CFB Looks Into 'Pay for Play';
Political Contributions Given
To Provide State Contracts
Or Other Favorable Results.
By Henry J. Stern
February 2, 2005

The city's Campaign Finance Board has been holding public hearings on how to deal with one of the most troublesome issues in the funding of political campaigns, described briefly as "pay to play."

Broadly defined, pay to play refers to the solicitation and receipt of campaign contributions by corporations and individuals who do business with the government, or who want to, and whose bottom line would be affected by decisions made by public officials, whether in the executive or legislative branch. This is a complicated issue, with a great variety of situations where influence can be exerted. Today we will begin with some of the simpler cases.

Paying sums of money by cash or check or giving real or personal property directly to a public official or candidate for office is a crime under federal and state law. It is bribery if initiated by the corrupt citizen and extortion if the money is demanded by the official. For those crimes, those found guilty usually go to prison.

Former State Senator Guy Velella was convicted of a felony, automatically disbarred, compelled to resign his Senate seat (with his pension intact) and sentenced, by agreement, to a short stay on Rikers Island for a long-standing pattern of conduct. He received money from contractors and used his influence with the state administration to assure that his benefactors received contracts to provide services to the state, e.g. bridge painting.

Interestingly, the legislator was not bribed to enact or defeat a proposed law, or to sell his vote in Albany, but to use his considerable political influence to see that certain corporations were given more consideration by state agencies than they would ordinarily receive if decisions were made on the merits.

Senator Velella tried to conceal his acts by requiring the bribers not to pay him money directly, but to engage the services of his father's law firm. His father, Vincent Velella, a Republican member of the Board of Elections, was in his 80's at the time, and whatever legal services he may have performed were scarcely onerous and most likely unnecessary. The case broke open when papers were discovered indicating that the senator shared in the profits of the law firm, and therefore was personally enriched by the contractors' legal fees. One of the oldest stories in politics, attributed to former Governor Alfred E. Smith, is that going to law school and being admitted to practice means that a person could take a bribe and call it a fee.

But what if the senator had not shared directly in the fees of the law firm? What if the firm had been more discreet and not generated the incriminating documents that somehow fell into the hands of New York County District Attorney Robert M. Morgenthau? Don't expect matters of this nature to be prosecuted diligently in many other counties in New York State.

The Velella prosecution was the source of intense rage expressed by upstate Republicans as the case proceeded. How dare the New York County DA interfere in the politics of other counties? Indeed, various pieces of legislation were drafted which would limit Morgenthau's jurisdiction on a territorial basis. One senator barred the district attorney from his office, and refused to speak to him on any matter.

To go back in history a moment, Morgenthau had been appointed United States attorney for the Southern District of New York by President John F. Kennedy and served until he was dismissed by US Attorney General John Mitchell, at the direction of or with the concurrence of President Richard Nixon. His father was Secretary of the Treasury in the administration of his Hyde Park neighbor, Franklin D. Roosevelt. His grandfather was minister to Turkey under President Woodrow Wilson.

Most public officials are not so careless as to receive bribe money directly. Spiro Agnew demanded and received cash in envelopes, and as a result lost his office, and his chance for the presidency. Mayor Frank Hague of Jersey City had a famous desk in his office which opened both on his side and on the side of his visitors. The favor-seekers left their gifts in the drawer, and the bounty was removed by opening the drawer from the other side. Strictly speaking, no money changed hands directly.

The modern sale of influence is more sophisticated. Contractors, concessionaires and firms doing business with the state, or seeking to do state business, are given opportunities to contribute to the campaign funds of those who have influence in government. This is not a crime, it is perfectly legal. It has some negative effects; it means that state contracts may go to the most generous contributors, rather than to those who could do the best job for the taxpayers. It is the new style of political corruption

In reality, swollen campaign treasuries may amass far more money than is needed to win an election in the gerrymandered one-party districts that have been carved by the leadership to protect incumbents. When one retires from politics, one has considerable latitude in how these funds can be extended. For example, funds collected as campaign contributions are available for the legal defense of officeholdersstemming from charges of misconduct in public office..

We will continue tomorrow, specifically discussing the Jan. 31 hearing of the Campaign Finance Board and the issues presented there.

Links:

Post: "Outrage at 'Giff & take': City-biz staffs pay up," by Heather Gilmore, Lindsay Powers and Stefan C. Friedman, 1/30, p8
Times: "Manhattan: Campaign Fund Limits," Metro Briefing, by Mike McIntire (scroll to fifth item), 2/1, pB8
Sun: "Campaign Finance Board Considers Pay-to-Play Donations," New York Desk, 2/1, p4

Related Stories:

Mayor is called out in plan to cap gifts
BY DAVID SALTONSTALL, DAILY NEWS CITY HALL BUREAU CHIEF
Tuesday, February 1st, 2005

A proposal by Mayor Bloomberg to limit campaign gifts from people doing business with the city got a full airing yesterday - but not before Bloomberg took some heat.
In a bid to end so-called pay-to-play donations, Bloomberg has proposed lowering to $250 the amount lobbyists and others doing business with the city can contribute to elected officials.

Candidates for citywide office can now accept up to $4,950, and City Council members can collect up to $2,750.

"This practice can create the appearance of impropriety," testified Anthony Crowell, a special counsel to the mayor, before the city's Campaign Finance Board. "And beneath those appearances lies a potential to corrupt government decisions."

As a self-financed candidate who spent $75 million of his own money on his first campaign, Bloomberg is able to sidestep disclosure and spending laws that govern other candidates.

Critics have pointed to gifts given to Bloomberg-backed charities as a possible back door to winning an ear in City Hall.

As the Daily News reported last month, the Mayor's Fund to Advance New York has collected $36 million over the past three years - some from corporate interests with business before the city.

The fund helped pay for 9/11 anniversary services, an Olympic torch relay and other projects for which tax money is not available.

"The fact that some of the contributors have business before the city does raise concerns about ... the same pay-to-play issues," Rachel Leon of Common Cause-New York said.

Mayoral aides said comparing a charity with a candidate is like mixing apples and oranges.

"If you think you are going to get special consideration [by giving to the mayor's fund], just keep it," said Bloomberg communications chief Bill Cunningham.

NYC Will Create a Database to Combat "Pay To Play"

NYC Mayor and Campaign Finance Board Agree That "Pay To Play" Politics Should End