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De Blasio on Defense

eye on the news

De Blasio on Defense

The Gotham mayor’s tangled web of money, power, and influence could finally be unraveling. April 25, 2016
New York
Politics and law

Did New York City mayor Bill de Blasio run a pay-to-play money laundering operation out of City Hall? It’s looking that way. Corruption-busting U.S. attorney Preet Bharara is probing the progressive icon’s political fundraising to determine whether those seeking something from city government were expected to pony up substantial sums that were then funneled to the mayor’s political allies.

The clearest example of these machinations was the mayor’s 2014 effort to win the New York state senate for the Democrats. The mayor—or his advisers—allegedly circumvented limits on individual campaign contributions by having wealthy real-estate developers and powerful public-employee unions make major contributions to upstate county Democratic committees. Bharara’s office is now investigating claims that those committees passed the money they received directly to designated local candidates, in violation of state law. The candidates were supposedly informed that they had to spend the money through specific New York City strategic consultants, all closely tied to the de Blasio administration and, just as important, to the Working Families Party—the political engine that launched de Blasio’s unlikely rise in 2013. The only surprise is that it has taken this long for these schemes to come to light.

The Working Families Party was a late-nineties creation of labor unions and the now-defunct Acorn (Association of Community Organizations for Reform Now.) Taking advantage of New York’s fusion-voting system that allows candidates to run on multiple ballot lines, the WFP gained traction in the 2000s by endorsing liberal “up-ballot” Democrats, and then encouraging people to vote the WFP line in order to maintain ballot position. Its goal, even then, was to wrest the state senate from Republicans’ decades-long control. The WFP leveraged its expertise in door-to-door campaigning to develop a superb political field operation that excelled at identifying likely voters and turning them out on Election Day. Funded heavily by public-sector labor unions such as DC 37 (municipal workers), the UFT (teachers), and SEIU 1199 (hospital workers), the WFP has become a major force in New York politics. It now has branches in New Jersey, Connecticut, and other states.

In 2008, after Democrats briefly took control of the state senate, the WFP decided to spin off its field and electoral operations into a subsidiary, Data and Field Services (DFS), which could hire itself out on a for-profit basis to WFP-backed campaigns. DFS’s actual purpose seems to have been the reallocation of resources and personnel among the WFP’s candidates, and to enable coordination between campaigns—all of which is illegal, according to New York City’s campaign-finance laws.

De Blasio’s involvement with the WFP and Acorn is longstanding. “Without exaggeration, Acorn’s long-range plan since 2001 was to elect de Blasio mayor,” an anonymous Democrat told the New York Post in 2013. In 2006, then-city councilman de Blasio hired himself out for $33,000 to a group called “Progressive America Foundation” for some obscure lobbying services. The foundation operated out of the WFP’s offices. And, in 2009, de Blasio was DFS’s biggest client, paying the organization nearly $200,000 during his run for public advocate.

Even as the WFP expanded its reach, operatives from Acorn and the New York state senate Democratic political organization went into business for themselves. Acorn veterans Jonathan Rosen and Valerie Berlin—chief of staff to then-state senator, now-attorney general Eric Schneiderman—formed consulting firm BerlinRosen. Doug Forand, Marc Lapidus, and Nathan Smith, the senate Democrats’ brain trust, formed Red Horse Strategies. These firms have prospered richly under the WFP/de Blasio ascendancy, together booking more than $6 million in consulting fees for the 2013 municipal elections alone. But these outfits don’t limit themselves to helping politicians get elected: they also serve as consultants to labor unions, real-estate development corporations, and issue-based organizations—all seeking access to the halls of power. Neither BerlinRosen nor Red Horse is obligated to disclose the fees it collects, since neither calls itself a “lobbyist.” De Blasio reportedly spends hours per day talking to Rosen, who was also Sheldon Silver’s longtime adviser. Both claim that they never mix business with politics.

Four out of the city’s five district attorneys, as well as the state attorney general, are clients of these same consulting firms, so it is no surprise that this web of interconnections has become a federal matter. Consultants have turned New York’s political system inside out. They control the flow of money from their private clients to candidates who are forced to hire them, with the mayor’s office allegedly acting as a go-between. The mayor’s spokesperson insists that the “letter of the law” has been observed. Such legalistic language will be cold comfort to New Yorkers who expect the mayor to aspire to more than staying just inside the border of criminality—assuming he has done so.

Photo by Andrew Burton/Getty Images

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