ALBANY — State Senate Republicans’ campaign arm has struck a $200,000 settlement to close an inquiry into the party’s alleged abuse of its campaign “housekeeping” account, a sanction that could temper how soft money funds are spent by New York’s political parties.
State Board of Elections enforcement counsel Michael L. Johnson charged that Senate Republicans abused their housekeeping account in the lead-up to the 2016 election by issuing a series of campaign-style mailers that allegedly crossed a line into expressly seeking election of GOP candidates. While potential fines and penalties could have totaled more than $2 million, according to Johnson’s statement in the settlement, he signed off on the $200,000 agreement last Friday.
The penalty appears to be the largest sanction won by Johnson since he was appointed by former Gov. Andrew M. Cuomo to the elections watchdog office in June 2021. Senate Republicans suggest the investigation had partisan undertones, arguing Johnson’s legal theory contradicted a formal opinion authored by the state Board of Elections in 2013.
The six-figure penalty is a blow to the Senate Republicans’ uphill efforts to retake control of the chamber in November. The conference is already lagging far behind Senate Democrats in campaign fundraising.
Statewide political parties maintain two different types of campaign funds: A normal campaign account — which is subject to a six-figure contribution limit — and a party housekeeping account. Housekeeping accounts, which can take uncapped contributions from donors, have long been derided by good-government groups as loophole-ridden vehicles for infusing big money into New York politics.
Under state Election Law, a campaign account can be used to expressly advocate for or against a candidate, while a housekeeping account is supposed to be used to maintain a “permanent headquarters and staff” for “ordinary” party activities. Housekeeping funds under state law cannot be used for the express purpose of “promoting the candidacy of specific candidates.”
Four political parties in New York — Democrat, Republican, Working Families and Conservative — have authority to maintain housekeeping accounts.
The long-running inquiry began in 2017 and featured a lengthy legal battle over the breadth of a subpoena issued to the Senate GOP. Senate Republicans provided the Times Union a copy of the settlement agreement this week, framing the move as a transparency measure and an effort to voice their side of the story.
“The agreement with the Board of Elections enforcement counsel relates to years-old campaign activity that took place long before the current leadership took charge of the campaign committee,” said Katy Delgado, a Senate Republican spokeswoman. “While we believe our committee has consistently complied with New York election laws, avoiding a costly and protracted legal effort is the most responsible path forward.”
Senate Republicans believe the mailers in question were “issue ads” that did not expressly advocate for the election of specific candidates.
“Throughout this process, the [Senate Republican campaign] committee has questioned the legal rationale and the political timing of this enforcement action, which selectively targets activity in which political committees of both parties have engaged in,” Delgado said. “However, resolving this matter allows us to focus our resources on making New York safer, stronger and more affordable by electing a Republican Senate majority.”
The case revolved around the Senate Republicans’ spending six years ago when they were led by then-Senate Majority Leader John Flanagan and seeking to hold a tenuous majority in the chamber.
Within 10 days of the 2016 general election, the party’s housekeeping account paid $384,000 for 21 mailers sent to voters’ homes that, according to Johnson, had the “express purpose of promoting the candidacy” of eight Senate Republican candidates, allegedly violating state law.
One mailer sent out by Senate Republicans stated that if a Democratic Senate candidate in 2016, Sara Niccoli, “is elected, NYC Democrats could take over all branches of state government again.”
Other GOP mailers cited by Johnson spoke negatively about individual Senate Democratic candidates, or positively about Republicans — but did not directly mention an election. The criticisms of Democrats ranged from their alleged history of raising taxes to ethical lapses.
Johnson pursued the case under the theory that — because Senate Republicans used the housekeeping account for campaigning — donations to the housekeeping fund in 2016 should be counted as contributions to the campaign account.
The contribution limit for normal party electoral committees in 2016 was $109,600 per individual donor, and $5,000 per corporation.
After adding in donations made to the GOP housekeeping account, Johnson charged Senate Republicans took eight individual contributions and 12 corporate donations worth $1.2 million over the allowed limit.
Johnson’s office arrived at that figure by combining Senate GOP donors’ campaign and housekeeping contributions. For instance, the “Neighborhood Preservation Political Action Fund,” a group affiliated with New York landlords, gave the maximum $109,600 to the Senate Republicans’ main campaign arm, and $200,000 more to the housekeeping account. According to Johnson’s theory, those donations totaled $200,000 over the contribution limit.
In the settlement, both parties cast the agreement as a means of avoiding the delay, expense and uncertainty of protracted litigation. Johnson stated in the settlement that the agreement was not a concession his office’s claims were unfounded; Senate Republicans stipulated it was not an admission of any wrongdoing.
Republicans argue that New York has long used a landmark 1976 U.S. Supreme Court decision, Buckley v. Valeo, to define the meaning of express electoral advocacy. The ruling defined such advocacy as using specific words like “vote, oppose, elect, defeat or reject” in reference to a candidate.
Indeed, a formal opinion issued by the state Board of Elections in 2013 said “express advocacy” was defined by the board as “a standard created by the United States Supreme Court in Buckley v. Valeo.”
Senate Republicans strongly disagree with Johnson’s position that all 21 mailers crossed the line into express electoral advocacy, and contend that — for a time — the enforcement counsel’s office seemed to concur.
In May, an attorney representing the Senate Republicans, Jeffrey Buley, wrote a letter to Johnson stating that in the spring of 2020, Senate Republicans were invited to make a settlement offer based on a narrowed legal standard for what constituted “express” electoral advocacy. Former enforcement counsel Risa Sugarman, who had started the investigation, still led the office at that time.
Senate Republicans made a settlement offer in March 2020, but Buley said he only recently found out that the enforcement counsel’s office had not considered the offer to be serious.
Johnson, who did not immediately respond to a request for comment, was appointed as enforcement counsel by Cuomo and easily confirmed in the state Senate and Assembly. He previously served as counsel for 11 years to the Assembly’s Ways and Means Committee, under chair and former Assemblyman Herman “Denny” Farrell, who passed away in 2018. Respected as a powerful elder statesman and trailblazer, Farrell was not known as a reformer: He came out of the vaunted Harlem political clubhouse and led the Manhattan Democratic Party for nearly three decades.
Last November, Johnson struck a settlement with another influential Harlem Democratic politician, then-Lt. Gov. Brian Benjamin. The settlement followed media reports of Benjamin potentially misusing campaign funds for a wedding-related party, car loan payments, gasoline, and auto repair.
Benjamin repaid nearly $26,000 to his campaign fund and a fine of $2,550; Johnson’s office stated in the settlement that Benjamin committed violations subjecting him to up to $17,000 in fines.
In April, Benjamin was indicted on federal criminal charges in Manhattan related to campaign fundraising. None of the alleged acts, however, involved the matters that had been investigated and settled by Johnson’s office.
