Pol's Challenge Could Mean Trouble for "1st Non-Profit Election Consulting Firm"
The city's campaign finance laws and matching fund program allow the public to see into a candidate's war chest as if it were made of glass. But as the unfolding story of the blurred line between the non-profit Working Families Party and the for-profit Data and Fields Services shows, those measures can be skirted.
Now questions have emerged about a non-profit consulting firm called Grassroots Initiative -- "The world's first non-profit election consulting firm," they call themselves -- to whom several, mostly first-time and lesser-known candidates have paid $100,000 for campaign services.
Councilman G. Oliver Koppell mounted a challenge on August 19 against his primary opponent, Tony Perez Cassino, after he discovered Cassino paid $25,000 to that group, which peddles under-market-rate campaign services to candidates across the city.
In addition to accusing Cassino of failing to list his expenses with the group as in-kind contributions, Koppell questions whether it's even legal for Grassroots to participate in elections. He calls Grassroots an "illegal conduit" between corporations barred from making election contributions and candidates -- because the largesse these contributors donate to Grassroots enables it to offer below-market rate costs on campaign services.
The outcome of the Campaign Finance Board's ruling on the matter could bite several other citywide candidates doing business with the organization and spark new challenges.
According to the most recent campaign finance records for this election cycle, city candidates have logged over $100,000 in expenditures with the group. The list includes mostly first time candidates like Yetta Kurland, who's challenging City Council Speaker Christine Quinn; Fernando Cabrera, who's running against Bronx Councilwoman Maria Baez; and Andy King, who's facing off against Bronx Councilman Larry Seabrook.
Records show only a couple of established politicians seeking higher offices paid for the group's services: Underdog Democratic mayoral candidate Tony Avella paid Grassroots Initiative $200 for petition expenses, and White House Director of Urban Affairs and former Bronx Borough President Adolfo Carrion, Jr. shelled out almost $4,000 for campaign literature when he was eyeing a run for comptroller.
Of all the expenses documented, the majority were not recorded as in-kind contributions. Kurland noted only two of her ten expenses with the organization as such.
Grassroots Initiative started up its operation in 2005, helping candidates fill some of the city's not-often-thought-about positions -- county committee member, district leader -- "in communities that tend to be underrepresented or traditionally marginalized," its president, Jeff Merritt said.
This is the first year, Merritt said, that the group has worked with citywide candidates. The organization offers some services to candidates free of charge, and charges set prices for printing literature, sending out mailings, and petitioning -- usually at a below market-rate price.
"I'd say it's very typical for a campaign consultant or a mailing house to charge about a dollar per piece," Merritt said. "Our prices average about fifty cents per piece." He says collective purchasing power and donations keep charges to candidates down.
Koppell says Grassroots' donations -- some coming from corporations and limited liability companies -- are problematic since the public has no way to know exactly whose generosity funds the operation.
Merritt said his group knew the law.
"We're by law not able to influence the outcome of an election," he explained. "I know it sounds sort of odd that we do elections, but at the end of the day because our services are offered to all candidates and that we can't do messaging for example, we can't provide anyone candidate something that we couldn't provide to their opponent or any other candidate."
According to campaign finance records, Grassroots provided services to Cassino and another candidate who has since dropped out of the District 11 race. Merritt said his services are readily available to Koppell, too.
"I know it seems like we're a political organization," he added, "but at the end of the day we're sort of more of a civic organization."
Jerry H. Goldfeder, a prominent election attorney who does not represent either campaign, said that if the allegations made in the Koppell complaint proved true, it would be a "serious circumvention of campaign finance laws."
He punctured Grassroots' civic-group argument. "If they're providing a service to a candidate whatever their intentions might be," he said, "they're still providing a service and compliance with the campaign finance law is required by a candidate who receives such services."
Goldfeder explained that the candidates who receive below market value services must reflect that in their filings. "If the allegations are true, then there appears to be a violation of the campaign finance rules because they're getting an illegal in-kind contribution that's going unreported," he said.
In city council races, candidate spending is capped at $161,000. Most office seekers raise enough to receive that amount since the city matches every dollar they raise with six dollars in taxpayer money. The value of an in-kind contribution would be subtracted from the amount a candidate has to spend.
Cassino said that he received the same rate as other citywide office seekers doing business with Grassroots. "Should I go to his high-priced consultant instead?" he asked.
Merritt says his organization spurs democracy and allows all candidates "to run a professional campaign and not get ripped off." He said that when the ratio of matching funds went from four-to-one to six-to-one, the price of election services increased along with it.
But Koppell doesn't believe it's a matter of leveling the playing field or thrift. "The fact is that you have to play the game fairly," he said. "If you don't play it fairly, you should be called to account."
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