For immediate release: For more information:

Tuesday, May 7, 2013 Bill Mahoney, (518) 817-3738

Malignant Neglect: The Abject Failure of the State’s Campaign Finance Laws

103,805 Violations of New York State Campaign Finance Law in Past Two Years

Comparing enforcement of campaign finance law in Albany and New York truly is a tale of two cities. In

Albany, it is unfortunately the worst of times for voters longing for ethical and transparent government

driven by a functioning electoral system.

In the 2009 election cycle, the New York City Campaign Finance Board imposed 128 penalties on 31

candidates for over-the-limit contributions. When the Board of Elections has received complaints about

similar violations in the state level – in 2009, for example, NYPIRG identified 346 corporations that

donated more than the state’s $5,000 aggregate annual limit – letters were sent to the donors, but no

penalties were ultimately levied.

In the 2009 election cycle, the New York City Campaign Finance Board imposed 95 penalties on 20

candidates for reporting donations from unregistered political committees. Yesterday, Citizens Union

identified 224 political clubs in New York City that had donated to or received funds from state

candidates while failing register as committees.

In the 2009 election cycle, the New York City Campaign Finance Board completed 219 audits as of April

2013. That year the Board of Elections completed 0. Recent news that their enforcement unit has no

staffers indicates this is unlikely to change anytime soon.

The one enforcement activity that the Board of Elections has claimed success in is identifying candidates

that do not file on time. In their 2011 annual report, they claimed to have mailed 9,848 letters to

treasurers letting them know their filings were late.1 They imposed small fines on 792 of them.

Unfortunately, this practice of enforcement-by-letter has not stopped candidates from failing to file. An

August 2012 report by NYPIRG found that over $31 million in campaign funds has gone “missing in

action.” 2,328 active committees had not disclosed any transactions in the July filing period, including

622 committees with over $12M in the bank that appear to have fallen off of the grid and simply

stopped filing.

1 2011 Annual Report, p 28: http://www.elections.ny.gov/NYSBOE/download/AnnualReport2011.pdf

Many of the violations summarized in this report are admittedly relatively minor. The failure of a

candidate to provide the address of a vendor they paid is not ipso facto evidence of corruption.

However, these omissions—in such huge quantities—can prevent auditors or members of the public

from uncovering more serious violations of the law. In any event, missing information means the public

gets an incomplete picture of how campaign funds are raised and spent.

The severity of corruption among participants in the New York State system has been exponentially

greater than in New York City, as can be seen in cases such as that of former Comptroller Hevesi. Cases

like the recent conviction of City Comptroller Liu’s treasurer are uncovered less frequently at the state

level since the information needed to alert investigators is masked by the shroud of opacity created

when thousands of candidates fail to obey disclosure laws.

Further, the massive number of minor violations is indicative of a system in which the purported

enforcement entity is willing to tolerate a complete disregard for its regulations. Lax enforcement of

minor violations can both hide more serious corruption problems and breed a general sense of

lawlessness that lets some politicians grow comfortable with ignoring ethics and election laws.

Many of the public officials recently accused or convicted of corruption would have been at the top of

the following lists in years past. Senator Pedro Espada and Assemblyman William Boyland, for example,

each failed to submit dozens of legally-required disclosure forms. Under a functioning campaign finance

system, these early red flags should have told investigators to examine their political dealings more

closely. Unfortunately, failure to obey basic laws such as the requirement to file are so common that

the entire system is held in disregard.

Methodology

This analysis examines campaign finance disclosure reports submitted to the New York State Board of

Elections between January 2011 and January 2013. All of the information is current as of April 26, 2013.

Violation Totals

Count Type

278 Entities reported as corporations giving more than $5,000 in 2012

18,156 Donations with no address

44,834 Expenditures with no address

454 Donations with no date

429 Expenditures with no date

14,606 Itemizations filed improperly

80 Expenditures with no payee

22,416 Expenditures with no correct expenditure code

2,328 Committees failing to report as of July

224 Political clubs not registered

Corporations Donating More than $5,000 in 2012

The Board’s database shows that 278 corporations gave over the legal $5,000 aggregate contribution

limit in 2012.2

Some of these apparent violations are explicit. The five companies listed below gave between three and

twelve times their aggregate annual limits in single checks. It seems clear they are each corporations

and do not simply appear as such due to filer error: searches on the Department of State’s website

identify the first four as such, and the fifth is given the suffix “INC.”

These are the apparent violations of law that should prompt an immediate response from the state’s

enforcement entity. Sadly, they are likely to produce silence.

Filer Name Type of

Transaction Date Amount Corporate Donor

REAL ESTATE BOARD PAC B- Corporate 17-Oct-12 $59,000.00

PLANNED DEVLOP MGMT CORP

SUFFOLK COUNTY CONSERVATIVE CHAIRMAN'S CLUB

B- Corporate 22-Oct-12 $50,000.00 KOCH IND INC

FRIENDS OF ED MANGANO

B- Corporate 21-Dec-12 $25,000.00 BOLLA MANAGEMENT

FRIENDS OF WILLIAM NAUGHTON

B- Corporate 18-Sep-12 $18,300.00 KINGS PARK IND INC

ASSOCIATION OF INDEPENDENT COMMERCIAL PRODUCERS, INC. PAC

B- Corporate 09-Feb-12 $17,500.00 CAPS UNIVERSAL INC.

Failure to Report Addresses

Election law clearly requires that all contributions over $99 and all expenditures of $50 or more must be

reported to the Board of Elections. Campaign treasurers need to report information such as the donor

or payee’s name and address. The need for this disclosure is obvious. Without the inclusion of

addresses, it is often impossible to tell who is funding a political campaign and might be seeking to

influence a politician.

2 This number is likely not exact: many candidates incorrectly list donations from LLCs or PACs as

corporations, meaning some of these are due to treasurers failing to obey the Board’s regulations; and

many corporations are reported with a variety of spellings, masking donations they may have given

above the legal limit. Past investigations by NYPIRG show that these two factors generally balance out.

The Board’s complete disregard for three complaints filed in recent years makes it pointless to perform

a thorough investigation.

An examination of the donations reported between 2011 and 2013 shows that this requirement is

routinely ignored. 2,168 committees failed to report the address of at least one donor over $99 that

was not identified as an unitemized grouping of smaller donations. There were a total of 18,156 of

these donations.

Of these, Senator Greg Ball failed to include full addresses for the largest number of contributors:

10 Committees Missing the Most Donor Addresses

Committee Name Donors >$100 Missing All/ Part of Address

NEW YORKERS ON THE BALL 387

NEW YORK ANESTHESIOLOGISTS POLITICAL ACTION COMMITTEE 275

FRIENDS OF DENISE SHEEHAN 248

RENSSELAER COUNTY REPUBLICAN COMMITTEE 208

FRIENDS OF THOMAS F. DIVINY 201

ULSTER COUNTY REPUBLICAN COMMITTEE 183

CERETTO FOR ASSEMBLY 158

WATERVLIET DEMOCRATIC ASSOCIATIONS 152

SUFFOLK COUNTY CONSERVATIVE CHAIRMAN'S CLUB 151

TOWN OF AVON REPUBLICAN COMMITTEE 142

25 of Senator Ball’s donations had partial information, in some cases, only the state. The remaining 362

had absolutely no part of the legally-mandated address submitted. Many of these donations were made

by individuals with fairly common names such as “James Ryan” and “Christophe [sic]3 Johnson.” By

failing to disclose their addresses, his committee obfuscates any attempts to determine who funded his

campaign.

10 largest schedule A, B, or C donations to Senator Ball with incomplete/ missing addresses

Date Street Address City State Zip Donor

Donation Size

2/9/2011 PAYPAL JUAN TORRES $5,000.00

7/7/2011 PAYPAL KRISTEN K FISHER $5,000.00

10/22/2012 PAYPAL ANDREW ROSENBERG $5,000.00

1/9/2012 MICHAEL H BRISMAN MD $5,000.00

1/12/2012 JOHN J GUTLEBER $5,000.00

10/29/2012 ARMONK NY 10504 BILL & MIC ENDICO $4,000.00

3 The Board’s filing software is so antiquated that it does not allow filers to enter first names of more than 10

characters, so this likely misspelling of “Christopher” cannot be blamed on Senator Ball’s treasurer.

9/13/2012 REAL ESTATE BOARD PAC $4,000.00

7/12/2012 PAYPAL MICHAEL TOBIAS $3,000.00

1/9/2012 PAYPAL ALFRED TINGER $2,509.95

1/12/2012 PAYPAL

SCUBA BIMINI DIVE RESORT

$2,509.95

A particularly telling committee is “New Yorkers For De Blasio,” which had 83 donations missing parts or

all of the address fields.

New York City candidates are required to file with both the Board of Elections and the New York City

Campaign Finance Board. When one examines DeBlasio’s three largest donors who had no information

in the address field in the BOE database, they will find that each of these had complete information in

the CFB’s database. Further, New York City’s legal requirement that donors identify their employers

makes it even easier to tell who is trying to exert influence on whom.

Donor Amount Employer Street # Street City State Fetner, Sondra

$4,950.00 SFA Properties

LLC

1 Bryant Park New

York

NY

Kaufman, Idy $4,950.00 Homemaker 4273 17th Avenue Brooklyn NY

Weingarten,

Allen $4,950.00

Stone Key Group

LLC

622 Third Avenue New

York

NY

44,834 expenditures of over $49 were missing all or part of an address.

Of the 5,815 committees making at least one itemized expense over this two year period, Senator Ball’s

once again leads the pack. 66.8% of his itemized expenditures were missing at least a part of the

payee’s address. He is joined on this list of most-frequent scofflaws by committees such as then Bronx

Republican Committee Chair Jay Savino’s housekeeping account, former opponent Justin Wagner, and

“People for Honest Government.”

Committee Expenses >$49 with no address

NEW YORKERS ON THE BALL 995

FRIENDS OF ERNIE DAVIS 479

COMMITTEE TO ELECT MAZIARZ STATE SENATE 411

FRIENDS OF JUSTIN WAGNER 379

MIKE RANZENHOFER FOR STATE SENATE 378

PEOPLE FOR HONEST GOVERNMENT 370

FRIENDS OF ADRIANO ESPAILLAT 300

FRIENDS OF CHRIS J. COSCHIGNANO 290

BRONX COUNTY GOP HOUSEKEEPING 278

As with donations that fail to provide addresses, this lax disclosure makes it difficult to perform the

audits that are desperately needed. It also obfuscates the true recipient of campaign money. Even

more troubling is that the Board has chosen to mandate the inclusion of a zip code in order to search

their database. If an individual wishes to search for campaign expenditures made to vendors in a certain

region, they will find it extremely difficult to locate information.

A public financing system will necessarily be coupled with improvements in this area. Candidates

seeking matching funds for contributions from constituents will need to verify their donors’ locations by

providing complete information. In New York City, for example, committees need to provide detailed

information about their expenditures to prove they are campaign-related and make them eligible for

public funds.

Dates

Election law requires that committees report dates of each expenditure and contribution. 454

donations of more than $99 either did not include a date or reported an unbelievable one (for example,

donations reportedly made on 5/14/1901 and 7/29/2020 were reported in the past two years).

At first glance, this can seem like an extraordinarily unimportant violation of Election Law. However, it is

absolutely essential if the Board is to perform its purported enforcement duties. When this information

is missing, it can be impossible to tell if a donor gave over the legal limit in a calendar year. A donation

appearing in a disclosure report submitted in the January 2013 filing period could have been made in

July 2012 or January 2013, which could affect both a donor’s aggregate annual limits and a candidate’s

limits for an election cycle.

This is not a difficult problem to fix. In most cases, a simple e-mail to a treasurer could have resulted in

the submission of corrections. Unfortunately, this chaos is yet another instance of the abject failure to

obey state election laws created by the Board’s negligence.

Committees with the most missing dates for donations over $99

Committee Missing Dates

FRIENDS OF PAUL FEINER COMMITTEE 112

LIVINGSTON COUNTY DEMOCRATIC COMMITTEE 21

FRIENDS OF DANIEL O'DONNELL 6

FRIENDS OF ERIN GALL 5

SHIRLEY HUNTLEY FOR STATE SENATE 4

FRIENDS OF TOM KEHOE 4

FRIENDS OF SENATOR SEWARD 4

FRIENDS OF ANTHONY SENFT 4

CAPITAL CITY COMMITTEE 4

NIAGARA COUNTY DEMOCRATIC COMMITTEE 4

Additionally, 429 itemized expenditures contained no or implausible dates. As is the case with

information on addresses, this absence makes it impossible for users of the Board’s website to locate

these expenditures using the Board’s search feature, since the date of an expenditure is a required field.

Credit Card Payments/ Reimbursements

The Board’s guidelines require committees to disclose who the ultimate recipients of contributions are.

For example, payments to credit card companies must be accompanied by information identifying the

vendors that were paid with the credit card. This requirement is an absolute necessity. If it were not in

place, political committees could simply make one payment to their credit card provider each month

and hide the names of the vendors they actually paid.

The Board’s handbook makes the requirements for reporting this information explicitly clear. Three full

pages4 show that the credit card company or reimbursed individual must be listed as a payee. The

political committee’s report must then list the names of all the vendors that received money from this

payment by placing $0 in the amount field, placing the check number of the credit card payment

followed by the letter “R” in the check number field, listing the dollar amount accompanied by the word

“memo” in the explanation field, and filling in the rest of a payee’s information as if it were a normal

expenditure.

Only 21% of the itemized transactions from reports filed from January 2011 through January 2013

exactly followed the filing instructions provided by the board. An additional 39% of the transactions

came close, but added superfluous words or characters that would prevent an auditor from analyzing

these expenditures.

18,494 Total itemized expenditures

3,888 Itemizations following Board regulations

7,162 Itemizations partially following Board regulations

7,444 Itemizations completely ignoring Board regulations

In many ways, this can be seen as a relatively minor peccadillo. For a significant number of these

expenditures, viewers can still discern whom was paid and how much. However, the general sloppiness

of the filings and their presentation in dozens of varying styles makes it nearly impossible to examine

them on anything larger than a case-by-case scale. A user of the database cannot isolate expenditures

of a certain size, and would face serious difficulties calculating the amount of money all committees paid

to a particular vendor.

4 Campaign Finance Handbook, pp 85-87: http://www.elections.ny.gov/NYSBOE/download/finance/hndbk2013.pdf

A more serious concern is that these wildly varying ways of entering the data make it impossible to

perform comprehensive audits of the sort that should be expected in a campaign finance disclosure

system. A number of candidates have reported paying themselves out of their campaign committees

yet failed to itemize how they spent this money. The chaotic presentation of information makes it

impossible for an auditor or general user to isolate these instances without reading through each of the

disclosure reports on a file-by-file basis.

One example of this can be found in the campaign committee Friends of Tom O’Mara, which reported

paying its candidate $14,863 in 2011 and 2012. While some of this money may have fallen below the

$50 threshold that would have required him to itemize, it is unlikely that all of it did. In fact, one of the

payments was specifically identified as being for expenses greater than $50.

There are thousands of other candidates that have similarly failed to itemize their expenditures, but the

nearly complete disregard for the Board’s filing regulations make them all but impossible to pinpoint.

Committee Amount Date Payee Explanation

FRIENDS OF TOM O'MARA $568.50 1/7/2011 THOMAS O'MARA MILEAGE

FRIENDS OF TOM O'MARA $255.50 5/31/2011

TOM O'MARA EXPENSE REIMBURSEMENT

FRIENDS OF TOM O'MARA $618.15 7/27/2011 TOM O'MARA EXPENSES

FRIENDS OF TOM O'MARA $820.00 7/29/2011 TOM O'MARA EXPENSES/MILAGE

FRIENDS OF TOM O'MARA $151.29 9/30/2011 TOM O'MARA EXPENSE

FRIENDS OF TOM O'MARA $387.23 9/30/2011 TOM O'MARA EXPENSES

FRIENDS OF TOM O'MARA $529.50 10/8/2011 TOM O'MARA EXPENSES

FRIENDS OF TOM O'MARA $1,374.00 11/18/2011 TOM O'MARA EXPENSES

FRIENDS OF TOM O'MARA $2,700.00 11/21/2011 TOM O'MARA

FRIENDS OF TOM O'MARA $1,024.34 6/27/2012 TOM O'MARA EXPENSE > $50.00

FRIENDS OF TOM O'MARA $1,034.40 7/12/2012 TOM O'MARA TRAVEL

FRIENDS OF TOM O'MARA $393.11 8/10/2012 TOM O'MARA EXPENSES

FRIENDS OF TOM O'MARA $1,100.00 8/24/2012 TOM O'MARA EXPENSES

FRIENDS OF TOM O'MARA $285.00 10/18/2012 TOM O'MARA MILEAGE

FRIENDS OF TOM O'MARA $1,344.36 12/3/2012

TOM O'MARA UNREIMBURSED MILEAGE

FRIENDS OF TOM O'MARA $2,277.48 12/18/2012

TOM O'MARA UNREIMBURSED MILAGE

No Payee

80 expenditures not identified as unitemized aggregates of payments less than $49 were so lacking in

transparency as to include no identified payee.

Committees with the most payments made to unidentified payees

Committee Payments with no payee

FRIENDS OF SENATOR SEWARD 16

FRIENDS OF ROBERT J. RODRIGUEZ 8

COMMITTEE TO ELECT WALTER T. MOSLEY 7

MARJORY JAEGER FOR TOWN CLERK 5

Missing expenditure codes

The Board of Elections requires all filers to include an expenditure code for their payments.

Expenditures should be labeled with a predetermined code identifying their purpose; for example,

“RADIO” should be used for purchases of radio ads, and “CMAIL” should be used for campaign mailings.

A huge number of expenditures are labeled with the wrong expenditure code. Shockingly, many

completely omit this required information or use codes that do not match any of those provided by the

Board. Others use the “OTHER” code, but fail to explain what these expenditures were for, as required.

This makes the performance of audits nearly impossible. Ideally, a user should be able to quickly notice

that a candidate spent nearly all of their campaign funds on international travel and none of their

money on actual campaigning. When this requirement is ignored, auditing for personal use becomes

unrealistic, as a user is required to manually read through millions of records each year.

Committees with the most missing, incorrect, or incomplete expenditure purpose codes

Committee Incorrect Purpose Codes

DEMOCRATIC ORGANIZATION OF QUEENS COUNTY 1020

LAWPAC OF NEW YORK 729

NEW YORKERS ON THE BALL 489

MIKE NOZZOLIO FOR STATE SENATE 408

Non-Filers

In August of 2012, NYPIRG found that 2,328 active committees with a combined total of $31,18,363.85

in the bank had not filed any July 2012 disclosure reports more than a month after their legal due date.

The following chart shows some of the top scofflaws. While many of those identified below have since

filed, the fact that they were able to avoid disclosing for as long as they did reveals that the Board is

impotent even in this area.

Committee Name Last Known $ On

Hand Last Time Reporting

Transactions

Last Time Filing a No-

Activity-Report

FRIENDS OF STEVE LEVY $4,012,403.71 2011 July None Filed

FRIENDS OF PETE MC GOWAN $1,127.007.38 2006 January None Filed

NEW YORKERS FOR ESPADA $290,556.24 2010 11 Pre Primary None Filed

RECALL BALL $200,000.00 2008 July None Filed

FRIENDS OF DICK GOTTFRIED $150,497.08 2012 January None Filed

FRIENDS OF LEECIA EVE $71,430.77 2010 July 2011 July

COMMITTEE TO RE-ELECT STATE SENATOR OLGA A. MENDEZ

$70,821.48 2004 11 Pre General None Filed

ANNE ADAMS FOR JUSTICE $66,000.00 2008 July None Filed

ESPADA FOR THE PEOPLE $62,593.51 2008 11 Pre Primary None Filed

TRUTH ABOUT BALL $50,000.00 2008 July None Filed

MONSERRATE 2010 $46,731.51 2010 32 Pre Primary None Filed

PEOPLE FOR JIMMY DAHROUG $45,565.82 2009 July None Filed

FRIENDS OF MCCALL/MEHIEL $43,281.98 2006 January 2006 July

RESPONSIBLE NEW YORK $41,556.11 2012 January None Filed

COMMITTEE TO ELECT ELIO FORCINA

$40,907.15 2011 January 2012 January

WRIGHT FOR THE COUNTY $40,834.90 2010 July None Filed

FRIENDS OF MICHAEL BENJAMIN $40,592.65 2010 July None Filed

NEW YORKERS FOR DILAN $39,615.83 2011 January None Filed

WILLIAM F. BOYLAND JR 2010 RE-ELECTION CAMPAIGN

$30,950.00 2010 July None Filed

Unregistered Political Clubs

Yesterday, Citizens Union identified 224 political clubs that should have registered with the Board of

Elections but did not. For more information, call CU’s Alex Camarda at (202) 494-0611.