Opinion Editorial on Campaign Finance
Patry's balk to their benefitJames Odato
Monday, April 8, 2013
ALBANY --— State Senate leader Jeffrey Klein would have had a serious cash flow problem during his hard-fought but successful 2004 election campaign if Republican adversaries had used a weapon against him won in a never-publicized court victory.
But for some reason, Republican elections attorney John Ciampoli, working for the Senate GOP majority, did not utilize a state court judgment that might have bankrupted Klein's campaign account just before the election that ushered the Democrat from the Assembly to the upper house.
Klein now leads the Independent Democratic Conference, which shares control of the Senate with Republicans. He will be facing numerous pleas for campaign finance reforms this session.
Nine years ago, about a month before Klein was elected to fill the seat of banished Republican Sen. Guy Velella, Ciampoli won a novel election law case that could have led to one reform: closing a glaring loophole used by a candidate who collects funds for a run at a high office but changes their mind and enters the race for a lower position.
The suit challenged Klein's ability to exceed contribution limits for a Senate campaign by drawing funds from campaign accounts unrelated to his Senate run. Most importantly, it sought to close off money collected from donors who gave beyond the limits of an account set up for a Senate candidate.
Klein's 2004 Senate campaign relied heavily on a committee he opened for a bid to become attorney general, a statewide office with much higher donation thresholds. But he abandoned that effort once Velella's seat became open after the veteran lawmaker's felony conviction in a corruption case.
Examining the records of a Senate campaign committee called Friends of Klein, Acting State Supreme Court Judge Thomas J. McNamara in Saratoga Springs reviewed its receipt of three lump sums in the summer of 2004: $1,008,836 from Klein 2006, which had been opened for the attorney general run; $17,663 from Klein for Assembly and another $58,000 from Klein 2006.
At the time, donations from any one entity for a state Senate campaign were capped at $5,400 for a primary and $8,500 for a general election — an aggregate of $13,900 per donor. A statewide candidate's committee was allowed up to $16,200 per donor for a primary and up to $33,900 for the general election, an aggregate of $50,100.
McNamara ruled that the three big transactions were not legal transfers, but illegal contributions that exceeded the allowable thresholds for a Senate candidate. "To the extent that the exchanges ... exceed the contribution limits ... the funds must be returned to the donor committees," McNamara ordered.
Ciampoli did not to enforce the order, and Klein did not satisfy it.
The file on the case at the Albany County clerk's office does not contain the original order – only a copy.
"That is unusual," said Robert Foley, law clerk for Judge McNamara. He added that it is equally uncommon for a prevailing lawyer to abandon a victorious ruling. "It is a valid judgment," he said. He said money judgments are good for 20 years and that extensions can be sought. The Klein case was not a money judgment, Foley said, and he couldn't say how many years it remained in effect.
The defendants were Klein and campaign treasurers Marilyn Klein and Dominick Calderoni, Klein's law partner, and the state Board of Elections. A spokesman for the board was unable to comment, and Klein's lawyer Stanley Schlein did not return calls. IDC spokesman Eric Soufer called the judge's order an "opinion" and "an interesting read" that would have had wide-reaching impact if it had been interpreted broadly. Ciampoli said that his clients lost interest in the case after Klein prevailed in a Democratic primary against former Democratic Assemblyman Stephen B. Kaufman, who also lost the Republican primary. "It was on the eve of the election," Ciampoli said. After the primary, "both sides, I think, lost the vigor to fight out every last thing."
Some election lawyers say an immediate appeal would have been the likely move.
Why it didn't happen is a mystery, but an appeal would have moved the decision to higher status if it was upheld, causing it to become precedent. As it stands, it has "persuasive authority" on another state court.
"I know the lawsuit was brought," said Kaufman, who ultimately ran against Klein on the Conservative line. "I remember raising a ruckus that he was using attorney general money."
Kaufman was among critics of Assembly Speaker Sheldon Silver who lost favor in his chamber when he joined a coup to oust Silver. Kaufman suspects leaders in the Legislature worked things out to benefit Klein. He was unaware the lawsuit had prevailed. "I really can't tell you what caused that to be dropped," he said.
Some election lawyers say both sides may not have wanted the case to set precedent, because other incumbents wanted the chance to raise funds for statewide office without losing the opportunity to transfer them when they dropped down to a lower office.
One election lawyer said the suit may have been meant only to distract Klein, but the judgment is remarkable, and Ciampoli acknowledged it was a political case. "It's interesting," said the lawyer, who asked not to be identified. "It's sitting out there like a little grenade."
Henry Berger, a Manhattan lawyer who has handled campaign law for 40 years, said McNamara's decision was wrong.
Berger said he wouldn't be surprised if David Paterson, who was Senate minority leader at the time, settled it with then-Senate Majority Leader Joseph L. Bruno. "Maybe he reached an agreement with the Republicans that it wouldn't be enforced," said Berger.
Paterson, who later became governor, did not return a call seeking comment.
"A movement of money from a single candidate committee to another candidate committee is not a contribution, it's a transfer, and it isn't an issue with election law," Berger said. But he added that candidates should not be allowed to use funds in the same election cycle that exceeded campaign limits for the office they seek when they end their run for an office with higher thresholds.
William Samuels, who was finance chairman of the Democratic Senate campaign in 2008 and has in recent years led reform efforts, said he thinks the judge's ruling was both correct and "common sense." Shown the decision, Russ Haven, lawyer for the New York Public Interest Research Group, said it's clear the judge wanted Klein to return the funds to the two other committees minus the $13,900 total limit for that Senate election — well over $1 million in refunds.
Ciampoli seemed to feel strongly about that when he filed his complaint during the intense three-way race to represent the Bronx and part of Westchester County. The lawyer told the court that Klein and his treasurers concocted a scheme to illegally channel money raised for one purpose but used for a different one for "an undue advantage" over opponents. "If this is allowed to stand," Ciampoli wrote, "every officeholder in the state will 'run' for governor or some other statewide office so the contribution limits for the office they truly seek are effectively obliterated."