all things.

Mongolia, which allegedly owes New York $2.1 million, is accused, like India, of housing government staff without tax-exempt diplomatic credentials. Officials here say that, under the city’s laws that deal with the UN presence in New York, only heads of missions and others with diplomatic status are exempt from local taxes.

The mayor said in a statement yesterday that “although we are proud to be the host of the UN, one thing we simply cannot afford is to be taken advantage of by our guests”. Aides to the mayor say discussions with the four governments have dragged on for months, but with no signs of any settlement.

The lawsuit has been filed at a time when New York faces a budget deficit estimated at $3.4 billion. Bloomberg is seeking a bailout of $2 billion from the federal government and New York state and has threatened to lay off at least 3,400 civic workers by month-end in view of the city’s precarious finances.

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