A Question of Candor

New Council Speaker Misled Campaign Finance Officials, Ducked Limits

New City Council speaker Gifford Miller, an East Side liberal with reform credentials, declined to participate in the city's voluntary but celebrated campaign finance system last year and made misleading submissions to the Campaign Finance Board, the Voice has learned.

With Michael Bloomberg also opting out of the CFB system in 2001, the city's two most powerful new public officials, unlike their predecessors Rudy Giuliani and Peter Vallone, sidestepped what is widely regarded as the nation's top regulatory program. Ironically, many of the councilmembers who helped make Miller speaker last week—especially the 38 new ones—benefited from the CFB's public matching funds and are champions of the system. Miller registered with it himself for his first two campaigns, in 1996 and 1997, receiving $117,000 in matching funds.

Though Miller maintains he didn't register this time because he thought he was running unopposed when the CFB deadline occurred on June 1, he concedes that the board's possible oversight of Council 2001, a political action committee (PAC) tied to him, was also "something I was thinking about." Had Miller joined the finance system as a participating candidate, CFB advisory opinions indicate that Council 2001 might well also have been compelled to abide by its strict contribution limits.

Instead, the PAC raised and spent almost $200,000 between July 2000 and December 2001, distributing most of it to 27 council candidates across the city, ostensibly to gain support for Miller's bid to become speaker. It did not abide by CFB rules—collecting $15,000 in what would have been banned corporate contributions and $30,000 in individual donations that exceeded the CFB's $2500 cap. By not filing with the CFB, Council 2001 also avoided disclosing which lobbyists and other interests might have played a role as intermediaries in raising its war chest. The other major speaker candidates had no similar PACs, though Vallone did. The CFB forced Vallone's to comply with its limits.

In an attempt to obtain CFB approval for Miller to participate in the system without Council 2001 having to join it, Miller and Lawrence Laufer, a Council 2001 consultant, wrote letters to the CFB in April 2001. They claimed that the councilman, who described himself as a PAC member but not on its eight-member executive committee, did not "exercise authority" over the "activities" of what they insisted was an "independent" group.

Miller now freely concedes that he "helped create" the PAC, that its executive board consists almost exclusively of his "friends," that its sole full-time employee was his former and current council aide Jessica Lappin, and that he was "extremely influential" in the endorsement decisions it made.

Laufer, the former CFB counsel, went so far as to contend that Miller's participation in the PAC's decision-making was "exactly the same as any other member without authority or position—an effort of advocacy, not an exercise of authority." Arguing that it would be an "astounding leap" to conclude that Miller ran the organization, Laufer said Miller "may or may not choose to play an active role in helping it meet its objectives."

Miller now freely concedes that he "helped create" the PAC, that its executive board consists almost exclusively of his "friends," that its sole full-time employee was his former and current council aide Jessica Lappin, and that he was "extremely influential" in the endorsement decisions it made. "It supported all the same candidates I supported," Miller told the Voice. "I raised all the money." Robert Hammond, the group's treasurer, is a college friend of Miller's who says he's known him for 12 or 13 years and, like others on the executive board, has no other involvement in politics.

Prompted by the Miller/Laufer letters, the CFB issued an opinion last May that took no definitive position about Council 2001, but suggested that if Miller decided to participate, that might "trigger an inquiry" into "whether activities of the political committee should properly be attributed" to Miller. In a footnote, the CFB revealed that it had learned independently that some of the PAC's executive committee members "are or appear to have been staff members of various elected officials, including Mr. Miller."

The CFB noted that neither Miller's nor Laufer's letter "alluded to this set of circumstances," though an "employer-employee relationship would likely lead to a conclusion that those staff members do operate on behalf of the candidate and that therefore the activities of the committee should properly be attributed" to Miller. The opinion was referring to Lappin, who left Miller's council payroll to go on the PAC's. Less than two weeks after the issuance of this opinion, which was consistent with 1999 and 2000 CFB rulings about Vallone's PAC, Miller opted out of the system.

Miller prefers to attribute his decision not to participate to his belief that he had no opponent—a claim his press aide says he made in a New York Times editorial board interview last year. But the Republican-Liberal nominee in his district, James Lesczynski, filed registrations to run with the Board of Elections on February 9 and with the CFB on March 28. Miller insists he was still unaware of both filings by the June deadline. Asked why he wouldn't register with the CFB anyway—just in case an opponent emerged—Miller said it "seemed like a stupid idea to opt in when it was unnecessary."

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