Ex-speakers kept campaign cash

From the NY Times:

In big election years, the city has given anywhere from $4 million to $42 million to candidates in an effort to limit the influence of special interests and level the playing field for candidates of modest means.

There were, though, supposed to be limits to the city’s generosity. Candidates who accepted taxpayer money and did not empty their campaign accounts in the course of their election fights were obliged by law to return all surplus money to the city.

But the city, while handing out a total of roughly $120 million to candidates over the years, has been unable to recover much of the money it is owed.

Tens of thousands of dollars that candidates initially reported as surpluses appear to have dribbled away as the city took years auditing campaigns to determine how much might be owed. There are also candidates who have seemed to be in no hurry to settle up. Today, for instance, two dozen candidates owe a total of $800,000 from publicly subsidized races in 2001, 2003 and 2005.

Though it has sought to clarify its rules, the city has also struggled to stay a step ahead of candidates who avoid meaningful repayment by using surplus campaign funds to hire lawyers during the audits to challenge the city’s calculation of what they owe, or by paying penalties with surplus funds they would otherwise owe the city.

And to this day the city cannot keep publicly financed candidates from using legal loopholes to funnel leftover money to political or charitable causes of their choosing. Quirks in the rules governing runoff elections, for instance, have allowed two former City Council speakers, Peter F. Vallone Sr. and A. Gifford Miller, to shift six-figure surpluses of campaign money into political action committees they controlled.

From the NY Times:

Here is how it worked: When candidates running for office — those who had agreed to limits on private donations and thus benefited from the city’s program for generously aiding them with matching awards of taxpayer dollars — suspect that they might be in a primary race that will result in a runoff, they can petition the Campaign Finance Board for the right to raise extra private money for the runoff.

Mr. Miller, who in 2005 was the City Council speaker and was trying to gain the Democratic nomination for mayor, made such a petition.

He had raised millions of dollars himself and stood to receive roughly $2.5 million in addition from the city, but he argued that he needed more as the primary approached and he battled for votes in a crowded Democratic field. Allowed to go back to donors, Mr. Miller, of Manhattan, wound up raising over $200,000 more.

Mr. Vallone, of Queens, was in the same situation in 2001. He was City Council speaker and hoped to win the Democratic nomination for mayor.

He, like Mr. Miller, raised an additional $200,000 or so with the city’s blessing, on top of the millions he had already raised, even though he, like Mr. Miller, ultimately failed to attract enough votes to reach a runoff.

In each case, the candidate wound up with a six-figure campaign surplus, even after repaying a good chunk of the matches he got from the city.

Ordinarily, the city is allowed to demand that any campaign surplus — whether it stems from private contributions that are eligible for matching, or interest on bank deposits that are not — be used to pay it back.

But in both these cases, the candidates argued that their surpluses were merely the fruit of their added bit of private fund-raising, and that they were entitled to keep control of them.

And in both cases, the candidates prevailed.

Mr. Miller would not discuss the money but issued the following statement through a spokesman: “Funds that Speaker Miller raised from private contributors for the potential 2005 mayoral runoff campaign never received any public matching dollars because the campaign never took place.”

He did offer contributors to his runoff account a chance for refunds, which left him about $100,000 that he was free to move into his own political action committee. And that committee, controlled by Mr. Miller, has sent tens of thousands of those dollars to some of Mr. Miller’s favored charitable causes, including one run by a close friend.

Since 2008, the committee has given a total of $37,500 to Friends of the High Line, a charity that supports the new elevated park on the West Side of Manhattan. The High Line’s co-founder is Mr. Miller’s college friend Robert R. Hammond. Records of the State Board of Elections show that Mr. Hammond was also the treasurer of “Miller for New York” in its early days.

Mr. Vallone, for his part, used the same wrinkle in the law to preserve about $200,000 of his runoff money, set aside in a war chest that has come in handy as Mr. Vallone has pursued a new career as a paid lobbyist.