Money in Politics in New York, Aug. 12 Edition


Common Cause/NY and Fair Elections Ask Moreland Commission to Investigate Real Estate Contributions and 421-a Tax Break
A “Moreland Monday” analysis by Common Cause/NY is raising serious questions about millions of dollars in campaign contributions from real estate and development interests in New York City. Between 2011 and July, 2013 the Real Estate Board of New York (REBNY), a trade group of 37 real estate companies, contributed over $1.7 million to Senate Republicans, $478,000 to Senate Democrats, and $249,000 to Senate Independent Democrats. In the Assembly, the Democrats received $305,000 from the group, while Republicans accepted $67,000. REBNY also takes full advantage of New York’s LLC loophole– which allows each LLC controlled by a single corporation to be treated as an individual subject to a $150,000 aggregate contribution limit. Of REBNY’s political contributions, over 73 percent have gone to state candidates outside of New York City. The return on REBNY’s political investment in Albany is clear: the 421-a property tax abatement for new residential construction continues to balloon. The cost of foregone taxes from 421-a has increased from $130 million in 2002 to$1.1 billion in fiscal year 2013 – greater than the entire annual budgetfor New York City’s House Preservation and Development Agency. Susan Lerner, executive director of Common Cause/NY, urged “the Moreland Commission to use the full scope of their investigatory powers to fully examine this situation and recommend policies to end this exploitation.”

Moreland Commission Subpoenas Real Estate Developers for Documents
The Moreland Commission to Investigate Public Corruption has issued subpoenas to three high profile real estate developers in an apparent effort to examine whether there is any link between their campaign donations and huge tax breaks that were granted for several luxury apartments in New York City. A state law passed this session singled out five buildings in Manhattan for lower taxes. Moreland Commission Co-Chair Kathleen Rice has stated that the commission is committed to investigating loose campaign finance laws and their relationship with the epidemic of corruption scandals that rocked Albany earlier this year. “You can say ‘it’s just a couple of bad apples.’ Is it the political system itself that is the problem?,” Rice posed. The subpoenas have all been for documents thus far. No individual has been compelled to testify at this point. The New York State Board of Elections and the Joint Commission on Public Ethics have also both been asked to preserve all documents.

NYC Campaign Finance Board Disburses Public Funds for Primary Races
The New York City Campaign Finance Board (CFB) has approved the first round of public funds for 75 qualifying candidates running in citywide and city council races. As part of the matching funds program, NYC provides candidates that can raise enough small donations from constituents in their district with $6 for every $1 raised per donation up to $175. In the mayoral race, City Council Speaker Christine Quinn received $3.4 million in public funds, reflecting her large haul of small donations. Quinn was followed by Public Advocate Bill De Blasio who got $2.2 million. On the Republican side Joe Lhota, former MTA chairman, received $1.44 million. His spending limit was also increased from $6.42 million to $9.63 million reflecting heavy election spending by his primary competitor John Catsimatidis, who is self-financing his campaign. The board also denied public funds to City Comptroller John Liu’s mayoral campaign, citing “evidence of substantial non-compliance” with the law. A 139 page CFB report, to which Liu has released this response, details evidence of reporting discrepancies, insufficient documentation, and irregular means of attaining contributions by the campaign. Two former Liu campaign operatives have been convicted of scheming to route contributions through straw donors – people who contribute under their own name and get illegally reimbursed later. The CFB’s tough approach on compliance has helped prevent abuse of the City’s public funds.