Tuesday, July 6, 2010

Quirk on Runoffs Allows Candidates to Keep Thousands by Alison Leigh Cowan - NYTimes.com

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New York City’s efforts to recoup taxpayer money it has awarded to candidates running for office have been hampered over the years by delays, legal fights, poor record-keeping and the plain defiance of some candidates determined not to give back extra campaign cash.
But sometimes, it turns out, the city’s inability to recover taxpayer dollars owes to rules that the city’s lawmakers devised and approved.

To wit, the cases of A. Gifford Miller and Peter F. Vallone Sr., candidates who took the city’s money, failed in their election bids, but got to keep tens of thousands of dollars for their own use because of an arcane wrinkle in the campaign finance laws involving runoff elections.

Here is how it worked: When candidates running for office — those who had agreed to limits on private donations and thus benefited from the city’s program for generously aiding them with matching awards of taxpayer dollars — suspect that they might be in a primary race that will result in a runoff, they can petition the Campaign Finance Board for the right to raise extra private money for the runoff.

Mr. Miller, who in 2005 was the City Council speaker and was trying to gain the Democratic nomination for mayor, made such a petition.

He had raised millions of dollars himself and stood to receive roughly $2.5 million in addition from the city, but he argued that he needed more as the primary approached and he battled for votes in a crowded Democratic field. Allowed to go back to donors, Mr. Miller, of Manhattan, wound up raising over $200,000 more.

Mr. Vallone, of Queens, was in the same situation in 2001. He was City Council speaker and hoped to win the Democratic nomination for mayor.

He, like Mr. Miller, raised an additional $200,000 or so with the city’s blessing, on top of the millions he had already raised, even though he, like Mr. Miller, ultimately failed to attract enough votes to reach a runoff.

In each case, the candidate wound up with a six-figure campaign surplus, even after repaying a good chunk of the matches he got from the city.

Ordinarily, the city is allowed to demand that any campaign surplus — whether it stems from private contributions that are eligible for matching, or interest on bank deposits that are not — be used to pay it back.

But in both these cases, the candidates argued that their surpluses were merely the fruit of their added bit of private fund-raising, and that they were entitled to keep control of them.

And in both cases, the candidates prevailed.

“Everything was done according to Hoyle,” Mr. Vallone said in an interview.

Mr. Miller would not discuss the money but issued the following statement through a spokesman: “Funds that Speaker Miller raised from private contributors for the potential 2005 mayoral runoff campaign never received any public matching dollars because the campaign never took place.”

He did offer contributors to his runoff account a chance for refunds, which left him about $100,000 that he was free to move into his own political action committee. And that committee, controlled by Mr. Miller, has sent tens of thousands of those dollars to some of Mr. Miller’s favored charitable causes, including one run by a close friend.

Since 2008, the committee has given a total of $37,500 to Friends of the High Line, a charity that supports the new elevated park on the West Side of Manhattan. The High Line’s co-founder is Mr. Miller’s college friend Robert R. Hammond. Records of the State Board of Elections show that Mr. Hammond was also the treasurer of “Miller for New York” in its early days.

Six charities shared $22,300 more last year, courtesy of Mr. Miller’s committee. The LGBT Center, an organization that serves the gay and lesbian community, got $5,000. New Yorkers for Parks, New York City Outward Bound, and City Futures each got $5,000, and the Council on the Environment got $300. New York Academy of Medicine got two gifts of $1,000.

Mr. Vallone, for his part, used the same wrinkle in the law to preserve about $200,000 of his runoff money, set aside in a war chest that has come in handy as Mr. Vallone has pursued a new career as a paid lobbyist.