After an “unbelievable” closed-door session, the New Haven Democracy Fund slapped a $500 fine on the mayor’s campaign for a late filing. Then it gave him a pass for “flying in the face of” the spirit of the clean elections law by moving cash into a political action committee to support aldermanic candidates.
The decisions came during a three-hour meeting Monday evening of the Democracy Fund, the board set up to administer the city’s public financing program for municipal campaigns.
The voluntary program gives grants to qualifying mayoral candidates who agree to limit campaign spending. The aim is to curtail the influence of lobbyists, contractors and political action committees and level the playing field for democracy.
Mayor John DeStefano championed the clean elections program, which debuted in the 2007 election cycle.
Monday, DeStefano’s campaign was scrutinized for two possible violations of the program that he helped create by board members he appointed to oversee it.
DeStefano won election earlier this month to a historic ninth term. He has been the only one to participate in the program so far; opponents have failed to drum up enough contributions to qualify.
Late Reports
First on the agenda Monday, DeStefano campaign staffers tried to persuade the Democracy Fund not to penalize the campaign for failing to hand in campaign finance forms on time.
The 2009 reelection campaign failed to file five reports on time. Reports that were due on April 10, July 10 and Sept. 10 didn’t come in until Sept. 29, according to Robert Wechsler, the Democracy Fund administrator. Two subsequent reports came in 10 and 20 days late.
The filings are important, board Chairman Caleb Kleppner (pictured) stressed, because they’re the only way that the board can determine whether the mayor is accepting and spending money in keeping with the guidelines of the program. If the reports aren’t filed promptly, it maybe too late to correct errors, he argued.
The total penalty the board could levy would be $5,850 plus 12 percent interest.
DeStefano campaign treasurer Richard Epstein, who’s better known in his role as a city police commissioner, defended the campaign’s actions. He said all campaign finance reports were filed at the city clerk’s office, even if copies had not been sent to the Democracy Fund.
“All the info was public. It was there,” said Epstein (pictured). The person responsible for filing the reports with the Democracy Fund, DeStefano campaign manager Keya Jayaram, could not be reached Monday to explain why the reports were missing. She was visiting Argentina, Epstein said.
Epstein said no one told him until Nov. 13 that any reports were late. When he was made aware of the omission, he sent the reports promptly.
Attorney Gerald Weiner, who was present at the meeting representing DeStefano’s 2009 campaign, pleaded with the board not to levy any fines. The board should have known to contact Epstein as soon as any reports were late, he reasoned.
In a memo written to the board, Wechsler (pictured) sought not to let the campaign off the hook. He lobbied to charge the campaign a reduced fee of $2,450, with higher penalties for the reports that came in late after mid-September, when Wechsler started sending a flurry of emails notifying the campaign of late filings.
Board member Dennis Curtis (at left in photo at top of this story), who oversaw Los Angeles’ campaign finance program in the 1990s, declared the omission a “campaign screwup.”
What should the penalty be?
Closed-Door “Democracy”
Before making that decision, the Democracy Fund took a surprising move to go into executive session, where the board meets behind close doors and the public is booted out of the room.
Four of the six Democracy Fund board members were present Monday.
Board member Steve Kovel (pictured) made a motion to go into executive session to “discuss moving forward” toward a consensus on whether the to penalize DeStefano’s campaign. The board approved the measure by a vote of 4 to 0.
Several members of the public noted that this was an outright violation of the state Freedom of Information Act. The board for the session claimed that the reason fell into the category of discussing “litigation” because they were discussing a penalty.
State law limits the use of closed-doors sessions to five narrow purposes. One of them is to discuss “strategy and negotiations regarding pending claims and litigation,” according to a pocket Freedom of Information Commission handbook handed to the board to no avail. None of the valid reasons appeared to fit the vaguely worded justification articulated Monday evening for kicking the public out.
“Unbelievable!” declared one experienced media lawyer as eight members of the public filed out of the room.
“This is the Democracy Fund! This is supposed to be about open process!” protested Darnell Goldson, the alderman-elect in West Rock’s Ward 30.
The session lasted less than 10 minutes. After the doors reopened, Chairman Kleppner announced that the board had made a decision to take a vote that night about the campaign penalty. (Weiner had asked them to table discussion until Jayaram returned from Argentina.)
Kovel made a motion to slap DeStefano a symbolic fine of one dollar.
Curtis (at left in photo) upped the ante to $500, which gained approval by a 3 to 1 vote, with Kovel objecting.
Asked later about the apparent illegality of the closed-door session, Curtis replied, “So, we did a terrible thing.” He countered that board members kept their conversation limited to whether they should vote that night.
“You didn’t miss much,” he said.
A “Loophole”?
The board turned its attention to another possible violation of the clean elections law. This one concerned the last election cycle, in 2007.
After the election was over, DeStefano’s campaign gave $12,500 in left-over campaign money to a political action committee run by the mayor’s chief of staff. The committee, called the James Hillhouse Society, used some of that money to support candidates who faced challenges from anti-administration opponents in 2009.
The board didn’t know about the expenditure until Wechsler read this Independent story revealing the money trail, he said. He decided to discuss a the possible violation.
Attorney Elia Alexiades (pictured) approached the table to defend the mayor’s 2007 campaign along with mayoral staffer Adriana Arreola, who served as the campaign manager that year.
Alexiades pointed to a section of the Democracy Fund law that states that “public matching funds shall be used exclusively for qualified campaign expenditures.”
Contributing to a PAC is not a “qualified campaign expenditure.” The Democracy Fund ordinance specifically prohibits giving money to a “political committee.”
Alexiades said the mayor’s campaign was not in violation because the rules apply only to public funds. The campaign used its public funds for appropriate purposes, then used private funds to donate to the PAC, he argued. According to Democracy Fund policy, he asserted, “public funds are deemed spent first.”
Board members took issue with that assertion: They said once a campaign signs a contract to take part in the program, it must restrict its spending to the “qualified” purposes, such as paying for campaign food, posters, and poll workers.
Arreola said the campaign was at a loss for what to do with the extra money. The campaign spent the maximum $250 in qualified expenditures after the election, but staffers didn’t know what to do with the rest. So they consulted state statutes, and found that giving to a PAC was permitted, as long as the PAC doesn’t give the money back to the mayor. They settled on giving the money to the Hillhouse PAC, as allowed by state law, she said.
Curtis said even if the $12,500 check was technically legal, it appears to “fly in the face of the purposes” of the clean elections law.
Alderman-Elect Goldson (pictured) agreed.
Giving money to a PAC is “totally against what the intent was of this ordinance,” he said.
He felt the effects on the ground, when the mayor’s money was used to try to stomp out his “anti-administration” campaign. Using money from the mayor’s 2007 campaign, the James Hillhouse Society sent a $375 check to prop up his opponent, Carlton Staggers, in a heated West Rock race. Goldson said he couldn’t afford lawn signs, while his opponent could.
Goldson seconded the call to clarify the city policy. He urged the board to do it quickly, before the public loses faith in the idealistic clean campaign effort.
Kleppner agreed that the practice was not in keeping with the spirit of the ordinance. He concluded that the DeStefano campaign either took advantage of a “loophole” or “violated” the law.
“It’s a loophole,” opined Kovel.
The problem boils down to this, members agreed: The Democracy Fund ordinance does not give enough guidelines about what a campaign is supposed to do if it has extra money left over after the election. Should there be limits on how that money is spent, beside the limits set by state law?
The Democracy Fund board agreed not to hold the DeStefano campaign accountable for the apparent loophole. By a 4 – 0 vote, members agreed to conclude the investigation into the Hillhouse contribution without finding probable cause.
The board plans to meet to clarify the Democracy Fund’s policy on this issue at a later date.
The board also plans to consider a new revelation, that the mayor’s 2009 campaign was using a second PAC, called Elm & Oak PAC, to pay for the mayor’s campaign staff and campaign headquarters rent, thereby bypassing the Democracy Fund rules. Click here for Elizabeth Benton’s Register story on the topic.
Meanwhile, Goldson pledged to monitor the issue of siphoning money through PACs to thwart anti-administration candidates.
“I’ll be watching” from across the hall at the aldermanic chambers, he said, “to make sure those kind of tricks aren’t used against me again.”
This entire board should be dismissed. How can you oversee and enforce clean elections when you have the chief executive of the city manipulating the rules, prostituting the intent of the Democracy Fund with board approval and then hatch a deal behind closed doors in clear violation of the state's laws? It's surreal. If any of them had an ounce of personal integrity, they would all resign, especially David Curtis. ...