State Attorney General Eliot Spitzer is probing the nonprofit charities supported by Independence Party power-player Lenora Fulani, The Post has learned. Spitzer's action follows a Post report Monday detailing the overlapping relationships between the Fulani-founded All Stars Project and its sister group, Castillo Theater, as well as the East Side Institute for Short Term Psychotherapy, where Fulani is on staff.
The groups share office space, have common membership and grant money to each other. A majority of the groups' key directors, officers and employees contribute to the Independence Party, which Fulani helped take over.
"Our charities bureau is looking into it," Spitzer spokesman Darren Dopp said yesterday.
The Post has also learned that the Manhattan Independence Party has paid Castillo Theater $3,400 for "professional services" and "banners and signage," according to records.
Federal tax laws have strict rules about nonprofit staff who could be construed as acting on behalf of a political organization.
Meanwhile, corporations touted by All Stars as sponsors of its April fund-raising gala said yesterday they had only a marginal association with the performing arts group.
A spokesperson for media conglomerate Bloomberg LP, owned by Mayor Bloomberg, said it gave a small, one-time donation to match an employee's donation to the gala, but noted it is not an ongoing sponsor of the program.
Earlier this year, $50,000 of a $10 million private donation given by the mayor to the Carnegie Corp. was dispersed to the Castillo Theater. Neither that donation, nor that of Bloomberg LP, were directed by the mayor, a spokesperson said.
HBO also said its participation was a one-time deal in support of its own talent. "Sopranos" producers Maureen and Steven Van Zandt co-chaired the gala, which honored show star and All Star spokesman Dominic Chianese.
Fulani founded All Stars with her mentor, neo-Marxist Fred Newman, 18 years ago. Newman is founder of the East Side Institute, where he and Fulani practice "social therapy" - a discipline that believes mental and emotional problems can be cured by political activism.
Former members say Newman runs a cult; he vehemently denies it.
"The effects of this group can be devastating," said Rick Ross, a cult expert who has counseled former members of Newman-led groups. "Some of them have been driven to the edge emotionally and physically in the name of Fred's cause. They describe a highly abusive environment in which they are systematically broken down and reshaped to be like Fred, to do what he says without question."
The mother of a 15-year-old All Stars participant told The Post her daughter "became involved in social therapy" sessions after joining the kid group. Another parent said her teenager was encouraged to do political work.
"All Stars children . . . are not directed to participate either in social therapy or political volunteerism of a partisan nature," said All Stars president Gabriel Kurlander.
Gov. Pataki recently helped push through an $8.5 million tax-exempt bond for Castillo and All Stars to build a performance space.
"In my opinion, the All Stars program is really social therapy disguised as performance art - and these politicians and corporations support it," said Ross.
"They might as well be telling these parents: Give us your children, so we can hand them over to Fred."