Bad math 12 years ago inflates Smithtown GOP finances, officials say

An apparent math error from 2006 led Smithtown Republicans’ leadership committee to overstate its finances in every filing since by roughly $55,000, state and county officials said.

The committee entered a $2,834.16 balance for July of that year in the account used for expenses such as rent and utilities, according to New York State Board of Elections records. The committee added $26,500 from a fundraising account and should have subtracted $27,497.77 in expenses.

That should have yielded a closing balance of $1,836.39. But the committee recorded expenses as a negative number. By subtracting negative $27,497.77, the Republicans actually added that amount, incorrectly inflating the closing balance for that reporting period to $56,831.93.

The error was never corrected, providing a comfortable, if illusory, cushion as Smithtown Republicans took in and spent amounts in that account typically in the mid-five figures annually, according to records, yielding closing balances that ranged from a low of $54,347.27 reported in 2007 to a high of $71,535.54 in 2014. The last reported closing balance, in July, was $67,378.66.

In an interview Tuesday, Smithtown GOP chairman Bill Ellis said town Republicans have always accurately recorded “all the money that comes in and all the expenditures that go out” and abided by the state's finance reporting schedule.

He said that “there’s no $68,000 in any account.” He said he knew nothing about the discrepancy with campaign finance records, which he said he does not review. “I don’t know anything about that because I don’t handle that,” he said. "That’s 12 years ago.”

Any suggestion that he bears responsibility as the top Republican leader in the town is incorrect, he said. “I’m not responsible for anything, according to the election law,” he said.

“I don’t see any violation here," said John W. Conklin, director of public information for the New York State Board of Elections, though he said his agency's compliance unit likely will ask Republicans to amend their filings. "I think they entered a debit creating a double negative" for the July 2006 filing, he said.

Two changes to campaign finance reporting rules in 2006 may have contributed to the apparent error, he said. Committees switched from filing paper reports with county election boards to filing electronically with the state that year; and the number of committees required to file with the state jumped from 4,000 to 14,000. The campaign finance office at that time had a staff of just six. They checked filings in response to specific complaints, but didn't generally review them.

The filer — usually but not always the committee treasurer — verifies the information on filings as true and accurate as part of the submissions process, Conklin said.

Ellis said filings are examined by a certified public accountant, but he declined to identify that person.

Louis Necroto was the treasurer through April 2012 and Charles Michaels is the current treasurer, Conklin said.

Voting records show two Louis Necrotos in the county, one of whom is a certified public accountant and the county's chief deputy comptroller. Michaels and that Necroto did not respond to requests for comment.

Correcting the finance math by subtracting $54,995.54 from the reported July balance yields $12,383.12.

Ellis would not confirm that amount. “Our records are our records,” he said.

While money from the Republicans' housekeeping account cannot legally be spent to promote specific candidates, Ellis' political rivals said its inflated balance may have influenced local candidates or those considering running for office.

Nicholas LaLota, GOP commissioner for the Suffolk County Board of Elections, wrote in an email Monday: “Former Deputy Commissioner Ellis, who I fired in 2015, has been overreporting his committee’s account by nearly $55k in every one of his 25 filings since 2006. It is possible the initial act was an innocent arithmetic mistake, but Ellis, the Bernie Madoff of Suffolk Politics, used the issue to his advantage in the 12 years since. He did so to make his committee appear stronger than it was and fend off would-be political challengers.”

Ellis, asked to respond to LaLota's comment, said, "I have nothing to say for the story because of the federal lawsuit against Mr. LaLota in which I am a witness." A Suffolk Conservative Party secretary alleged in a 2015 lawsuit that LaLota had illegally fired him from his elections board job; LaLota said then that the suit had "no merit."

Smithtown Democratic chairman Ed Maher said the purported size of the GOP account had made it difficult to recruit candidates. “If their number is inflated or wrong, it might change things," he said. "Maybe Republicans don’t have the advantage we think they have.”

Ellis won the town chairmanship in 2003 and for a time rose to county leadership in the party. A one-time public relations director for Suffolk County's correction officer union, he went on to serve as the county’s deputy GOP elections commissioner before being fired from the job.

Smithtown Republicans control town government and have elected Republican lawmakers at the county, state and federal levels. Ellis said the town party thrived under his leadership, adding, “We’re the most successful Republican organization in the County of Suffolk.”