New York

The Working Families Party Scam

The Working Families Party Scam

No one else seems to be covering the expanding Working Families Party scandal around here, even though it was on Room 8 that it was erratically covered early on. So I will provide the followup to Hildy Johnson's somewhat difficult to interpret coverage.

An article in City Hall News covers this developing scandal in considerable detail. Here is the breakdown they give of the scandal:

A complicated web of coordinated activities, shared resources and staff, and quiet money transfers between the Working Families Party, a secretive private company called Data and Field Services and at least six current Council campaigns, as well as Bill de Blasio's campaign for public advocate, appears to have found several ways around the strict city campaign finance laws. Upwards of a million dollars, and possibly more, are involved, with over $1.7 million in matching funds comprised of taxpayer dollars already disbursed and more are potentially at stake.

There have long been assumptions and rumors of the collaboration between the Working Families Party (WFP) and its favored candidates, but never before has the scope of or intricate processes behind its joint activity been exposed to the degree made possible by an extensive review of public documents and close to 50 interviews with a range of key players conducted by City Hall over the last few days.

The article goes on in great detail and is well worth reading.

Another City Hall News article basically has the lawyer who helped set up the whole scheme admitting that WFP is indeed sidestepping transparency and quite possibly the actual rules by not adequately separating the political party (WFP) from its for-profit spinoff (DFS). It is kind of amazing that WFP thinks this is okay, whether or not it winds up being legal. Strikes me as precisely the kind of BS reformers are trying to stop. But then again, I have come to realize WFP is NOT about reform, which is why they can buddy up with Vito Lopez and Steve Levin.

Yet another City Hall News article takes the scandal further, showing that Working Families Party may well be violating further election finance laws but either not properly reporting or not properly paying rent on some of their offices:

A review of the Party's expenditures in public documents filed with the state Board of Elections over the last decade which were reported as rent shows an erratic pattern of payments made to several different landlords, and none marked as going directly to Flatbush Fulton Realty Associates, the owner of its current space at 2 Nevins Street in Brooklyn. Some years, the WFP appears to have paid no rent at all, based on the data filed with the Board of Elections.

Political parties are required to pay rent, in order to ensure that no party is getting an unfair monetary advantage over others, and the parties are required to report all money paid out for expenditures.

"The committee needs to account for any expenditures they have, and if they receive any in-kind contributions, then the value of those as well," said Bob Brehm, a spokesman for the state Board of Elections.

Furthermore, it seems no one can get a straight answer from WFP regarding the rent scandal:

In an email sent Tuesday night, Levitan offered an explanation for why rent had spiked in recent months, arguing that the money paid so far in 2009 went to "rent and overhead to pay for our main office, office space in Buffalo and Albany, and spillover offices in Brooklyn. The increase in rent reflects the higher price of our new office space on 2 Nevins Street."

No payments show up as going to Buffalo, and except for those which went to the Association of Black, Puerto Rican and Asian Legislators PO box in 2007, none show up as having gone to Albany either.

You'd think they'd check if their excuses even made sense before they gave them publicly.

So WFP may be bending or breaking laws regarding how they help out endorsed candidates and regarding how they pay (or don't pay) their rent.

The candidates who are potentially caught up in this scandal are Bill de Blasio (running for, ironically, Public Advocate), and several city council candidates: Brad Lander, Debi Rose, Daniel Dromm, Lynn Schulman, Jumaane Williams, S.J. Jung, Jimmy Van Bramer. Each of these candidates are using WFP personnel and/or resources in a way that may well either violate or at least dodge existing campaign finance laws. NOT something that makes them look like reform-minded candidates.

I should note that one of the candidates caught up in this scandal, Daniel Dromm, I have endorsed. I don't know if I consider involvement in this scandal a deal breaker, but Dromm definitely is on thin ice with his WFP connections and involvement in this scandal is one strike for a candidate in my book. I like everything else about Dromm, but his ties to WFP do raise an eyebrow. Interestingly, another candidate that WFP and I agree on, John Liu, has NOT been mentioned in this WFP scandal, so perhaps he followed the rules in his connections with the WFP. I find this encouraging about Liu.

In other cases I should note I have endorsed candidates opposing the WFP candidates involved in this scandal. Brad Lander is running against my friend Josh Skaller. Lynn Schulman is running against my endorsed candidate Mel Gagarin. And I also have endorsed Brent O'Leary over Jamie Van Bramer.

It is unclear whether the WFP candidates themselves have violated the law (intent or letter) or were merely unwittingly caught up in a WFP scandal. Either way, it makes WFP look pretty bad and makes their endorsement seem about the equivalent to that of corrupt Party Boss Vito Lopez, who happens this year to be a political ally of WFP.

Josh Skaller, running to replace Bill de Blasio in the City Council, has this to say about his opponent Brad Lander's role in the scandal:

"Once again, we are disappointed to learn that a candidate has engaged in slush fund politics at the public's expense -- this time it's Brad Lander. Lander has allowed his Council campaign to be propped up by unethical and possibly illegal under-the-table funds, and the public might be awarding him taxpayer-generated matching funds regardless of this scandal.

"Recent media reports confirm the intent of New York City's Campaign Finance Law has been violated through the creation of a for-profit company named Data and Field Services (DFS). DFS was created by the Working Families Party and an unknown amount of money has flowed through the Working Families Party and DFS to certain campaigns, including Brad Lander's.

"My entire campaign I've been talking about real reform. I am proud to say that Democrats -- and all New Yorkers -- can track each of our contributions and expenditures to the penny through our filings with the Campaign Finance Board. But you can't do that with Lander's funds because his real expenditures -- and the real level of contributions from the Working Families Party -- are laundered through DFS. Lander has abused the public's trust and the evidence of an unholy relationship with the Working Families Party is quite plentiful.

"Brad Lander talks about his reform credentials. Yet he has failed a critical test of leadership when it comes to his Council campaign. We cannot stop typical Democratic Party politics in Brooklyn if we have elected officials without the judgment and the guts to do the right thing. We cannot stop slush fund politics in the City Council if we have candidates like Lander who utilize slushy money to fuel their campaigns. If it's good enough during the campaign, we will see more dirty money when the new Council takes office.

"It was my call to end slush funds that helped to put the City Council and a disgraced former elected official on the spot and stop the outrage. [EDITOR'S NOTE: Presumably a reference to the DiBrienza scandal] No other Council candidate in the 39th District joined me in making that call -- I stood alone. Then, it was my refusal to accept any contributions from developers that led other candidates to make the same pledge -- I was again the leader on this critical issue. Brad Lander got around to returning developer money he had already accepted.

"Now, I am calling for the New York City Campaign Finance Board to rescind any funds provided to the Lander campaign until and unless a full accounting of the Lander finances has been provided both to the Board and to the public. New Yorkers deserve to know the truth. If violations are determined to have taken place, then appropriate action must be taken.

"We don't need four more years of corruption in the City Council. We need independent Democrats who understand what democracy is supposed to look like. On September 15, Brooklynites can choose more of the same, or they can choose reform. A vote for me is a vote for real change."

Of course I want to give credit where credit is due (even if it is not always adequately returned). Here at Room 8 another blogger (whose identity or identities have been much discussed) has already written about supposed corrupt behavior by WFP, targeting Brad Lander in particular. And one particular accusation, made in May, is of note because it presages the current scandal. From Hildy Johnson's article:

These transactions are hidden behind a wall of corporate secrecy.

Yes, corporate: To run its canvassing operations, the WFP has created an in-house, for-profit corporation called Data & Field Services. The party publicly discloses only the five-figure lump sums it occasionally "pays" the company. (Some individual candidates also disclose payments to DFS.)

This practice apparently violates state campaign-finance regulations. Board of Elections officials insist that party committees are required to itemize exactly who gets the money they dispense, even if it's paid through an "outside" vendor. While the public can sometimes see where the WFP's money comes from, it knows very little about where it goes. In the Working Families Party, ACORN has created a conglomerate that is one part campaign machine, one part commercial enterprise and one part lobbying-clearinghouse for special-interest money and muscle -- a conglomerate that is shored up by its privileges as a state-registered political party and shielded from scrutiny by a corporate subsidiary.

Of course this is precisely the scandal that is now hitting the papers, brought up months before by a Room 8 blogger. Perhaps this lends credibility to some of the other accusations made in that article...

But one thing I want to emphasize is that Brad Lander is not the only candidate involved, even though the Room 8 blogger and (not surprisingly) Skaller both focus on Lander's involvement. I think Bill de Blasio deserves even more scrutiny than Lander. And even some people I have considered good candidates seem involved. I think this shows how widespread scandal is in our local government, whether it is the slush fund scandals that involve as much as 3/4 of the current City Council (including, I should add, Bill de Blasio near the top of the list of dubious slush fund transactions), or the WFP scandals described here, these scandals cross party lines and really call for massive reform in NYC. When I blog about national issues it is usually Republican corruption I target. Here is seeems to be Democratic corruption and now WFP corruption. And to think I naively believed WFP could be an effective counter to the corruption of Vito Lopez's machine.

Brad Lander, Bill de Blasio and the other candidates named in the WFP scandal (even Daniel Dromm who I endorsed) should be carefully investigated. It also might be nice if they would show some backbone and condemn corruption even in groups that endorsed them. A condemnation of WFP's dubious practices might go a long way to reassuring voters that candidates like Lander, de Blasio and Dromm aren't part of this corruption.

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