On Sept. 10, 2014, the Mayor convened roughly 160 potential donors, many of whom had contributed to his Mayoral campaign, at a breakfast meeting at the Midtown Manhattan offices of a law firm, Kramer Levin. Mayor de Blasio left the meeting before his Campaign Finance Director, Ross A. Offinger, made the pitch for donations, according to two people who were present. The Mayor returned to the room soon after. A company linked to Michael Kohn, a businessman with real estate interests in Brooklyn, gave $100,000 to the Ulster County Democratic Committee in October 2014; in early 2015, another company associated with him gave $50,000 to the Mayor's nonprofit.
During most election cycles, Putnam County, N.Y. receives few donations of more than $1,000 coming into the local Democratic Committee in the decade beginning in 2004. But 2014 was different. Amid an aggressive push by Mayor Bill de Blasio to wrangle donors to help secure Democratic control of the State Senate, a flood of large contributions started pouring into the Putnam Committee and at least two other County Committees.
Over two weeks in October that year, the Putnam Committee received 16 donations, totaling $547,300, from labor unions, real estate interests and individuals including the grocery store magnate John A. Catsimatidis. The money then went to two Democratic candidates in tight Senate races, Terry Gipson and Justin Wagner, who would have been barred by State Election law from collecting such large sums directly.
Now those donations, solicited in part by the mayor’s campaign apparatus, are under scrutiny as part of a multi-pronged criminal investigation being conducted by Federal and State authorities, several people briefed on the matter have said.
The inquiry into the 2014 donations is based on a State ban on contributions to a Party Committee if they are given or solicited for a particular candidate, with an intent to evade individual contribution limits. Party Committees can receive contributions of up to $102,300, far more than the $11,000 General Election maximum from individuals directly to State Senate candidates. And the Committees are not restricted in how much they can transfer to candidates.
It appears that prosecutors have never made a criminal case under this section of State Election law, a violation of which would be a felony: Records going back to 1999 show no arrests or arraignments on the charge, according to the State Division of Criminal Justice Services.
Nonetheless, what prosecutors investigating the State Senate fund-raising effort appear to be seeking, in subpoenas issued this week by the Manhattan District Attorney’s office, is evidence of a scheme to use the county Committees to illegally redistribute contributions to candidates favored by Mayor de Blasio.
There seemed to be little question where the money sent to County Committees should ultimately end up, officials with the Committees said. “We were told, before we got it, how it was going to be used,” said Louis Epstein, the First Vice Chairman of the Democratic Committee in Putnam County, a far-northern suburb of New York City. A similar message was received in Monroe County, where an incumbent State Senator, Ted O’Brien, faced a tough re-election in Rochester.
“Generally what happened was somebody said we have a donor who would like to help Ted,” said Dave Garretson, Chairman of the Monroe County Democratic Committee at the time. “They would like to make a contribution to the county committee where the contribution limit is higher.” Mr. Garretson said that he had made it clear he could not promise how the money would be spent, and that there were never “any conversations with donors where there was a wink-wink arrangement.” He and Mr. Epstein also said that their Committees sought advice to ensure that their handling of the money was proper, adding that they did not deal directly with donors.
Neither the County officials nor Mayor de Blasio, who held fund-raisers in September and October of 2014 in New York City on behalf of upstate Senate Democrats, has been accused of any wrongdoing.
Money has always played an outsize role in political races, but its influence increased in 2014, when an aggregate limit of $150,000 on individual donors was struck down in a court, paving the way for a single donor to give the $102,300 maximum to more Party Committees and, ultimately, embattled candidates.
The process of soliciting donations for the County Committees, which political-campaign veterans characterized as commonplace and legal, appeared to be a central part of the State Prosecutors’ investigation into the fund-raising for the Senate races.
Mayor de Blasio’s efforts to raise money on behalf of Senate Democrats began early in his administration. On Sept. 10, 2014, he convened roughly 160 potential donors, many of whom had contributed to his Mayoral campaign, at a breakfast meeting at the Midtown Manhattan offices of a law firm, Kramer Levin, making the case for why his liberal agenda would falter in Albany unless the Democrats gained control of the Capitol.
At the meeting, the mayor’s top political aide, Emma Wolfe, outlined which of the swing races that year could tip the balance in favor of Democrats in the State Senate. While politicians are not usually shy about asking for money for their campaigns, Mayor de Blasio left the meeting before his campaign Finance Director, Ross A. Offinger, made the pitch for donations, according to two people who were present. The Mayor returned to the room soon after. Mr. Offinger has come under scrutiny in two different aspects of the sprawling Federal investigation.
The use of Local Committees stemmed, in part, from a belief among some political consultants and de Blasio administration officials that Gov. Andrew M. Cuomo had not pressed forcefully for a Democratic takeover of the Senate, several people with knowledge of the strategy said. The State Democratic Party Committee is closely allied with Gov. Cuomo. “You can’t give money to the state committee, forget it,” Bill Samuels, the Founder of EffectiveNY, a nonprofit group devoted to Government reform, who is a supporter of Mayor de Blasio’s, said in an interview this week.
Several of those who gave to the County Committees in 2014 were also major donors to Campaign for One New York, a nonprofit organization created to support Mayor de Blasio’s agenda. The group’s fund-raising has become a focus of a sprawling investigation by the United States Attorney in Manhattan, Preet Bharara, and the Federal Bureau of Investigation, that has ensnared top Police Department officials and extended into the political sphere. Mr. Bharara’s office, as well as State Prosecutors, have now also issued subpoenas to NYCLASS, a group that donated to the Mayor’s campaign, and had spearheaded an effort to ban horse carriages in the city, according to Michael McKeon, a spokesman for the group.
The main Federal investigation, which covers fund-raising by Mayor de Blasio and his staff since his 2013 election campaign, is examining whether donors were promised or received favorable municipal treatment in exchange for their contributions. The nonprofit is in the process of closing down, the Mayor said last month, explaining that its work advocating universal prekindergarten and affordable housing was finished. “I hold myself and my administration to the highest ethical standards,” he has said repeatedly when asked of the Federal investigation.
A review of State campaign records and voluntary disclosures by Mayor de Blasio’s nonprofit show an interlocking web of donors with interests before the City. Beyond the labor unions, which give lavishly to Democratic campaigns in any election, there are men with little prior experience as major donors in New York politics on the rolls of Local and State Campaign Committees.
Jona S. Rechnitz, a young real estate developer from Los Angeles who is under scrutiny by the Federal authorities, gave $102,000 to the Statewide Democratic Senate Campaign Committee and $50,000 to the Mayor’s nonprofit and bundled more than $44,000 for Mr. de Blasio’s 2013 election.
A company linked to Michael Kohn, a businessman with real estate interests in Brooklyn, gave $100,000 to the Ulster County Democratic Committee in October 2014; in early 2015, another company associated with him gave $50,000 to the nonprofit.
Others donors, like Mr. Catsimatidis, the grocery chain owner and a former Republican Mayoral candidate, were first-time contributors to the Mayor’s causes. “I saw him at the Al Smith dinner and he said, ‘Can you do me a favor and send it to them?’” said Mr. Catsimatidis, recalling a conversation with Mayor de Blasio. “I never got anything in return. Later on I found out they sent it to the State Democrats, the Senate. You know how I found out? I found out because someone told me, thank you.”
An assistant of Mr. Catsimatidis’s who handles some of his political donations said that Mr. Offinger, who was also the Treasurer of the Campaign for One New York, instructed him on the details of where to send the check. “I take hundreds of these guys’ phone calls every day,” the assistant, Matthew Wanning, said. “Ross was one in the mix.”
In all, the Democratic Committees in Putnam, Ulster and Monroe Counties raised at least $1.2 million in large donations from Union Political Action Committees, private companies and individual donors, State records show, and sent money to four Senate candidates in close races.
Cecilia Tkaczyk, who received money in October 2014 from the Ulster County Committee during her unsuccessful re-election campaign, said the State Party’s efforts, which included fliers attacking her opponent, ended up working against her. She declined to comment on whether she had gotten a subpoena from State prosecutors, which people familiar with the investigation said had gone to some candidates in tight races that year.
Mr. O’Brien, who received money from the Monroe County Committee, said he had not received a subpoena. “I have not been contacted by a soul about it,” he said.
Mr. O’Brien said he was not privy to the conversations about how the money ended up in his Campaign coffers. “I didn’t have any conversations with anybody that I recall,” he said. “I was so busy trying to run the day-to-day campaign stuff.”
Despite the push by Mayor de Blasio to alter the balance of power in the Capitol that year, the effort failed. Mr. O’Brien and other Democrats who got the influx of donations lost, and Republicans maintained control of the Senate.
NYC Wins When Everyone Can Vote! Michael H. Drucker
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