Tough Watchdog

Lefþer the Latest to Feel Campaign Board’s Bite

It was the scheme of former Queens councilman Sheldon Leffler to con the city's Campaign Finance Board into giving him almost $40,000 in matching funds for his race for borough president in 2001, according to an indictment unsealed last week.

To do so, said Manhattan District Attorney Robert Morgenthau, Leffler enlisted a wealthy landlord who agreed to put $10,000 of her own money into separate contributions of $250 listed in the names of her tenants.

Had all gone well, those bogus individual contributions would have qualiÞed for the campaign board's program of providing a four-to-one match—$4 in public funds for every $1 raised privately in small donations.

But things quickly fell apart when Leffler's official filings landed in front of the audit staff at the campaign board. The contributions were in money orders, not personal checks. Red flag number one. The money orders were in sequential order. Flag two. And they had all been purchased on the same day. Flag three. Campaign board officials referred the matter to the D.A., whose investigators had little difficulty establishing the fraud. As a tenant whose name appeared on one of the money orders told the Voice last summer: "I don't contribute. I don't have any money to contribute. I'm on welfare." ("Someone Else's Money," August 28—September 3, 2002).

Leffler has pleaded not guilty and vowed that he will be vindicated at trial. But whoever is responsible for the dummy money orders should have known better. It doesn't pay to mess with the Campaign Finance Board.

When the city's campaign finance law was first established in 1988, there were skeptics aplenty about the idea of using public money to keep the cost of campaigns down. Why should taxpayer funds be used to help someone get elected to office? Free money? Why, the waiting line would be around the block as soon as the doors opened. And fraud? Everyone and their sister would be plotting ways to scam the board out of its funds.

Campaign finance advocates countered that putting limits on the amount of money that politicians can take and spend was the only way to reduce the obscene amounts poured into elections. And offering public funds as a bonus for those candidates who raised their money in smaller amounts from everyday citizens instead of mega-checks from power brokers would level the playing the field.

The board's most convincing promoter was Fordham University president Reverend Joseph O'Hare, the sharp-eyed but soft-spoken Jesuit priest who was selected by then mayor Ed Koch as the board's first chairman. O'Hare had just finished serving as a prominent member of a state panel that exposed the seamy side of campaign fundraising. The priest, in turn, immediately hired as his executive director a smart, no-nonsense attorney named Nicole Gordon, who had served as counsel for the panel.

Fifteen years later, O'Hare and Gordon have proven their side of the argument. More people are running for office than ever before, many of them doing so because the promise of public matching funds makes it possible. More than 300 people participated in the local finance program in 2001; there were just 57 in 1989. Campaign finance laws have helped propel more minorities into office, sending the first Asian American to the City Council and the first African American to the comptroller's post.

The law has also given outsiders the muscle to successfully challenge the political machine. In Brooklyn, a Democratic clubhouse lawyer named Steven Cohn was considered a shoo-in for the 33rd Council District after raising an astonishing $317,000 for the race–the most of any council candidate. Instead, Cohn was beaten by an unknown named David Yassky–today considered one of the council's ablest members–using a combination of small contributions and public matching funds.

And woe to those who have tried to flimflam the board and steal campaign funds, as Leffler is only the latest to learn. Before him, ex—corrections union boss Ron Reale learned the same lesson.

New York's campaign finance program has pumped democracy into an otherwise battered and tainted electoral system. Its public disclosure of campaign filings has let sunshine into what was a closed and secretive process. Amid ever present political quicksand, it has remained steadfastly independent and quick to reprimand those who violate its rules, regardless of political standing. In 1993, the board outraged then mayor David Dinkins, ruling that his campaign had vastly exaggerated its expenses for complying with the law—expenses that are exempt from the law's spending cap. The board fined his campaign a whopping $320,000. As a going-away present on his last day in office, Dinkins ordered O'Hare replaced by a Democratic party hack. A civic outcry followed, along with two tough Times editorials. A new mayor, Rudy Giuliani, quickly reversed that decision and reappointed O'Hare.

The move won Giuliani no special favors. In 1997, board auditors cited Giuliani's campaign for repeatedly and flagrantly accepting contributions from overlapping corporate contributors. The board proposed its second-largest fine, $220,000. In a last-ditch effort to block the penalty, Giuliani dispatched a political crony named Joe Erazo, who barged into the board's crucial meeting on the subject and attempted to have himself recognized as a new member. Unfazed, O'Hare turned to Erazo and introduced himself, saying, "I don't believe we've met." The board then proceeded with its business and approved the fine.

Giuliani wasn't done. After his re-election, he tried to cut the board's budget and move its offices to Brooklyn. Leading the attack was Giuliani's budget director, Robert Harding, whose father, Raymond, is the Liberal Party leader and Giuliani ally who grew wealthy lobbying City Hall after Rudy's election and whose brother, Russell, also won cushy jobs in the administration. At a June 1999 campaign board meeting, Robert Harding delivered a stunningly harsh tirade, calling the board's budget proposal "gluttonous and abusive" and accusing it of hoarding money in a reserve fund. O'Hare politely reminded Harding that the reserve fund was required by city law. Giuliani later backed down.

The biggest contretemps in the 2001 mayoral election was the board's ruling that the freebie services provided by political guru Hank Morris to then candidate Alan Hevesi had to be counted as actual expenditures. A furious Morris showed up at the board meeting to denounce the decision, insisting that he would go to court to have it overturned. An unruffled O'Hare merely shrugged. "So sue me," the priest said.

Last week, at a meeting where Leffler's violations were due to be discussed, O'Hare, 71, quietly announced that he had informed Mayor Bloomberg that he would be stepping down when his term ends on March 31. A search for his replacement has begun, but those involved in shaping the original program agree that its unþappable chairman will be hard to replace.

"You wanted someone who was not only highly intelligent and had great integrity but also someone of great courage," Koch said last week of O'Hare. "He was all of that. He was unþinching. It was wonderful. He fined every mayor, including me. And he was right. We paid it. Dinkins fired him because he fined him, and Giuliani hated him for it."

"It is the best program in the country," said good-government advocate Gene Russianoff, who helped champion the original law. "A lot of it is because of Father O'Hare's stature. He called them as he saw them, and he stuck to his guns."

O'Hare himself said the job had been a learning experience. "I really didn't know what I was getting in for," he said from his office at Fordham, where he is also retiring this spring. "I learned that municipal politics is not a non-contact sport. Things did get tough."

Being a priest, he acknowledged, "probably insulated me from some of the criticism." Another edge, he said, came from hiring Gordon, a move he called "the best decision I ever made."

Under the law, the board is designed to be bipartisan, controlled by no major party. "We haven't been perfect, but we have established a nonpartisan culture," he said. "I hope that can continue."

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