Forbes: New York Gov. Andrew Cuomo Reaped $6.2 Million In Campaign Cash From 347 State Vendors Who Pocketed $7 Billion Since 2014 73_cuomo_2

October 28, 2020 08:37 AM

Forbes-01

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While New York congresswoman Alexandria Ocasio-Cortez and national progressives decry corporate money in politics, Governor Andrew Cuomo has embraced the highly unethical practice of soliciting campaign cash from state contractors.

Our auditors at OpenTheBooks.com found 347 state vendors that gave $6.2 million in political donations to Cuomo over a six-year period (2014-2019). Meanwhile, these companies reaped $7 billion in state payments. 

These donations represented the equivalent of more than half of the current cash on hand – $11.9 million – in the governor’s campaign committee as of 12/31/2019, according to disclosures.

We created an interactive map displaying by ZIP Code all of the governor’s campaign contributions since 2014. Just click a pin (ZIP Code) and scroll down to see the results that render in the chart beneath the map.

 

Interactive_Map

 

We reached out to Governor Cuomo and Rich Azzopardi, a senior advisor, answered for the administration, “No contribution of any size plays a role in any official action and any official who can be swayed by a single dollar has no business being in government.”

However, since 1940, individuals and entities negotiating or working under federal contracts have been prohibited from giving political cash to federal candidates, parties, or committees. In New York, however, this political patronage is perfectly legal (at least for now).

Here are some of the big winners who gave campaign cash to Gov. Cuomo and separately received state payments.  

Hospitals – Covid-Positive Patients Transferred To Nursing Homes

The Greater New York Hospital Association (Association) funneled $1 million to Cuomo’s re-election through the state Democratic party in 2018. That same year, the Association and the healthcare union, 1199SEIU, backed Cuomo’s healthcare “reforms” and spent $5.9 million lobbying in Albany. 

By February 2020, Cuomo appointed the Association’s past chair and board member Michael Dowling along with 1199SEIU President Dennis Rivera as co-chairmen of the “Medicaid Redesign Team.” (State Medicaid was $4 billion in the red because of Cuomo’s accounting gimmicks.)

Just six weeks before the governor’s appointment, Michael Dowling gave Cuomo a $5,000 campaign donation (12/14/19). (Dowling is also the CEO of Northwell Health – which received $10 million in state payments in 2019.)

Twenty-eight days before the governor made 1199SEIU president Dennis Rivera co-chairman of his Medicaid Team, the union gave $15,000 to Cuomo’s re-election fund (1/6/2020). Since 2014, 1199SEIU backed Cuomo with political endorsements and $95,250 in campaign cash.

Then, the pandemic hit. The Association and Cuomo’s healthcare power brokers/major campaign donors convinced the administration to transfer positive Covid-19 patients to nursing homes to relieve bed pressures on hospitals. 

An estimated 15,000 senior residents died in New York nursing homes even while the hospital association ran statewide advertising promoting Cuomo and the safety of hospitals.

Real Estate, Development, and Construction Companies

Between years 2011 and 2020, real estate tycoon Scott Rechler, owner of RXR Realty, LLC, his wife, children, and affiliated LLC businesses gave $540,000 to Cuomo’s campaign fund. Family donations amounted to $385,000 and multiple LLCs fundedanother $155,000.

Scott’s brother, Todd, Chief Construction and Development Officer at RXR Realty, also contributed an additional $90,000 to Cuomo during the period.

We found four real estate leases owned by RXR Realty affiliated LLCs and signed by two state agencies: Office of Inspector General and Commission on Judicial Conduct. These leases were signed in the years 2014, 2019, and 2020 and are worth $41 million with $13.7 million already paid out. (Note: In 2014, RXR bought the building and the state agencies were existing tenants.)

The public has a right to know whether Cuomo was serving the public interest or his private political interest when his administration negotiated these leases. Every single transaction is a potential conflict of interest.

Furthermore, in 2011, the governor appointed Rechler to the Board of the Port Authority of New York and New Jersey, where he became chairman. In 2017, the governor nominated Rechler to the Board of the Metropolitan Transit Authority (MTA) and he served until 2019.

Here’s another example:

CHA Consulting, Inc., founded as Clough, Harbour & Associates, gave Cuomo $195,000 between 2013-2015. Separately, state records show the firm received 47 state contracts for $134.7 million with $63.1 million already spent. We found $14 million in contracts given to the firm within one year of the campaign contributions.

Responding to our comment request, Michael Platt, General Counsel and Executive Vice President of CHA Consulting issue the statement: 

“CHA Consulting, Inc. has been providing high quality engineering services to the State of New York for more than 50 years. CHA has not made any campaign contributions to Governor Cuomo since 2015. Any depiction that CHA is receiving work from the State of New York because of campaign contributions is misguided and inaccurate.”

Big Four Accounting Firms - $360,000 in campaign cash

The independent accounting firms, Deloitte; Ernst & Young (EY); KPMG; and PriceWaterhouseCooper collectively gave Gov. Cuomo $360,000 in campaign donations during years 2014-2019. The firms reaped $258.8 million in state payments. 

Between 2013 and 2015, New York regulatory agencies and the governor investigated Deloitte, PwC, and EY for alleged wrongdoing. The firms paid $45 million and other penalties to settle the various claims.

Are these firms “independent” auditors with a fiduciary responsibility to taxpayers? We found that the firms coordinated their campaign cash to the governor giving the same amounts on the same days in the same years. 

Three of the Big Four – PwC, KPMG, and EY – each gave the exact same amount of campaign cash to Cuomo during the six-year period ($88,333.33). Deloitte contributed another $105,000.

Even in Illinois, where the number-one manufactured product is corruption, a 2011 law barred state vendors with contracts exceeding $50,000 from giving campaign donations to statewide officeholders.

New York has no general ban on politicians soliciting state vendors for campaign cash.

NY_Corruption_Mugshots_2

 

Big Banks – $196,100 in campaign cash

Citibank – As Attorney General of New York, Andrew Cuomo forced Citibank to funda $2 million student loan education fund administered by his office, threatened lawsuits over “free” checking, and along with the Securities and Exchange Commission, forced a $7.3 billion repurchase of allegedly fraudulent auction-rate securities.

Nevertheless, since 2014, Citibank donated $70,000 to the governor’s campaign fund and cleared $2.9 billion in state payments. Citi is the vendor for the state’s lucrative purchase and travel card business – a $4 billion contract spanning seven years until 2021.

Bank of America BAC -2.8% – In 2010, as Attorney General, Cuomo filed civil litigation of alleged fraud against Bank of America and their former chairman Ken Lewis for actions purchasing Merrill Lynch. Lewis eventually settled for $10 million and a three-year ban from serving in public companies.

However, since 2014, BofA gave $81,600 in campaign cash to Cuomo and reaped $11.5 million in state payments. Today, BofA is the issuer behind the lucrative New York Child Support Debt Card. 

JPMorgan Chase – JPMorgan Chase & Co JPM -1.9%. PAC donated $44,500 to the governor. Separately, the bank received $20 million in state payments. The bank provides lock box and banking services to the Department of Taxation, other services, plus a $200 million line of credit to the Long Island Power Authority.

Big Lawyers – top 10 firms donate $440,000 in campaign cash

We found ten law firms that reaped $10.4 million in state payments after giving $440,000 in campaign cash to the governor, all since 2014. These donations came directly from law firm accounts and did not include principals, partners, or key employees (unless noted).

Whiteman Osterman & Hanna received $3.3 million in state payments since 2014. The firm donated $13,750 to the governor’s campaign. 

During this period, the firm inked eighteen contracts from twelve state agencies including seven contracts with states colleges related to immigration legal work. 

In 2016, WHO Government Solutions (WHO), the lobbying arm of the law firm, represented Louis Ciminelli, a big Cuomo donor and developer – eventually convictedin the “Buffalo Billion” scandal. 

Nixon Peabody donated $83,635 to the governor’s campaign fund. Separately, the firm received $2.2 million in contracts for legal work. When adding donations from partners and employees since 2010, donations to Cuomo total $164,000.

Abrams Fensterman gave $25,129 in campaign donations to the governor. Separately, the firm collected $1.75 million in state payments. In 2011, Cuomo appointed managing partner Howard Fensterman to the Public Health and Health Planning Council. In 2014, around the time when Fensterman’s privately owned nursing homes were investigated, he gave $10,000 more to Cuomo’s campaign.

Barclay Damon gave $55,000 in campaign donations to the governor. Separately, the firm reaped $1.9 million in state payments. The firm contracted for $1 million to handle the St. Regis Mohawk land claims through the NY Department of State. Will Barclay, partner, is also the minority leader in the General Assembly. 

Orrick Herrington & Sutcliffe donated $5,000 to Cuomo and received $568,019 in state payments. Since 2011, the firm procured five contracts for a total value of $2.7 million. (Two more contracts flowed through the Comptroller, a separate state officer, for $3.3 million.)

Others prominent firms backing the governor and receiving state payments included: Boies Schiller & Flexner ($100,000); Phillips Lytle ($93,500); Jackson Lewis ($51,500); Manatt, Phelps & Phillips ($17,500); and Winston & Strawn ($5,000).

Cable and Telco Companies — $610,000 in campaign donations

In highly regulated industries, these five major cable and telephone companies reaped $233.9 million in state payments since 2014.

Comcast CMCSA -0.8% and affiliates donated $106,200 and NBC Universal UVV -0.8%, a Comcast company, donated another $106,200 to the governor’s campaign fund. Cuomo received $82,000 from the companies in January 2014; in February, Cuomo announced a state regulatory review of the Comcast/Time Warner merger then-valued at $45 billion.

Time Warner gave $75,000 in campaign donations to the governor and, separately, received $52.9 million in state payments. Since 2014, the company procured $82.5 million in state contracts with the largest in September 2019 – $49 million to provide teleconnectivity services.

AT&T gave $106,650 in campaign donations to the governor while reaping $37.7 million in state payments between 2014 and 2019. Since 2014, contracts include $44 million and $48 million for statewide umbrella coverage and telecommunication services. 

Verizon VZ -0.7% gave $30,000 in campaign donations to the governor and reaped $140.9 million in state payments. Since 2014, Verizon procured 25 contracts valued at $91 million.

Cablevision and its affiliate CSC Holdings collectively gave $155,000 and received $2.4 million in state payments. Owned by the Dolan family, they also had significant tax breaks on their ownership of Madison Square Garden.

The Dolans, who also own the New York Rangers and Knicks, gave individual donations of $135,000 to Cuomo since 2014. With the sale of Cablevision to Altice Media Solutions in 2016, donations to the governor by Cablevision Systems NY PAC stopped. 

LLC Loophole — $12.6 million in campaign cash

Since 2014, Cuomo solicited campaign cash from 1,225 individual limited liability companies (LLCs) to raise $12.6 million. Until January 31, 2019, when legislation finally closed the loophole, LLCs skirted the New York campaign finance law limiting corporate political donations to $5,000. 

Fully $1 in every $5 Cuomo raised between 2014 and 2019 flowed through this loophole.

However, the 2019 legislative reforms did not prevent professional partnerships (LLPs) from exceeding the $5,000 corporate limit. For example, large chunks of campaign cash continued to flow from law firms such as Nixon, Peabody LLP ($40,000); Belluck & Fox LLP ($40,000); Boies, Schiller & Flexner LLP ($25,000) and others between 2019 and the first half of 2020.

LLC_Campaign_Finance_Loophole

 

In all the examples identified above, no quid-pro-quo is alleged or implied; however, the patterns are troubling. In fact, the individual transactions are probably legal at arm’s length. 

But that’s precisely the problem. Politicians preside over, in essence, a legalized money-recycling scheme aimed at monetizing incumbent political power. 

Cuomo didn’t answer our question as to whether soliciting state contractors for campaign cash was ethical, and a senior aide, Rich Azzopardi, argued that the governor exerted no influence.

“Agency contracting is done at the agency level on the merits, by career civil servants and procurement professionals — with no input or influence from the Executive Chamber—and generally through a competitive bidding process.” 

Meanwhile, New York residents are left with skyrocketing taxes and an increasingly bleak future. 

We can blame Governor Cuomo, but he’s just a reflection of today’s broken culture of public service.  

Methodology: We matched companies donating to Andrew Cuomo For New York, Inc., as disclosed by the NYS Board of Elections, to state payment transactions – which are available for download on the NYS Comptroller’s website, Open Book New York. Separately, the Comptroller posts a searchable contract file also within the Open Book New York portal. To the extent that the information contains government errors, our report will reproduce those errors. No quid pro quo or illegal activity by any elected official, company or individual referenced in this piece is implied or intended. Andrew Cuomo was elected governor in 2010. Every person or entity in this piece was given an opportunity to provide comment.

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