DIVISION OF ELECTION LAW ENFORCE STATE BOARD OP ELECTIONS 40 NORTH PEARL STREET, SUITES ALBANY, N.Y. 12207-2729 Phone! 518.486.7858, Risa S. Sugarman Chief Enforcement Counsel PRIVILEGED & CONFIDENTIAL January 4, 2016 Mr. Douglas A. Kellner Mr. Andrew J. Spano Kellner Herlihy Getty & Friedman, LLP 210 Trump Park 470 Park Ave. South - 7" floor North Shrub Oak, NY 10588 New York, NY 10016 Mr. Gregory P. Peterson Esq. Mr. Peter Kosinski Berkman, Henoch, Peterson, Peddy & Fenchel, PC 70 Marsdale Court 100 Garden City Plaza Suite 300 Selkirk, NY 12158 Garden City, NY 11530 Re.: Notice pursuant to Election Law § 3-104 (5) (b) E-062/2014 and E-067/2014 Dear Commissioners: In October 2014, the state board of elections (“SBOE”) Division of Election Law Enforcement received separate, similarly drafted complaints against the Putnam County Democratic Committee (*PCDC”) and the Ulster County Democratic Committee UCDC”). The complaints alleged that both the PCDC, the UCDC and others solicited or received donations from various organizations for the purpose of funneling contributions that exceeded contribution limits to democratic state senate candidates, Justin Wagner, Terry Gipson and Cecilia Tkaczyk. Specifically, the complaints alleged that New York City Mayor Bill de Blasio engaged his campaign staff to solicit contributions from the NYS Nurses Association PAC, District Council NYC UBC, Kingsland 359 LLC, CWA District,Mr. Douglas A. Kellner, Mr. Gregory P. Peterson January 4, 2016 Mr. Andrew J. Spano, Mr. Peter Kosinski Page 2 of 8 One PAC, 32BJ United ADF, PAC, 71-85 Lewis Avenue LLC, Roth & Sons Management LLC and others for the benefit of these candidates and instructed the donors to send the contributions to the PCDC and UCDC. The complaint alleged that the County Committees then forwarded the contributions they received, which far exceeded limits on contributions the organizations could have made directly, to the candidates. It was alleged that these actions violated Election Law §§ 14-120, 14-126 (5), and 14-126 (6). The investigation was conducted by Associate Counsel Carla DiMarco and Investigator Genevra Cushman. Campaign finance statements filed by the PCDC (SBOE filer number C2170), the UCDC (SBOE filer number €22401) , the New York State Democratic Senate Campaign Committee (“DSCC” SBOE filer numbers A01540 and A05452), the candidates, and the political committees mentioned were reviewed for filing periods within the dates January 1, 2009 through December 5, 2014. The data existing on the Board’s public website at the time were utilized for this review. According to SBOE records, the PCDC registered as a constituted county committee on January 1, 2006. The treasurer is Robert Zubrycki. The UCDC registered as a constituted county committee on February 1, 2006. Clement Hays is the treasurer. The DSCC registered as a party state committee on July 15, 1999. The treasurer is Gretchen Werwaiss. The review revealed a pattem consistent with coordinated fundraising and expenditure of funds to evade contribution limits in violation of Election Law §§ 14-126 (5), and 14-126 ©. By letter dated January 2, 2015, I requested authorization to exercise the powers which the board is otherwise authorized to exercise pursuant to Election Law subdivision five of section 3-102. At the Executive Session on January 12, 2015 authority was granted to the Division by the Board. The Division subpoenaed records from various campaign bank accounts and identified political consultants. Documents were obtained via subpoena from five political consultants involved in these campaigns: BerlinRosen, LTD., Mark Guma Communications, The Parkside Group LLC, AKPD Message and Media LLC, and Red Horse Strategies LLC. Information was sought about work these consultants performed in connection with campaigns for the state senate races of Justin Wagner, Terry Gipson, and Cecilia Tkaczyk. Thousands of documents were produced. Review of the documents revealed evidence of campaigns that were coordinated at every level and down to minute detail. Documents establish that de Blasio established a team to raise and spend money on behalf of the candidates examined in this case — Cecilia Tkaczyk, Justin Wagner, and Terry Gipson. Prominent players on this team, referred to interchangeably as “Team de Blasio,” or “Team Coordinated,” included the following: © William de Blasio, New York City mayor and founder Campaign for One New York, Ine.;«Emma Wolfe, New York City Director of Intergovernmental Affairs; Ross Offinger, Campaign for One New York treasurer; Josh Gold, New York Hotel Trades Council Director of Political & Strategic Affairs and Campaign Manager Campaign for One New York; ‘* Jason Goldman, United Federation of Teachers Assi of Legislation and Political Action; and ‘* Neal Kwatra, Metropolitan Public Strategies Founder and former Hotel Trades Council Political Director. ‘* The political consulting firms of BerlinRosen, AKPD Message and Media, and Hilltop Public Solutions, and key staffers, were also very involved with Team Coordinated. tant Director POLITICAL CONSULTANTS ‘The documents reviewed established a pattern of coordination between Team de Blasio, the candidates, the DSCC, the PCDC and the UCDC. The coordination began as early as August 25, 2014 (before the 2014 primary) with a meeting between Justin Wagner and representatives of Team de Blasio. Wagner met with Emma Wolfe, United Federation of Teachers President Michael Mulgrew, and Jason Goldman. Emma Wolfe told Wagner there was an agreement that Mark Guma would do Wagner’s full mail plan and would work with Valerie Berlin of BerlinRosen. ‘Team de Blasio was in discussions with the DSCC conceming who would be paying for what aspect of the campaigns. This was prior to de Blasio’s major fundraising push and the largest contributions to the DSCC, the PCDC, the UCDC, and the candidates that resulted from that fundraising. ‘The evidence indicates that Team de Blasio and the DSCC coordinated how the monies raised by de Blasio would be identified. © For the county committees, the contributions from unions, businesses, and other New York City donors were passed through directly to the candidate committees. © Contributions to the DSCC were identified as originating from the de Blasio team by having them directed to the DSCC care of Ross Offinger. © The evidence showed that the de Blasio team then controlled, in coordination with the DSCC and candidate committees, how those funds were spent. * The DSCC, the de Blasio team, and the candidates also coordinated who would work on the campaigns, who would pay for each aspect of the ‘campaigns, and which vendors/political consultants would be hired to do the work. The other main source of funds was the DSCC team. The campaigns and their political consultants coordinated with the DSCC, Team de Blasio, and County Committees. There was a coordinated budget, ‘coordinated spending of each entity for different purposes, coordinated field work, coordinated calendars, coordinated production and drop dates forMr. Douglas A. Kellner, Mr. Gregory P. Peterson January 4, 2016 Mr, Andrew J. Spano, Mr. Peter Kosinski Page 4 of 8 political materials, and coordinated strategy and content of messaging. There was also evidence that the de Blasio team, including the unions, provided campaign and field personnel to the campaigns. Copies of invoices for work performed by political consultants and payments confirmed that orders were placed and work performed prior to candidates’ receipt of funds to pay for that work. This indicates that the candidates knew how much money they would be receiving through the PCDC, the UCDC, and the DSCC to pay for those orders. ‘There was also evidence that the DSCC, candidate committees, and the de Blasio team coordinated in the production and approval of DSCC paid political communications. CAMPAIGN FINANCE - FUNDRAISING PCDC ~ Monies received Contributions and incoming transfers reported by the PCDC jumped dramatically in 2014. Even including a year of an unusually high influx of funds (in which a $30,000 transfer was received), contributions and transfers to the PCDC averaged approximately $10,016 annually in the five years prior to 2014. In 2014, the PCDC reported receiving $671,329.76. Notably, 99 percent of that amount -- $664,500 — was received after September 1, 2014 just prior to the election. Almost all of these funds were received by the PCDC in October and disbursed within a few days following their receipt to Friends of Justin Wagner and Friends of Terry Gipson, UCDC — Monies Received Amounts of contributions and incoming transfers reported by the UCDC also jumped dramatically in 2014. Contributions and transfers to the UCDC averaged approximately $37,021.04 annually in the five years prior to 2014. In 2014, the UCDC reported receiving $390,317.00. Notably, 96.8% percent of that amount -- $378,102.00 — was received after September 1, 2014 just prior to the election. Almost all of these funds were received by the UCDC in October and disbursed within a few days following their receipt to Friends of Cecilia Tkaczyk. Evidence of de Blasio Influence In reviewing checks deposited into the DSCC account, some of the checks reflected not only the name of the payee but also the address to which the check was sent. Checks generally were payable to the DSCC, and many of the checks were directed to Ross Offinger at two different addresses in New York City. One of the addresses is the address of the treasurer of the DSCC and the other was the location of offices of Kirsten Gillibrand for U.S. Senate. Ross Offinger has been the finance director of Gillibrand for Senate since 2009 as well as being the campaign finance director for the de Blasio campaign and treasurer of Campaign for One New York. Some checks deposited also included notations. such as “donation per Mayor” in the memo line.In reviewing checks deposited into UCDC and PCDC accounts, the committees received a number of large contributions from entities and people who it appears never had contributed to that committee in the past. For example, on October 14, 2014, the UCDC deposited four checks totaling $364,000 from NYSNA Political Action Committee, CWA District One PAC, 32BJ United ADF, and 71-85 Lewis Avenue LLC. A search could find no previous contributions from these entities to the UCDC. A similar pattern was evident in PCDC bank records. COORDINATED CONTRIBUTIONS AND EXPENDITURES Bank records often illustrated the coordinated timing of contributions and expenditures." ‘The candidates’ accounts displayed evidence of coordination. Friends of Cecilia Tkaczyk (*FOCT’) received numerous wire transfers into its bank account which it then transferred out in exactly the same amounts to political consultants on the same day or the following day. At the same time, FOCT received other transfers from UCDC and DSCC, as well as many direct contributions from New York City unions, companies, and individuals likely linked to the de Blasio team that were simply absorbed into the campaign account and used to pay hundreds of thousands of dollars more to political consultants such as GRSC Consulting, AKPD Message and Media, and The Parkside Group. As was the case with other committees examined, Friends of Terry Gipson (FOTG) and Friends of Justin Wagner (FOJW) received other transfers from the PCDC and other direct contributions from New York City unions, companies, and individuals likely linked to the de Blasio team that were simply absorbed into the campaign account and used to pay political consultants. Candidates were aware of the pattern of money transfers, the expected arrival of funds and the necessity of transferring funds out to consultants in a timely manner. The wire transfers out of the UCDC account to Friends of Cecilia Tkaczyk were initiated by Hayes Clement, the UCDC treasurer, for the benefit of Friends of Cecelia (sic) Tkaczyk / Matthew Lerch. Matthew Lerch was Cecilia Tkaczyk’s campaign manager. Included in the bank records for one of the wire transfers was an email from Matthew Lerch to Hayes Clement on October 16, 2014 stating the following: “Hayes, I am just following up. ... Has the check for $60k cleared? Below is our banking info, we need the 60 transferred over ASAP please.” This email shows that representatives of FOCT were aware UCDC had received a check from NYSNA, knew that those funds would be passed on the FOCT, and previously had discussions about this matter. This pattern of activity indicates that the committees already had committed to these expenditures prior to receiving the funds. Total transfers from the PCDC to Friends of Justin Wagner and Friends of Terry Gipson were $367,000 and $273,750, respectively. Transfers from the UCDC to Cecilia Tkaczyk totaled $330,000. Based on the evidence that these transfers were prearranged, reasonable cause exists to believe that all the contributions were made to the county committees simply as straw donors. Therefore, they should be considered contributions to the candidates and subject to the candidates’ contribution receipt limits. "The attached memo provides an example ofthe deposits nd withdeawals from the accounts UCDC and PCDC, as wel as the candies.Mr. Douglas A. Kellner, Mr. Gregory P. Peterson January 4, 2016 ‘Mr. Andrew J. Spano, Mr. Peter Kosinski Page 6 of 8 ELECTION LAW VIOLATIONS - COORDINATION §§ 14-126 (2), 14-126 (4), 14-126 (5) and 14-126 (6). Election Law § 14-126 (2) Any person who, acting as or on behalf of a candidate or political committee, under circumstances evineing an intent to violate such law, unlawfully accepts a contribution in excess of a contribution limitation established in this article, shall be required to refund such excess amount and shall be subject to a civil penalty equal to the excess amount plus a fine of up to ten thousand dollars, to be recoverable in a special proceeding or civil action to be brought by the state board of elections chief enforcement counsel. Election Law § 14-126 (4) Any person who knowingly and willfully fails to file a statement required to be filed by this article within ten days after the date provided for filing such statement or any person who knowingly and willfully violates any other provision of this article shall be guilty of a misdemeanor. Election Law § 14-126 (5) Any person who knowingly and willfully contributes, accepts or aids or participates in the acceptance of a contribution in an amount exceeding an applicable maximum specified in this article shall be guilty of a class A misdemeanor. Election Law § 14-126 (6) Any person who shall, acting on behalf of a candidate or political committee, knowingly and willfully solicit, organize or coordinate the formation of activities of one or more unauthorized committees, make expenditures in connection with the nomination for election or election of any candidate, or solicit any person to make any such expenditures, for the purpose of evading the contribution limitations of this article, shall be guilty of a class E felony. There is considerable evidence in this case that New York City mayor William de Blasio organized a team dedicated to getting a sufficient number of democratic New York State senators elected in 2014 to achieve a democratic majority in the senate, The evidence indicates that de Blasio established a structure, both within and outside City Hall, and entered into an agreement with powerful unions -- New York Hotel Trades Council and United Federation of Teachers -- and political consultants — BerlinRosen, AKPD Message and Media, and Hilltop Public Solutions — to raise and spend money to influence state senate races. The entire fundraising and campaign operation was run from City Hall by de Blasio staff in coordination with unions and Campaign for One New York officers and political consultants, ‘The evidence further indicates that the de Blasio team entered into agreements with at least six political committees — the DSCC, the PCDC, and the UCDC, Friends of Justin Wagner, Friends of Terry Gipson, and Friends of Cecilia Tkaczyk. As part of the agreement, the deBlasio team solicited contributions for the benefit of the campaigns of Justin Wagner, Terry Gipson, and Cecilia Tkaczyk and instructed contributors to route contributions through the DSCC, the PCDC, and the UCDC. These committees then transferred the funds to the candidate committees. Many contributors donated to the candidate committees, the county committees, and the state committee. In numerous cases, aggregate contributions from single donors far exceeded candidates’ contribution receipt limits. The evidence demonstrates that the de Blasio team coordinated its fundraising activities with and intentionally solicited contributions for these candidates to be made to the DSCC, the PCDC, and the UCDC in order to evade contribution limits and to disguise the true names of the contributors, conduct which may violate Election Law §§ 14-126 (5) and 14-126 (6). Some of the donors fom whom de Blasio solicited contributions were themselves political committees that file campaign finance disclosure statements with the SBOE. To the extent those political committees knowingly structured contributions to candidates by routing them through county and state committees as straw donors for the purpose of evading contribution limits, they also may have violated Election Law §§ 14-126 (5) and 14-126 ©. ‘There is also evidence in this case that Friends of Justin Wagner, Friends of Terry Gipson, and Friends of Cecilia Tkaczyk failed to report certain in-kind contributions. For example, evidence showed that several individuals from the de Blasio team worked on behalf of the campaigns at certain times. To the extent those individuals were employed and paid for that work by someone other than the campaign, such as the City of New York, a union, a PAC, or a political consulting firm, the value of their compensation should have been reported as in-kind contributions. No such contributions were reported. The filing of campaign finance disclosure statements that falsely characterize contributions or fail to report contributions or the keeping of such false records may constitute the crimes of offering a false instrument for filing and falsifying business records, respectively, in violation of Penal Law article 175. I have determined that reasonable cause exists to believe a violation warranting criminal prosecution has taken place, pursuant to Election Law section 3-104 (5) (b). The violations discovered by this investigation can only be described as willful and flagrant. This investigation should now proceed to the New York County District Attomey. I have determined that reasonable cause exists for the New York County District Attorney to investigate any indictable offense or offenses and to prosecute any indictable offense or offenses committed by any individual or individuals associated with this investigation regarding New York State Election Law and Penal Law crimes. I request that the District ‘Attorney investigate any and all crimes or offenses arising out of this investigation. I have enclosed the memo prepared by Ms. DiMarco and Ms. Cushman for your review. Thereby request the opportunity to present this request to the Board at your next meeting scheduled on January 11, 2016. I further request that this presentation be done at an Executive session. If you have questions, please do not hesitate to contact me. Until that time I remain,Mr. Douglas A. Kellner, Mr. Gregory P. Peterson January 4, 2016 Mr. Andrew J. Spano, Mr. Peter Kosinski Page 8 of 8MORANDUM TO: Risa S, Sugarman Chief Enforcement Counsel FROM: Carla V. DiMarco Associate Counsel Genevra Cushman Special Investigator SUBJECT: — Case Numbers E-062/2014 and F-067/2014 DATE: December 31, 2015 The Complaints On October 31, 2014 the state board of elections (“SBOE”) Division of Election Law Enforcement received separate complaints against the Putnam County Democratic Committee (‘PCDC”) and the Ulster County Democratic Committee (“UCDC”). The complaints were drafted similarly. In the first complaint, Putnam County Republican Committee Chairman Anthony G. Scannapieco, Jr. alleged that the CDC and others solicited or received donations from various organizations for the purpose of funneling contributions that exceeded contribution limits to democratic state senate candidates Justin Wagner and Terry Gipson. Specifically, Scannapieco alleged that New York City Mayor Bill de Blasio engaged his campaign staff to solicit contributions from the NYS Nurses Association PAC, District Council NYC UBC, Kingsland 359 LLC, CWA District One PAC, 32BJ United ADF, and Roth & Sons Management LLC for the benefit of these two candidates and instructed the donors to send the contributions to the PCDC. The complaint alleged that the PCDC then forwarded the contributions it received, which far exceeded limits on contributions the organizations could have made directly, to the candidates. It was alleged that these actions violated Election Law §§ 14-120, 14-126 (5), and 14-126 (6). In the second complaint, Daniel Aversano, Chairman of the Town of Rochester Republican Committee (located in Ulster County), alleged that the UCDC and others solicited or received donations from various organizations for the purpose of funneling contributions that exceeded contribution limits to democratic state senate candidate Cecilia Tkaczyk. Specifically, Aversano alleged that New York City Mayor Bill de Blasio engaged his campaign staff to solicit contributions from the NYS Nurses Association PAC, 71-85 Lewis Avenue LLC, and others for the benefit of this candidate and instructed the donors to send the contributions to the UCDC. ‘The complaint alleges that the UCDC then forwarded the contributions it received, which far exceeded limits on contributions the organizations could have made directly, to the candidate. It ‘was alleged that these actions violated Election Law §§ 14-120, 14-126 (5), and 14-126 (6).Background During the summer of 2014, it was widely reported that New York City mayor William. de Blasio was attempting to influence New York State senate races in upstate New York. Reportedly, de Blasio utilized labor unions, activists, individuals and companies who do business with New York City, and other supporters to steer donations to democratic committees and push for a democratic majority in the state senate that would further his own political agenda, Mayor de Blasio had made no secret of his earlier efforts to raise money to further his political agenda, Following his election in 2013, de Blasio began fundraising efforts for his PAC, the non-profit Campaign for One New York, Inc. (initially known as UPKNYC), to bolster his efforts to establish a universal pre-kindergarten program in New York City schools and other administration agenda items. ‘The organization is closely tied to de Blasio friend and advisor Jonathan Rosen of BerlinRosen, run by de Blasio’s former campaign manager and now Hilltop Public Solutions partner Bill Hyers, and staffed by other people who were instrumental in de Blasio’s mayoral campaign, such as de Blasio fundraiser and Campaign for One New York treasurer Ross Offinger, and political operative and Campaign for One New York secretary Stephanie Yagzi. Campaign for One New York, Inc. accepts donations in unlimited amounts, even from people and companies who do business with New York City, claiming that it does not spend money on elections. According to de Blasio press secretary Karen Hinton, Campaign for ‘One New York does not engage in politics but exists solely to advance the administration's agenda, Several news accounts reported on de Blasio’s fundraising activities in connection with the 2014 senate races. On September 10, 2014 Sally Goldenberg reported in POLITICO New York that on the day after the state’s primary elections, Mayor Bill de Blasio and his closest aide, ‘New York City director of intergovernmental affairs Emma Wolfe, met with about 100 longtime supporters at the law office of Kramer Levin.' According to the article, the mayor and Emma Wolfe told the potential donors that they needed a Democratic majority to push through their agenda in Albany, and de Blasio aide Ross Offinger asked attendees to donate to the state Democratie party. On October 29, 2014 Ken Lovett reported in the New York Daily News that John Catsimatidis, a New York City businessman and 2013 republican mayoral candidate, made a $50,000 contribution to the PCDC at the request of de Blasio.” Catsimatidis reportedly told Lovett he made the contribution because he does a lot of business with the city and wanted to show the mayor he was “willing to work with him” when de Blasio asked for the “favor” on October 1. Catsimatidis said the next day Ross Offinger called Catsimatidis’s office to tell him where to donate and how much. Lovett also reported that Alexis Lodde, founder of a Dallas transportation company doing business with New York City and Putnam County, donated $100,000 to the PCDC, and four labor unions donated $237,000. "Sally Goldenberg, De Blasio marshals donors for Democratic Senate push, POLITICO, Sep. 10, 2014 2 Kenneth Lovett, EXCLUSIVE: Using campaign finance loophole, Mayor de Blasio steers huge amounts of money into Democratic battle for state Senate, N.Y. Daily News, Oct. 29, 2014 2On October 30, 2014 Ken Lovett reported in the New York Daily News that a key de Blasio fundraiser, Sam Nagourney, sent an email to a New York City developer asking the developer to contribute $50,000 to one of three committees, including the UCDC and the New York State Democratic Senate Campaign Committee (“DSCC”).’ According to the news report, the request made the developer “uncomfortable” because although he had business with the city, such as permitting and land use issues, he didn’t think senate democrats were friendly to his industry. Sam Nagourney works for Hilltop Public Solutions, one of de Blasio’ closest political consultants, which is employed by Campaign for One New York. Also on October 30, 2014 CBS reported on de Blasio’s fundraising efforts to back upstate democrats in Putnam and Ulster Counties.’ Republican senate candidate Terrence Murphy, of Ulster County, characterized Mayor de Blasio’s activities as a “shakedown of New York City businesses” and a “money-laundering scam.” Good government groups similarly have decried de Blasio’s end run around New York City law limiting contributions by those who have business with the city, as well as campaign finance limits imposed by New York City and the state, in connection with Campaign for One ‘New York. According to a September 24, 2015 article in POLITICO New York, Campaign for ‘One New York accepted $3.87 million from dozens of real estate developers, unions and others who do business with City Hall.* Reportedly, during the first six months of 2015, at least 46 of 74 donors (62%) had business with New York City or were trying to secure approval for a project when they contributed, The article outlines several instances in which these donors received a benefit from the city shortly after making a donation to Campaign for One New York, Ine. ‘Thomas Kaplan reported in the New York Times on November 4, 2015 that Campaign for One New York paid millions of dollars to the firms of de Blasio’s private consultants, such as Jonathan Rosen of BerlinRosen, Jon Del Cecato of AKPD Message and Media, and Nick Baldick of Hilltop Public Solutions. Despite the fact that these firms represent unions, real estate developers, and others who do business with the city, de Blasio press secretary Karen Hinton denied that the firms lobbied City Hall on behalf of those clients. The article also described a number of instances in which a donation to Campaign for One New York was followed by a favor from de Blasio or a favorable result in their business with City Hall. A November 4, 2015 New York Daily News article described the mayor's “shadow cabinet” and the Campaign for One New York as the new way of doing business in New York.” BerlinRosen and AKPD Message and Media are two of the political consultants who received hundreds of thousands of dollars as a result of the de Blasio team’s fundraising and political spending on behalf of Putnam and Ulster County candidates. > Kenneth Lovet, Bill de Blasio fund-raiser asking for $50G to help Democrats capture state Senate made developer fel ‘uncomfortable,’ N.Y. Daily News, Oct. 30,2014 * De Blasio's Fundraising Tactics In NY Senate Race Called Into Question, CBS New York, Oct. 30,2014 5 Laura Nahmias and Sally Goldenberg, The transactional mayor returns, POLITICO, Sep. 24, 2015 Thomas Kaplan, Mayor de Blasia's Hired Guns: Private Consultants Help Shape City Hall, NY. Times, Nov. 4, 2015 7 Harry Siegel, Friends, money and progressive politics, NY. Daily News, Nov. 4, 2015 3Document Production of Political Consultants We obtained documents via subpoena from five political consultants involved in these campaigns: BerlinRosen, LTD., Mark Guma Communications, The Parkside Group LLC, AKPD Message and Media LLC, and Red Horse Strategies LLC. We sought information about work these consultants performed in connection with campaigns for the state senate races of Justin Wagner, Terry Gipson, and Cecilia Tkaczyk. ‘Thousands of documents were produced. Review of the documents revealed evidence of campaigns that were coordinated at every level and down to minute detail. Documents establish that de Blasio established a team to raise and spend money on behalf of the candidates examined in this case — Cecilia Tkaczyk, Justin Wagner, and Terry Gipson — and possibly others not referenced in this investigation. Prominent players on this, team, referred to as “Team Coordinated” or “Team de Blasio,” included the following: William de Blasio, New York City mayor and founder Campaign for One New York, Inc.; Emma Wolfe, New York City Director of Intergovernmental Affairs; Ross Offinger, Campaign for One New York treasurer, Josh Gold, New York Hotel Trades Council Director of Political & Strategic Affairs and Campaign Manager Campaign for One New York; Jason Goldman, United Federation of Teachers Assistant Director of Legislation and Political Action; and ‘Neal Kwatra, Metropolitan Public Strategies Founder and former Hotel Trades Council Political Director. The political consulting firms of BerlinRosen, AKPD Message and Media, and Hilltop Public Solutions, and key staffers, were also very involved with Team Coordinated. There was evidence that the team was established as early as August 25, 2014 when Justin Wagner met with representatives of Team Coordinated. The evidence indicates that ‘Wagner met with Emma Wolfe, United Federation of Teachers President Michael Mulgrew, and Jason Goldman, Emma Wolfe told Wagner there was an agreement that Mark Guma would do ‘Wagner's full mail plan and would work with Valerie Berlin of BerlinRosen. According to documents produced, Team Coordinated was in discussions with the DSCC concerning who ‘would be paying for what aspect of the campaigns. This was prior to de Blasio’s major fundraising push and the largest contributions to the DSCC, the PCDC, the UCDC, and the candidates that resulted from that fundraising. ‘The evidence indicates that Team de Blasio and the DSCC coordinated how the monies raised by de Blasio would be identified. For the county committees, the contributions fromunions, businesses, and other New York City donors was passed through directly to the candidate committees. Contributions to the DSCC were identified as originating from the de Blasio team by having them directed to the DSCC care of Ross Offinger. The evidence showed that the de Blasio team then controlled, in coordination with the DSCC and candidate committees, how those funds were spent, The DSCC, the de Blasio team, and the candidates also coordinated who ‘would work on the campaigns, who would pay for each aspect of the campaigns, and which vendors/political consultants would be hired to do the work. The other main source of funds was the DSCC team. ‘The evidence revealed that the campaigns and their political consultants coordinated with the DSCC, Team Coordinated, and County Committees. There was a coordinated budget, coordinated spending of each entity for different purposes, coordinated field work, coordinated calendars, coordinated production and drop dates for political materials, and coordinated strategy and content of messaging. There was also evidence that the de Blasio team, including the unions, provided campaign and field personnel to the campaigns. Copies of invoices for work performed by political consultants and payments confirmed that orders were placed and work performed prior to candidates’ receipt of funds to pay for that work. This indicates that the candidates knew how much money they would be receiving through the PCDC, the UCDC, and the DSCC to pay for those orders. There was also evidence that the DSCC, candidate committees, and the de Blasio team coordinated in the production and approval of DSCC paid political communications. Campaign Financial Disclosure Statements As part of our investigation of contributions to state senate candidates in Putnam and Ulster Counties we reviewed campaign finance statements filed by the PCDC (SBOE filer number C21700), the UCDC (SBOE filer number C22401) , the DSCC (SBOE filer numbers A01540 and A05452), the candidates, and the political committees mentioned for filing periods within the dates January 1, 2009 through December 5, 2014. The data existing on the Board’s public website at the time were utilized for this review. ‘According to SBOE records, the PCDC registered as a constituted county committee on January 1, 2006. ‘The treasurer is Robert Zubrycki. The UCDC registered as a constituted county committee on February 1, 2006. Clement Hays is the treasurer. The DSCC registered as a party state committee on July 15, 1999. The treasurer is Gretchen Werwaiss. Our review revealed a pattern consistent with coordinated fundraising and expenditure of funds to evade contribution limits. The following tables summarize the receipts and expenditures reported in campaign finance disclosure statements filed. PCDC - Monies received As illustrated, contributions and incoming transfers reported by the PCDC jumped dramatically in 2014. Even including a year of an unusually high influx of funds (in which a $30,000 transfer was received), contributions and transfers to the PCDC averaged approximately$10,016 annually in the five years prior to 2014. In 2014, the PCDC reported receiving $671,329.76. Notably, 99 percent of that amount -- $664,500 — was received after September 1, 2014 just prior to the election. Total # transactions ##$100.01- #$500.01- #$1000.01- jeriod money comingin Total Amount #=>$100 $500.00 $1000.00 $10,000 #<$10,000 2009 2 $425.00 1 1 ° ° ° 2010 85 $3028.12 67 v 1 ° ° ro 39 $2,530.00 36 3 ° ° ° 2012 82 $38,651.68 27 2» 2 2 1 2013 2 $450.00 1 1 ° ° 0 2014 8 $671,309.76 1 2 4 10 9 Total 264 $721,418.56 osyo/14-12/05/14 27 $664,500.00 ° 4 4 10 9 $000 $1,700.00 $4,000.00 $71,500.00. $587,300.00 % Dollars Reve 026% 0.60% 10.76% 98.38% Sizes of individual donations also increased in 2014. Prior to 2014, the PCDC only once in the previous five years received a contribution or transfer larger than $10,000 (a $30,000 candidate transfer in 2012) and only five other times in the previous five years received a contribution or transfer larger than $500. 73 percent of donations the PCDC reported for 2009- 2013 were $100 or less. In 2014, only 49 percent of contributions and transfers were in amounts, $100 or less. For the period after September 1, none of the contributions or transfers received were $100 o less. Approximately 89 percent of all dollars received after September 1, 2014 were contributions or transfers greater than $10,000, and an additional 10 percent came from contributions or transfers greater than $1,000. Almost all of these funds were received by the PCDC in October and disbursed within a few days following their receipt to Friends of Justin Wagner and Friends of Terry Gipson. UCDC — Monies Received Amounts of contributions and incoming transfers reported by the UCDC also jumped dramatically in 2014, Contributions and transfers to the UCDC averaged approximately $37,021.04 annually in the five years prior to 2014. In 2014, the UCDC reported receiving $390,317.00, Notably, 96.8% percent of that amount - $378,102.00 ~ was received after September 1, 2014 just prior to the election. Sizes of individual donations also increased in 2014. Prior to 2014, the UCDC only once in the previous five years received a contribution or transfer equal to or larger than $10,000 (a $10,000 candidate transfer in 201 1) and only 30 other times in the previous five years received a contribution or transfer larger than $500. Approximately 96% percent of all dollars received after September 1, 2014 were contributions or transfers greater than $10,000. Almost all of these funds were received by the UCDC in October and disbursed within a few days following their receipt to Friends of Cecilia Tkaczyk.Total # transactions ¥$100.01- W$500.01- $1000.01- Filing Period money comingin Total Amount #=$100 $500.00 $1000.00 $10,000 «$10,000, 2008 348 $50,438.00 2548S 6 3 0 2010 208 $25,68050 15841 3 1 ° zon 7 Sa9s7168 28180 4 2 ° 2012 269 $0292.79 18772 7 3 ° 203 Bt $1632.23 10325 1 1 ° 2018 11 $390,317.00 92 30 2 3 4 Total M429 $575,422.20 c9/o1/14-12/05/18 89 $378,102.00 330 1 1 4 ‘4202.00 $6,700.00 $1,000.00. $1,600.00 $264,600.00 % Dollars Revd 11% L7TK 026% ORK 96.43% PCDC - Monies Expended ‘The PCDC’s reported use of the funds it received changed markedly in 2014, as illustrated in the table below. Year ‘Transfers out Dollar Amount Going to #of separate committees 2009 8 $3,200.00 a 2010 un $4,018.00 u 201. 6 $1,800.00 6 2012 a 2,100.00 8 2013, 10 $1,850.00 10 2014 $642,965.41 4 2014 Breakdown 5 $367,000.00 FRIENDS OF JUSTIN WAGNER 4 $273,750.00 FRIENDS OF TERRY GIPSON 2 $2,065.41 OSBORNE FOR COUNTY CLERK 1 ‘$150.00 PUTNAM VALLEY DEMOCRATIC COMMITTEE 2014 Totals 2 $642,965.41 In each of the five years prior to 2014, the PCDC made a number of transfers, and each transfer gave a small amount of money to a different committee. Specifically, the PCDC made eight transfers totaling $3,200 in 2009 to different committees, eleven transfers totaling $4,018 in 2010 to different committees, six transfers totaling $1,800 in 2011 to different committees, eight transfers totaling $2,100 in 2012 to different committees, and ten transfers totaling $1,850 in 2013 to different committees. In 2014, by contrast, 99.9 percent of the funds the PCDC ‘transferred out went to just two committees ~ Friends of Justin Wagner and Friends of Terry Gipson — in the amounis of $367,000 and $273,750, respectively. Notably, 100 percent oftransfers out during the month of October 2014 (prior to the election) went directly to these two candidates UCDC — Monies Expended ‘The UCDC’s reported use of the funds also changed markedly in 2014, as illustrated in the table below. In the five years prior to 2014, the UCDC made a small number of transfers out, and each transfer gave a small amount of money to a different committee. Specifically, the UCDC made 6 transfers totaling $4800 in 2009 to 5 different committees, 3 transfers totaling $1600.00 in 2010 to different committees, 1 transfer totaling $1000.00 in 2011 to a single committee, and 3 transfers totaling $4500.00 in 2012 to different committees. In 2014, by contrast, 99 percent of the funds the UCDC transferred out went to just one comt -- Friends of Cecilia Tkaezyk — in the amounts of $60,000, $100,000 and $170,000. Year ‘Transfers out Dollar Amount Going to # of separate committees 2009 6 ‘$4,800.00, 5 2010 3 $1,600.00, 3 2011 1 $1,000.00, 1 2012 3 ‘$4,500.00 3 2013 0 $0.00 N/A 2014 4 $332,000.00 2 2014 Breakdown 3 $330,000.00 FRIENDS OF CECILIA TKACZYK 1 {$2,000.00 COMMITTEE TO ELECT GILDA RICCARDI 2014 Totals 4 $332,000.00 NYS Democratic Senate Campaign Committee Review of reports filed by the DSCC revealed a pattern consistent with coordinated fundraising and expenditure of funds as well. There was an influx of donations during October, and then those funds were transferred out shortly afterward to committees of only five candidates statewide — Justin Wagner, Terry Gipson, Cecilia Tkaczak, Ted O’Brien, and Marc Panepinto. ‘These facts are consistent with the facts reportedly conveyed in the fundraising email sent by de Blasio fundraisers. Although this memorandum focuses on only two of those committees about which complaints were received, it appears the pattem of activity was replicated in all these races.Coordinated Contributions Exceeded Limits DSCC and other committee statements showed contributions were received from some of the same donors who also contributed to the PCDC, the UCDC, Justin Wagner, Terry Gipson, and Cecilia Tkaczak directly. To the extent an understanding existed that contributions to these committees would simply be forwarded to these specific candidates, these should be considered contributions to the candidates themselves and subject to the candidates’ contribution receipt limits. So considered, many of these aggregate contributions exceeded the candidates’ contribution receipt limits -- $10,300 for the general election cycle plus $6,500 additional if there was a contested primary election. For example, the New York State Nurses Association Political Action Committee (-NYSNA PAC”) contributed $5,000 each to Friends of Justin Wagner, Friends of Terry Gipson, and Friends of Cecilia Tkaczyk, $60,000 each to the PCDC and the UCDC, and $100,000 to the DSCC during the month of October 2014. The PCDC, the UCDC, and the DSCC promptly combined these amounts with other contributions and transferred them to the candidates. As a result, the NYSNA PAC effectively contributed approximately $235,000 to these three candidates in one month by funneling some of the money through county and state party committees. Other donors similarly contributed to the PCDC, the UCDC, the DSCC and the candidate committees directly, thereby evading contribution limits. Coordinated Expenditures For the Purpose of Evading Contribution Limits DSCC and committee reports also reflect coordinated spending activities by the involved committees. The initial contributions appear to have been solicited between the months of June and October 2014. The committees and individuals from which contributions were solicited made their largest payments to the county committees and state committee following the primaries, consistent with the news account of a de Blasio solicitation during a meeting with supporters the day after the September 9 primary elections. According to statements filed, the Ds in support of 13 candidates as shown below. made direct expenditures totaling $3,351,413.52 Oliver Koppell $31,889.19 0.95% ‘Adam Haber $648,087.00 19.34% Justin Wagner $574,867.90 17.15% Mare Panepinto $286,294.32 8.54% Terry Gipson $398,595.94 11.89% Cecilia Tkaczyk $536,071.00 16.00% Ethan Irwin $17,959.75 0.54% George Latimer $245,930.18 7.34% Andrea Stewart-Cousins $110,916.50 3.31% ‘Adrienne Esposito $7,152.00 0.21% Elaine Altman $32,377.05 0.97% Dave Denenberg $2,602.69 0.08% Ted O’Brien $458,670.00 13.69%Total $3,351,413.52 100.00% As with monies transferred, to the extent these expenditures were coordinated with candidate committees, they should be reported as contributions and subject to contribution limits. Spending of the county committees and state committee also were coordinated with the candidates and those who solicited the funds. These committees’ disclosure statements and bank records reflect that some of the monies raised in the New York City area actually were directed to Ross Offinger, who was part of Mayor de Blasio’s fundraising team. Offinger then presumably deposited those funds or forwarded them to the DSCC, as we see the checks deposited into the DSCC bank account. Campaign finance reports filed, as well as bank records, reflect that the candidate committees paid for certain expenditures, the county committees paid for others, and the state committee paid for others. ‘The companies that were paid as consultants by these committees, such as BerlinRosen, ‘The Parkside Group, and Mark Guma Communications, produced documents showing that every expenditure was coordinated through the candidate committees, de Blasio’s staff, his political consultants, and the DSCC. The people involved in Campaign for One New York were also involved here in de Blasio’s activities to further his agenda of attaining a democratic state senate. ‘The campaign-style pattem of activity in this fundraising is also the same as that undertaken by Campaign for One New York, as UPKNYC, in raising money to fund the push for de Blasio’s universal Pre-K initiative. If Campaign for One New York was involved in attempting to influence the Senate elections, however, it should have been registered as a political committee with the SBOE and should have filed campaign finance disclosure statements. In addition, if Campaign for One New York is a political committee, itis subject to state contribution limits. Campaign for One New York is not registered as a political committee and did not file campaign finance disclosure statements. Conflicts of Interest As with donations to Campaign for One New York, many of the donors of money contributed to these candidates and committees (in response to solicitations of Mayor de Blasio) also appeared in the database of people doing business with the city of New York. Some of the individual donors included Alexis Lodde (contributed $100,000), John Catsimatidis ($50,000), Leonard Riggio ($118,000), David Rich ($11,500), Joseph Tahl ($10,000), Martin Dunn. ($10,300), Chaim Klein ($25,000), Dean Poll ($10,000), and Jon Halpern ($10,000). Under New York City Local Law 34 of 2007, as amended by Local Law 67 of 2007, those donors would not have been permitted to contribute more than $400 each to the mayor directly. Some of the businesses and union donors who also do business in New York City included 32B3 United ADF (New York, NY), CWA District 1 PAC (New York, NY), Roth & Sons Management LLC (New York, NY), Kingsland 359 LLC (Brooklyn, NY), NYSNA PAC (New York, NY), District Council NYC UBC (New York, NY), and 1199 SEIU Political Action Fund (New York, NY). These donors contributed hundreds of thousands of dollars. 10Also as with donations to Campaign for One New York, much of the money contributed ‘was retumed to key de Blasio political consultants such as BerlinRosen and AKPD Message and Media, As noted above, these political consultants represent unions, real estate developers, and others with interests before the city of New York. Bank Records We examined records obtained by subpoena from banks holding accounts of the relevant committees. The bank records corroborated most of the transactions reported in campaign finance statements filed by the committees with the exception of a large deposit that Friends of Cecilia Tkaczyk failed to report. Evidence of de Blasio Influence In reviewing checks deposited into the DSCC account, we noted that some of the checks reflected not only the name of the payee but also the address to which the check was sent. Checks generally were payable to the DSCC, and many of the checks were directed to Ross Offinger at two different addresses in New York City. One of the addresses is the address of the ‘treasurer of the DSCC and the other was the location of offices of Kirsten Gillibrand for U.S. Senate, Ross Offinger has been the finance director of Gillibrand for Senate since 2009 as well as being the campaign finance director for the de Blasio campaign and treasurer of Campaign for One New York. Some checks deposited also included notations such as “donation per Mayor” in. the memo line. In reviewing checks deposited into UCDC and PCDC accounts, we also noted that the committees received a number of large contributions from entities and people who it appears never had contributed to that committee in the past. For example, on October 14, 2014, the UCDC deposited four checks totaling $364,000 from NYSNA Political Action Committee, CWA District One PAC, 32BJ United ADF, and 71-85 Lewis Avenue LLC. We could find no previous contributions from these entities to the UCDC. A similar pattern was evident in PCDC bank records. DSCC Focus on Five Senate Races Bank records showed that the DSCC focused primarily on five senate races statewide. In October 2014, the DSCC made sixteen payments totaling $1,326,500 to only five committees — Committee to Re Elect Ted Obrien, Friends of Cecilia Tkaczyk (“FOCT”), Friends of Mare Panepinto, Friends of Terry Gipson (“FOTG”), and Friends of Justin Wagner (“FOJW”). The following table illustrates total transfers made out of the DSCC account to these five committees and percentage of total transfers going to each committee. COMMITTEE TO RE ELECT TED O'BRIEN $266,000 20.1% FRIENDS OF CECILIA TKACZYK. $462,000 34.8% FRIENDS OF MARC PANEPINTO $153,000 11.5% FRIENDS OF TERRY GIPSON $333,000 25.1%FRIENDS OF JUSTIN WAGNER® $112,500 8.5% Total $1,326,500 Based on the evidence of coordination described herein, and based on the fact that no monies were directly distributed to candidates other than the five reportedly supported by de Blasio fundraising, we believe that all the funds that were transferred were prearranged and that the DSCC was simply a straw donor. As such, these contributions should be considered contributions to the candidates and subject to the candidates’ contribution receipt limits. As noted above, to the extent they were coordinated with the candidates, the DSCC’s direct expenditures on behalf of the candidates also should be considered contributions and are subject to candidates’ contribution receipt limits. Coordinated Contributions and Expenditures ~ County and Candidate Committees Bank records often illustrated the coordinated timing of contributions and expenditures. ‘The following table illustrates a sample of the movement of monies into and out of the PCDC account. This is just a sample and does not reflect all deposits and withdrawals, 97224 HUDSON VALLEY PAC $1,000 10/9/14 CWA DISTRICT ONE PAC $102,300 10/9/14 32BJ UNITED ADF $50,000 10/9/14 ROTH & SONS MANAGEMENT LLC $50,000 10/14/14. ALEXIS E LODDE. $100,000 10/14/14. NYSNA PAC $60,000 10/14/14. JOHN CATSIMATIDIS $50,000 10/14/14. DISTRICT COUNCIL NEW YORK CITY UBC $25,000 10/14/14. KINGSLAND 359, LLC $10,000 10/14/14 MARSAM REALTY CORP. $5,000 10/15/14 Check out to FOTW $94,000 10/15/14 Check out to FOTG $92,000 10/17/14 Wire out to FOIW $155,000 10/17/14 Wire out to FOTG. $92,000 10/21/14 32 BJ UNITED ADF $50,000 10/23/14 1199 SEIU- NYS POLITICAL ACTION FUND — $100,000 10/23/14 MARTIN D DUNN $10,000 10/23/14 KENSINGTON VANGUARD HOLDINGS, LLC $1,500 10/23/14 METROPOLIS RISK MANAGEMENT LLC $10,000 1023/14 ROBERT P MOREA $5,000 10/23/14 | HUDSON MERIDIAN CONSTRUCTION GRP $1,000 10/23/14 APTSANDLOFTS.COM $1,000 10/23/14 BOLD, LLC DBA BOLD NEW YORK $1,000 10/24/14 JOSEPH A TAHL. $10,000 1024/14 UDC 114TH STREET, LLC $10,000 10/24/14 92ND REALTY LLC $5,000 the DSCC consistently made its transfers payable to Justin Wagner for NY, they were sent to and deposited into the account of Friends of Justin Wagner. 1210/24/14 RIVER YORK BARCLAY LLC $5,000 10/24/14 Wire out to FOUW $50,000 10/27/14 Payment to Southpaw Strategies $12,901.82 10/28/14 Wire out to FOJW $55,000 10/28/14 Wire out to FOTG. $74,750 10/30/14 Wire out to FOTG. $15,000 1030/14 Wire out to FOW $13,000 The following table illustrates the movement of monies into and out of the UCDC account, This is just a sample and does not reflect all deposits and withdrawals. 10/14/14 NYSNA POLITICAL ACTION COMMITTEE $60,000 (2 day) 10/14/14 CWA DISTRICT ONE PAC $102,300 (8 day) 10/14/14 32BJ UNITED ADF $102,300 (8 day) 10/14/14 71-85 LEWIS AVENUE LLC $100,000 (8 day) 10/17/14 Wire out to FOCT $60,000 10/20/14 Wire out to FOCT $100,000 10/21/14 Wire out to FOCT $170,000 ‘The wire transfers out of the UCDC account to Friends of Cecilia Tkaczyk were initiated by Hayes Clement, the UCDC treasurer, for the benefit of Friends of Cecelia (sic) Tkaczyk / Maithew Lerch. Matthew Lerch was Cecilia Tkaczyk’s campaign manager. Included in the bank records for one of the wire transfers was an email from Matthew Lerch to Hayes Clement on October 16, 2014 stating the following: “Hayes, I am just following up. .. . Has the check for $60k cleared? Below is our banking info, we need the 60 transferred over ASAP please.” This ‘email shows that representatives of FOCT were aware UCDC had received a check from NYSNA, knew that those funds would be passed on the FOCT, and previously had discussions about this matter. The days noted next to the above contributions were written on the checks deposited, presumably indicating the float period. The candidates’ accounts also displayed evidence of coordination. Friends of Cecilia ‘Tkaczyk (“FOCT”) received numerous wire transfers into its bank account which it then transferred out in exactly the same amounts to political consultants on the same day or the following day. 10/9/14 Wire in from DSCC $105,000 10/10/14 Wire out to AKPD Message and Media —_ $105,000 10/16/14 Wire in from DSCC $225,000 10/16/14 Wire out to The Parkside Group $225,000 10/21/14 Wire in from UCDC $100,000 10/22/14 Wire in from UCDC $170,000 10/22/14 Wire out to AKPD Message and Media $270,000 10/22/14 Wire in from DSCC $90,000 10/22/14 Wire out to The Parkside Group $90,000 10/30/14 Wire in from DSCC $10,000 10/31/14 Wire out to AKPD Message and Media —_ $10,000 13At the same time, FOCT received other transfers from UCDC and DSCC, as well as many direct contributions from New York City unions, companies, and ini iduals likely linked to the de Blasio team that were simply absorbed into the campaign account and used to pay hundreds of thousands of dollars more to political consultants such as GRSC Consulting, AKPD Message and Media, and The Parkside Group. ‘The following table illustrates some of the coordinated receipts and expenditures of Friends of Justin Wagner. 10/15/14 Wire in from DSCC 10/15/14 Wire in from PCDC 10/15/14 Wire out to BerlinRosen 10/17/14 Wire in from PCDC 10/20/14 Wire out to BerlinRosen 1022/14 Wire in from DSCC 1022/14 Wire out to BerlinRosen 1023/14 Wire out to BerlinRosen 1024/14 Wire in from PCDC 10/27/14 Wire out to BerlinRosen 1028/14 Wire in from PCDC 1029/14 Wire out to BerlinRosen $52,100 $94,000 $72,700 $155,000 $210,000 $60,400 $27,300 $80,000 $50,000 $50,000 $55,000 $46,000 As with FOCT, FOIW received other direct contributions from New York City unions, ‘companies, and individuals likely linked to the de Blasio team that were simply absorbed into the campaign account and used to pay political consultants. The following table illustrates some of the coordinated receipts and expenditures of Friends of Terry Gipson. 10/10/14 Wire in from DSCC 10/10/14 Wire out to AKPD Message and Media 10/15/14 Check in from PCDC LO/17/14 Wire in from PCDC 10/17/14 Wire out to AKPD Message and Media 10/23/14 Wire out to The Parkside Group 10/23/14 Wire in from DSCC 10/23/14 Wire out to AKPD Message and Media 1027/14 Wire in from DSCC 10/27/14 Wire out to AKPD Message and Media 1028/14 Wire in from PCDC 10/30/14 Wire out to AKPD Message and Media 10/30/14 Wire in from DSCC 10/31/14 Wire out to AKPD Message and Media 14 $100,000 $95,000 $92,000 $92,000 $120,000 $30,000 $120,000 $120,000 $93,000 $100,000 $74,750 $74,700 $20,000 $20,000As was the case with other committees examined, FOTG received other transfers from the PCDC and other direet contributions from New York City unions, companies, and individuals likely linked to the de Blasio team that were simply absorbed into the campaign account and used to pay political consultants. This pattern of activity indicates that the committees already had committed to these expenditures prior to receiving the funds. Total transfers from the PCDC to Friends of Justin Wagner and Friends of Terry Gipson were $367,000 and $273,750, respectively. Transfers from the UCDC to Cecilia Tkaczyk totaled $330,000. Based on the evidence that these transfers were prearranged, we concluded that all the contributions were made to the county committees simply as straw donors. ‘Therefore, they should be considered contributions to the candidates and subject to the candidates’ contribution receipt limits. Statutory Provisions ‘The following definitions are relevant to this case, Election Law § 14-100 As used in this article: .. 1, “political committee” means any corporation aiding or promoting and any committee, political club or combination of one or more persons operating or co- operating to aid or to promote the success or defeat of a political party or principle, or of any ballot proposal; or to aid or take part in the election or defeat of a candidate for public office or to aid or take part in the election or defeat of a candidate for nomination at a primary election or convention, including all proceedings prior to such primary election, or of a candidate for any party position voted for at a primary election, or to aid or defeat the nomination by petition of an independent candidate for public office; but nothing in this article shall apply to any committee or organization for the discussion or advancement of political questions or principles without connection with any vote or to a national committee organized for the election of presidential or vice-presidential candidates; provided, however, that a person or corporation making a contribution or contributions to a candidate or a political committee which has filed pursuant to section 14-118 shall not, by that fact alone, be deemed to be a political committee as herein defined. 9. “contribution” means: (1) any gift, subscription, outstanding loan (to the extent provided for in section 14-114 of this chapter), advance, or deposit of money or any thing of value, made in connection with the nomination for election, or election, of any candidate, or made to promote the success or defeat of a political party or principle, or of any ballot proposal, (2) any funds received by a political committee from another political committee to the extent such funds do not constitute a transfer, 45(3) any payment, by any person other than a candidate or a political ‘committee authorized by the candidate, made in connection with the nomination for election or election of any candidate, or any payment made to promote the success or defeat of a political party or principle, or of any ballot proposal including but not limited to compensation for the personal services of any individual which are rendered in connection with a candidate's election or nomination without charge; provided however, that none of the foregoing shall be deemed a contribution if it is made, taken or performed by a candidate or his spouse or by a person or a political committee independent of the candidate or his ‘agents or authorized political committees. For purposes of this article, the term “independent of the candidate or his agents or authorized political committees” shall mean that the candidate or his agents or authorized political committees did not authorize, request, suggest, foster or cooperate in any such activity; and provided further, that the term contribution shall not include: (A) the value of services provided without compensation by individuals. who volunteer a portion or all of their time on behalf of a candidate or political committee, (B) the use of real or personal property and the cost of invitations, food and beverages voluntarily provided by an individual to a candidate or political committee on the individual's residential premises for candidate-related activities to the extent such services do not exceed five hundred dollars in value, and (C) the travel expenses of any individual who on his own behalf volunteers his personal services to any candidate or political committee to the extent such expenses are unreimbursed and do not exceed five hundred dollars in value. 10, “transfer” means any exchange of funds or any thing of value between political committees authorized by the same candidate and taking part solely in his campaign, or any exchange of funds between a party or constituted committee and a candidate or any of his authorized political committees. ‘The following section contains the requirement that a treasurer of a political committee file statements of campaign receipts, contributions, transfers and expenditures. Election Law § 14-102 Statements of campaign receipts, contributions, transfers and expenditures to and by political committees 1. The treasurer of every political committee which, or any officer, member or agent of any such committee who, in connection with any election, receives or expends any money or other valuable thing or incurs any liability to pay money or its equivalent shall file statements sworn, or subscribed and bearing a form notice that false statements made therein are punishable as a class A misdemeanor pursuant to section 210.45 of the penal law, at the times prescribed by this article setting forth all the receipts, contributions to and the expenditures by and liabilities of the committee, and of its officers, members and agents in its behalf. Such statements shall include the dollar amount of any receipt, contribution or transfer, or the fair market value of any receipt, contribution or transfer, which is other than of money, the name and address of the transferor, 16contributor or person from whom received, and it the transferor, contributor or person is a political committee; the name of and the political unit represented by the committee, the date of its receipt, the dollar amount of every expenditure, the name and address of the person to whom it was made or the name of and the political unit represented by the committee to which it was made and the date thereof, and shall state clearly the purpose of such expenditure. Any statement reporting a loan shall have attached to it a copy of the evidence of indebtedness. Expenditures in sums under fifty dollars need not be specifically accounted for by separate items in said statements, and receipts and contributions aggregating not more than ninety-nine dollars, from any one contributor need not be specifically accounted for by separate items in said statements, provided however, that such expenditures, receipts and contributions shall be subject to the other provisions of section 14-118 of this article, The following sections of law concern limitations on contributions to candidates and committees. Election Law § 14-114 Contributions and receipt limitations 1. The following limitations apply to all contributions to candidates for lection to any public office or for nomination for any such office, or for election to any party positions, and to all contributions to political committees working directly or indirectly with any candidate to aid or participate in such candidate’s nomination or election, other than any contributions to any party committee or constituted committee: a, [elections for public office to be voted on by the voters of the entire state] b. Inany other election for party position or for election to a public office or for nomination for any such office, no contributor may make a contribution to any candidate or political committee and no candidate or political committee may accept any contribution from any contributor, which is in the aggregate amount greater than: . .. in the case of a nomination for state senator, four thousand dollars as increased or decreased by the cost of living adjustment described in paragraph ¢ or this subdivision; in the case of election for state senator, six thousand two hundred fifty dollars as increased or decreased by the cost of adjustment described in paragraph c of this subdivision . . 3. As used in this section the term “contributor” shall not include a party committee supporting the candidate of such party or a constituted committee supporting the candidate or such party. 10. No contributor may make a contribution to a party or constituted committee and no such committee may accept a contribution from any contributor which, in the aggregate, is greater than sixty-two thousand five hundred dollars per annum [as increased or decreased by the cost of living adjustment described in paragraph b of this subdivision}. 9 NYCRR § 6214.0 Campaign contribution limits 17The following limits will apply to campaign contributions until such time as the State Board of Elections adjusts the limits to reflect changes in the consumer price index: ... $6,500 State senate primary $10,300 State senate general $ 102,300 Party committees This section of law makes clear that contributions must be made in the true name of the contributor and not in the name of another. Election Law § 14-120 (1) No person shall in any name except his own, directly or indirectly, make a payment or a promise of payment to a candidate or political committee or to any officer or member thereof, or to any person acting under its authority or in its behalf or on behalf of any candidate, nor shall any such committze or any such person or candidate knowingly receive a payment or promise of payment, or enter or cause the same to be entered in the accounts or records of such committee, in any name other than that of the person or persons by whom it is made. The following section prohibits use of campaign funds for strictly personal purposes. Election Law § 14-130 Contributions received by a candidate or a political committee may be expended for any lawful purpose. Such funds shall not be converted by any person to a personal use which is unrelated to a political campaign or the holding of a public office or party position. ‘The following provisions set forth relevant violations of the Election Law. Election Law § 14-126 (2) Any person who, acting as or on behalf of a candidate or political committee, under circumstances evineing an intent to violate such law, unlawfully accepts a contribution in excess of a contribution limitation established in this article, shall be required to refund such excess amount and shall be subject to acivil penalty equal to the excess amount plus a fine of up to ten thousand dollars, to be recoverable in a special proceeding or civil action to be brought by the state board of elections chief enforcement counsel. Election Law § 14-126 (4) Any person who knowingly and willfully fails to file a statement required to be filed by this article within ten days after the date provided for filing such statement or any person who knowingly and willfully violates any other provision of this article shall be guilty of a misdemeanor. Election Law § 14-126 (5) Any person who knowingly and willfully contributes, accepts or aids or participates in the acceptance of a contribution in an amount exceeding an applicable maximum specified in this article shall be guilty of a class A misdemeanor. 18Election Law § 14-126 (6) Any person who shall, acting on behalf of a candidate or political committee, knowingly and willfully solicit, organize or coordinate the formation of activities of one or more unauthorized committees, make expenditures in connection with the nomination for election or election of any candidate, or solicit any person to make any such expenditures, for the purpose of evading the contribution limitations of this article, shall be guilty of a class E felony. Election Law § 17-128 A public officer or employee who knowingly and willfully omits, refuses or neglects to perform any act required of him by this chapter or who knowingly and willfully refuses to permit the doing of any act, authorized by this chapter or who knowingly and willfully hinders or delays or attempts to hinder or delay the performance of such an act is, if not otherwise provided by law, guilty of a felony. Election Law § 17-168. Any person who knowingly and willfully violates any provision of this chapter, which violation is not specifically covered by any of the previous sections of this article, is guilty of misdemeanor. Conclusion There is considerable evidence in this case that New York City mayor William de Blasio organized a team dedicated to getting a sufficient number of democratic New York State senators elected in 2014 to achieve a democratic majority in the senate. The evidence indicates that de Blasio established a structure, both within and outside City Hall, and entered into an agreement with powerful unions -- New York Hotel Trades Council and United Federation of Teachers -- and political consultants ~ BerlinRosen, AKPD Message and Media, and Hilltop Public Solutions — to raise and spend money to influence state senate races. The entire fundraising and campaign operation was run from City Hall by de Blasio staff in coordination with unions and Campaign for One New York officers and political consultants. The evidence indicates that the de Blasio team entered into agreements with at least six political committees ~ the DSCC, the PCDC, and the UCDC, Friends of Justin Wagner, Friends, of Terry Gipson, and Friends of Cecilia Tkaczyk. As part of the agreement, the de Blasio team solicited contributions for the benefit of the campaigns of Justin Wagner, Terry Gipson, and Cecilia Tkaczyk and instructed contributors to route contributions through the DSCC, the PCDC, and the UCDC. These committees then transferred the funds to the candidate committees. Many contributors donated to the candidate committees, the county committees, and the state committee. In numerous cases, aggregate contributions from single donors far exceeded candidates’ contribution receipt limits. ‘The evidence demonstrates that the de Blasio team coordinated its fundraising activities with and intentionally solicited contributions for these candidates to be made to the DSCC, the PCDC, and the UCDC in order to evade contribution limits and to disguise the true names of the contributors, conduct which may violate Election Law §§ 14-126 (5) and 14-126 (6).. 19‘The evidence also shows that there was an agreement that funds raised by the de Blasio team would be expended in connection with the election of candidates Justin Wagner, Terry Gipson, and Cecilia Tkaczyk and that the candidates authorized and cooperated in this activity ‘The expenditures were reported as transfers or Schedule F expenditures in campaign finance statements filed by the committees. However, they should have been reported as contributions for two reasons. First, contributions the committees received as straw donors and then passed on to candidates should be considered contributions to the candidates simply because they were not in the true name of the contributor. Straw donors are not permitted. Second, because there was an agreement that the monies solicited by de Blasio were to be expended for the benefit of ‘Wagner, Gipson, and Tkaczyk and not expended independently (see Election Law § 14-100 (9) (3)), those expenditures should have been reported as contributions by the committees. Similarly, the candidates’ campaign committees should have reported these receipts as contributions. Instead, the contributions were falsely reported as transfers or Schedule F expenditures in campaign finance statements filed. ‘There is also evidence in this case that Friends of Justin Wagner, Friends of Terry Gipson, and Friends of Cecilia Tkaczyk failed to report certain in-kind contributions. For example, evidence showed that several individuals from the de Blasio team worked on behalf of the campaigns at certain times. To the extent those individuals were employed and paid for that, ‘work by someone other than the campaign, such as the City of New York, a union, a PAC, ora political consulting firm, the value of their compensation should have been reported as in-kind contributions, No such contributions were reported. Some of the donors from whom de Blasio solicited contributions were themselves, political committees that file campaign finance disclosure statements with the SBOE. To the extent those political committees knowingly structured contributions to candidates by routing them through county and state committees as straw donors for the purpose of evading contribution limits, they also may have violated Election Law §§ 14-126 (5) and 14-126 (6). The filing of campaign finance disclosure statements that falsely characterize contributions or fail to report contributions or the keeping of such false records may constitute the crimes of offering a false instrument for filing and falsifying business records, respectively, in violation of Penal Law article 175. ‘The evidence obtained in this case demonstrates that the de Blasio team took an active role in soliciting contributions and coordinating specific candidates’ campaigns and campaign expenditures in connection with 2014 state senate elections. Therefore, the organization established by William de Blasio for the purpose of aiding in the election of 2014 candidates for the office of state senator was a political committee required to register with the SBOE and file campaign finance disclosure statements. The organization effectively had a treasurer, Ross Offinger, who collected campaign contributions, was chaired by William de Blasio, and was operated by Emma Wolfe. The evidence also suggests that personnel of Campaign for One New York, a PAC created by de Blasio, also played an integral role, which may lead to a determination that the PAC acted as a political committee. A search of SBOE records failed to locate any such registered committee. 20The evidence in this case also showed that de Blasio’s team cooperated with others, including New York Hotel Trades Council and United Federation of Teachers, to solicit, make and receive contributions exceeding candidates’ contribution limits and disguise those contributions by channeling them through county and state political committees. This conduct should be investigated further to determine whether other charges are warranted. It is recommended that this case be referred for further investigation and prosecution as appropriate, 21