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NYS Board of Elections 40 Steuben Street Albany, NY 12207-2108
To the NYS Board of Elections: I write today to make a formal complaint regarding and request a formal inquiry into the campaign finance practices of the housekeeping account of the NYS Independence Party (FILER ID A51115) and other accounts affiliated with or controlled by the leadership of the State Independence Party. There are several areas, which seem irregular, improper or outright violations of the law. Just so you understand my interest in this and my perspective, I’ve served on the state committee of the Independence Party since the Fall of 2002 and served on the state Executive Committee since 2005. I resigned both of those posts last month after a series of political disagreements with the rest of the state leadership and a deep disagreement with the state Chairman regarding the direction of the party. I think much of our disagreement over direction can be illustrated by the shady campaign finance practices on display within the Independence Party. Below are several instances or circumstances that I believe cry out for greater scrutiny. • How expenditures are made. Sitting on the State Committee for the last eight years (and the executive committee for the last five), I can tell you that I never once voted on a single expenditure. This begs the question….how does the party decide what to spend money on? I know that the State Chairman frequently charges restaurant or hotel bills related to party business to the party’s account and I’ve seen the First Vice-Chairman Tom Connolly direct the Treasurer to write checks for things like room rentals, etc. So is it just Mackay and Connolly that get to make decisions about spending? Is there any oversight of their spending habits or any committee or body that they are answerable to? If the answer to those questions is no, then I think donors (or potential donors) should be made aware that. I can certainly tell you that there’s nothing whatsoever in the state party rules governing the process by which money is spent. I think this lack of transparency, approval and oversight, coupled with all of the media reports related to the housekeeping accounts questionable spending practices begs the question, who’s in charge here? Where the money goes. What the money has been spent on is in a word alarming. Here are just a few areas that I think raise some red flags.
The payments to Special Election Operations LLC of $750,000 have already been written about at great length in the press and have resulted in an investigation by the Manhattan DA’s office that has already yielded one indictment. If that weren’t troubling enough, when a reporter for The NY Post asked the state Chairman Frank Mackay who the principals behind this firm were or who had recommended them, he feigned ignorance. This is all the more alarming when one sees that the Albany address the company used as on its paperwork didn’t house any such company or entity. It appears that the vast majority of this money was used by a Queens political consultant to purchase a house. I think this begs several questions. Who directed the party to make these payments to this company? What did the company tell the party it would be doing with the money? Why did the State Chair not immediately reveal the identity of the principals behind the company (did he really not know or was this motivated by some other intent to conceal the true purpose of the funds?)? Why was this company not formed until after the election it was hired to do campaign work in? These are but a few of the questions that a controlling legal authority like the Board of Elections needs to ask the state IP leadership. The other troubling trend is the spending that involves ties to Chairman Frank Mackay’s wife. I hesitate to mention this since I’ve known both Frank and Kristin for many years, and have never held her in anything but the highest regard. That being said, there are some disturbing expenditures, as was reported by The New York Post, on July 22, 2010. For instance, the Independence Party Chairman’s Club (FILER ID C28101) paid Gene Gentile, a consultant and Kristin Mackay’s former business partner, $11,517 for almost no verifiable work. For example, Gentile claimed that one $4,000 payment was to develop a book chronicling the history of the Independence Party. No such book has been published. Where did the money go? What was this payment for? While no IP book was published, Frank Mackay did write and publish a book about his days in the music industry entitled “The Network Interviews”. Is this the book that Gentile was paid to help develop? If so, it seems that the IP Chairman’s Club is being used as little more than a slush fund to benefit the Chairman’s private business interests and funnel financial benefits to his wife’s business associates. Gentile also claimed that he’d set-up social networking websites for the party over the years and been responsible for other endeavors. Currently, both the state and Suffolk County parties (the latter of which Mackay also Chairs) have almost no internet presence to speak of and have websites that could’ve been designed by sixth grade communications class for a spring break project. If this is indeed what Gentile was paid for (which to me is not the least bit clear), it seems to me as if he was paid (with party funds), far in excess of the market value of these services. Was this an ancillary benefit to partnering with Mackay’s wife? I think the donors to this Chairman’s Club would be very anxious to know.
In addition to the aforementioned questionable expenditures, I’m disturbed by the number of payments that went directly from the State Housekeeping Account to other accounts that were solely controlled by Mackay. These include a $25,000 payment to the Suffolk County Independence Party (in July of 2009), which was listed as a reimbursement, $1,000 to the Suffolk County Independence Party which was listed as a contribution, two contributions of $12,000 each to the Chairman’s Club (in December 2007 and January 2008), and a $3,000 contribution to the Chairman’s Club in August 2007. These accounts have almost no oversight at all and are also essentially controlled completely by Frank Mackay. It might not come as a shock to see that examining the campaign finance disclosure reports of these committees; one finds several large payments to other companies with ties to Mackay’s wife, including Roosevelt Strategies, the principal of which is Anthony Manetta, another former partner of Kristin Mackay. Again, it seems as if these accounts serve no verifiable political purpose aside to be a slush fund for Mackay and his business associates. Direct Payments to party leaders. As I’ve observed and noted, it seems as if the only two people who have any say whatsoever in how IP money is spent are Frank Mackay and First Vice-Chairman Tom Connolly (currently on the staff of State Senator Carl Kruger, who is under Federal Criminal investigation for deceptive campaign finance practices). It’s no wonder then that Mackay and Connolly so often believe that the best use of Independence Party funds is to pay themselves off. Here are just a few instances where the housekeeping account is used solely to line the pockets of those who control it: - $7,218 to Connolly in November 2009 - $7,122 to Connolly in March 2010 - $5,000 to Connolly in March 2009 - $3,280.75 to Connolly in June 2008 - $2,241.71 to Connolly in June 2008 - $2,218 to Connolly in January 2010 - $2,204.40 to Connolly in July 2008 - $2,000 to Connolly in April 2010 - $1,872 to Connolly in November 2009 - $1,712 to Connolly in July 2009 - $1,673.90 to Connolly in September 2008 - $1,560.35 to Connolly in July 2009 - $1,532. 26 to Connolly in January 2010 - $1,512 to Connolly in June 2009 - $1,492.20 to Connolly in January 2010 - $1,392.65 to Connolly in April 2009 - $1,382 to Connolly in August of 2009 - $1,332.20 to Connolly in May 2010 - $1,309 to Connolly in May 2009 - $1,274.42 to Connolly in July 2008 - $1,272 to Connolly in April 2009
- $1,267 to Connolly in October 2009 - $1,256.20 to Connolly in July 2008 - $1,228.16 to Connolly in October 2008 - $1,165.05 to Connolly in October 2008 - $1,137 to Connolly in November 2008 - $1,089 to Connolly in September 2009 - $1,026.14 to Connolly in August 2008 - $1,011.45 to Connolly in September 2008 - $1,008.60 to Connolly in October 2008 - $944.28 to Connolly in April 2010 - $943.54 to Connolly in September 2008 - $60,000 to Mackay in March 2009 - $2,462.53 to Mackay in September 2008 That is over $62,000 to Connolly and Mackay each in just two years!! That’s incredible. This doesn’t include anything they were given from the Rensselaer County Independence Party (which Connolly controls) or the Suffolk Independence Party (which Mackay controls). What’s particularly alarming is the $60,000 payment to Mackay and the $5,000 payment to Connolly that came just days after a windfall contribution to the party by Michael Bloomberg. Was this the Mayor’s intention? Was the party’s decision to back several candidates at the behest of the Mayor’s aides (e.g. Dan Halloran for City Council and James Molinaro for Borough President) the result of the Mayor’s contributions (and Mackay’s pay day)?? These are the questions that I think the donors to the IP are entitled an answer to. • Use of housekeeping account for Campaign purposes. The reason that housekeeping accounts exist is to allow parties to pay for things like office expenses, stationary, small reimbursements for party functions, etc. The purpose of a housekeeping account isn’t to be a type of PAC or campaign fund that aids candidates and yet that’s exactly what the IP housekeeping account has become. - As I mentioned before with respect to the payments to Special Election Operations LLC, almost everything about the deal requires further scrutiny. Even if both Haggerty and the IP leaders are telling the truth about the intent of the payments though, it’s clear that these payments were only going to be used for campaign use not standard housekeeping business. This is a clear perversion of the intent and purpose of a housekeeping account. - In the fall of 2009, there was a hotly contested Democratic primary for City Council in the North Shore of Staten Island (49th Council District) between Ken Mitchell (incumbent) and Debi Rose. Even though the party never endorsed Mitchell or voted on supporting his candidacy in any way whatsoever, the party (through funds funneled through the housekeeping account), did a series of mailings on Mitchell’s behalf to Democratic primary voters. So, here you had a party injecting itself into another party’s contest without any endorsement of one candidate over the other and without the proper committee making the expenditures. Why was this done? I think as the only two people who seem to be able to exercise any
control over this account, Tom Connolly and Frank Mackay owe the IP members and donors an explanation. With strict requirements in NYC races regarding campaign contributions and expenditures, it would seem to me that this was certainly (at the very least) an in-kind contribution in excess of what’s permitted in council races and if it was coordinated with the Mitchell campaign (as appears likely) could very will have brought his campaign finance expenditures over the legal limit. - In 2008, Mayor Bloomberg gave $1.2 Million in contributions to the housekeeping account of the state party with the stated intention of helping the Republicans keep their majority in the state senate. This money was then used to fund mailings on behalf of candidates like Serph Maltese and Frank Padavan, who were in competitive races. Aside from looking like a blatant and intentional attempt to skirt the campaign finance law, this seems like clear campaign use, not housekeeping use. These are but a few of the many instances in which Mackay and Connolly have used money that’s prescribed by law to be earmarked solely for housekeeping issues, for anything but. I realize that there’s not a whole lot the state BOE can do to enforce adherence to the campaign finance law, but I think these shenanigans cry out for further investigation. I would ask that you look seriously at each of the incidents I’ve outlined and make a determination to see what if any laws were violated. Perhaps this can result in a series of recommendations from the BOE to the state legislature as to how to give NY’s famously week campaign finance laws teeth, so as to prevent future party leaders from abusing the hard earned contributions of their donors or the trust of their members in the future. If you think there’s a possibility that any of the aforementioned incidents are the product of criminal malfeasance, fraud or abuse, I would encourage you to refer your findings to the Albany County DA or the U.S. Attorney in any relevant jurisdiction. Please let me know if there’s any way I can be of further assistance or if you’d like to discuss any of this further. Sincerely, Frank Morano
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