Thursday, October 6, 2016

NY Ethics Panel Investigating NYC Mayor de Blasio’s Nonprofit with Broad Subpoena


A New York State Ethics panel investigating New York City Mayor Bill de Blasio’s Political Nonprofit organization has served a sweeping subpoena on City Hall seeking communications among the Mayor, his Aides, the Nonprofit, its Donors and Consulting firms that worked for it, people with knowledge of the matter said.

The scope of the subpoena suggests a widening of the investigation by the State Joint Commission on Public Ethics (JCOPE), which enforces State Lobbying laws and has been focused on whether the group, the Campaign for One New York, illegally lobbied the City in 2015.

At the same time, several lawyers representing donors to the group who have been contacted by the panel said the inquiry also appeared to be focused on whether some donations from Lobbyists or their clients who have business before the City actually constituted Undisclosed Gifts to the Mayor. Any such Undisclosed Gifts would violate State Lobbying laws.

The subpoena was served on Sept. 14, just four days after a State Supreme Court Judge in Albany rejected the group’s effort to quash two earlier subpoenas from the panel. The Judge ordered the Nonprofit and several Consulting companies that had done work for it and for Mayor de Blasio’s Mayoral Campaign to provide almost all of the documents sought by the panel, also known as JCOPE.

In doing so, the Judge rejected arguments from the group and the Mayor that the panel’s inquiry was politically motivated. The ruling limited the Group’s efforts to stop disclosure of communications with the Consulting companies and their employees. Mayor de Blasio, a Democrat, had contended that such communications were privileged and should be kept confidential.

The new subpoena, according to people familiar with it, seeks a broad range of documents and communications from the Mayor, his Senior Aides and anyone in City Hall assigned to do work related to the nonprofit, which shut down in March.

It also seeks emails from the Mayor and his Staff to Donors, Lobbyists, Consultants and Reporters, as well as any telephone logs, calendars or schedules relating to the Mayor and the Nonprofit, the people said.

A Mayoral spokesman said in a statement on Tuesday that when the Nonprofit was formed, in late 2013, the Administration sought guidance from the City’s Conflict of Interest Board on the “appropriate management and solicitation of funds, consistent with applicable conflicts of interest laws,” and that the Mayor’s office “consistently followed that guidance throughout” the Group’s existence.

Laurence D. Laufer, a lawyer for the Campaign for One New York, said in a statement, “We are sad, but not surprised, that Jcope’s year-and-a-half-long political fishing expedition is continuing, nor are we shocked that they have invented yet another frivolous legal theory to justify its existence.”

Walter McClure, a spokesman for the Commission, said that under law, he could not comment on anything that might relate to an investigative matter.

The inquiry by the Ethics panel, which has the authority to bring administrative actions and seek fines, is separate from more than a half-dozen Federal and State criminal investigations that in recent months have examined various aspects of the Mayor’s political fund-raising. One of those, being conducted by Federal Prosecutors in Manhattan and the Federal Bureau of Investigation, has also focused in some measure on the Campaign for One New York, according to people briefed on the matter.

Critics have raised questions about the relationship between the Nonprofit and the Mayor, who had an active role in fund-raising for the Group.

The questions include whether the Group was simply working as an arm of his Campaign and whether giving money to it may have been a way for those with business before the City, or those seeking such business, to curry favor with him without being subject to Campaign-Finance limits. The group initially declined to release its donors’ names but ultimately did so in response to criticism.

The nature of that relationship seemed even murkier after the Albany Judge’s ruling, when Mayor Blasio’s response seemed to tacitly acknowledge that there was little separation between the Nonprofit and him and his Administration. When asked why the Nonprofit had refused to comply with the subpoena, Mayor de Blasio said, “We disagree with judge’s final judgment, and so we’re exploring appellate options at this point.”

The Campaign for One New York is what the Internal Revenue Service characterizes as a Social Welfare Nonprofit, which means that it was supposed to work primarily to promote the common good and welfare of an entire Community. Such Nonprofits, which include groups like the Sierra Club and the National Right to Life Committee, are allowed to participate in politics, as long as politics does not become their primary focus.

In its incorporation papers and documents filed with the I.R.S., the Group said that its purpose was to “advocate for One New York and New York City by informing the public and policy makers about Legislative and Public Policy options.”

After the United States Supreme Court loosened campaign-finance rules in its 2010 Citizens United ruling, many Political Consultants and Politicians started using Social Welfare groups, which do not have to disclose donors, to hide the source of Federal Campaign donations.

Having a Nonprofit act as an arm of the Mayor raises questions about transparency and about whether it is just intended to help him win re-election and be a place where people with business before the City can donate to gain favor.

The idea of having a politician so closely tied to a Social Welfare Nonprofit has prompted controversy in recent years. Allies of Govs. Andrew M. Cuomo of New York, a Democrat, and Chris Christie of New Jersey, a Republican, formed such Nonprofits to advance each Administration’s goals. Both were shut down after criticism from lawmakers and Campaign Finance watchdogs.











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