More than half the money given to the candidates in last month’s special election to replace former state Sen. Dean Skelos was transferred by political party committees, a long-standing practice that is under new scrutiny following criminal investigations into New York City Mayor Bill de Blasio’s fundraising operation.
Campaign finance records filed last week show that transfers from party committees accounted for $1.9 million of the total $3.5 million that Democrat Todd Kaminsky, who won the April 19 election, and Republican Chris McGrath collected during the three-month campaign for the 9th Senate District.
Under state law, the party committees, which can receive contributions often 10 times larger than candidates can directly, are permitted to move unlimited amounts of money into candidates’ campaign accounts. They cannot, however, agree to earmark donations they have received for eventual transfer to specific candidates.
The latter scenario was alleged by state Board of Elections investigator Risa Sugarman in a recently released report regarding de Blasio’s 2014 fundraising efforts on behalf of Democratic State Senate hopefuls.
Sugarman wrote that the mayor conspired with a hotel union, a teachers union and political consultants to channel at least $971,000 to three dormant upstate Democratic committees for transfer to specific candidates. She recommended the Manhattan district attorney open a criminal investigation.
De Blasio’s administration, which is reportedly also under federal investigation for fundraising practices, has said it followed all laws.
In the Kaminsky-McGrath race, both Democrats and Republicans deny their transfers involved any earmarks, but GOP officials have used the de Blasio case to question Nassau County Democratic Committee transfers to Kaminsky, and have asked Sugarman to investigate.
Whether or not earmarks were involved, campaign finance experts say the general practice of party committee transfers to candidates amounts to a loophole that boosts the influence of party leaders and big donors.
“When the limits for contributions to the parties are much higher than for candidates, contributions to the parties in effect become a pass-through to the candidates,” said Michael Malbin, a University at Albany political science professor and director of the Campaign Finance Institute, a nonpartisan Washington, D.C., think tank.
Committees can receive up to $109,600 in contributions from a single entity. The limits on contributions to individual candidates range by office but are universally much tighter; it was $11,000 in the Kaminsky-McGrath special election.
As a result, wealthy donors and the political action committees of unions and corporate interests often give to political party committees that are backing candidates they favor — in addition to, or rather than, the candidates themselves.
In the Kaminsky-McGrath race, for example, the Communications Workers of America PAC, which endorsed Kaminsky, gave $109,600 to Nassau Democrats on April 12, while the state Trial Lawyers Association’s PAC, which has backed a GOP-led Senate, gave more than $100,000 to the New York State Senate Republican Campaign Committee in the months after Skelos (R-Rockville Centre) vacated his seat due to a federal corruption conviction.
Nassau Democrats transferred $253,000 to Kaminsky (D-Long Beach) in the last two weeks of the campaign. The state Democratic Senate Campaign Committee moved $707,742 to Kaminsky over the last three weeks.
The Senate Republican committee transferred a total of $1 million to McGrath’s campaign over two months, including $243,700 in the last 10 days of the race. The transfers accounted for more than two-thirds of the $1.5 million McGrath’s campaign brought in.
“It’s a common practice, is legal and should not be considered sneaking under the door,” Nassau Democratic chairman Jay Jacobs said of party transfers. “It’s an open door.”
Senate GOP spokesman Scott Reif said: “We don’t earmark on the advice of others.”
Such transfers are common in almost every competitive race in New York State.
Nassau County Republicans last year transferred $550,000 to former Hempstead Town Supervisor Kate Murray’s unsuccessful campaign for district attorney, while county Democrats also transferred $220,000 to former County Executive Thomas Suozzi’s failed 2013 attempt to win back his seat.
Gerald Benjamin, a political scientist at SUNY New Paltz, said the stark difference between contribution limits to political parties and candidates should be part of a “massive rethinking of how we’re financing campaigns,” which also includes the well-known “LLC loophole” that allows corporations to use subsidiaries to exceed corporate donation limits.
But absent the full public financing of campaigns statewide, Benjamin said “my experience, over time is that money, like water, finds a path.”
“We can make incremental adjustments from year to year,” Benjamin said, “but I’m not convinced that we won’t come back 10 years from now and find somebody has invented another little path.”
Senate Republicans are pointing out common donors and fundraisers between Nassau Democrats and the de Blasio case.
“As a former federal prosecutor, Todd Kaminsky should know better,” Reif said.
The Republicans noted that some of the same unions that worked with de Blasio in 2014 gave large donations to Nassau Democrats during the Kaminsky campaign, many for much higher amounts than they had ever given the committee before.
The committee also used one of de Blasio’s fundraisers, Ross Offinger, who secured a $50,000 contribution on April 7 from New Jersey based A&J Contracting LLC.
Public records do not indicate who owns A&J Contracting. But after a report in the Albany Times-Union last month that called the contribution “untraceable,” Jacobs said he used an address on the contribution’s wire transfer to tie A&J Contracting to the New York City real estate developer the Lightstone Group, whose CEO, David Lichtenstein, was appointed to a city board by de Blasio.
A Lichtenstein spokesman said in a statement that “the contribution was made in compliance with applicable campaign finance laws,” but did not answer further questions.
Jacobs said he never had direct contact with Lichtenstein, and that the A&J contribution was not solicited specifically to be transferred to Kaminsky.
“I have no information or any reason to believe that he would have done anything that was wrong,” Jacobs said of his fundraiser.
He and Kaminsky’s aides answered criticism by pointing out Republicans’ own transfers, including $125,000 from the campaign account of retiring state Sen. Charles Fuschillo in 2014 to the Nassau GOP Committee. The committee then made transfers in that same amount to state Sen. Michael Venditto, who was then running for the seat.
“Their campaign finance schemes have been well documented, yet they still refuse to even entertain any reform proposals,” said Kaminsky spokesman Evan Thies.
The party committees, in addition to transferring $1.9 million to Kaminsky and McGrath, spent another $2 million directly from their accounts on mailers, polling and other items related to the race.
Combining the transfers and direct spending, party money made up the majority of the $7.1 million in total campaign expenditures.
Kaminsky, a former state assemblyman, and McGrath, a personal injury attorney from Hewlett, will face off again in the November general election.