Hankering for a Loophole

Is Hevesi Doing an End-Run Around Campaign Finance Rules?

The CFB issued a letter last week making it clear that Morris can volunteer "a part or all of his time without compensation" as an individual, but that any services donated by his company would be treated as an in-kind contribution and count against the expenditure cap. This opinion means that the CFB audit will closely examine copying, phone, secretarial, utility, rental, supply, fundraising, and other Morris & Carrick costs and how they are allocated to Hevesi usage.

One indication of the disparity, for example, is Green's expenditure of $65,762 for "office start-up, equipment and supplies" versus the $1726 listed by Hevesi for office expenses. Hevesi lists no rent—since it's subsumed into the overall Morris fee—and Green lists $60,385. Morris & Carrick's total non-exempt billing to the campaign since 1998 is a meager $125,000, though it may also have taken an undisclosed, and minimal, amount from the TV ad buy.

Beyond these possible corporate subsidies from the Morris firm, Hank Morris individually can only donate his time to the campaign if he isn't being paid by his firm (otherwise, his time is just another corporate contribution). Unless he has been on an extended leave from Morris & Carrick while running this campaign, his attempt to volunteer his services may well be treated by the CFB as a corporate expense that counts against the cap.

Morris is unable to talk about the CFB without a snide growl in his voice. He caustically refers to the new system as Vallone and Green's law, since they were the prime sponsors of the recent reforms. "We intend to fully comply with the campaign law that Mark Green wrote when he changed the rules in the middle of the election cycle," he once barked at the Post. He even stonewalled the CFB for months—refusing to return $67,600 in over the limit Hevesi contributions from 1997 and forcing the board's counsel to write earlier this year that his recalcitrance "was a matter of concern, particularly in light of the reminders" sent him by the board's audit unit. Hevesi went so far as to briefly oppose the landmark 4-to-1 matching fund reform. While Green and Vallone have appeared at the periodic CFB hearings to discuss legislative changes, Hevesi hasn't.

The peculiar arrangements at the heart of the Hevesi campaign, now documented in the July 15 filings, are a defiant dare and a risky gamble. While the polls so far have rarely been kind to Hevesi, he is still very much in this race. How the CFB responds may well determine his fate.

Research assistance: Joey Fiskin, Anna Levine-Gronningsater, Shonna Carter, Gregory Bensinger, Douglas Gillison, Lisa Schneider.

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