Money in Politics in NY: Feb. 14 Edition

Congressmen Support Public Campaign Financing
Three members of New York’s congressional delegation announced their support for publicly financed elections this week. U.S. Representatives Hakeem Jeffries, Sean Maloney and Dan Maffei held aconference call for reporters along with Karen Scharff of Citizen Action of New York to call for the passage of a bill that would create a public funding system for congressional elections. The Government by the People Act is sponsored by Representative John Sarbanes and Minority Leader Nancy Pelosi. It provides matching funds to candidates who garner small contributions, like the system Governor Andrew Cuomo has proposed in his executive budget.

Papers Question Wisdom of Liquor Warehouse Bill
A new bill proposed by Senator Jeffrey Klein (IDC-Bronx) would require all spirits to be warehoused in New York for at least 24 hours before they can be sold in the state. Currently many liquor merchants store their products in New Jersey, where the imported wine typically arrives and the cost of storage is lower. Wine sellers claim the legislation will lead to higher prices for consumers, while proponents argue that it would put New York law on par with other states and create more jobs. Empire Merchants and Southern Wine and Spirits are two distributors with warehouses in New York that allegedly stand to benefit from the bill. Pieces criticizing the legislation appeared in the Albany Times-Union and the Daily News. The Times-Union column revealed that Empire Merchants and its leadership have donated $53,000 to Senator Klein since 2009, and $31,000 to his Independent Democratic Conference, which co-leads the Senate in a coalition with the Republicans. A New York Post investigation last week illustrated that Empire Merchants and its subsidiaries have donated a total of $797,850 to state lawmakers since 2009, while Southern Wine and Spirits has contributed $106,856 to state campaigns over the same period.

Congressman Grimm’s Contributor Arraigned in Federal Court
Diana Durand, a 47-year-old resident of Houston, was arraigned in federal court in Brooklyn on Wednesday for irregularities related to U.S. Representative Michael Grimm’s campaign. A Justice Department probe of the campaign alleges that Durand, a former business associate of Grimm, illegally reimbursed donors in order to evade legal contribution limits and funnel more money to Grimm’s 2010 Congressional campaign. Stuart Kaplan, the attorney representing Durand, said that Durand simply did not understand the regulationssurrounding campaign finance. “This is a woman that was never involved with politics before she met Michael Grimm. I think she is totally or she was totally devoid or ignorant to the rules or regulations or laws or ethical constraints with respect to fundraising,” said Kaplan. Grimm’s campaign has been facing allegations of irregularities for the past two years. Last year, Ofer Biton, a former fundraiser for Grimm pleaded guilty to visa fraud. And a few weeks ago, in a video that has since gone viral, the Congressman threatened a reporter who posed questions regarding his campaign. However, Grimm has not been implicated in any of the federal investigations.

Attorney General Responds to Dark Money Group’s Attempt to Quash Subpoena
Attorney General Eric Schneiderman has filed documents in response to a dark money political consultant’s request to quash a subpoena by the Moreland Commission to Investigate Public Corruption. The Moreland Commission’s December subpoena to Strategic Advantage International sought to shed light on the donations to and expenditures by Common Sense Principles, which spent more dark money in the 2010 and 2012 elections than any other entity in the state. The sole contributor listed on state records for the group was a shell company; however the group’s website was registered to Strategic Advantage International. According to filings, Common Sense Principles raised $2.62 million in 2010 and spent $2.54 million to run attack ads against Democratic state senators. Attorney General Schneiderman said the commission wants to gain an understanding of how dark money was spent in the state, in an effort to improve state disclosure and political expenditure laws.