So much for democracy in City Council spending, at least for one member.

Today’s federal indictment of Queens City Councilmember Dan Halloran on fraud and conspiracy charges — alongside State Sen. Malcolm Smith, Republican party officials and others — alleges that Halloran took more than $20,000 in bribes from an FBI agent posing as a real estate developer. The indictment states that he promised the agent up to $80,000 in City Council discretionary funds – money that council members choose to direct to groups in their districts.

“Money is what greases the wheels,” he allegedly told an informant, “good, bad, or indifferent.”

Yet Halloran was also willing to hand over control of a more sizeable chunk of money to the people in his district. He is one of just eight council members currently asking their constituents to decide how to spend a large portion of those funds, in a process known as participatory budgeting. The results will decide how Halloran earmarks $1 million in capital funds, about one-third of the total available to him.

Yesterday was the first day of voting for participatory budgeting in Halloran’s district, with Queens residents invited to cast their ballots in a box in the councilmember’s Whitestone office.

Councilmember Dan Halloran casts a ballot Monday to select community projects for funding — just hours before his arrest on conspiracy and fraud charges. Photo courtesy office of Dan Halloran

Halloran took a moment yesterday to cast his ballot, just hours before federal agents led him away from his home in Whitestone.

“Voting on Participatory Budget voting begins today!” he cheered on Facebook. “I voted — get out and vote!

Voting is scheduled to continue through the end of the week, and is open to all residents of the 19th Council District, which includes Whitestone, Bayside and Douglaston.

Eighteen proposed projects are up for a vote, including technology updates to local schools, the installation of two NYPD security cameras, the renovation of a community center, and the instillation of a kayak and canoe launch in two local parks.

Councilman Halloran gave up control of just under a third of his discretionary capital budget when he agreed to try participatory budgeting this year. He was the only Republican this year to partake in the alternative budgeting process spearheaded by progressive council members such as Melissa Mark-Viverito and Jumaane Williams.

Halloran spokesman Kevin Ryan says that balloting will continue as scheduled through Saturday in Halloran’s district office and other sites in the community.

The New York World interviewed Halloran last month about why he took the plunge.

“If you can only work effectively with people in your own party, you shouldn’t be in politics,” said Halloran, whose politics can be described as conservative Libertarian. “I certainly have to as a Republican; there are only four of us” in the council.

Halloran said his politics aren’t at odds with the process. He was one of the first City Council members to disclose his discretionary funding online, something that is now required of all members. As a self-described proponent of government accountability and transparency, he said he sees participatory budgeting as an exercise of both.

“I want taxpayers to see the process of how the government decides how to spend our money,” he said.

Participatory budgeting takes $1 million from each district’s discretionary capital budget and lets residents decide how to spend it. Over the eight-month process, residents set up committees, design projects, and research the estimated costs. Four council members tried the process last year and four more, including Halloran, signed up this year.

When the nonprofit Participatory Budgeting Project approached Halloran to participate last year, he said he was wary of committing staff and resources to a long process. Organizers gave him the option of trying it out on only part of the district but he declined.

“If I was going to do it, I wanted to go all in and include the entire district,” he said.

This year, when organizers approached him again, he discussed it with his staff and felt that he could commit the time and resources to trying it out.

Halloran assigned two full-time staff members to his office’s efforts, charged with spreading awareness to local schools and civic organizations, and setting up monthly meetings for residents to decide which projects to do.

As voting time approached, Halloran’s staff went door-to-door and hosted phone banks to encourage residents to vote.

Kevin Ryan, Halloran’s spokesman, described how the process gave constituents an up-close view of how tough it can be to get a project across the finish line. One 71-year-old resident, Bill Knight, had worked on community development projects in Nigeria but was dismayed to lose control over design and budget once a proposed $175,000 canoe ramp went to the Parks department for approval.

“That’s the same experience that the councilman normally goes through,” said Ryan.

Said Knight, after he heard the news of Halloran’s arrest: “It reminds me of Nigeria.”

Additional reporting by Nathaniel Herz and Alyssa Katz