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Spitzer Helps Donors Skirt $10,000 Limit He Set

The check was for $10,000, less than one-fifth of the maximum donation allowed under New York State law. But it was all he could give to the governor, who had imposed strict limits on what he would accept from donors as part of his highly publicized pledge to end the excesses of special-interest money in Albany.

So Mr. Richman took out his checkbook again. This time he gave $15,000, but sent it to the state Democratic Party, which Mr. Spitzer is now tapping in his drive to rid Albany of the Republican Senate majority.

Dual donations like Mr. Richman’s are not uncommon. Despite his high-profile pledge, Mr. Spitzer’s political organization has raised more than $1 million above the cap he imposed on himself, by directing his donors to the state party account, which he controls.

The strategy has helped bring the governor and his party within one seat of gaining control of the Senate. But it has raised questions about whether Mr. Spitzer is living up to the high ethical expectations he set, especially among those who looked to him to change the way business is done in Albany.

“It’s not meaningful if you raise the ethical bar but you have a very effective work-around,” said Russ Haven, the legislative counsel for the New York Public Interest Research Group. “That doesn’t net you any reform to the system.”

Mr. Spitzer’s aides acknowledge encouraging contributors to give to both accounts, but say they are abiding by the law and the governor’s pledge, while trying to match the bare-knuckle politics of state Republicans.

“Reform needs action; it’s not a rhetorical device,” said Ryan Toohey, the governor’s top political strategist and the architect of the Democrats’ efforts to win the Senate. “So long as the Republican Senate is there, reform is going to be too often frustrated by their obstructionist tactics.”

The governor could not have been more emphatic when he initially announced his policy. On Nov. 30, 2006, before even taking office, Mr. Spitzer held a news conference to unveil a number of reforms he intended to undertake, with the $10,000 limit the most eye-opening proposal — well below the $55,900 that statewide candidates can accept.

“I think this is unprecedented,” the governor said at the news conference. “I do not know of another instance where others have acted unilaterally.

“I’ve even said it myself in the past: You cannot expect me to unilaterally disarm. We are doing that today,” he added. “We are doing that because we believe it is important to set a tone, send a message and to lead by example.”

A review by The New York Times found that the governor raised more than $1 million from at least 50 individuals or business entities that donated $10,000 to Spitzer 2010, the governor’s campaign fund, and then far more than $10,000 through the state party. The two entities are housed in the same Manhattan office, one floor apart and connected by a spiral staircase.

In a number of cases, donors wrote consecutive checks to the two organizations. For instance, on July 7, Eric D. Hadar, a real estate developer, wrote a $10,000 check to Spitzer 2010 — check No. 4032 from his account — and then gave $94,200 on check 4033 to the state party, formally known as the New York State Democratic Committee.

Last May, the Democratic fund-raiser Norman Hsu donated $10,000 to Spitzer 2010 on check No. 1332, and then wrote check No. 1333, for $25,000, to the state party. The money was donated to charity after news reports surfaced that Mr. Hsu was a fugitive in a fraud case.

The organizations are so conjoined that the Medical Liability Mutual Insurance Company’s political action committee recently conflated the names of the two entities in a campaign finance filing, reporting a donation of $25,000 to “NYS Democratic Com for Gov Spitzer 2010.”

Mr. Spitzer’s aides note that other governors have similarly used state party accounts. And they say that Mr. Spitzer tried to pass legislation further restricting limits on donations, but that Senate Republicans have rejected that measure and other attempts to overhaul the way business is done in the capital.

“The reason we do this, and the reason it’s a priority, is so that we can achieve a majority in the Senate to accomplish the necessary reforms,” Mr. Toohey said. “We’re never going to get the kinds of reforms that people want on a range of issues if we don’t have a Democratic Senate.”

Republicans, who have long suggested that Mr. Spitzer keeps one set of rules for himself and another for everyone else, say he is blatantly circumventing the voluntary limits he imposed on himself.

“From our standpoint, it’s not surprising,” said John McArdle, the spokesman for the Senate majority leader, Joseph L. Bruno. “If it were a Republican, you’d have The New York Times and the League of Women Voters attacking him.”

The money from the state party is crucial to Mr. Spitzer’s goal of taking over the State Senate, which would give Democrats control of all three branches of state government for the first time since the Great Depression. Last week, Democrats scored an important upset in a special election in the 48th Senate District in Watertown, taking a seat in an overwhelmingly Republican district, thanks in part to $1.4 million from the state party account. The race was orchestrated and financed by the governor’s political operation.

While his aides cast Mr. Spitzer’s desire for control of the Senate in policy terms, removing the Republican majority would have a significant impact on the governor’s personal political situation, too. Mr. Spitzer’s administration faces three investigations related to efforts last summer to disseminate records of Mr. Bruno’s use of State Police escorts. The most aggressive investigation is being undertaken by the Senate, but it would almost certainly be shelved if the Democrats took power.

Some who pushed for an ethical overhaul in Albany say that the fund-raising strategy is just one of the ways in which Mr. Spitzer has let them down. The governor, for instance, once pledged to reduce the influence of lobbyists in state government. But on Friday, a top Albany lobbyist, Patricia Lynch, is holding a fund-raiser for him at the St. Regis Hotel in Manhattan.

Good-government groups are increasingly concerned that Albany may never lift itself out of its ethical morass.

“It’s looked a lot like what we’ve seen before,” Mr. Haven said. “It wasn’t the kind of bright-line departure from the past in Albany that we would have hoped for.”

Mr. Richman, the Spitzer donor, who owns a large real estate development, management and financing company based in Connecticut, said that although he supported the governor, he did not support donor limits.

“I think it’s unconstitutional,” he said. “If the First Amendment wasn’t talking about political speech, what were they talking about? There’s almost a knee-jerk reaction in some parts of the political world that they have to support this stuff. Everybody knows this hasn’t been effective.”

 

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