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Groups want Cuomo-sponsored probe to look at campaign loophole

A leading government reform group has some advice for Gov. Andrew Cuomo’s Moreland Act Commission’s ongoing investigations. They say look at a major loophole that has allowed $98 million in unlimited donations to flow into what’s known as party housekeeping accounts.

Common Cause, along with a coalition that’s been pressing for campaign finance reform, says the party housekeeping accounts were originally intended to buy office supplies, pay for voter outreach and other non-partisan activities. The group’s Susan Lerner says the accounts have morphed into a multi-million dollar loophole. The loophole led to nearly $100 million funneled through New York’s Democratic and Republican Party housekeeping accounts in the past seven years, according to an analysis by Common Cause.

“When you look at the donors, they cover the political spectrum,” said Lerner.

The largest single housekeeping account donor was New York City Mayor Mike Bloomberg, who gave over $7 million, followed by Greater New York Hospitals and the teacher’s union. Also topping the list, big pharmaceutical companies, Walmart, Verizon and Phillip Morris. Half of the money was contributed by just 59 donors.

But Lerner says her group’s analysis can only go so far. The Moreland Act Commission has the power to probe further to see if there is any criminal activity involved.

“The Moreland Commission can issue subpoenas. They can track the money,” Lerner said.

Lerner says the commission can trace transfers of money from the housekeeping accounts that might coincide with campaign promotions for a particular candidate.

“They can see if there was advertising or other activities supporting or opposing a particular candidate in close proximity to, surprise, the same amount of money for that original check,” Lerner said.

Even Cuomo has taken advantage of the loophole to fund television advertisements promoting his policy agenda and touting his achievements, including the passage of the third on-time budget in a row.

The New York State Democratic Committee spent $5.3 million of its housekeeping account on the ads, out of the $5.9 million it raised, according to an analysis by Common Cause. Lerner says the use of the housekeeping account money to fund the ads is not technically wrong. Under the few rules that do exist, party housekeeping money is not supposed to be used to promote any specific political candidate. While Cuomo has said he intends to seek reelection in 2014, an official announcement is still months away.
“We’re not saying it’s a violation of the law,” Lerner said. “It’s an interesting phenomenon that shows why housekeeping needs to be controlled.” Common Cause hopes that ultimately the Moreland Commission will adopt new rules that will close the party housekeeping loophole.

The Moreland Act Commission has held several private meetings, and co-chairwoman, Nassau County District Attorney Kathleen Rice, has said subpoenas have already gone out.

“We are in fact issuing subpoenas,” Rice said. “The subject matter of them will be made public at a certain point, as long as it doesn’t affect the integrity of the investigations.”

Rice says the New York State Ethics Commission and Board of Elections are on notice to keep all of their paper and electronic communications.

Public hearings will be held next month.