Questions raised over money sent to Putnam County
by Chip Rowe
The Manhattan District Attorney’s office says it found no criminal wrongdoing after investigating accusations of improper campaign fundraising in 2014 by the mayor of New York City that benefited, among others, two state Senate candidates in Putnam County. But it also concluded the actions amounted to an improper “end run” around campaign finance laws.
“The transactions appear contrary to the intent and spirit of the laws,” wrote D.A. Cyrus Vance in a 10-page letter detailing the findings. He said his office could not prove beyond a reasonable doubt that a crime had occurred, both because the mayor and his aides had relied on the advice of their attorneys and because the election laws are open to interpretation.
The investigation focused on two races in 2014 that included parts of Putnam County. In October of that year the Putnam County Democratic Committee distributed hundreds of thousands of dollars, raised largely in New York City by aides and associates of Mayor Bill de Blasio, to the campaigns of incumbent Terry Gipson, who represented District 41, which includes Philipstown and Beacon, and Justin Wagner, who was running for the District 40 seat, which includes eastern Putnam County. The mayor made clear that year he wanted to obtain a Democratic majority in the Senate to further the city’s agenda.
The district attorney’s probe began after the state Board of Elections concluded de Blasio’s team had engaged in a coordinated effort to raise the money and distribute it through county committees to circumvent campaign contribution limits and disguise the names of contributors. At the time, Board of Elections Chief of Enforcement Risa Sugerman wrote that the violations appeared to be “willful and flagrant.”
State law limits the amount of money that individuals or groups can contribute to a legislative race; in 2014 it was $10,300 per general election cycle (now $11,000, after adjustments for inflation). County committees, however, in 2014 could receive contributions up to $102,300 from a single source (now $109,600). They also are not limited in how much they can contribute to a candidate but are not permitted to accept donations earmarked for a particular candidate.
According to the report by the Manhattan D.A., the Putnam County Democratic Committee received contributions totaling $671,329.79 in 2014, after having never raised more than $38,652 in a year. The Putnam Democrats transferred $273,750 to Gipson’s campaign and $367,000 to Wagner’s campaign, both of which “almost immediately” spent the funds on political consultants. Gipson lost his seat to Republican Sue Serino (he challenged her in 2016 but lost again), while Wagner was defeated by Republican Terrence Murphy.
Similarly, the Ulster County Democratic Committee received contributions totaling $364,000, having previously raised no more than $50,438. In October 2014, nearly all of the funds were transferred to the campaign of Cecilia Thacyzk, the Democratic incumbent for the 46th District, which extends from Amsterdam to Kingston. Thacyzk won her seat in 2012 by 18 votes over George Amedore but lost in a rematch in 2014 by 11,000 votes.
In a statement, Terrence Murphy, who was re-elected in 2016, called the decision not to prosecute “incredibly disappointing,” terming the contribution to the Putnam Democrats “a blatant attempt to evade campaign finance limits.” Murphy has introduced legislation to make what he called the “de Blasio loophole” from an election-law felony to the equivalent of money laundering.
When the investigation was announced last year, the Putnam Democrats said all the contributions received and expenditures were within the law, and that the committee had disclosed to the Board of Elections each contribution and payment. In a memorandum prepared for the committee, attorney Laurence Laufer wrote: “It is hard to conceive how a political party committee choosing to participate in the party’s statewide effort to help elect the party’s slate of candidates to the state Senate could be characterized as a mere straw donor in a conspiracy unless you found evidence that the committee’s officers and members were held hostage and forced to deposit and disburse funds at gunpoint. I am guessing that’s unlikely.”
A separate federal investigation of Mayor de Blasio also concluded without charges. In a statement on March 16, Joon Kim, the acting U.S. attorney for the Southern District of New York, said his office and the FBI had investigated whether de Blasio and others in 2013 had solicited donations from individuals who sought favors from the city and then “made or directed inquiries” on their behalf to city agencies.
Kevin E. Foley contributed earlier reporting.