A glaring loophole in New York’s campaign finance rules allows people doing business with the city to steer thousands to candidates for office despite limits on how much they can personally donate.
The glitch means lobbyists, developers and others who stand to profit from government action can curry favor with current and future decision-makers — and skirt donation limits ― by bundling donations from their wealthy pals and sending them to candidates for city office.
Twelve people who have city business, prohibiting them from giving more than a few hundred bucks themselves, have already bundled $112,405 in donations for 2021 candidates, an analysis by The Daily News found.
Anyone considered to be doing business with the city — like lobbyists and those with municipal contracts — can’t give more than $400 to any one candidate for mayor, public advocate and comptroller. They’re barred from giving over $320 to candidates for borough president and $250 for pols running for City Council.
Yet that doesn’t stop them from bundling hundreds of fat checks.
"Some donors circumvent NYC's doing business contribution limits by bundling contributions from others, which can result in more influence than giving contributions directly,” said Alex Camarda, a senior policy adviser at good-government group Reinvent Albany.
So far, Bronx Borough President Ruben Diaz Jr. leads 2021 candidates in bundled cash from the conflicted donors, collecting $49,700 from two people with city business as of July 11, the end of the most recent filing period.
He’s followed by Councilman Rafael Salamanca, Jr., with $14,525 from bundlers with city business, Brooklyn Borough President Eric Adams with $12,040, and Comptroller Scott Stringer with $10,800.
The amount of bundled cash from those with municipal business is likely to skyrocket in the next two years before the 2021 election, when term limits open 41 of the city’s 59 elected positions that more than 500 candidates are expected to run for.
During the last wide-open election in 2013, a whopping $1.7 million was bundled and given to candidates for mayor, public advocate, comptroller, borough president and city council from 93 people doing business with the city at the time, according to a Daily News analysis of campaign filings.
Another $875,098 was bundled by 70 people with city business during the 2017 election, The News found.
Mayor de Blasio collected $346,290 from donors with city business in the 2013 race and $280,145 in 2017.
De Blasio faced numerous investigations into his political fundraising practices, including whether he was favorable to donors and others with business before the city. Though federal and state prosecutors eventually said they wouldn’t charge de Blasio or his aides, one still said the mayor intervened on behalf of donors seeking favors from City Hall.
Contributions from people doing business with the city were restricted in 2007 and a database was created to ensure candidates and donors complied with the law. Commercial lobbyists pushing city policies and seeking municipal contracts for their clients are included. So are top executives and owners of companies who already have contracts and those lobbying the city.
But the law allows them to act as “intermediaries” for other donors without the same contribution limits.
Critics say the arrangement leaves the door wide open for powerful and well-connected New Yorkers to influence elections and sway politicians in their favor.
“If people want to circumvent the intent of the regulation, they’ll do it,” said Betsy Gotbaum, executive director of good-government group Citizens Union.
The most generous bundler with city business so far in 2021 is Michael Muzyk of Baldor Specialty Foods, who arranged for $45,700 for Diaz Jr., the Bronx borough president. The food distributor leases space from the city at the Hunts Point industrial park in the Bronx and expanded its operations there in 2015.
Lobbyist Perry Vallone bundled a combined $23,775 for Councilmen Costa Constantinides, Paul Vallone and Salamanca. Vallone’s clients this year include 31 companies targeting city officials over budget, real estate and land use matters, records show.
John Mascialino, a principal of law firm Greenberg Traurig, bundled $7,460 for Councilman Jimmy Van Bramer. The company’s clients include SL Green Realty Corp., the city’s largest private landlord, Morgan Stanley, Ernst & Young, Deloitte and AT&T, among dozens of other companies lobbying the city. Greenberg Traurig also lobbies on behalf of the Metropolitan Transportation Authority.
“There is no question that someone doing business with the city is only going to bundle because they think it will help their bottom line,” Councilman Ben Kallos (D-Manhattan) said.
Critics of the loopholes hope an increase in the public match, from 6-to-1 to 8-to-1 for certain donations, will help curb big-money influence in the 2021 elections.
“Hopefully that disincentives this behavior,” Kallos said.
Campaign Finance Board executive director Amy Loprest said New York has the “strongest campaign finance disclosure laws in the country” and that the board recommended barring matching funds for contributions bundled by people with city business.
“The Board is required by law to review the program and recommend changes following every citywide election cycle," Loprest said. "In light of the changes made to the matching funds program, the impact on bundling contributions is one of many issues that the Board will review closely following the 2021 election.”