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Scandal Over 2014 Senate Races Could Grow

Government reform groups say you can add one more item to the long list of reforms that they believe are needed in Albany. They say limits are needed on campaign contributions to county political committees. The committees collection and distribution of money factor into a growing criminal case against  New York City Mayor Bill de Blasio’s administration, and upstate Senate races in 2014.

A memo from the chief enforcement officer at the state Board of Elections, first leaked to the Daily News,  accuses the  mayor’s staff  of improperly supervising a plan to help more Senate Democrats win office, that  skirted campaign contribution limits.

According to investigator Risa Sugarman, de Blasio aides solicited large campaign contributions from unions and real estate developers. The donations were made to county party committees, including in Putnam and Ulster Counties in the Hudson Valley, where as much as over $100,000 can be donated by a single entity. The money was then transferred from the party committees to individual Senate campaign accounts. The limit for an individual contribution to a Senate candidate is closer to $10,000. Sugarman, in the memo, said that amounts to violating the contribution limits for the Senate races.

Mayor de Blasio’s counsel confirmed Wednesday night that his office has received subpoenas in the case from the Manhattan District Attorney. 

Susan Lerner, with Common Cause, is not commenting on whether anything illegal actually occurred, saying she doesn’t know all the facts, but she says transfers of funds between varying political accounts is common, and needs to be fixed.

“It seems to be a shell game back and forth,” said Lerner. “It’s very difficult to follow the money when there are virtually limitless transfers between different committees at different levels.”

Lerner says dramatically lowering contribution limits for party county committees would effectively curb the funneling of money to skirt donation limits.

Common Cause issued a report on the LLC loophole in the state’s campaign finance system. It allows donors to form multiple Limited Liability Companies  to get around donation limits. Governor Cuomo has said he wants to close that loophole, but he dropped a proposal to put it in the state budget, saying he’ll push in the remaining months of session. Lerner says the governor’s support for closing the LLC loophole is key, but she says more needs to be done to change the state Capitol’s culture of corruption, that’s led to sentencing dates in the next two weeks for both former leader of the legislature on multiple corruption convictions. The office of US Attorney Preet Bharara will sentence former Assembly Speaker Silver on May 3rd, and former Senate Leader Skelos and his son on May 12th. Both face potentially lengthy prison terms.

“We can’t just have the US Attorney be the cop on the beat when there are no systemic changes,” Lerner said.  “That’s not the way to end the problem.” 

Sugarman, the Board of Elections official who  recommended the criminal prosecution, was appointed to her job by Governor Andrew Cuomo. She previously was deputy commissioner in Cuomo’s Transportation department.

Cuomo and de Blasio have had a rocky relationship. Blair Horner, with the New York Public Interest Research Group, says that will lead to charges, by some, that the investigation is tainted.

“Any ethics enforcer who comes right from the governor’s office or the legislature, is going to be operating under a cloud,” Horner said.

But he says the bipartisan State board of Elections signed off, and both the US Attorney and Manhattan DA are investigating, so they too must believe there could be something there.

“Any argument that this is about a political vendetta sort of melts away when you get back to the facts,” he said. “The facts at the end of the day is, was this a violation of the campaign finance laws or not, and increasingly it looks like it could have been.”

So far, the two Senate candidates, who both lost, have not been implicated in the growing scandal. But Sugarman did say in her memo that there’s evidence that some of the same illegal funneling of campaign contributions could have occurred in Western New York, in Senate races in the Rochester and Buffalo areas. But she said without anyone actually filing a complaint, she could not take any further steps. That changed Wednesday, when Monroe Republican County Chair Bill Reilich, wrote a letter to the Board of Elections asking for a review of the matter.

“This is very serious,” Reilich said. “This is something that could result in a misdemeanor or felony charges.”

The request could widen the investigation.

Karen DeWitt is Capitol Bureau chief for New York State Public Radio, a network of public radio stations in New York state. She has covered state government and politics for the network since 1990.
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