By Jared Chausow
By Katie Toth
By Elizabeth Flock
By Albert Samaha
By Anna Merlan
By Jon Campbell
By Jon Campbell
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In the post-Bloomberg political era that began November 9, with $80 million self-financed campaigns a nightmarish memory, two new realities took center stage at City Hall: an imminent change in council leadership and the shaping influence of New York's unparalleled campaign finance system.
Unfortunately, these dual dynamics have wound up at war already, with a leading candidate for next Council Speaker, Bill de Blasio, ramming through a bill that tilts the finance system's level playing field on behalf of the unions that back him, rushing for narrow advantage in the Speaker sweepstakes. A Park Slope liberal with deep labor roots, de Blasio, who managed Hillary Clinton's 2000 Senate campaign and John Edwards's 2004 presidential effort in New York, hardly looks like a special-interest backslider hurriedly reversing reform. But undaunted by the opposition of every editorial board and good-government group in the city, that's what de Blasio is willing to make of himself, if it will secure additional council votes on his way to Speaker selection in January.
De Blasio is a poster boy for conflict of interest on a bill that essentially exempts unions from the same affiliation standards that the Campaign Finance Board (CFB) has long applied to all institutional donors, including corporations and partnerships. Passed 44-3 last Wednesday and expected to be vetoed by Mayor Bloomberg, the de Blasio legislation sets standards so low that a Times editorial branded them "meaningless," concluding that they would allow ostensibly affiliated unions to each donate the maximum permitted under city law to candidates. In the election cycle that starts now for 2009 contests from mayor to council, the de Blasio bill invites unions to dump maximum donations in favored laps again and again, restricted only by their ability to secure different checking accounts and signatories for every connected entity under one leader's sway.
The two unions whose past donations have resulted in virtually all of the affiliation fines or other proposed penalties so far generated by the CFB, which combined to prompt this bill, are the Service Employees International Union (especially SEIU's Local 1199) and HERE, the Hotel Employees and Restaurant Employees International Union. De Blasio was on the SEIU payroll, as was his wife, when he ran for council in 2001. One of his top aides, Peter Colavito, has become the political director of another SEIU local involved in the affiliation controversy, 32BJ. De Blasio's cousin, John Wilhelm, was elected national HERE president in 1998 and is one of the most powerful labor leaders in the country. HERE has allowed de Blasio to use its New York office for a fundraiser, Wilhelm has co-hosted another fundraiser for de Blasio in Washington featuring Senato Clinton, and Wilhelm's son worked in de Blasio's first council campaign.
HERE and SEIU were the first- and second-largest donors to council candidates in 2003, combining for $117,000. In 2005, their total so far has almost doubled to $228,216. Among the first donors to de Blasio's initial council race, HERE gave $2,500 in 2000. It and Local 6, its New York affiliate, have steered over $20,000 to de Blasio altogether, leading to a $250 CFB fine against him last November for coordinated contributions. De Blasio filed a written challenge to the CFB's fine, contending that the New York Hotel and Motel Trades Council and Local 6 Political Action Committee "are not affiliated entities," and thus could each give him the $2,750 maximum.
De Blasio made this argument though the sworn registration form filed by each organization with the CFB identified the same HERE official, Peter Ward, as the only person with "the authority" to "determine the candidates for whom the committee makes contributions." Four other councilmembers, including outgoing Speaker Gifford Miller, were fined for over-the-limit contributions from the same two entities, the only such affiliation fines imposed. Even de Blasio now concedes that the joint Ward accounts violate his weak affiliation standard.
While de Blasio declined to be specific about the Speaker race, he acknowledged that he "compared notes throughout the primary period" this year with union leaders "about the choices I had made" in councilmanic elections this year, indicating that he and his labor allies endorsed a similar group of candidates. "I certainly spoke to John about my race for Speaker," he added, saying Wilhelm "has been helpful, saying positive things to other folks." A HERE representative participated in a task force that de Blasio formed to devise his affiliation bill, and UNITE HERE, the newly merged garment and hotel workers union co-run by Wilhelm, supplied the first four union witnesses at an April hearing on de Blasio's bill.
SEIU's 1199 and 32BJ, which respectively represent health care and janitorial workers, also joined the de Blasio task force, pushed in part by an ongoing CFB case against Bronx councilwoman Annabel Palma, a former SEIU organizer. This June, the CFB filed preliminary charges against Palma, imposing $165,450 in potential fines and penalties for the most excessive union "coordinated" abuses in history, spearheaded by 1199 and also involving HERE. Included are charges of fraud and misrepresentation, as well as a fine for $20,025 in over-the-limit contributions from SEIU entities all over the country. With another SEIU staffer, Melissa Mark-Viverito, newly elected to the council and also facing a coordination complaint filed with the CFB by an opponent, the union is doubly anxious about the affiliation issue. SEIU's lawyer in the Palma case is Henry Berger, who is also de Blasio's compliance counsel with the CFB.
While CFB brass testified at a recent council hearing that it would not consider 1199 and 32BJ affiliated entities because of their divergent decision-making processes, both are widely regarded as supporting de Blasio's Speaker candidacy. They and all other SEIU locals have combined to contribute $18,575 to de Blasio campaigns since 2001. Much more importantly, SEIU was his family's prime source of income when he first ran for council.
But de Blasio's decision to force a quick vote on the billrejecting a CFB request that he wait until after the charter-mandated December hearing when the board was planning to consider a new affiliation ruledid not just please his union allies in the Speaker race. It pleased much of the council, whose members have collectively grabbed over a million dollars in CFB matching funds for noncompetitive races this year, but are still so outraged by the CFB that Queens' Leroy Comrie told the board's witnesses at the recent hearing that they needed to be "spanked." Staten Island's Mike McMahon derided the same witnesses because none had run for office or worked as a campaign treasurer, suggesting they didn't know how their rules felt at the receiving end. McMahon did not reveal that his brother Tom was the registered lobbyist on the de Blasio bill for the Central Labor Council, whose president, Brian McLaughlin, was one of the witnesses there to rail against the CFB.
De Blasio argues that the CFB forced this combat by promulgating a new rule in February that tried to impose an odious affiliation definition in the middle of the 2005 cycle, without listening to labor or the council. But he asked the CFB at the April hearing to withdraw that rule and by June it did, settling the controversy until after this election. De Blasio believes that the CFB's decision to move ahead with the Palma case after the withdrawal of the new rule breached its understanding with the council, though the violations cited in Palma were obviously based on pre-existing regulations, not prospective ones. He accuses the CFB of "zealotry," calling it "a bit of a star chamber," and he cites a long family history, involving his father, mother, brother, and himself with the labor movement as the justification for his action.
But the only real rationale for his rush on this bill is the Speaker's race, which puts de Blasio in the company of his former boss David Dinkins and former nemesis Rudy Giuliani, both of whom tried to punish the CFB for perceived wrongs. Dinkins tried to remove the Jesuit who chaired the board that fined him, and Giuliani tried to exile the board to Brooklyn. Fueled by the fines facing Palma's 2003 committee and a desire to shut down CFB audits of 2005 campaigns, de Blasio is so far succeeding where his mayoral predecessors failed: He is successfully slapping the CFB into council compliance, reversing the tables on a regulator every pol comes to disdain.