Maziarz, Gallivan spending questioned

Do state lawmakers pocket campaign contributions for personal use?

The Moreland Commission, charged with investigating corruption in state government, was asking that question before Gov. Andrew Cuomo disbanded the panel in March. A couple dozen state legislators were on the commission’s radar screen because their campaign finance disclosure reports didn’t document some expenses or failed to itemize their spending to detail precisely what they spend their money on.

Sen. George Maziarz, R-Newfane, topped the commission’s list, with about $140,000 in unitemized spending over a six-year period, according to a report published today by City & State, a magazine and website that covers politics and government in New York State. Commission investigators also found tens of thousands of dollars in unreported spending.

Expenses called into question include $125,000 of purchases at retailers including Target and BJ’s Wholesale Club; $10,000 for wine, flowers and chocolates; and $4,000 in what appears to be child-related purchases involving toys, clothing and a clown.

Sen. Patrick Gallivan, R-Elma, ranked third with $80,000 in unreported spending. Notable expenses include credit card payments involving casinos, cigars and tanning.

Three of four senators who represent districts in Western New York submitted unitemized spending reports that also exceeded the $10,000 threshold the commission established for continued scrutiny, according to City & State. They were led by Sen. Tim Kennedy, D-Buffalo, with $30,000 of unitemized spending. Lesser amounts were reported for Catharine Young, R-Olean, and Michael Razenhofer, R-Amherst.

No local members of the Assembly filed disclosure reports whose unitemized or unreported spending topped $10,000.

The state’s campaign finance law permits the filing of unitemized expense reports for purchases under $50, but it does require that all funds be spent on legitimate campaign purposes. The commission, had it not been terminated, intended to test the legitimacy of the unitemized spending by subpoenaing the records of vendors and campaign treasurers, City & State reported.

“It’s a shame that they made so much progress in starting an investigation into this area, but were unable to follow this investigation through to completion,” Bill Mahoney, research coordinator at New York Public Interest Research Group, told City & State.

Candidates exploit legal ambiguities

City & State’s story is based on Moreland Commission documents obtained by the publication. City & State reported that its review of the documents “found no proof of illegality on the behalf of any elected official or candidate.” However, it said “there are a number of expenditures that appear suspect.”

Mahoney of NYPRIG reviewed the documents for City & State and said of the lawmakers who reported itemized spending:

“Some of them might have good explanations, and I’m sure many of them do,” he said. “But it’s also very possible that some of them are intentionally hiding this money to avoid letting their voters see how they’re spending campaign funds.”

What constitutes a legitimate campaign expense is murky under state law.

Campaign contributions, according to the law, can be spent for “any lawful purpose,” but “shall not be converted by any person to a personal use which is unrelated to a political campaign or the holding of a public office or party position.”

What constitutes “personal use” is not defined, however, and that ambiguity has been exploited by candidates to include purchases that are not directly tied to political activity. Examples include spending on babysitters, legal fees, car leases and repairs, and, in the case of former Senate President Joseph Bruno, a cover for the pool at his house, where he sometimes held fundraisers.

Maziarz and Gallivan spending

Here’s what City & State reported on Maziarz:

According to the documents, Maziarz amassed more than $140,000 in unitemized campaign expenses in filings reported between 2008 and 2013—which averages out to more than $23,000 a year, or nearly $2,000 a month.

The senator’s campaign also had “over $67,000 of charges and expenditures to Chase and Chase Card Services,” identified broadly as “office” expenses. The total sum, which exceeded all other lawmakers by tens of thousands of dollars, is broken down in depth within the documents and includes details not included in his public campaign filings.

The commission found that the Maziarz campaign doled out more than $125,000 at retailers such as Target and BJ’s Wholesale Club, including $56,250 in expenditures that investigators concluded had not been reported. Another $10,000 from the senator’s re-election funds went to specialty chocolatiers, a florist and wineries and wine stores. The campaign committee also paid for $7,850 worth of reading materials at Borders, Readers Digest and Barnes and Noble, with $2,000 labeled as “unreported” by the Commission.

The commission also tabulated the Maziarz campaign spending $12,000 at arts and crafts stores like Michaels and Oriental Trading; $7,000 at the now defunct online gift boutique Southern Living at HOME and its successor, Willow House; and $4,000 on purchases related to children, including from Toys ’R’ Us and Mud Pie, and payments to Do-do, the clown.

A company called MEM Enterprises also received a cumulative $39,000 from the Maziarz campaign. A Commission document notes that the company has only one employee, brings in $54,000 a year and is based at a residence owned by a person who appears to be the senator’s relative. Efforts to reach MEM Enterprises were unsuccessful, however, based upon inquiries made by City & State, it appears that the company’s address is the same as that of the senator’s brother, Marvin Maziarz, a retired Niagara County Community College professor.

John Conklin, a spokesman for the Board of Elections, said that it is not illegal to pay family members for legitimate campaign services.

In response to questions from City & State, Maziarz issued the following statement: “We have followed all campaign laws, reported all expenditures and have always been very transparent.”

Subsequent reporting by Investigative Post found that the $140,000 in unitemized spending accounted for 10 percent of the $1,412,321 in expenses his campaign reported to the Board of Election from 2008 to July of 3013. Maziarz raised $1,949,539 during this period.

Investigative Post has previously documented the senator’s fundraising prowess.

Maziarz declined further comment on the Moreland Commission’s preliminary findings when contacted by Investigative Post.

Gallivan, meanwhile, “had about $80,000 in ‘unreported credit card expenses,’ ” according to City & State.

Records for a Capital One card revealed $1,200 spent at casinos, $1,000 on cigars and $300 on “tanning beds and at salons.”

The senator also had approximately $4,000 in unreported charges to AT&T, $3,500 in unreported charges to Verizon Wireless, $4,000 in charges to the Delacy Ford dealership in Elma, N.Y., and almost $3,000 in unreported loan payments to M&T Bank.

The commission apparently was unable to obtain records for an American Express card that had $47,000 in unreported campaign charges.

Investigative Post found that Gallivan’s $80,000 in unreported spending accounted for 26 percent of the $212,807 of campaign expenses he reported to the Board of Elections for the time in question. Gallivan raised during this period $389,032.

Gallivan, in a statement to Investigative Post and City & State, said, “All expended funds were related to a political campaign or the holding of public office as required by applicable election law. We have always endeavored to comply with the state’s campaign financial disclosure requirements and continue to review all of our filings to ensure full compliance.”

Prosecutors have documents

Besides Maziarz and Gallivan, those with the largest amounts of unitemized or unreported spending included Senators John Bonasic ($100,000), Michael Nozzolio ($70,000) and Andrew Lanza ($60,000).

Senate President Dean Skelos and Assembly Speaker Sheldon Silver do not appear to be among those whose unitemized and unreported spending exceeded $10,000.

The commission did not look into the campaign expenditures of candidates for governor, lieutenant governor, attorney general or state comptroller.

It’s unclear what, if anything, happens with the commission’s preliminary review of legislative spending.

Documents have been shared with Albany County District Attorney David Soares and Preet Bharara, the United States attorney for the Southern District of New York. Neither have indicated what, if any, action they will take. Bharara was critical of Cuomo’s decision to shutter the Moreland Commission in exchange for the Legislature’s approval of improved ethics laws.

“It was disbanded before its time,” he said. “Nine months may be the proper and natural gestational period for a child, but in our experience it is not the amount of time necessary for a public corruption prosecution to mature.”

Data analyst Andrew Bailey of Primary Data contributed to this report.