Judicial Reports: Show Me the Money

By Jesse Sunenblick
jsunenblick@judicialstudies.com
Poste: 08-13-08

Two Civil Court campaigns spar over the meaning of campaign money. One claims conniving. The other claims an innocent mistake. Both involve well-regarded Law Secretaries. Is this any way to run a judiciary? 

* A response from John Reddy's campaign, below, has been added to the original story. 

In politics, as in business, it takes money to make money.

Which is one reason that money mavens in New York judicial campaigns typically have July 15 marked on their calendars. That’s when candidates are first required to file an expenditure report online with the State Board of Elections.

Campaigns can gain or lose steam based on the reports, which are aggressively tracked by campaign managers and occasionally monitored by attorneys making donation decisions.

“Contributors want to win,” explained veteran campaign treasurer Darrell Paster. “It’s a basic law of politics — who wants to support a sinking ship?”

Paster’s belief in the influence of expenditure reports explains his willingness, for what he said was the first time in his career, to join a complaint filed with the Judicial Campaign Ethics Office on behalf of his client, Michael Katz, against Nancy Bannon, Katz’s competitor for a seat on the Manhattan Civil Court. The seat opened in late May, after Judge Shirley Kornreich was elevated to an interim seat on the Manhattan Supreme Court.

The abrupt vacancy left precious little time for judge seekers to scurry into the race.

By the time Katz and Bannon, both Law Secretaries to Supreme Court Justices and both with ample endorsements, were approved by independent screening panels to square off in the September primary, it was so late in the game that both were saddled with the full cost of printing and distributing petitions. That’s a task normally handled by political clubs, but those groups had already shipped off their mailings. (Paster says Katz spent $30,000 distributing petitions.)

By the July 15 deadline, the only substantive donations to either candidates’ hastily formed campaign committees were loans they’d written out of their own checkbooks — Katz for $83,000, and Bannon for about $13,000.

But while Katz’s expenditure report listed the loan as a campaign donation — in accordance with State law — Bannon’s report cloaked the loan, and indeed all of her expenditures, in a “no activity” report. That’s a default measure typically reserved for elected officials whose campaign committees remain shuttered in non-election years.

Bannon says she got bad advice from the State Board of Elections, and that once she realized candidate loans counted as committee expenditures, she submitted an amended report to the City Board of Elections, which has no online database. But as of August 7, a day before the next filing deadline, her record at the State Board of Elections — where records are easily retrievable online — remained enigmatic.

“It still shows here as a ‘no activity’ statement. If we got a new report we’d update it and you’d see new information,” said Bob Brehm, of the BOE’s press office.

Bannon’s campaign manager, Michael Oliva, fired back at Katz’s team.

“These guys are complaint crazy,” he said. “We have receipts for everything filed. The error was on the Board of Elections. Nobody’s saying we didn’t file an amended report. Bannon might be an experienced attorney, but she’s not an experienced electioneer. It was a shoestring campaign, and we got it together as quickly as we could. If we were hiding something, we would not have amended the filing.

Paster, however, wonders whether the Bannon camp intentionally hid their scant coffers.

“No activity means precisely that,” said Paster. “She’s worked in the courts for long enough to know the law.”

“I’ve had this discussion with judges 50 times,” he continued. “You sit down with the wife and husband and say, ‘To run a countywide race in Manhattan this year, it’s gonna cost, say, $200,000. Can you do it if you have to?’ Everybody knows that there are certain threshold amounts you have to raise and spend to be a viable candidate.”

The typical financial expenditure threshold for a countywide Civil Court race is roughly $100,000. Needless to say, Bannon was well behind, And the July 9 report, which her campaign did file with the State Board of Elections, shows the situation is now even more dire: Bannon only has a few thousand dollars left in her account.

“This is wasting everybody’s time,” countered Bannon, a former president of the Brooklyn Women’s Bar Association who has worked under Manhattan Acting Supreme Court Justice Deborah Kaplan for many years. (Katz works for Manhattan Supreme Court Justice Barbara Kapnick.)

“I can’t see where it’s coming from, except maybe trying to get a leg up by making false accusations,” she added. “There’s nothing hidden, nothing to hide, I’ve been paying for my own expenses. I don’t understand it, and I hope I never do, because it’s very distasteful to me.”

At least one campaign consultant not involved in the race supports Bannon.

" It's much to do about nothing — very few people will look at the campaign filings," said consultant Ernest Lendler. "I look at the State Board filings — her filings are a mess, there's no logic to them. [Her opponents] are trying to make bad stories about their opponent. I can appreciate that. It's reasonable thing to do. If you catch someone making a mistake, its your obligation to file something. Now . . . whether it's serious or not is a whole different question.”

Oliva is putatively a shrewd and experienced political operative. (In addition to Paster, Katz is represented by longtime consultant Jerry Skurnik.)

In 2006, Oliva orchestrated the surprising Civil Court victory of Margaret Chan against David Cohen — who had been endorsed by Assembly Speaker Sheldon Silver, The New York Times, and a contingent of elected officials.

What’s more, that came despite a lawsuit that claimed Chan had submitted an insufficient number of petition signatures to add her name to the ballot.

This year, Oliva is also representing Manhattan Surrogate Court candidate Nora Anderson, and accusations of impropriety in that race have seeped into Bannon’s race.

Anderson has been criticized for accepting a $225,000 loan from Brooklyn attorney Seth Rubenstein, a frequenter of the court whose father,  E. Ivan Rubenstein, was the Brooklyn Surrogate Judge from 1950 to 1955.

That race is also marred by allegations of financial abuse by another candidate, John Reddy, the counsel to the public administrator, who has received multiple donations exceeding $25,000 from sources who “don’t have that kind of money,” according to Oliva. “All the money comes from his law firm. He’s funneling money through those people.”

The Reddy campaign issued a statement in response:

"John Reddy has always strictly obeyed New York State Election Law, campaign finance regulations and New York State Judicial Ethics rules. Put simply, Michael Oliva and the Anderson campaign are pulling these comments out of thin air. There is no basis for Oliva's comments whatsoever, and he clearly has no idea of what he is talking about. The donations John Reddy has received, which Oliva points to, and which are very small in number, were given to John by his family members. Oliva knows nothing about John's family members and should know better than to make false accusations. Instead of making wildly untrue claims about his client's opponents, he should probably spend his time figuring out how Nora Anderson is going to repay the quarter-million dollar loan given to her by her employer."

“Nora Anderson did make a filing, which is also the subject of a complaint,” said Paster. “She printed petitions with her name and Nancy Bannon’s name — joint petitions. This itself isn’t improper. But . . . did each candidate pay for their share of the petitions?”

And although Bannon claims to have executed all accounting decisions personally or through her accounting team, Paster is skeptical.

“The law says the treasurer has sole responsibility,” he said. “As a practical matter, Nancy appears to be a political novice, and Oliva is a political sophisticate. My experience is, in these matters, people turn to advisors and ask for advice.”

“We’re at a strategic disadvantage,” said Skurnik. “If we have no idea how much money she has or spent, it’s a sexy campaign. We don’t know if she’s going to do five mailings and go on TV, or just campaign on the street. Let’s say she received contributions from a law firm that represents landlords or insurance companies. That could affect the campaign. It affects what we, and the public, knows about the campaign.”

“I look at all my clients’ filings, some I even do myself,” said Peter Weiss, a local consultant. “I want to make sure they’re right. I would assume Oliva looked at [Bannon’s ‘no activity’ filing.]” “The treasurer is going to call him up and say, ‘I didn’t report this loan, what should I do?’ I have a Civil Court race in Brooklyn, and the treasurer called me last week to explain how to put certain expenditures."

The severity of this kind of dustup can be weighed primarily in political capital: Most donors to judicial campaigns are attorneys, and they typically are affiliated with one of the myriad of bar associations that hold functions for judicial candidates. “The question they always ask is, ‘What’s the shot? That’s a way of asking: ‘What kind of club support and money you have,’ ” said Paster.

But that other obvious reason why one campaign would want to keep tabs on a competitor’s resources is paramount: to know how much money they can be expected to spend.

“He’s got x amount of money, so I know he’s going to do a mailing, and I have to do two mailings” said Weiss, the consultant. “It gives you an idea of what your adversary has in the bank. A loan is even more interesting — it shows there’s no grassroots support.”

“I’d call up my client and say, ‘Your opponent has spent pretty much all they raised: tell the world she has no money.’ ”

Weiss has no problem with Paster making an issue out of an opponent’s gaffe. “I would probably have filed a complaint, too. It raises some press, puts the other campaign in defensive mode, and you may make some hay out of it. It keeps everyone busy, maybe stops the campaign for a few days. They’re concentrating on other things.”

What it has to do with sitting on the bench, of course, is another question altogether.

Posted by Jason on August 13, 2008 05:38 PM to Judicial Reports