Klein Spends $2 Mn In 8 Months; Now Poster Boy For Need For Campaign Finance Reform
Will we find out after the election whether all this spending was legal?
Jeff Klein has spent $836,172.64 in just the last three weeks and a total $2,003,325.97 in the first eight months of 2018 in order to gain re-election to the State Senate, according to his campaign disclosure filings with the New York State Board of Elections. And Klein still has almost another $1 million in his campaign fund and will clearly create a new record for the most money spent on a Senate campaign.
Klein spent another $340,000 in 2017 and is presumably going to keep spending until primary day, Thursday, Sept. 13. So it’s possible he could end up spending $3 million or more.
Almost all of Klein’s money comes from corporate, PAC and LLC contributions. Klein claims he is in favor of campaign finance reform and closing the LLC loophole, but he is clearly not leading by example, except perhaps to prove why reform is needed.
There is a $7,000 limit per contributor for Senate primaries. Is Klein honoring that limit? Will we found out after the election when it’s too late?
The filings by his campaign committee, Jeff Klein Excelsior, can be found here:
https://www.elections.ny.gov/recipientstext.html (Enter “Jeff Klein Excelsior” into the search field.)
There are six filings so far this year: the July periodic report, the 32 day pre special report, the 11 day pre special report, the 27 day post special report, the 32 day pre primary report and the 11 day pre primary report. (The January 2018 periodic report mostly covers 2017.)
Klein of course claims that campaign contributions do not influence his actions. See below.
Below is a record of how the media has reported on Jeff Klein. All language is taken directly from the stories, except for comments in two footnotes. Emphasis added in some cases. Stories are from the NY Times, NY Daily News, NY Post, Riverdale Press, ProPublica and others.
A. CAMPAIGN FUNDRAISING
“A breakdown of Klein’s campaign contributions by broad industry shows that real estate is by far his largest industry donor, having given $1.2 million from 2000 to 2016, according to data collected by the National Institute on Money in State Politics. In 2017, the Real Estate Board of New York’s political action committee alone gave $15,000 to Klein and $100,000 to the IDC’s campaign fund – the PAC’s largest contribution that year, according to state Board of Elections filings. REBNY gave a further total of $41,000 to other individual IDC members, which adds up to $156,000, or more than a quarter of the PAC’s contributions last year.”
A first-of-its-kind analysis shows just how tactical the real-estate industry is about bankrolling state legislators who will protect its $1.4 billion tax break and weaken rent laws.
“While most of their valuable properties are in New York City, developers directed almost two-thirds of their Senate donations to candidates in upstate and Long Island races. The biggest beneficiary, though, was a Bronx Democrat: Jeff Klein. The former deputy majority leader, who now heads an independent caucus of Democrats, has received almost $320,000 since his election to the Senate in 2004 from big developers with 421-a subsidies. Glenwood contributed almost half of the total.
“The industry’s Senate allies not only promote legislation in its interests, but also stymie opposing bills from reaching a floor vote. Bills to regulate rents, usually sponsored by senators from New York City, languish in committee.
For once, the party held a slim majority, giving pro-tenant bills a chance. So Krueger and other senators pushed for repeal of a law, known as vacancy decontrol, that removed limits on rent hikes for apartments where tenants moved out and the rent exceeded $2,000 a month (now $2,700). Then-deputy majority leader Klein, the chamber’s biggest recipient of real-estate contributions, refused to co-sponsor the repeal bill. In June 2010, the Metropolitan Council on Housing organized a protest at Klein’s house. Tenant advocate Mike McKee and Mario Mazzoni, then the Council’s director, both recall Klein telling them that he would quash their repeal efforts.
“He said he would vote for it if it came to the floor but would do everything he could to make sure it did not come to the floor,” McKee recalled. “It never came to the floor.”
“Just 2.1 percent of the campaign cash received by members of the recently shuttered Independent Democratic Conference, which caucused with Republicans, came in the form of donations of $200 or less.
“A crop of New York State Senate hopefuls is knocking on the door of the chamber, hoping to unseat eight Democrats who recently left the powerful Independent Democratic Conference (IDC), a group that aligned with Republican senators, effectively giving the GOP a majority and helping stall legislation concerning single-payer healthcare, LGBT rights, election and campaign finance reform, reproductive health and tenant protections.
“While the ex-IDC incumbents accept large sums from corporations and LLCs, many of their challengers have pledged to reject corporate money. With the help of extensive outreach operations, most IDC challengers have been able to raise lots of small donations from individuals and, as a result, have average contribution amounts far lower than those of the incumbents they’ll face in the September primary.
“So far this cycle, the incumbents raised, on average, just 2.1 percent of their campaign cash from small donations of $200 or less. Their challengers, by contrast, averaged 42.2 percent of their fundraising totals from small donations.”
“State Senator Jeff Klein took a $10,000 campaign donation from a mafia-linked realty company–the same firm he rents his district office space from.
“The Bronx pol’s July filing shows that the Hutchinson Metro Center, an affiliate of Simone Development–formerly known as Hutch Realty Partners–kicked in the five figures in June. The donation brings the real estate group’s total contribution to Mr. Klein’s operation to a whopping $93,850 since 2006.”
“An independent expenditure committee funded by the Greater New York Hospital Association reported spending $325,496 on a television and digital ad purchases to boost the re-election bids of Sens. Jeff Klein and David Valesky.”
“Mr. Klein’s campaign has also been aided by the fact that state law allows corporate subsidiaries to be counted as separate donors. On a single day in December 2009, four LLCs owned by well-known affordable housing developer Peter Fine donated a combined $34,000 to Mr. Klein’s campaign. Even though that total figure is above the amount a corporation is allowed to give to a state Senate campaign, each individual contribution was at or near the contribution limit for that election cycle, and so those gifts did not break any rules.”
B. BENEFITS TO CAMPAIGN DONORS
Jeff Klein and Mark Gjonaj “submitted a letter of support for the temporary restraining order and a reinstatement of Sanitation Salvage’s license. ‘Sanitation Salvage has been an exemplary example of a good corporate citizen,’ they wrote.”
“According to a ProPublica review of state campaign finance records, since 2007, the Squitieri family, along with their companies and a web of realty corporations and LLCs, has given over $120,000 to Klein. Gjonaj has received more than $40,000 from the Squitieris as well.”
“A gentleman named Leonard Schwartz is chairman of Global Wholesale Tobacco, which stood to profit handsomely from the legislation. And he wrote many checks to further his cause. He has contributed…$43,000 to Mr. Klein since 1999.
“I’m not opposed to raising the price of a pack of cigarettes,” Ms. Krueger says. “But someone just decided to buy themselves a bill.”
“Earlier this year he carried substantial (Honey, call the chiropractor) weight for the check-cashing business, backing legislation that would allow firms to charge working-class New Yorkers as much as 200 percent interest on short-term loans. That industry poured $50,000 into Mr. Klein’s campaign coffers in the past five years.”
“Klein has also gone to bat for other industries that help fill his campaign coffers, records show. He sponsored a bill to bar religious entities that operate cemeteries from selling gravestones, and require that the bereaved buy from private monument companies. Klein has raked in nearly $20,000 from the Monument Industry PAC, whose biggest contributors include the Sprung family, the Long Island-based operators of the Northeast’s largest monument supplier.
“Klein also is co-sponsor of a bill to let check-cashing outfits make short-term loans. Check-cashing entities have steered nearly $24,000 to the lawmaker in recent years, with another $5,000 going to his Independent Democratic Conference.”
“State Sen. Jeff Klein’s campaign cup is spilling over with $33,000 in cash from a national wine distributor that would almost singularly benefit from a bill the Bronx lawmaker authored. But Klein’s re-election war chest is growing at the expense of small merchants and wine-loving consumers in New York, who could end up paying an extra $7 per bottle, critics charge.”
“For six years, Jeff Klein wore two hats. While serving as a Bronx state senator, Klein also sat on the board of directors of a Bronx nursing home, Morningside House.
As a state senator, Klein sponsored a law that made it easier for New Yorkers to pay for nursing home care — a potential benefit to nursing homes just like Morningside — and he also steered $50,000 in state funds to Morningside's parent company, records show. And the nursing home industry, it turns out, helped Klein, showering the Bronx Democrat with at least $71,000 in campaign contributions, records show.
Klein never revealed his position on Morningside's board in his annual state financial disclosure reports, as required by law.”
“Klein also said that even though he was a board member, he was unaware of the home's regulatory and safety record. It has been sued 22 times by patients alleging negligence and has paid out $1.4 million in settlements since 2005. Klein said he "never discussed lawsuits" as a Morningside board member.”
“Bronx state Sen. Jeff Klein is putting on his hard hat for campaign contributors — at the city’s expense, critics charge. Klein, the Senate Independent Democratic Conference Leader, is pushing legislation that would allow construction firms to walk off tax-funded jobs amid payment disputes with local governments, The Post has learned. The main backers of the measure, the Subcontractors Trade Association PAC and Empire State Subcontractors, have pumped $61,200 in donations into Klein’s campaign kitty since 2004, records show.”
“Mintz said campaign contributions are "the only thing that could possibly explain" why lawmakers are backing the bill. "Legislators have a duty to protect New Yorkers in need — not offer them up to the highest bidder," the consumer affairs czar said.
From 2008 to 2013, New York Check PAC, check-cash stores and associated individuals have made more than $480,000 in contributions to state campaigns and political parties, a review of state Board of Election records shows.
Sen. Jeffrey Klein (D-Bronx) was the main sponsor of an earlier version of the bill and is a co-sponsor of the current version. He piled up nearly $50,000 in check cash-related contributions from 2008 to 2013, records show.”
A staggeringly bad anti-consumer bill that would allow check-cashing stores to start making loans is quietly winding its way through the state Legislature, advanced by lawmakers who ought to know better — and who happen to have received hefty donations from the check-cashing industry.
“Over the past six years, the Independent Democratic Conference, a group of breakaway Democrats who support Republican control of the New York State Senate, have received $676,850 from charter school political donors. These political donors, including hedge fund managers and their political action committees, have been rewarded by the IDC as seen in the 2017 state budget where privately run charter schools got much larger funding increases per pupil than public schools. The IDC-Republican advocacy for privately-run charter schools at the expense of public schools runs counter to the IDC’s public pronouncements that they are championing public school funding and the Campaign for Fiscal Equity.”
C. OTHER ISSUES
“Klein has gamed the system — and possibly broken the law — for years, thumbing his nose at city zoning regulations, getting tax breaks he isn’t entitled to, and failing to disclose his assets to state officials. His ethical breaches range from a dubious mortgage and scandal-scarred political donors to questionable court appointments and renting his Senate office from a firm with alleged mob ties.
“Among the highlights:
* In 2005, Klein and law partners Dominick Calderoni and Fred Santucci Jr. took out a $450,000 mortgage to buy a two-family home on Williamsbridge Road in the Morris Park section of The Bronx. They applied for a residential mortgage knowing the property would be used for commercial purposes. The trio immediately turned the two-story building into a law office, ignoring the zoning code despite signing a mortgage mandating that they “comply with all laws.”
* The city slapped the firm with a violation and fine for “illegal use in residential district.” The firm ignored the city directive to “discontinue illegal use.”
* There is no certificate of occupancy for the home, which is required when work is done on older homes.
* The property had a STAR tax exemption for two years, a break given only to a primary residence. Klein got the same break on his actual Bronx home during one of those years.
* The law office was improperly taxed at a lower residential rate for seven years, saving the firm tens of thousands of dollars.
* Klein failed to reveal his ownership of the home, and two mortgages on it, on his yearly state financial disclosure forms — a possible breach of the state Public Officers Law.
* Klein accepted a $4,500 campaign contribution in 2006 from Edul Ahmad, a Queens real-estate agent indicted last year in a $50 million mortgage fraud scheme.
* The lawmaker moved his district office to the Hutchinson Metro Park, an office complex owned by Hutch Realty Partners, which has contributed more than $30,000 to Klein’s campaign coffers. Two of its owners, Michael Contillo and Joseph Deglomini, were indicted along with a mobster in a 1990s racketeering case.
* Klein has raked in $166,974 since 2003 through 43 separate appointments as a legal guardian, referee and other court-appointed jobs. Most of the appointments came through the Appellate Division’s Second Department on Long Island, 18 miles from his Bronx office, where his partner Santucci’s father was a justice.
* Klein put Calderoni on the state payroll as a part-time lawyer with enough hours so he qualified for state health insurance. Calderoni quit the job suddenly last year when questions were raised about it.
* Between 2007 and 2011 Klein was a lawyer for the William Gallina law firm in The Bronx, which has more than 100 lawsuits against the city. Meanwhile, Klein’s own firm was raking in $2.25 million from the city to review lawsuits and decide whether the city should settle or go to court. After The Post reported the conflict in December 2011, Klein claimed he quit the Gallina firm.”
“Bronx state Sen. Jeff Klein couldn’t lose. The Democrat enjoyed a profitable “of counsel” position with a personal-injury firm that specializes in suing city agencies — while his own firm collected millions from the Comptroller’s Office to evaluate some of those very same lawsuits.
“Since 2006, the firm of Klein Calderoni & Santucci has received three contracts worth $2.25 million from the Comptroller’s Office to conduct so-called “50-h” hearings — preliminary reviews of suits that help the city decide if it should settle or fight.”
“State court records show that Mr. Klein and a longtime law partner who has doubled as his legislative aide have been among the biggest winners when it comes to legal fees earned from judicial designations.
“Records show that since June 2003, when reforms aimed at limiting the appointments of politically tied officials were implemented, Mr. Klein and his law partner, Dominick Calderoni, have earned nearly $730,000 in fees for work performed as court-appointed fiduciaries.
“The fees were awarded by the courts after Mr. Klein and Mr. Calderoni were selected by judges to represent individuals unable to care for themselves, including the elderly and the incapacitated. A Riverdale Press survey has found that despite repeated efforts to separate the courts from the political clubhouse, politically connected officials still benefit from a system in which judges need political backing to win election to the bench.“
“Some state senators are taking advantage of a little-known loophole to give legal pals hired at minimum wage a sweet perk: taxpayer-funded medical care for just 17 hours of work a week. New Yorkers footed yearly medical bills of up to $13,000 apiece for workers who earned as little as $6,597 in their Senate jobs, a Daily News review of state payroll records showed.
“One of the beneficiaries, a law partner of Bronx state Sen. Jeff Klein, resigned Friday after The News asked questions about the arrangement that caused more financial pain for the average Empire Stater. ‘This is ridiculous,’ said one Senate official. Klein ‘is putting money in his own pocket by saving his firm the cost of health insurance. If it is not already illegal, it damn well should be.’”
Defection pays. Republican state Senate Majority Leader Dean Skelos created a separate payroll for a turncoat Democrat that allows the legislator to keep a $1 million staff, The Post has learned. Plus, the 17-employee team is far larger than those of other lawmakers in the minority party.
D. THE IDC CAMPAIGN FUND ISSUES
“State Sen. Jeff Klein and the state Independence Party created an illegal fundraising committee that was used to circumvent contribution and spending limits, a state judge ruled on Thursday. The committee and related accounts had a combined $1.4 million balance as of January, campaign records show.”
“What is the Independence Party and why is it raising money for the former IDC members?
“Over the years, editorial boards and investigations have exposed problems indicating that the party hasn’t lived up to its name. Some critics argue that it is merely an appendage of the Republican Party – and that its support for the IDC is the latest manifestation of that. In 2013, the Daily News reported that the party's two biggest donors were state Senate Republicans and the Real Estate Board of New York, one of the GOP's key allies. Money from these two sources made up 85 percent of the contributions to the party’s housekeeping account.
“The IDC aligned itself with the Senate GOP, which has historically been one of the Independence Party’s biggest donors. The fact that the IDC members agreed to reunite with the Democratic Party in April did not stop the Independence Party from providing them with campaign cash.”
“A group of New York State Senate Democrats that aligned with Republicans is refusing to return hundreds of thousands of dollars worth of contributions, mostly from corporations and PACs, that the state Supreme Court ruled illegal in June.
“Sludge has identified the top ten special-interest donors to the three committees aligned with the ex-IDC senators. Among these interests are three unions (the PACs of construction and hazardous material handlers union the Mason Tenders, construction union New York State Laborers, and a New York City correction officers union), two health care trade groups (Empire Dental PAC and the Healthcare Association of New York State), two major telecom companies (Time Warner Cable and the PAC of Cablevision Systems N.Y.), a powerful real estate association (PAC of the Real Estate Board of New York) and pro-charter school political committee New Yorkers for Putting Students First.”
E. A PRIOR FUND TRANSFER
GOP didn't use law to stem cash flow of rival now leading coalition
“In 2004, Klein raised money to run for Attorney General, using the higher campaign contribution limits allowed for statewide races, but transferred all the money to his Senate campaign fund when he decided to run for his current seat. A judge ruled that the transfers were illegal and had to be returned. Klein ignored the order and the Republican lawyer did not seek to have it enforced.”
F. OTHER CAMPAIGN FUND USE ISSUES
“Despite being formed by members of the IDC and being the political spending arm for the conference, since filing as an independent expenditure the IDC has sought to distance itself from the IDC initiative so as not to break election law. Independent expenditure groups are prohibited from coordinating their efforts with campaigns or PACs. However, the initiative began as an IDC Campaign Committee, and since it's conversion has broadly supported IDC members and potential recruits”
“Finally, Sugarman should issue a penalty above and beyond the refunds, given the IDC's history of playing fast and loose with campaign finance laws and regulations. It happened as recently as 2014, when the IDC attempted to circumvent standard campaign financing limits by using their PAC as an Independent Expenditure Committee — spending hundreds of thousands of dollars in a maneuver that would later become illegal under state law in 2016. They paid a five-figure fine in a nominally unrelated matter, but came out ahead in the process. Now, they find themselves back in front of the same regulator for a similar scheme. They need to be held accountable.”
1* The violation was never resolved and is still outstanding, along with subsequent violations, the latest in 2014.
2* Klein’s law firm’s contract with the City prohibited the firm or any employee from representing any client suing the City during the life of the contact. But Klein worked for the Galina firm, which was suing the City during that same time period. The City could seek to recover the $2.25 million paid to Klein’s firm for this serious contract violation.