NYC Election: Who’s Giving Last-Minute Cash To Mayoral Hopefuls Bill De Blasio, Joe Lhota?

 @christopherzarac.zara@ibtimes.com
on November 04 2013 12:27 PM
Lower Manhattan w SOL
Lower Manhattan, New York City. Reuters

NYCMayors Outgoing New York Mayor Michael Bloomberg (left), who funded his own campaigns, will be replaced by Joe Lhota or Bill de Blasio, who didn't.  Reuters

There was something very Zen-like about having a billionaire mayor for the last 12 years. Whether Michael Bloomberg was pushing plutocrat-friendly policy or paving the way for lawn chairs in Times Square, he could be perplexing, polarizing or just downright maddening. But at least he couldn’t be bought. And in the financial epicenter of the world -- a city built on cronyism, backroom deals and corruption -- that goes a long way toward peace of mind. Over the course of his three election cycles, Bloomberg eschewed outside contributions and instead spent a combined $261 million of his own money.

Hampered by far shallower pockets, the candidates currently eyeing City Hall have to be a little more resourceful than Bloomberg, which speaks to a source of free-floating anxiety about who will pull the strings in post-Bloomberg New York: No doubt there will be a return to the pedaling of lobbyists and special interests, but exactly where will the next mayor’s allegiances lie?  

One thing is certain: When the smoke clears from Tuesday’s mayoral race, the winner will owe a lot of favors. Almost certainly, that winner will be Bill de Blasio, the Democratic public advocate who has been enjoying an absurdly comfortable lead over his Republican rival, Joe Lhota. Since last month’s primary, when de Blasio’s probable win became evident, his campaign has taken in more than $1 million in independent spending, according to records from the city’s Campaign Finance Board.

And so it’s worth asking where that money is coming from. New York City has some of the strictest campaign-finance regulations in the country, but they’re far from loophole-free. Although individual donors may not contribute more than $4,950 to a mayoral candidate, intermediaries -- or bundlers -- can solicit hundreds of thousands of dollars on a candidate’s behalf. Bundlers are often lobbyists or other high-ranking executives representing special interests, and critics of the practice say their efforts can, and do, influence the candidates who receive the funds.

“If they’re getting contributions that are bundled by people who are doing business with the city, that’s problematic to me,” said Gene Russianoff, a lawyer for the New York Public Interest Research Group (NYPRIG). In a phone interview, Russianoff said he has an obsession with the role of lobbyists peddling influence through bundling. He argued, unsuccessfully, against the bundling loophole in 2006, when the city passed an amendment aimed at restricting the influence of lobbyists.

Bundled contributions may even be matched by taxpayer money under the city’s matching program -- tantamount, Russianoff said, to lobbyists increasing their influence on the public’s dime. “They’re able to bundle contributions from people whose contributions are matchable,” he said.

Yellow Taxis Hail de Blasio

A look at the major bundlers for the de Blasio campaign offers a telling window into the special interests staking out their claim in post-Bloomberg New York. And it’s impossible to ignore the unusual abundance of solicitors with ties to the taxicab industry. De Blasio’s top bundler, the taxi-industry lobbyist Michael Woloz, raised $234,865 for the campaign. Also high on the list is David Pollack, executive director for the Committee for Taxi Safety, who raised $86,700. Additionally, there’s Evgeny Freidman, president of the Taxi Club, and Jean Barrett, executive director of the Metro Taxi Board of Trade, who raised about $49,000 each. One bundler, the taxi fleet owner Fredric Heller, even appears on the list twice. Combined, taxi interests are responsible for soliciting, collecting or delivering more than one-third of the $1.4 million in bundled contributions to de Blasio’s campaign.

Bill Mahoney, a campaign-finance expert with NYPRIG, said the taxi industry is one whose influence often flies under the radar, as donors associated with it may not be widely known. “Most people eyeballing contributions quickly might not realize who’s actually writing the checks,” he said.

Why the sudden interest from the taxi lobby? Simply put, yellow-cab drivers don’t want to give up their longtime citywide monopoly on street hails, and yet they have been notoriously unwilling to accommodate the growing demand for service in the outer boroughs and upper Manhattan. In 2011, Mayor Bloomberg proposed a controversial remedy: five-borough cabs with jurisdiction in the outlying areas. The mint-green “Boro Taxis” began rolling out in September. They are prohibited from picking up street hails in the busy areas of Manhattan (below 110th Street on the West Side and 96th Street on the East Side), but yellow-cab drivers still believe the green taxis are cutting into their business model. Bloomberg’s plan, which calls for an estimated 18,000 new borough cabs over the next few years, is pitting green cabbies -- livery drivers -- against the traditional yellow cabbies in an increasingly contentious turf war.

Caught in the middle is de Blasio, who has been repeatedly criticized for not being forthcoming about where he stands on the issue. When Bloomberg first announced the five-borough taxi plan, de Blasio, a proud Brooklynite, released a statement calling it “a winner.” But before long, he became one of its most vocal opponents, and went as far as supporting a lawsuit to block the green-cab rollout in May 2012. Around that same time, bundled contributions to his then-nascent mayoral bid began rolling in from yellow-taxi interests: leasers, maintenance executives and the like. The support hit overdrive in the home stretch of the campaign, with Woloz and Pollack raising more than $300,000 combined in the last month alone.

Today, it’s clear that de Blasio intends to revisit Bloomberg’s green-taxi plan if (read: when) he becomes mayor; what’s unclear is how much of that stance is bought and paid for with yellow money. Dan Levitan, a spokesman for de Blasio’s campaign, insisted that the candidate has addressed the issue “many times” but declined to comment further. And he’s not the only one who doesn’t want to talk about it. Asked about the influence of taxi-industry money on the de Blasio campaign, Allan Fromberg, a spokesman for the Taxi & Limousine Commission, “respectfully” declined to comment, and requests to Woloz, the Taxi Club, the Committee for Taxi Safety and the Metro Board of Taxi Trade all went unreturned.

Spread the Wealth, Spread the Allegiance

Alongside the taxicab interests bundling for de Blasio are many standard rank-and-file New York City power players. The class-action attorney Jay Eisenhofer, who specializes in pension litigation, raised $89,675. The real-estate tycoon Steven Witkoff, whose interests include the Woolworth Building, raised $49,500, a sum that challenges the narrative that de Blasio is an adversary of One Percenters.

One of the more unusual additions is Gina Argento, president of the film and television studio Broadway Stages. Soliciting $97,780 for the campaign, she’s de Blasio’s second-largest bundler. It’s not hard to surmise why. For New York’s $7 billion entertainment industry, the stakes in the mayoral election couldn’t be higher. Under Bloomberg, the sector has been stronger than at any point in the city’s history, adding some 30,000 jobs since 2004. The billionaire mayor helped push though initiatives like NYC TV, the “Made in NY” training program and the aggressive tax credits that lure productions to the city. And yet all of those initiatives could conceivably end with the stroke of a pen, a prospect that no doubt keeps the entrainment industry’s biggest players awake at night. 

Reached by email, Argento said she is confident that the next mayor, regardless of who it is, will continue Bloomberg’s legacy. But she said that de Blasio has already proven himself the more film-friendly choice. “Unquestionably, Bill is a huge supporter of film and television in New York,” she said. “Every time the industry asked him for help while he was public advocate, he helped.”

Argento downplayed the notion that her significant bundling efforts are an attempt to score political favor. She said she is simply “very excited about Bill,” adding that she’s known him since his days on the school board: “He was a great councilman, and I supported him for public advocate.” However, records indicate that she may not be as fierce a fan as she leads on. When de Blasio was running for public advocate four years ago, Argento raised $8,875 in support of Eric Gioa, who ran against him in the Democratic primary.

Indeed, such divided loyalties are not uncommon among New York’s political solicitors. Woloz, de Blasio’s biggest breadwinner, also raised money to support the 2009 comptroller campaign of John Liu, who later became a de Blasio rival in the mayoral race. Alexander Rovt, the billionaire fertilizer mogul, raised $34,650 for de Blasio over the last several weeks. Before that, though, he raised more than $77,000 for Anthony Weiner, who, it’s easy to forget, was a viable Bloomberg successor before his career was derailed by scandalous tweets and salacious selfies.    

Dual contributions aren’t new, and in fact they’re not even restricted to one side of the aisle. In 1993, for instance, numerous moneyed interests -- including David Rockefeller, John B. Hess, Arthur Zeikel and Walter Shipley -- donated to both David Dinkins and Rudy Giuliani, an effort to hedge their bets in a mayoral race that was much closer than the one concluding this week.

In contrast to those supporting de Blasio, bundlers for Joe Lhota are a bit more homogenous. Two of his top solicitors work at Cablevision Systems Corporation (NYSE:CVC), where Lhota served as executive vice president from 2002 to 2010. Gregg Seibert, Cablevision’s CFO, raised $52,000 for the Lhota campaign, while James Dolan, the company’s CEO, raised $19,200. Other top Lhota bundlers include the Republican activist Gail Hilson ($46,150), the law attorney Robert M. Harding ($41,145) and the real-estate executive Frank Ricci ($38,775). Lhota’s total bundled contributions, at $480,916, are less than half of de Blasio’s. Last month, a super PAC supporting the candidate had tried to bypass a $150,000 campaign-contribution limit, but a federal judge turned down the group’s request for an injunction.       

Old New York With A New Twist

The aggressive presence of taxi and entertainment interests is a curious departure from the New York of the 1980s and 1990s. Rudy Giuliani’s top-tier bundlers consisted mostly of developers and real-estate moguls. In 1993 and 1997, the top intermediary to Giuliani mayoral campaigns was William Koeppel, the real-estate scion who later met with scandal -- pleading guilty to soliciting political gifts from his tenants. Kenneth Langhorne, the founder of The Home Depot Inc. (NYSE:HD) and major Republican fundraiser, was also a key Giuliani bundler, raising more than $136,000 for Giuliani’s re-election bid.

For David Dinkins’ campaign in 1989, bankers and high-powered attorneys were doing much of the bundling. Ronald Gault, an investment banker and notable Dinkins tennis buddy, raised $106,500 for the one-term mayor. The real-estate lawyer Gordon J. Davis was close behind with $90,328. By far, Dinkins’ top bundler was Betsy Gotbaum, who raised $156,670. The following year, Dinkins appointed her New York City’s first female parks commissioner.

Scroll backward through New York’s political history, and you’ll find no shortage of campaign-finance controversy. In the 1970s, the developer David Buntzman suspiciously obtained a 99-year lease on the Bronx Terminal Market shortly after giving $30,000 in cash to former Mayor John Lindsay’s presidential campaign. In the 1960s, a top aide to Mayor Robert Wagner resigned from his post on the City Planning Commission after holding a controversial luncheon in which he raised $25,000 from real-estate tycoons and bundlers who do business with the city. In the 1930s, Mayor Jimmy Walker was forced to resign after it was discovered that he awarded municipal contracts in exchange for huge sums of cash. Decades earlier, during the wartime election of 1917, city officials were busted for more than $1.2 million in illegal expenditures in a failed bid to re-elect Mayor John Mitchel. It’s a trail of corruption whose lineage dates back to the Tammany Hall days of the 19th century, when Boss Tweed and his cronies would extort votes from the poor and charge a 15 percent fee to companies doing business with the city.

Are we heading back to those bad-old days? Not likely says NYPRIG’s Mahoney. It’s true that campaign-finance regulations have come a long way in 140 years. Then again, for every rule, there’s a loophole, and for every dollar raised, there’s a donor with expectations.

“Candidates do need to raise their money from somewhere,” Mahoney said. “Naturally, there are a number of donors trying to make themselves known to the person they view as the probable next mayor.”

Got a news tip? Email me. Follow me on Twitter @christopherzara

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