Tallying the Contributions to N.Y.C.’s Comptroller Race

Among the millions of dollars raised by four Democratic contenders for the office of New York City comptroller, public finance professionals have played a small role, contributing thousands of dollars, campaign finance records show.

Tomorrow, voters in the Democratic primary will make their choice for one of four City Council members to become the city’s fiscal watchdog. With recent polls showing none of the candidates approaching the 40% of the vote needed to secure the party nomination, tomorrow night could be a prelude to a Sept. 29 runoff before facing Republican Joe Mendola in November.

In addition to overseeing the city’s pension funds and auditing city agencies, the comptroller helps run bond sales on New York City’s general obligation, ­Transitional Finance Authority and ­Municipal ­Water Finance Authority credits, which are projected to total $8.65 billion in the current fiscal year, and is involved in the selection of underwriters and bond counsel. The comptroller is also an ex-officio member of the boards of the city’s ­Industrial ­Development Agency and the Capital Resource Corp., which issue bonds for economic development projects.

Of all the candidates, John Liu has raised the most private contributions, $3 million, and received $1 million of public matching funds, according to campaign finance records filed with the New York City Campaign Finance Board. Campaign finance data for the current comptroller race stretches back to 2006. Candidates can roll unused contributions from previous campaigns into their current campaign. 

Neck-and-neck in fundraising are ­Melinda Katz, who has raised $2.6 million and received $758,410 in matching funds, and David Yassky, who raised $2 million and received $1.8 million in matching funds. David Weprin has raised $1.9 million and received $928,771 in matching funds.

All of these candidates have received contributions from individuals at firms that work as bankers or attorneys in public finance. However public finance is generally only one part of what those firms do and most of those individual contributors do not appear to be in public finance, based on a comparison of campaign finance records and The Bond Buyer’s Municipal Marketplace directory, which lists public finance professionals.

Dick Dadey, executive director of Citizens Union, a good government group, said that there is always a potential for a conflict of interest where campaign contributions are made by those who do business with the city.

“People in this position do not give money simply because they admire the candidate but also because they want to develop a relationship with someone that they may do business with,” Dadey said. “Often candidates running for office come into contact for the first time with people who do business with the city through campaign contributions.”

Weprin spokesman Andrew Moesel that the amount of money taken in from people involved in city bond transactions is tiny compared to his total fundraising. He said that as comptroller, Weprin would “institute objective criteria to screen entities before the awarding of any contract, weeding out any principals with questionable ties or insufficient credentials.”

Ben Branham, a spokesman for Katz, said that raising money was an unfortunate part of running for office. “But Melinda, like her three opponents, is a professional and has never allowed any contribution to affect the way she has governed or taken stances,” he said.

A Liu spokeswoman said if elected, he would ban contributions from individuals who do business with the comptroller’s office.

The Yassky campaign did not respond to queries for comment.

New York City last chose bond counsel firms in 2004 through a request for proposals. Sidley Austin LLP is bond counsel on New York City GO and TFA issuance. The firm has worked on $25.46 billion of bond deals for the two issuers since 2006, according to Thomson Reuters. Orrick Herrington & Sutcliffe LLP is bond counsel to the MWFA. The firm has worked on $8.37 billion of bond deals since 2006 for the water authority, according to Thomson Reuters.

The IDA chose four firms last year as bond counsel on its deals through an RFP process. Three firms, Hawkins Delafield & Wood LLP, Nixon Peabody LLP and ­Winston & Strawn LLP, had been approved previously and remained. The IDA added Hiscock & Barclay LLP. The original three firms worked on $3.04 billion of bonds deals for the IDA since 2006.

Individuals at these firms have contributed a total of $16,599 to the four campaigns, according to campaign finance records. Among these, Winston & Strawn attorneys Henry S. Holmes 3d and James Normile both contributed $500 each to Weprin. Holmes is also a board member of the Port Authority of New York and New Jersey. Albany-based Jerry Weiss of Hiscock & Barclay gave Weprin $2,000. Howard I. Berkman of Hawkins Delafield gave $175 to Katz. 

Some public finance attorneys who contributed to the campaigns and who did not serve as bond counsel on city issuer deals nonetheless had some involvement in those transactions. For example, Steven Polivy of Akerman Senterfitt LLP serves as the attorney to Albee Development LLC, which is currently seeking $20 million of bonds through the Capital Resources Corp. and served as attorney to Bronx Parking ­Development Company LLC, which sold $237 million of tax-exempt bonds issued by the IDA to develop a parking garage across from the new Yankee Stadium.

Polivy contributed to $400 to Yassky and $100 to Katz. Jonathan Ballan, attorney for Mintz, Levin Cohn Ferris Glovsky and Popeo PC, who represented the New York Yankees, which used $1.2 billion of tax-exempt bonds sold by the IDA to finance its new stadium, gave $250 to Weprin.

Some other notable public finance attorneys who contributed to the campaigns include Blank Rome LLP attorney and Citizens Budget Commission trustee Linda D’Onofrio, who donated $675 to Weprin and $500 to Katz, and Squire Sanders & Dempsey LLP attorney Kenneth Bond, who donated $800 to Weprin.

 Financial adviser Doreen Frasca of Frasca & Associates, who is also a board member of the state ­Metropolitan ­Transportation Authority, gave $1,000 to Weprin.

Municipal Securities Rulemaking Board rule G-37 bars broker-dealer firms from doing negotiated underwriting with an issuer for two years if a muni professional from the firm has made a campaign contribution to an issuer official or candidate that has the ability to influence the award of bond business.

Donations of  no more than $250 per election are permitted if the individual is eligible to vote for the candidate. City campaign finance rules that went into effect in 2008 also prohibit individuals with business before the city from contributing more than $400 to a campaign.

Employees at Morgan Stanley, which is an underwriter of city GO and TFA bonds, contributed $3,215 to the campaigns, including $250 to Melinda Katz from public finance banker Paula Dagen. Jonathan White a banker at Siebert Brandford Shank & Co., which is also an underwriter of city GOs, gave $250 to Yassky.

Steven Kantor of First Southwest Co. gave $250 to Yassky, for whom he can vote. Employees at Merrill Lynch & Co., which is also a member of city underwriting pools, contributed $1,739 to candidates, including $500 from public finance banker Sonia ­Toledo to Liu. Toledo’s contribution does not appear to be in violation of G-37 because it was made in 2007, two years before Liu declared his candidacy for comptroller.

Merrill spokesman Bill Halldin said that the contribution “was entirely proper under all regulations and reviewed internally at the time and approved by Merrill Lynch.”

“The general principle is you look at the office the for which the person is running,” said MSRB general counsel ­Ernesto ­Lanza, speaking generally about the rule. “We don’t have any guidance where someone is running for one thing and then changes to another.”

Lanza said he did not think a dealer would be held accountable for changes in candidacy that the dealer had no reason to know about.

Samuel Ramirez, president of Samuel A. Ramirez & Co., which is an underwriter on MWFA deals, gave $250 to Weprin. Bernard Beal, chief executive officer of M.R. Beal & Co., which is also a water authority underwriter, gave $250 to Yassky, and the firm’s president, Stanley Grayson, gave $100.

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