Eric Schneiderman Hoodwinks the New York Times (UPDATED)

Campaigns test and reveal character, and we've learned a lot about Eric Schneiderman's character that we didn't know when he launched his "reform" candidacy for attorney general. The lessons of the last few days include:

--Hoodwinking the New York Times into thinking he was the anti-Cuomo candidate and then signing the Cuomo pledge as soon as he had the NYT endorsement.

Eric DiNallo, whose resume in the AG's office and as insurance commissioner makes him the best prepared candidate in this race, was the other finalist for the Times endorsement. Since the Daily News endorsed him, Times' backing could have made him a compelling force in this race. The Times questioned him about the fact that he had been on Cuomo's transition committee in 2006, as if that was a red flag that he might be too close to Cuomo for their comfort. But DiNallo, like the other finalist Schneiderman, satisfied the paper's "independent-from-Cuomo" standard by making it clear that he wouldn't sign the pledge. Kathleen Rice, the Nassau District Attorney who appeared to be Cuomo's early favorite and did sign the pledge, was grilled about her ties to the AG as well.

In the Times/NY1 debate at the Times shortly after the endorsement, Schneiderman gushed about Cuomo again and again, announcing that he was rethinking his refusal to accept Cuomo's pledge, which features commitments to enact five key reforms. Then he signed it and met with Cuomo, who decided not to endorse anyone in the race. Since Cuomo had already said that the only candidates he was considering were Rice, DiNallo or Sean Coffey, his neutrality was a boon to Schneiderman.

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--Misleading his own top supporters into signing a letter of outrage over Kathleen Rice's negative ad about him when he'd already done a negative mailer about her that was arriving in upstate homes at the same moment on Saturday that the Rice ad started airing. Schneiderman released a Saturday statement from some of his most progressive backers -- including Congressman Jerry Nadler, Council Speaker Christine Quinn, State Senator Liz Krueger, Congressman Jose Serrano, Public Advocate Bill deBlasio, and Councilman Brad Lander--denouncing the Rice ad. The Schneiderman mailer was sent on September 8, three days before the simulated statement of outrage.

The support statement deplored "this last-minute offensive type of campaigning," even charging that Rice "chose to launch this inappropriate attack on the Jewish holiday of Rosh Hashanah and on days in which we memorialize the 9/11 attacks," calling it "extremely disturbing." The supporters apparently didn't realize that he'd mailed just as harsh a piece, a precursor to a web ad he posted the next day, scheduled to hit at the very same "inappropriate" moment as Rice's ad.

The inexhaustible Liz Benjamin posted her blog item on the Schneiderman mailer at 1:53 on Saturday, precisely 20 minutes after she first reported the Rice ad. Under the headline "Hello Pot, I'm the Kettle," Benjamin said she got the mailer, which contended that Rice didn't "share our values," from an Albany-area resident. "It's hard to see this as anything other than a hit piece," wrote Benjamin.

Schneiderman even got the leader of a good government group -- Karen Scharff of Citizen Action New York -- to sign on to the hypocrisy statement, just the latest example of the Schneiderman bait and switch.

--Schneiderman's 2009 tax returns, partially released last week, raised far more questions than they answered, inviting potentially damaging scrutiny from Republican Dan Donovan should Schneiderman win the primary.

Taxes and giant expense deductions so reduced Schneiderman's $96,956 senate salary and $21,337 in dividend and interest income that he had only about $25,000 left to actually live on in 2009, hardly enough to sustain his Manhattan lifestyle. He's loaned his campaign $855,000 -- half of his supposed total assets. But if he actually had such substantial assets in bonds, the bank or other accounts, his meager interest and dividend income would be much higher. He's earning about one percent on his assets. This raises the specter of another Spitzer-like controversy (Rice alluded to this in a weekend press release, but didn't mention the small interest and dividend income). Eliot Spitzer's Democratic and Republican opponents charged that he'd illegally bankrolled his campaigns in 1994 and 1998 by facilitating side real estate deals through his father, including gifts and loans that exceeded state limits. The charges were eventually proven accurate. Schneiderman's returns, combined with his own family wealth, provoke similar questions.

Perhaps even more questionable is the $35,316 in unreimbursed expenses that Schneiderman deducted on his return. State legislators I talked to were shocked at the number. Schneiderman did not make public the Form 2106 that would detail these deductions, telling reporters only that they were "work expenses (travel, lodging) not reimbursed by the senate." The senate reimburses at a rate of $171 for every full day of session, $61 for half days, and 50 cents a mile for the trip to and from Albany. Schneiderman's per diem and travel expense reimbursement last year was $22,453, which would cover 94 days of regular or extraordinary session in 2009. That is a high number, other legislators tell me. To have as much as $35,316 in expenses for what the IRS calls "legislative days" -- when a legislature is not in session -- is a stunning number. IRS regulations allow a legislator to claim deductions at $171 a day for some of these legislative days, but Schneiderman apparently did it for approximately 200 days in 2009 (unless he's claiming extraordinary flying or other expenses, which is impossible to tell without Form 2106). "The legislature is considered 'in session,'" the IRS loophole reads, "when it is not in session for a period of four days or less." The IRS tried to close this loophole in recent years, but backed off the effort. One legislator I spoke to says he claims no unreimbursed expenses because the IRS is cracking down on the practice. Schneiderman capitalized on this nonsensical deduction to dramatically cut his taxable income and is hiding the form he filed to justify it. Between his reimbursed and unreimbursed expenses, he appears to be claiming nearly 300 days of senate expenses. Schneiderman spokesman James Freedland hasn't responded to Voice inquiries in the last couple of weeks, and did not reply to an email this morning. When I got him on the phone this afternoon, he took the questions and said he'd try to get back to me. I will update this item if he does.

Update: I misstated the $855,000 Schneiderman kicked into his campaign. It's a mix of loans and donations. One reader tells me a 1 percent return on his stock portfolio might be real in 2009, though most of the return wasn't taxable, suggesting it's bonds. He also took a small capital loss.


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