Sunday, February 28, 2010
Mike Bloomberg Is Being Investigated For a Mysterious Disappearance of $750,000
June 14, 2010
G.O.P. Consultant Accused of Stealing Campaign Money
By DAVID W. CHEN and COLIN MOYNIHA, New York Times
A top Republican political consultant was accused on Monday of stealing $1.1 million from Mayor Michael R. Bloomberg during the campaign last year and using part of the money to buy a house.
The consultant, John F. Haggerty Jr., 41, lied to Mr. Bloomberg and other aides by saying that he would spend the mayor’s money, which was funneled through the state Independence Party, on Election Day ballot security and poll watching last November, said Cyrus R. Vance Jr., the Manhattan district attorney.
But Mr. Haggerty, who set up a company, Special Election Operations L.L.C., to execute the Election Day plan, spent $32,000, Mr. Vance charged, and kept about $750,000 for himself. The balance of the money, $450,000, went to the Independence Party.
About $600,000, Mr. Vance said, went toward Mr. Haggerty’s purchase of his childhood home in Forest Hills Gardens, Queens. Mr. Haggerty even wrote out bogus checks from Special Election Operations, Mr. Vance charged, in an effort to cover up the crime.
“The defendant’s fraud was an audacious scheme to steal funds in order to buy a house, cynically misusing our political party process to hide what is common thievery,” Mr. Vance said at a news conference.
Of the five counts listed in the indictment — first-degree grand larceny, second-degree money laundering and three counts of falsifying business records — the first is the most serious and carries a maximum punishment of 25 years in prison. But election lawyers say that if convicted, Mr. Haggerty would most likely face a few months.
Mr. Vance also filed a civil forfeiture action against Mr. Haggerty and his company, seeking the seizure of Mr. Haggerty’s house.
The indictment culminates a politically sensitive investigation by Mr. Vance. Before the indictment, there was buzz in the political world about the unusual way that the mayor’s campaign directed the payment, using personal checks from Mr. Bloomberg rather than the campaign’s official account.
Some lawyers and political analysts say the case could prove embarrassing to the mayor, in shining an unwelcome spotlight on one of his least favorite topics: how he spends his own money.
“The mayor filed a statement with the Board of Elections that he would only make campaign expenditures through his campaign committee,” said one lawyer familiar with the case who spoke on the condition of anonymity because of the investigation. “But what might have happened here is instead of doing that, he gave personal funds to political parties to make political expenditures for him, and that could be stretching the rules.”
Mr. Vance emphasized that his office had found “no criminal misconduct” on the part of the mayor or his campaign.
But he added that a grand jury was reviewing evidence, and suggested that such evidence might pertain to the Independence Party. A lawyer for the party, under order from a judge, is expected to testify on Thursday before a grand jury.
When Mr. Vance was asked on Monday if the Independence Party was cooperating, he said flatly, “No.”
Asked how the mayor’s sophisticated campaign team might have been a victim of fraud, Mr. Vance hinted at the close relationship between the campaign and Mr. Haggerty, a longtime Republican activist who has worked for George E. Pataki and Jeanine F. Pirro, among other officials and candidates.
“They trusted him,” Mr. Vance said.
Mr. Haggerty pleaded not guilty Monday at his arraignment before a State Supreme Court judge, Larry R. Stephen. A lawyer representing him, Raymond R. Castello, pleaded not guilty on behalf of Special Election Operations.
Mr. Haggerty was released on his own recognizance. After the hearing, Mr. Castello told reporters that the investigation began as an inquiry into the possibility that money had been spent illegally by Mr. Haggerty.
“The indictment doesn’t show any money being spent illegally,” he said, adding that Mr. Haggerty had spent “hundreds of hours” working on ballot security issues.
Mr. Castello added: “He didn’t believe he was doing anything illegal. Mr. Haggerty has cooperated fully with the district attorney.”
Mr. Haggerty is now working on Carl Paladino’s campaign for governor.
Mr. Paladino’s campaign manager, Michael Caputo, said Mr. Haggerty would remain on the team, calling him “a loyal and straightforward man of character.”
John Eligon and Isolde Raftery contributed reporting.
From Betsy Combier:
When Mike Bloomberg won the election as Mayor of New York City, and he said to the public that he would take $1 as his salary, we all said that he was so rich, he did not take bribes...he gave them.
Looks like some major media - like below, the NY Post - are trickling out information on how true that assumption really was.
Remember Billy Thompson's laid-back run for Mayor in the past election? There was alot of talk about his wife's Museum getting funded by Bloomberg and his efforts to be elected being compromised.
Another would-be candidate, we were told, newly married Anthony Weiner withdrew from the race for mayor and his wife is working for Mayor Bloomberg.
I'm happy for Mike that he has so much money, but he must tell us what he is doing with it BEFORE it's too late to do something about it.
my two cents.
Mayor Bloomberg's money was able to buy silence concerning possible election miscues
Adam Lisberg, NY Daily News, February 28th 2010, 4:00 AM
Mayor Bloomberg's money was able to buy more than just consultants, polls and advertising in his reelection campaign last year: It was able to buy silence.
The mysterious $750,000 shell company that ran his Election Day poll-watching operation was paid by the state Independence Party, using $1.2 million Bloomberg gave from his own pocket.
Not a penny of it was disclosed until January. All the headlines about how operative John Haggerty can't account for the $750,000 came out after the election was over.
Separately, a coalition of real estate interests also gave $750,000 to the state Independence Party to support City Council candidates.
None of that was disclosed at the time, either, back when voters could have seen which landlords were dropping $45,000 apiece on those candidates - and could have voted accordingly.
A year earlier, Bloomberg dropped another $1.2 million on the Independence Party just as he was pushing to extend term limits with a professional-grade operation that never explained how it was funded.
All those donations went to an Independence Party account that reports its doings only in January and July - and is only supposed to be used for "ordinary activities," not "promoting the candidacy of specific candidates."
The law is flimsy, though, and Bloomberg and party officials believe it was porous enough to soak up the cash without penalty.
Critics say they broke the law, but since the donations were reported to the notoriously toothless State Board of Elections, don't expect a robust probe to find out who's right.
The city's own Campaign Finance Board, by contrast, runs one of the nation's most rigorous monitoring programs for political spending. It audits campaigns, asks for supporting documents and holds candidates to account.
The CFB does it because most city candidates - Mayor Bloomberg not among them - run for office with tax dollars. In exchange for taking public money, candidates forswear big bucks from special interests and agree to intensive monitoring.
Still, clever candidates always find loopholes. The CFB plugged one last year after Bloomberg's challenger, William Thompson, complained that the mayor's personal donations were buying him support without any disclosure.
The CFB agreed. Starting this year, all candidates must report any cash they give from their own pockets to a party.
The board also wants to force outside groups to report their independent spending on city campaigns, so New York voters will have a full picture of who's backing whom before casting ballots.
"There's a gap in disclosure of political activity at the city level," CFB spokesman Eric Friedman said of the board's proposal, which it hopes to enact this year.
"When outside parties go out and spend money on behalf of a candidate," he said, "they're going to disclose which candidate they're supporting, and they're going to disclose where the money comes from."
For New Yorkers who want to know that, it would have been a helpful law during last year's campaign - and during the push to extend term limits a year earlier.
As the law stands now, though, a smart candidate can buy influence - and silence.
'Phantom' firm got $$ in re-elex
By FREDRIC U. DICKER in Albany and DAVID SEIFMAN in NY, NY POST
Last Updated: 10:35 AM, January 29, 2010
A $750,000 payment from Mayor Bloomberg's campaign was delivered to a mysterious Albany company that wasn't even created until one month after the November elections, The Post has learned.
In an unusual transaction, Bloomberg's campaign last month sent a $1.2 million check to the state Independence Party -- and the party in turn transferred $750,000 to a previously unknown firm called Special Election Operations. The Independence Party appears to have kept the remaining $450,000.
Special Election Operations has no Web site, isn't found in any Internet or database searches, and was incorporated with the state on Dec. 3, about a month after Bloomberg won re-election as an independent.
The address listed for the outfit, 121 State St. in Albany, is the same as a lobbying firm, Capitol Public Strategies, that is run by many former aides to former Gov. George Pataki.
A partner in the lobbying firm, Ryan Moses, a former state Republican Party executive director who answered the door when a Post reporter visited the address, said he had never heard of Special Election Operations and insisted it wasn't located at that address.
But an hour later, he called The Post to say he had been mistaken. "I didn't recognize the name," he said.
Bradley Tusk, the mayor's campaign manager, said two well-known and politically connected Albany lawyers, Jeff Buley and Mike Avella, were behind Special Election Operations.
Both worked in the mayor's campaign -- but each told The Post that they had no connection to the company and had never heard of it. Neither Buley nor Avella has an office at 121 State St.; both have offices elsewhere in Albany.
On paperwork filed with the state, the organizer of Special Election Operations was listed as Joseph Lipari, a tax lawyer with the firm of Roberts & Holland in Midtown Manhattan. He didn't return numerous calls. As a limited-liability company, no other company officials had to be identified on the paperwork.
Bloomberg's $1.2 million payment went into the Independence Party's housekeeping account, which can only be used for office expenses and party-building purposes -- and not to benefit a single candidate.
So if whatever work Special Election Operations did was strictly for Bloomberg and not all party candidates, it would violate state election law.
Sources said it could also violate the city's campaign-finance rules, since it would be considered an in-kind contribution that wasn't reported.
Independence Party Chairman Frank MacKay accepted "full responsibility" for hiring Special Election Operations but said he had no idea who cashed his party's check for $750,000.
MacKay claimed a consultant whose name he couldn't recall referred him to the company, whose principals he didn't know and couldn't name.
Howard Wolfson, the mayor's campaign spokesman and soon-to-be special counsel, said Bloomberg's contribution was intended to support the Independence Party's "field and Election Day operations around the state -- canvassing, turnout reports, machine checks."
But MacKay told The Post the party's election operation was only citywide.
Asked about the contradiction, Wolfson responded in an e-mail, "I'm not going to speculate on conversations you may have had with Chairman MacKay."
Wolfson repeatedly ignored requests since last week for the names of the people behind Special Election Operations.
Bloomberg has had a long and cozy relationship with the state Independence Party, to which he contributed $1.35 million in 2008 to boost Republicans running for state Senate.
Records show Bloomberg sent $600,000 to the party on Oct. 30 and another $600,000 on Nov. 2, a day before the election.
Wolfson said the party then hired a "specialist for human-resources activities since they weren't going to go out and hire each worker one by one and do all the paperwork that came with it."
Mike mystery money went to key elex aide
By DAVID SEIFMAN City Hall Bureau Chief, January 30, 2010
A $750,000 personal campaign contribution that Mayor Bloomberg channeled through the state Independence Party during last year's mayoral election landed in the hands of a top aide, The Post has learned.
The aide, John Haggerty Jr., served as a Bloomberg "volunteer involved in some of the activities" of Special Election Operations LLC, a hastily formed company that hired 200 to 300 workers to do poll watching on Election Day, according to Ken Gross, counsel to the campaign.
But the company didn't register with the state Secretary of State's Office until Dec. 3 -- a full month after the election.
Haggerty was also the recipient of a separate, eye-popping $120,000 personal contribution from the mayor on Nov. 20, which went to a political committee he had formed a month earlier and registered at his home in Forest Hills, Queens.
Until yesterday, mayoral aides and party officials had refused for a week to say who was behind Special Election Operations.
Frank MacKay, the Independence Party chairman, went so far as to claim that not only didn't he know, but that he couldn't recall the name of the consultant who supposedly recommended he hire the firm.
Special Election Operations listed an address in Albany that's the same as that of Capitol Public Strategies, a lobbying firm operated by aides to former Gov. George Pataki.
INTRIGUE: This lobbying firm is at the Albany address listed for the murky "Special Election Operations."
David Catalfamo, one of the partners in the lobbying firm, said he gave permission for the address to be used on Special Election Operation's incorporation papers, but that was the end of any connection to the company. Some members of the lobbying firm are close with Haggerty.
Although Haggerty worked in the mayor's re-election campaign along with his brother, Bart, Haggerty didn't get paid.
Sources said John Haggerty was instrumental in helping Bloomberg land the Republican ballot line in the face of strong initial opposition from some GOP leaders and that the mayor considers him a trusted adviser.
"There are two people that can get the mayor's ear anytime they want -- [Deputy Mayor] Kevin Sheekey and John Haggerty," said one source.
Leaders of the city Independence Party -- which has been feuding with MacKay for years -- suggested the entire set-up might be "corrupt."
"We have nothing to do with MacKay and Company and we're not the least bit surprised that what they're doing looks fishy, perhaps even corrupt," said Jacqueline Salit, a spokeswoman for the city party and a Bloomberg ally.
One veteran GOP consultant said he believed Special Election Operations was designed to dispense "street money" -- cash that's spread around on Election Day to volunteers and for such incidentals as lunch.
But Howard Wolfson, the mayor's campaign spokesman, insisted the $750,000 -- part of a $1.2 million personal contribution Bloomberg made to the state Independence Party right before the election -- didn't go for that purpose.
"The [Independence Party] made the same Election Day expenses that all party committees make every election for Election Day workers," he said in an e-mail.
"Because the IP does not have the infrastructure to handle this kind of activity in-house, it used Special Election Operations to handle the payroll payments to all these individuals."
Gross said he couldn't immediately provide a list of those workers, saying that was the responsibility of the state Independence Party. Haggerty didn't return repeated phone calls.
Bloomberg's $750K payment for election may have funded purchase of Queens home
Adam Lisberg, NY Daily News, February 14th 2010
When Mayor Bloomberg funneled $750,000 to a longtime Queens ally last fall, he thought he was buying a citywide poll watching operation.
He may have paid for a house in Forest Hills Gardens, too.
The house was the childhood home of John Haggerty Jr., the Republican operative who has claimed he was working as a volunteer on Bloomberg's third-term campaign.
Haggerty has ducked calls to explain how he spent the $750,000 payment, which went into his newly formed "Special Election Operations LLC."
The money was channeled through the state Independence Party, which got $1.2 million from Bloomberg's pocket right before Election Day.
Sources inside and outside the Bloomberg campaign say it was supposed to buy an extensive Election Day operation, with up to 300 workers paid $500 each to make sure there was no funny business at poll sites.
That only adds up to $150,000, though. One source says the Independence Party can't account for $300,000 to $400,000 of the rest of the money - and has drawn up legal papers against Haggerty to locate the rest.
"It's just infuriating," the source said. "Haggerty probably made money throughout the campaign one way or another."
Special Election Operations got its $750,000 on Dec. 11.(see financial report)
Six days later, Haggerty bought out his brother Bart's share of the family home - paying $1.6 million to the estate of their late father, records show.
It's unclear how much of the purchase was in cash, but Haggerty apparently did not take out a mortgage. The next month, records show, Bart had enough money to buy a $619,000 apartment in Forest Hills - again, apparently without a mortgage.
So where did the Haggerty brothers get that cash? After all, it had been almost a year and a half since their father, a respected longtime lawyer in Albany, passed away.
In his will, he split most of his estate between the brothers - though he gave an extra $30,000 to Bart "due to the extra care, support and effort he expended on my behalf."
Haggerty had another potential pot of Bloomberg cash to tap as well: The mayor gave $120,000 on Nov. 20 to a new political committee Haggerty set up, the 28th Assembly District Republican Committee.
He did not respond to messages left at the house last week, or at the Rego Park office he rents for political operations. Bart did not respond to an e-mail.
Manhattan District Attorney Cy Vance Jr. has issued subpoenas in the case, which may deter them from talking even if Haggerty has done nothing wrong.
Bloomberg campaign officials have generally defended Haggerty, who ran Election Day operations for the mayor's 2001 and 2005 campaigns through the Republican Party.
They say he put together an extensive operation in November that could well have cost $750,000. Campaign spokesman Howard Wolfson said the campaign offered to pay Haggerty a salary or bonus, but he declined - which he would have been unlikely to do if he really needed money.
"The suggestion is unfair," Wolfson said. "If he was interested in money, he didn't demonstrate that during the campaign."
Bloomberg Meets With G.O.P. Chairs, Leaves Fast
By Azi Paybarah, New York Observer, February 25, 2009
Michael Bloomberg met with the five county Republican leaders this morning to seek approval to run in their party's primary, then left after a brief exchange with reporters.
That job was, for the most part, left to Bloomberg campaign spokesman Howard Wolfson, who said that although the mayor would like to run on the Republican line, his administration would continue to "govern" in a nonpartisan manner.
Here's what the mayor said before he left: "It was a nice meeting. These are five county leaders and we talked about the economy, the economy of the country, the economy of New York City in particular. We talked about elections and politics obviously, and I said the last two times I ran, I ran on the Republican line and I’d be honored to run again. We’ll see what they decide to do. But it was a nice meeting, a constructive meeting and most of the politics we discussed were not actually politics of New York City. We just talked about national politics and how we all hope that President Obama will be a good president, and this is not a partisan thing on a national level. We have a new president and it’s time for everyone to pull together and that’s what we’re going to do.”
Then, pointing to me, he said, “And you got a haircut.”
Then he excused himself, saying that he was late for a meeting.
Since Bloomberg is not a member of any party--he dropped his Republican registration around the time top aide Kevin Sheekey was pumping up speculation about a presidential run--he will need approval from three of five county leaders to make it onto a primary ballot.
Bloomberg's meeting with the chairmen at the Metropolitan Republican Club on East 83rd Street lasted more than an hour.
He had walked in with a gaggle of aides including Republicans Matt Mahoney and John Haggerty. Haggerty worked on Bloomberg's 2005 campaign when the Queens Republicans were split between Bloomberg and a former Republican city councilman Tom Ognibene. Haggerty has also waged an intense war with the leadership of the Queens Republican Party, which is now led by Phil Ragusa. Ragusa has said he'd back the mayor if Bloomberg rejoined the Republican Party.
While waiting with reporters on the sidewalk, Wolfson was chided for uncharacteristically wearing a tie. More than once, reporters joked to Wolfson that the meeting was taking too long, with one TV reporter asking Wolfson, "How long does it take to write a check?"
Reporters laughed and Wolfson grinned before saying that "it takes a long time" to talk about the mayor's record of accomplishments.