Shock and embarrassment, tinged with dread, seep into Louis Panacciulli’s voice like a slow-moving wave. Panacciulli, conductor of the Nassau Pops Symphony Orchestra, has just been asked by a reporter why his nonprofit group contributed last year to County Executive Tom Gulotta’s war chest.
Under federal law, tax-exempt organizations like the Nassau Pops are prohibited from making political donations of any sort, whether in support of a party, a candidate or a referendum.
Yet there was the symphony’s gift, check number 299 written for $200 to Citizens for Tom Gulotta and recorded July 27, 1998, in finance reports that Gulotta’s campaign filed with the county Board of Elections.
Panacciulli sucks in his breath. “Should I contact our attorney?” he says. “Is someone coming after us?”
Panacciulli’s dilemma started with an invitation to a dinner sponsored for Gulotta by local arts boosters. Panacciulli says he bought two tickets from the Nassau County Office of Cultural Development, without realizing he was making a campaign contribution. Though his check was made out to Citizens for Tom Gulotta, the conductor says he was showing loyalty to Long Island culture, not to a heavyweight Republican boss.
“If the tickets were not proper, they were given to us by the county,” Panacciulli says. “It was in allegiance to the arts. [The Office of Cultural Development has] helped us with getting positions in a concert or funding or whatever came up. When they call and ask you for help, you don’t want to say no, because they’ve always helped you.”
The Pops were hardly the lone nonprofit to back Gulotta last year. His list of donors included contributors ranging from the Minnewaska Chamber Music Society and the Eastern Amputee Athletic Association to the New York Brass Choir and the Nassau County Museum of Art. Even the Incorporated Village of Bellerose waded into the murky water, writing a $200 check that Gulotta returned in August after the illegal donation was pointed out by the Long Island Voice (see The Party in this issue, page 11).
After sinking the county into at least $200 million of debt, Gulotta has raised a personal campaign purse of more than $2 million—even though he’s not running for election until 2001. Despite being fiscally flush and despite having returned other improper donations, Gulotta’s campaign shows little sign of admitting any responsibility for the charities’ contributions.
When asked by the Voice, Bob Sherman, Gulotta’s campaign treasurer and chief of staff, says he’ll write to the nonprofits that donated and ask them to research the legality of the contributions. Rather than simply give back the money, Sherman says, he wants the charities to sort the matter out themselves. “If they wish the check back,” he says, “we will return it.”
Gulotta’s campaign wasn’t the only one that got funding from nonprofits. Financial reports filed by other GOP organizations contain a similar smattering of checks from groups that would seem to have scant reason for being politically active. Last September, the Baldwin Little League tossed $100 to the Nassau County Republican Committee. An organization listed as Rabbi Widom’s Discretionary Fund, from Temple Emanuel in Great Neck, blessed the North Merrick Republican Committee—which is Gulotta’s home base—with $500 in April.
Added together, the nonprofits’ contributions represent just a miniscule portion of the GOP’s considerable stash. County Republicans stoke their election engines with scads of cash from municipal workers, construction companies and influential law firms—not with modest checks from community choirs.
Yet the GOP machine’s hold on Nassau is so firm and its influence so pervasive that even the proceeds from Little League concession stands aren’t safe from politicians’ clutches. Party chiefs and the employees they hire control access to baseball diamonds, concert bills and grant money. That apparently leaves charities with an uncomfortable but distinct sense of self-imposed obligation to ante up—even though doing so may run afoul of the law.
Gerard Terry, an attorney affiliated with the Nassau Democratic Party, says the practice of culling donations from local nonprofits reveals the toll that political maneuvering takes on everyday Island life. Bowing to the machine has become so commonplace that suburbanites no longer weigh the risks.
“The culture is such that well-meaning people who are not even necessarily political or partisan—the Little Leagues and the Friends of the Arts—don’t even realize that when they bring that co-signed check to the Gulotta fundraiser, they’re doing something that in the most extreme instance could jeopardize their organization,” Terry says. “That’s the story. That tells us something about our community that maybe we didn’t know before.”
‘All the not-for-profits do it.’
Federal law leaves little room for interpretation when it comes to charities contributing to political causes. In exchange for a host of benefits, including the ability to attract donations by making them tax-deductible, nonprofits such as churches and museums agree to stay out of electioneering.
“The law is quite clear,” says Bob Kobel, spokesman for the Internal Revenue Service in Brooklyn. “A [charitable] organization is strictly prohibited from taking part in any form of partisan political activity. It’s one of the most explicit parts of tax law that I’ve seen.”
If a charity breaks the rules, it risks losing its tax-exempt status, but Kobel says a single violation would likely draw a mere warning.
Nonprofits that haven’t applied for tax-exempt status with the IRS operate under a more nuanced set of standards. Many charities that register with the state Attorney General’s Office are prohibited from giving to candidates or supporting ballot issues, but not all. “If you’re set up as a charity, you should shy away from political activities,” says Kenneth Shaw, a spokesman for the AG in Albany.
Yet ask Helen Kappel why her Visual Art Alliance of Long Island gave $1,000 to Gulotta last year and you’ll get a long lecture on the reasons it’s perfectly legal for her state-registered charity to put its shoulder to the political plow. Gulotta has been good to the arts, Kappel says, so the arts can be good to him. “You cannot go out and support somebody who’s your friend. You support someone who supports your issue,” she says. “All the not-for-profits do it. Anything for sports, for children, for the arts, can do this. They choose a candidate and then they go after that guy.”
Kappel, as it happens, works part-time for Nassau’s Office of Cultural Development, the agency that allegedly sold tickets for a 1998 Gulotta fundraiser. Connections like Kappel’s blur the line between charity and the GOP machine—a line that grows fuzzier as she explains her political contributions.
Kappel says the Visual Art Alliance gave to Gulotta when funding for the Office of Cultural Development was, according to her, on the chopping block. During budget season, the Alliance testified at hearings and turned to the county executive with the kind of lobbying that counts most: a check written to his campaign. “We did that because the department was ready to fold,” Kappel says. “It’s easy for them to slash $3 million and take arts away, but they’ll keep football.”
Argue with Kappel’s interpretation of the law and you’ll find yourself faced with a litany of the many years she has managed charitable arts organizations. If nothing else, Kappel is convinced she’s right. “When an election comes around, a not-for-profit will find a way to support the candidate who supports their issue,” she says. “It’s a matter of knowing how to survive, and knowing how the law operates. We can’t afford to have our organizations go down because of somebody’s mistake.”
Kappel might take pity on poor Constance Schwartz, director of the Nassau County Museum of Art, which is registered as a charity with the IRS. Trustees and executives at the museum have a history of giving to political causes, but not usually with checks written by the museum itself. That’s what happened on July 14, 1998: Check number 13781, for $200, went straight from the galleries to Gulotta’s coffers, according to public records filed by Gulotta’s campaign.
Schwartz sounds stricken when she hears the news. She calls the donation “absolutely stupid” and says she must have reimbursed the museum for a fundraiser she attended. “It would never have come from us—never, never,” she says. “Believe me, the museum does not make contributions to anybody’s campaign.”
But the museum has contributed, and the evidence is there for all the world to see. “Is this going to be in the newspaper?” Schwartz says. “I think I’ll have a heart attack. Oh, my Lord.”
Leader of the PAC
Part of the responsibility for enforcing campaign-finance law falls to state and county Boards of Elections.
Candidates and politically active organizations must file periodic reports that show how much money they’ve taken in, who contributed, how the funds were spent and how much is left over. In theory, a Board of Elections could audit the reports and crack down on charities that make illegal donations to campaigns, or at least report them to the IRS or state Attorney General.
But in the realm of campaign finance, theory is a long way from practice.
Nassau’s Board of Elections, for example, is so internally weak and so externally fortified that it accomplishes little beyond accepting reports. Calls to the Democratic commissioner, Barbara Patton, were referred to an outside attorney. Calls to the Republican commissioner, John DeGrace, were not returned at all.
Stanley Zalen, enforcement counsel at the state Board of Elections, says it’s not unusual for local boards to be incapable or unwilling to take action. Zalen says his agency is less concerned with charities that violate tax law than with groups that are politically active but fail to register as political action committees, or PACs. And in the case of PACs, the state Board has only enough time to track down the ones required to file in Albany. “We’ve got all we can do with those,” Zalen says. “We don’t go chasing the ones who are supposed to file locally.”
According to state elections law, if a company or association makes even a single political contribution, it should register as a PAC. Occasional givers rarely sign up, but dozens of frequent check-writers do.
The Family Values Coalition of Long Island, for one, has filed with Nassau. So has the Adjunct Faculty Association, a group that could include Gulotta’s wife, Betsy, a professor at Nassau Community College. Politically active labor unions like the Lieutenants Benevolent Association also turn in their papers, along with corporations like Aetna and Keyspan Energy.
Then there are clubs like the Friends of Long Island Wrestling, which frequently hands over checks to Republican causes but isn’t included on current state or county lists of PACs. Last October, the full-nelson fans gave $1,000 to Gulotta’s campaign, followed by $500 in December. In March, they pinned $125 to the mat for the North Merrick Republican Committee, and in April they sprang $125 on the Town of Oyster Bay Republican Committee.
You’d think the man behind all this giving, Jerome Seckler of Massapequa, would have enough political savvy to register his group as a PAC. For in addition to founding the wrestling association, Seckler directs the county’s Office of Cultural Development—a title that earns him $95,624 a year and a designation as one of the Island’s true renaissance men.
Seckler’s department, you might remember, is the one Nassau Pops says sold tickets for a Gulotta fundraiser. Or maybe the tickets actually came from the Friends of the Office of Cultural Development, which tipped $2,000 to Gulotta’s campaign last year but doesn’t appear on current lists of state or county PACs.
Without records to reveal who’s doing what, or even who’s who, voters can’t tell where candidates get their cash and instead have to rely on the word of those involved. If you’re looking for words from Seckler, forget about it, because he’s not talking. Meanwhile, charities that unwittingly donate to campaigns have their actions recorded in public documents—much to their surprise.
“Boy, oh, boy,” says the Pops’ Panacciulli. “You even have my check number?”
Noble like us
If only campaign-finance law made exceptions for those with good intentions, Christian Baiz’ headache might disappear.
Baiz serves as treasurer of Save Open Spaces Now, a Suffolk County organization formed in 1998 to protect hamlet centers, preserve farmland and stop suburban sprawl.
Which was fine, until SOS Now got involved in the successful battle to pass a 2-percent real estate tax, designed to fund purchases of undeveloped land in the five East End towns. Using money raised from its members, the group placed ads supporting the November referendum in the Suffolk Times and the News Review. That was enough political activity for someone—officials won’t say who—to complain to the Board of Elections that SOS Now should file campaign-finance reports.
Baiz says his alliance spent less than $1,000 on the ads, and chipped that in only after a group leader “panicked” when real estate interests began lobbying against the referendum. “Three of five board members were against spending the money,” he says. “But we did it anyway.”
After the vote, SOS Now received a letter from the state Board of Elections telling members they needed to file papers. Zalen, the enforcement counsel, told the Voice he’s been in touch with the group, and even faxed over a June 7 letter he’d written to the person who complained—with the complainer’s name blacked out. In his correspondence, Zalen explained that citizens can band together to seek legal relief if a politically active organization fails to follow the rules.
“The Board has sent a letter to that Committee advising it of the requirement to file,” Zalen wrote. “If you wish to take any further action, any five voters may institute a civil action to force the required filings to be made under Election Law Section 16-114.”
SOS Now told the state its requirement was unconstitutional, and the skirmish—such as it was—began. Asked for all the letters he’d sent to the Suffolk activists, Zalen turns churlish and refuses. “See, I give you what I can, and this is what I get,” he says. “We keep our things confidential. This is just our position on anything.”
That also turns out to be SOS Now’s position on anything. Baiz says he doesn’t want the donors’ names made public because their political foes might then harass them. He also says his lawyer advised him that the coalition hadn’t spent enough money to qualify as a political action committee.
Yet there’s no way to know for sure, because the group won’t disclose its finances. In addition to placing the ads, SOS Now contributed to other political organizations, but the amount of that spending, too, remains a mystery. “There was a lot of weekend and up-Island money,” Baiz says. “Since I’m not obligated to file, I’m not even going to tell you.”
In a perfect world, Baiz says, all candidates’ campaigns would be publicly funded. He even believes some manner of financial reporting is a good idea. He just doesn’t think the law should apply to “community issues that are as noble as SOS Now.”
Baiz says he hasn’t heard from election officials for a couple of months, which makes him think the case is going nowhere. In the meantime, SOS Now has continued to press its agenda, hosting community forums and keeping members informed about developers’ plans for the East End. “We hope to keep going in that vein,” he says. “We hope to be bringing those things into the public arena.”
Given Baiz’ civic zeal, it’s a shame he and other activists don’t grasp the importance of putting information about election financing in the public’s hands. Whether you’re a member of SOS Now or a citizen for Tom Gulotta, you owe it to your community to reveal when you’ve raised and spent money for political advantage. That way, people know when Big Tobacco is behind a referendum, or when environmentalists support a measure, or when a candidate has been bought and paid for powerful contractors.
A grassroots movement like SOS Now may indeed be small potatoes compared with a force like the Republican Party. But the campaign-finance laws that SOS Now refuses to follow are the same ones that allowed a federal jury in 1985 to see that the Nassau GOP was illegally requiring dues from municipal workers and to stop the invidious practice.
Mandating full financial disclosure lets Long Islanders see the ways in which charities like symphonies and kids’ baseball teams pay homage to the GOP machine. Disclosure shows just how far into their lives the tendrils of politics have reached, and it lets them begin to take the power back.