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July 25, 2012
Tyrone SellersPeople for Leroy Comrie
Dear Mr. Sellers:
Please find attached the New York City Campaign Finance Board’s (the “CFB” or “Board”) Final Audit Report for the 2009 campaign of Leroy G. Comrie (the “Campaign”). The report is based on a comprehensive review of the Campaign’sfinancial disclosure statements and submitted documentation, and incorporates the Board’s final determination of June 21, 2012 (attached). As detailed in the report, the Campaign failed to demonstrate compliance with the Campaign Finance Act (the “Act”) and the Rules of the Board (the “Rules”).
As detailed in the attached Final Board Determination, at this time the Campaign must repay the following:
The full amount owed must be paid no later than August 24, 2012. Please send acheck in the amount of $28,673.43, payable to the “New York City Election Campaign Finance Fund,” to: New York City Campaign Finance Board, 40 Rector Street, 7th Floor, New York, NY 10006.
If the CFB is not in receipt of the full amount owed by August 24, 2012, the Candidate’s name and the amount owed will be posted on the CFB’s website. The CFBalso may initiate a civil action to compel payment. In addition, any principal committee of the Candidate will not be eligible to receive public funds for any future election until the full amount is paid. Further information regarding liability for this debt can be found in the attached Final Board Determination.
Public Funds Repayment (Final Bank Balance) $12,401.43Penalties AssessedTotal Owed
$16,272.00$28,673.43
Tyrone SellersPeople for Leroy Comrie
- 2 - July 25, 2012
The January 15, 2010 disclosure statement (#16) was the last disclosure statement the Campaign was required to file with the CFB for the 2009 elections. The Campaign is required to maintain its records for six years after the election, and the CFB may require the Campaign to demonstrate ongoing compliance. See Rules 3-02(b)(3), 4-01(a), and 4-03. In addition, please contact the Board of Elections for information concerning their separate filing requirements.
The CFB thanks you for your cooperation during the 2009 election cycle. Should you have any questions about the enclosed report, please contact the Audit Unit at 212-306-5250 or [email protected].
Sincerely,
Julius PeeleDirector of Auditing and Accounting
c: Leroy G. Comrie
People for Leroy Comrie
Lawrence A. Mandelker, Esq.Kantor, Davidoff, Wolfe, Mandelker, Twomey & Gallanty, P.C.
Attachments
1
July 25, 2012
CAMPAIGN FINANCE BOARDFINAL AUDIT REPORT OF
PEOPLE FOR LEROY COMRIE
Among the purposes of the Act are to diminish the role and influence of private
money in New York City elections, to increase the information available to the public
about elections and candidates' campaign finances, and to reduce the potential for actual
or perceived corruption. The CFB is a nonpartisan, independent city agency that serves
the public interest by enhancing the role of New York City residents in the electoral
process. All candidates for the five covered offices - mayor, public advocate,
comptroller, borough president, and City Council member - are required to disclose all
campaign activity to the CFB.
BACKGROUND
All candidates must adhere to strict contribution limits and the ban on
contributions from corporations, and beginning January 1, 2008, partnerships and limited
liability entities. Additionally, participating candidates are prohibited from accepting
contributions from unregistered political committees. The CFB also administers the
voluntary Campaign Finance Program (the “Program”). Candidates who voluntarily
participate in the Program can qualify to have private contributions matched with public
money in exchange for agreeing to strict spending limits.
People for Leroy Comrie 2 July 25, 2012
The table below provides detailed information about the Campaign:
CAMPAIGN INFORMATION
Name: Leroy G. Comrie ID: 420Office Sought: City Council District: 27Classification: Participant Certification Date: June 3, 2009Committee Name: People for Leroy Comrie Ballot Status: Primary, GeneralPrimary Election Date: September 15, 2009 General Election Date: November 3, 2009Other Committees: No Party: Democratic, Working Families
Public Funds:Received: $88,330
Contribution Limit: $2,750
Returned: $0Expenditure Limit:2006-2008: $43,0002009 Primary: $161,0002009 General: $161,000
People for Leroy Comrie 3 July 25, 2012
The overall objective of the CFB’s audit was to determine whether the Campaign
complied with the Act and Rules. Specifically, CFB staff evaluated whether (1) the
Campaign accurately reported financial transactions and maintained adequate books and
records; (2) the Campaign adhered to contribution limits and prohibitions; (3) the
Campaign disbursed funds in accordance with the Act and Rules and complied with the
expenditure limits; and (4) the correct amount of public funds was received, any
additional funds are due, or any return of public funds is required in accordance with the
Act and Rules.
OBJECTIVES
Prior to the election, CFB staff performed an initial review of the Campaign’s
reporting and documentation of contributions for public funds eligibility and compliance
with the Act and Rules. After the election, CFB staff performed an audit of financial
disclosure statements one through sixteen (see Appendix #1), covering the period from
January 13, 2007 through January 11, 2010. The audit was conducted in accordance with
generally accepted government auditing standards (GAGAS) and included tests of
records and other auditing procedures as necessary. This audit was performed in
accordance with the audit responsibilities of the CFB as set forth in Administrative Code
§3-710.
SCOPE AND METHODOLOGY
CFB staff examined the bank statements submitted by the Campaign from June 1,
2007 through May 31, 2012 and reconciled transactions to the Campaign’s disclosure
statements during this period to verify that all financial transactions were accurately
reported and documented.
People for Leroy Comrie 4 July 25, 2012
CFB staff conducted a comprehensive review of all financial transactions reported
in the Campaign’s disclosure statements to determine whether contribution limits and
prohibitions were adhered to. Additionally, CFB staff reviewed the Campaign’s reported
expenditures to ensure that the Campaign disbursed funds in accordance with the Act and
Rules and complied with the expenditure limits.
CFB staff reviewed the Campaign’s eligibility for public matching funds, all
matchable contribution claims by the Campaign for compliance with the Act and Rules,
and the Campaign’s disbursements of public funds. The review was done to ensure that
the correct amount of public funds was received by the Campaign, and to determine
whether any additional public funds are due or whether any return of public funds by the
Campaign is necessary.
On November 30, 2010, CFB staff issued a Draft Audit Report to the Campaign
that contained preliminary findings of non-compliance with the Act and Rules and
recommended corrective actions. The Campaign subsequently responded to the Draft
Audit Report.
Based on CFB staff recommendations and the Campaign’s responses, the Board
issued this Final Audit Report.
People for Leroy Comrie 5 July 25, 2012
The Campaign failed to demonstrate compliance with the Campaign Finance Act
and the Rules of the Board as detailed below:
CONCLUSION
Disclosure Findings - Accurate public disclosure is an important part of the CFB’s mission. Findings in this section relate to the Campaign’s failure to completely and timely disclose the Campaign’s financial activity.
� The Campaign did not report or inaccurately reported financial transactions to the Board (see Finding #1).
� The Campaign did not report all advances correctly (see Finding #2).
Contribution Findings - All campaigns are required to abide by contribution limits and adhere to the ban on contributions from prohibited sources. Further, campaigns are required to properly document and disclose all contributions. Findings in this section relate to the Campaign’s failure to comply with the requirements for contributions under the Act and Rules.
� The Campaign did not provide intermediary contribution affirmation statements for contributions received through intermediaries and/or report that contributions were received through intermediaries (see Finding #3). The Board found the Campaign in violation and assessed a $100 penalty for failure to provide intermediary statements and a $100 penalty for failure to report intermediaries.
� The Campaign did not deposit all contributions in an account listed on its Certification (see Finding #4).
� The Campaign did not document the fair market value of in-kind contributions received and/or did not disclose in-kind contributions received (see Finding#5).
� During the pre-election period, the Campaign accepted the following unregistered political committee contributions: Friends of Bill Scarborough, $65 on March 27, 2009; and Shirley Hunter [sic] for State Senate, $100 on September 18, 2008. The Campaign refunded Friends of Bill Scarborough onJuly 10, 2009 and did not refund Shirley Hunter [sic] for State Senate. The Board found the Campaign in violation and assessed $600 in penalties: Friends of Bill Scarborough, $250; and Shirley Hunter [sic] for State Senate, $350.
� During the pre-election period, the Campaign accepted three over-the-limit contributions. See Exhibit I. The Board found the Campaign in violation and assessed $375 in penalties, $125 for each violation.
People for Leroy Comrie 6 July 25, 2012
� During the pre-election period, the Campaign accepted a contribution that exceeded the applicable $250 City Council Doing Business Limit from the following contributor, and failed to issue a refund within 20 days of receiving notice from the CFB:
The Campaign refunded the over-the-limit portion on August 7, 2009, which was after the 20-day time limit. The Board found the Campaign in violation and assessed a $125 penalty.
Expenditure Findings - Campaigns participating in the Program are required tocomply with the spending limit. All campaigns are required to properly disclose and document expenditures and disburse funds in accordance with the Act and Rules. Findings in this section relate to the Campaign’s failure to comply with the Act and Rules related to its spending.
� The Campaign exceeded the applicable $161,000 expenditure limit for the primary election (see Finding #6). The Board found the Campaign in violation and assessed a $11,172 penalty.
� The Campaign made cash disbursements greater than $100 (see Finding #7).The Board found the Campaign in violation and assessed a $50 penalty.
� The Campaign may not have properly reported and documented its joint expenditures (see Finding #8).
� The Campaign did not demonstrate that activity was independent of the Campaign (see Finding #9). The Board found the Campaign in violation and assessed a $3,750 penalty.
Statement/
NameSchedule/ Date of
Transaction IDRefund
NotificationContribution
Due Date
Amount
AmountOver-the-
Manshel, AndrewLimit
7/ABC/R0001546 04/01/09 04/21/09 $400 $150
People for Leroy Comrie 7 July 25, 2012
1.
FINDINGS AND RECOMMENDATIONS
Campaigns are required to report every contribution, loan, and other receipt
received, and every disbursement made. See Administrative Code §3-703(6) and Rule 3-
03. In addition, campaigns are required to deposit all receipts into an account listed on
the candidate’s Certification. See Administrative Code §3-703(10) and Rule 2-06(a).
Campaigns are also required to provide the CFB with bank records, including periodic
bank statements and deposit slips. See Administrative Code §§3-703(1)(d), (g), and
Rules 4-01(a),(b)(1),(f).
Financial Disclosure Reporting - Discrepancies
The Campaign provided CFB staff with its bank statements covering the period
June 1, 2007 through May 31, 2012:
a) The Campaign reported the following transaction that does not appear on its bank
statements:
b) The Campaign did not properly report the following transactions (see also
Findings #4 and #7):
BankChase
Account TypeChecking
Check No./Name
Statement/
TransactionSchedule/ Paid
Transaction ID DateBoard of Elections
Amount1146 10/F/R0002505 08/06/09 $118.75
ReportedName
ActualTransaction Type
Statement/
Transaction TypeSchedule/
Transaction IDAmount
DatePowell, Gerald
ReportedIn-kind contribution Monetary contribution 10/D/R0002513 08/01/09 $80.00
Paul, Rufus In-kind contribution Monetary contribution 10/D/R0002514 08/01/09 $5.00Morgan, Claudette In-kind contribution Monetary contribution 10/D/R0002515 08/01/09 $50.00Powell, Gerald In-kind contribution Monetary contribution 10/D/R0002516 08/01/09 $20.00Lewis, Kenny In-kind contribution Monetary contribution 10/D/R0002517 08/01/09 $100.00
Total $255.00
People for Leroy Comrie 8 July 25, 2012
c) The Campaign did not report the following expenditures:
� See also Finding #7.
a) For each transaction reported in the Campaign’s disclosure statements but not
appearing on the Campaign’s bank statements, you must provide evidence to
show that the transaction cleared the bank (i.e., a copy of the front and back of the
check, or the missing bank statement), was reported in error, or amend your
disclosure statement to void the check and forgive the expenditure payment. Any
forgiven liabilities will be considered an in-kind contribution.
Previously Provided Recommendation
b) For inaccurately reported transactions, you must amend your disclosure
statements to accurately report the transactions.
c) You must amend your disclosure statements to report these unreported
transactions.
Please note that any newly entered transactions will only appear as new
transactions in an amendment to the last disclosure statement, even if the transaction
dates are from earlier periods. Also note that the Campaign must file an amendment for
each disclosure statement in which transactions are being modified. Once all data entry
is completed, you should run the Modified Statements Report in C-SMART to identify
the statements for which amendments must be submitted. If any new transactions have
been added, you must amend Disclosure Statement 16.
Check No./ PaidTransaction DateDexter Sanders
Amount08/06/09 $80.00
Mona Lisa The Art of Photography* 08/06/09 $175.00Total $255.00
People for Leroy Comrie 9 July 25, 2012
b, c)
a) The Campaign explained that check number 1146 was issued to the Board of
Elections (BOE) but it did not cash the check. The Campaign stated that it
contacted the BOE to inquire whether a replacement check should be issued or
whether the liability would be forgiven. The Campaign stated that it never
received a response from the BOE.
Campaign’s Response
b) The Campaign stated that five individuals paid for the services rendered by
Dexter Sanders and Mona Lisa Photography. The Campaign submitted monetary
contribution cards for the individuals and a handwritten note dated August 1,
2009 that was signed by the Campaign and Lisa Hall from Mona Lisa
Photography. The note indicated that Lisa Hall was paid in cash for her services
from the funds collected at the August 1, 2009 fundraiser.
c) The Campaign stated it reported the expenditures as in-kind contributions.
a) The Board has taken no further action on this matter other than to make it a part
of the Candidate’s record with the Board.
Board Action
See Finding #7.
2.
For each advance, campaigns are required to report the name and address of the
person making the purchase (the advancer), the amount, and the name of the vendor from
whom the purchase was made. See Administrative Code §§3-703(1)(g), 3-708(8) and
Rule 3-03(c)(3).
Advances
People for Leroy Comrie 10 July 25, 2012
The Campaign’s reporting indicates that the expenditures listed on Exhibit II may
actually be advances.
You must amend your disclosure statements to report the transactions as
advances, and the advance repayments with the name and address of the advancer and the
name and address of the vendors from whom the purchases were made.
Previously Provided Recommendation
Campaign’s Response
The Campaign stated that it corrected the transactions. However, the Campaign’s
filings with the CFB do not show that the transactions were modified to report the
advance purchases correctly.
The Board has taken no further action on this matter other than to make it a part
of the Candidate’s record with the Board.
Board Action
3.
Campaigns are required to report all contributions delivered or solicited by an
intermediary. Intermediaries are people who solicit and/or deliver contributions to
campaigns. See Administrative Code §3-702(12), 3-703(6) and Rules 3-03(c)(1) and (7).
Intermediary Statements and Possible Unreported Intermediaries
Campaigns are required to provide a signed intermediary affirmation statement for each
intermediary containing the intermediary’s name, residential address, employer and
People for Leroy Comrie 11 July 25, 2012
business address, names of the contributors, the amounts contributed and specific
affirmation statements. See Rule 4-01(b)(5).
a) CFB staff’s review of the contribution cards provided by the Campaign indicated
that the Campaign may not have reported four intermediaries for the contributions
shown on Exhibit III.
b) A review of the Campaign’s response to the Draft Audit Report revealed that the
Campaign did not submit intermediary affirmation statements for 15 contributors
shown on Exhibit III.
a) You must indicate how each contribution was solicited and/or delivered. If they
were solicited and/or delivered by an intermediary, you must amend your
disclosure statements to reflect this information and provide an intermediary
contribution statement for each previously unreported intermediary. You should
also explain the fundraising methods used to solicit these contributions, including
the nature of Women for Comrie and its role in fundraising.
Previously Provided Recommendation
b) The Draft Audit Report did not include this finding.
Campaign’s Response
a) The Campaign stated that “Women for Comrie” was a group of women in the
district who organized a fundraiser for the Campaign and solicited contributions
by word of mouth. The Campaign stated that it amended its disclosure statements
to report the individuals listed on Exhibit III as intermediaries. However, the
Campaign failed to report four intermediaries.
People for Leroy Comrie 12 July 25, 2012
b) The Campaign did not provide intermediary statements for the intermediaries
reported with its response to the Draft Audit Report.
a) The Board found the Campaign in violation and assessed a $100 penalty for
failing to report intermediaries.
Board Action
b) The Board found the Campaign in violation and assessed a $100 penalty for
failing to provide intermediary affirmation statements.
4.
Campaigns are required to deposit all contributions into an account listed on the
candidate’s Filer Registration or Certification. See Administrative Code § 3-703(10) and
Board Rules 1-04(b) and 2-01(a). The Campaign stated that it did not deposit the
following cash contributions, and instead used them to pay vendors directly (see also
Findings #1b and #7):
Failure to Deposit Contributions
You must explain and provide evidence as to why this does not constitute a
violation of Board Rules.
Previously Provided Recommendation
Statement/
NameSchedule/ Received
Transaction IDAmount
DatePowell, Gerald
Reported10/D/R0002513 08/01/09 $80.00
Paul, Rufus 10/D/R0002514 08/01/09 $5.00Morgan, Claudette 10/D/R0002515 08/01/09 $50.00Powell, Gerald 10/D/R0002516 08/01/09 $20.00Lewis, Kenny 10/D/R0002517 08/01/09 $100.00
Total $255.00
People for Leroy Comrie 13 July 25, 2012
Campaign’s Response
The Campaign stated that the contributions were not cash donations. The
Campaign explained that five individuals covered the costs for two expenditures during a
Campaign event; therefore, the Campaign reported the transactions as in-kind
contributions. However, the Campaign documented the donations by submitting
monetary contribution cards from each of the five individuals.
See Finding #7.
Board Action
5.
In-kind contributions are goods or services provided to a campaign for free, paid
by a third party, or provided at a discount not available to others. The amount of the in-
kind contribution is the difference between the fair market value of the goods or services
and the amount your Campaign paid. Liabilities for goods and services for the Campaign
which are forgiven, in whole or part, are also in-kind contributions. In addition, liabilities
for goods and services outstanding beyond 90 days are in-kind contributions unless the
vendor has made commercially reasonable attempts to collect. An in-kind contribution is
both a contribution and expenditure subject to both the contribution and expenditure
limits. See Administrative Code §3-702(8) and Rules 1-02 and 1-04(g). Volunteer
services are not in-kind contributions. See Administrative Code §3-702(8) and Rule 1-
02.
Unreported In-Kind Contributions
Campaigns are required to report all in-kind contributions they receive. See
Administrative Code §3-703(6) and Rule 3-03. In addition, campaigns are required to
People for Leroy Comrie 14 July 25, 2012
maintain and provide the CFB with documentation demonstrating the fair market value of
each in-kind contribution. See Administrative Code §3-703(1)(d),(g) and Rules 1-
04(g)(2) and 4-01(c).
In response to the CFB staff’s letter dated October 16, 2009 (see Exhibit VII)
regarding alleged non-independent activity that occurred at or involved Guy R. Brewer
United Democratic Club (“GRBDC”), the Campaign submitted an affidavit by the
Candidate on November 4, 2009 and attached an invoice (see Exhibit IV) dated
September 15, 2009 from the GRBDC for $1,200. The invoice covers “June 15, 1009
[sic] to September 15, 2009 4 months @ $300 per month = $1,200.” The Campaign also
provided a copy of a cancelled check to GRBDC for $1,200. The affidavit stated that the
Campaign “rented a space from the GRBDC from June 15 – September 15, 2009 for
$300/mo. as its headquarters…which, upon information and belief, reflects its estimated
value.” The period from June 15 to September 15, 2009 reflects a period of three
months, not four; therefore, it is unclear whether the Campaign paid fair market value for
the space.
Further, in 2003, the Candidate’s campaign committee, Friends of Comrie 03,
appears to have paid GRBDC approximately $1,500 per month for the use of GRBDC.
Therefore, it appears that in 2009 the Campaign may have received an unreported in-kind
contribution from GRBDC.
You must address the following:
Previously Provided Recommendation
1) Clarify the monthly rent paid for the use of the GRBDC in 2009.
People for Leroy Comrie 15 July 25, 2012
2) Substantiate that this amount reflects the fair market value for the use of these
premises.
3) Where did the Campaign operate from prior to June 15, 2009?
4) Why did the Campaign fail to report an outstanding liability to the GRBDC
beginning in June 2009?
5) If the invoice from GRBDC was dated September 15, 2009, why did the
Campaign fail to report the expenditure until disclosure statement #14, covering
the period September 29 – October 19, 2009?
6) Explain why payments for use of the GRBDC in 2009 appear to be significantly
less than that paid by Friends of Comrie 03 in 2003.
If use of the GRBDC was provided to your Campaign free of charge or at a
discount/below market rate, you must amend your disclosure statement to report the
difference between the fair market value and the amount paid by the Campaign as an in-
kind contribution.
Campaign’s Response
The Campaign stated that it agreed to occupy the GRBDC space for three months
at a rate of $300 per month, but the Campaign was not able to vacate until October 15,
2009. The Campaign explained that the submitted invoice was erroneously dated
September 15, 2009 and that it should have been dated October 15, 2009. Therefore the
amount due to GRBDC was $1,200 (4 months x $300). The Campaign stated that it
could not substantiate the amount GRBDC charges other tenants, but that the 2009
Campaign occupied one-third of the GRBDC space, in contrast to 2003, when it occupied
the full space. The Campaign stated that prior to June 15, 2009, its operations were
People for Leroy Comrie 16 July 25, 2012
conducted at the Candidate’s home. The Campaign stated that “by choice of the
GRBDC” it was invoiced upon vacating the GRBDC premises on October 15, 2009.
The Board has taken no further action on this matter other than to make it a part
of the Candidate’s record with the Board.
Board Action
6.
CFB Program participants must abide by strict limits on the amount of money
they can spend on their campaigns. An expenditure is considered made when the good
and/or service is received, used or rendered regardless of when payment is made. Certain
types of expenditures do not count toward the expenditure limit:
Expenditures – Exceeding the Legal Limit
� Challenging or defending the validity of petitions or canvassing and re-canvassing
election results,
� Preparing for an appearance before the Board, and
� Limited expenses to prepare for the post-election audit.
See Administrative Code §3-706, 3-703(1)(i), 3-711(2)(a), and Rules 1-08, (b), (d), and
(l).
CFB staff’s review found that the Campaign exceeded the primary expenditure
limit. See Exhibit V which provides the expenditure limit calculation.
If you disagree with the calculation, you must provide a detailed explanation and
documentation such as invoices, contracts and consultant agreements to support your
Previously Provided Recommendation
People for Leroy Comrie 17 July 25, 2012
argument. You should address each line of the calculation you dispute and amend your
disclosure statements as appropriate.
Campaign’s Response
In response to the Draft Audit Report, the Campaign stated that prior to May 2009
the Candidate intended to run for Queens Borough President. The Campaign requested
that expenditures totaling $56,179 paid to Chung Seto, a fundraising consultant “hired to
help the Candidate run for Borough President,” should be removed from the expenditure
limit calculation because they were made in connection with the Candidate’s aborted
election. According to the Campaign, it spent $96,186.37 during the out years [2006 –
2008], and that of that amount, $60,500 was paid to Chung Seto. The Campaign argued
that because Queens County is divided into 14 Council districts, only 1/14th
The Campaign also amended its disclosure statements to report $5,319.60 in
outstanding fines to the New York City Environmental Control Board.
of the
$60,500 paid to the consultant benefited the re-election campaign ($60,500 ÷ 14 =
$4,321). Thus, by adjusting $56,179 from the out-year expenditure limit, the Campaign
would remain under the spending limit.
In response to the Alleged Violations and Recommended Penalties Notice, the
Campaign submitted a contract for Chung Seto’s services dated April 9, 2007. The
Contract stipulated that Chung Seto was retained to “serve as an independent fundraising
consultant for the candidate’s bid for Borough President.” To support its assertion that
the Candidate sought higher office, the Campaign also submitted a compilation of online
news reports mentioning the Candidate’s anticipated candidacy in the 2009 Queens
Borough President race.
People for Leroy Comrie 18 July 25, 2012
The Campaign stated that after the extension of term limits it relied on the
provisions of CFB Advisory Opinion No. 2008-7, which gave candidates who previously
sought election to higher office the option of maintaining their existing 2009 committee
in order to seek re-election to their lower office. The Campaign acknowledged that,
pursuant to CFB Rules 1-08(c) and 7-03(c), expenditures made by a candidate who
subsequently abandons a candidacy for higher office and seeks re-election to a lower
office are presumptively subject to the lower office’s spending limits. However, the
Campaign argued that it could overcome the presumption if it could demonstrate that
such expenditures were used for the aborted Campaign with no or minimal benefit to the
Candidate’s re-election campaign. The Campaign conceded that it failed to submit a
written statement to the CFB by January 15, 2009, as instructed by Advisory Opinion No.
2008-7, Option 1-B.1
In its appearance at the June 21, 2012 Board meeting, the Campaign reiterated
these arguments.
The Campaign stated that failing to submit the Higher Office Proof
form “should not be considered as a circumstance warranting imposition of a penalty.”
The Board found the Campaign in violation and assessed a $11,172 penalty based
on an overage of $33,516.
Board Action
1 CFB Advisory Opinion No. 2008-7, Option B, instructed candidates who had previously intended to run for higher office before changes to the term limits law that if they wished to run again for their lower, incumbent offices, they were required to submit a Higher Office Proof Form by January 15, 2009, and demonstrate that they were originally seeking higher office in 2009.
People for Leroy Comrie 19 July 25, 2012
7.
Campaigns are prohibited from maintaining a petty cash fund greater than $500.
See Rule 4-01(e)(2). Campaigns are also prohibited from spending amounts greater than
$100 except by checks from a bank account reported to the CFB and signed by the
Campaign’s authorized signatory. See Rule 1-08(i).
Cash Disbursements Exceeding $100
Based on documentation submitted, the CFB staff’s review revealed that the
following unreported expenditure in excess of $100 was made in cash:
*The Campaign stated that cash contributions from Rufus Paul, Claudette Morgan, Gerald Powell and Kenny Lewis were used to pay the vendor (see also Finding #1b).
You must explain and provide evidence as to why this expenditure does not
constitute a violation of Board Rules.
Previously Provided Recommendation
Campaign’s Response
The Campaign explained that the contributors paid the vendor directly for the
services rendered, and therefore the payments were in-kind contributions rather than cash
donations or expenditures. However, the Campaign did not provide in-kind contribution
forms or any other documentation showing that the intent of the contributors was to pay
for the service rendered. Instead, the Campaign submitted monetary contribution cards
from the contributors.
Check No./ PaidTransaction DateMona Lisa The Art of Photography*
Amount08/06/09 $175.00
People for Leroy Comrie 20 July 25, 2012
The Board found the Campaign in violation and assessed a $50 penalty.
Board Action
8.
Campaigns are permitted to engage in joint campaign activities, provided that the
benefit each candidate derives from the joint activity is proportionally equivalent to the
expenditure. See Administrative Code §3-715 and Rule 1-08(h). Upon request from the
Board, a campaign is required to provide copies of checks, bills, or other documentation
to verify contributions, expenditures, or other transactions. See Administrative Code §§3-
703(1)(d), (g), and Rule 4-01.
Joint Expenditures
In its response to the CFB’s post-election request for documentation dated
December 9, 2009, the Campaign stated, “People for Leroy Comrie did not engage in any
joint campaign activities.” However, the Campaign also submitted a copy of a palm card,
which was the same as one obtained by the CFB on the day of the primary election. The
card includes the name and picture of the Candidate, as well as those of Bill Thompson,
John Liu, Bill de Blasio and Helen Marshall (see Exhibit VI). In addition, in an affidavit
from the Candidate dated November 4, 2009, the Candidate affirmed that “the Campaign
printed a slate card….Each candidate who appeared on the card (Thompson, Liu,
deBlasio, Marshall and [Comrie]) paid a portion of the printing cost and, upon
information and belief, had its volunteers distribute the card in the 27th Council District.”
Based on a review of this information, it appears that the Campaign did not fully account
for this joint activity.
People for Leroy Comrie 21 July 25, 2012
If the Campaign has reported the transaction(s) for the palm card, it must identify
the associated transaction(s) reported by the Campaign by statement and transaction ID.
If the expenditure(s) has not been reported, the Campaign must provide an explanation
for the initial failure to report and must amend its disclosure statements to report this
transaction(s). Additionally, the Campaign must provide a methodology for the cost
allocations for each campaign and provide documentation for the expenditure(s). The
Campaign must clarify to what extent and to whom the other campaigns paid their
portions of the cost of the palm card.
Previously Provided Recommendation
Campaign’s Response
The Campaign stated that each Campaign paid the vendor directly for its portion
of the palm card and affirmed it was a joint activity. The Campaign stated that the
Treasurer’s statement that it did not engage in joint activities was correct at the time
because the other campaigns did not cover the Candidate’s portion of the cost. The
Campaign identified the reported expenditure (Transaction ID 12/F/R0002693), but it did
not provide the allocation methodology for the cost of the palm card.
The Board has taken no further action on this matter other than to make it a part
of the Candidate’s record with the Board.
Board Action
People for Leroy Comrie 22 July 25, 2012
9.
Administrative Code §3-702(8) defines contribution to mean "any gift,
subscription, advance, or deposit of money or any thing of value, made in connection
with the nomination for election, or election, of any candidate…provided however, that
none of the foregoing shall be deemed a contribution if it is made, taken or performed by
a person or a political committee independent of the candidate or his or her agents or
political committees….For purposes of this subdivision, the term 'independent of the
candidate or his or her agents or political committees…' shall mean that the candidate or
his or her agents or political committees so authorized by such candidate did not
authorize, request, suggest, foster or cooperate in any such activity…." Rules 1-08(f)(1)
and (2) set forth several factors for determining whether third party activity is
independent. See also Advisory Opinion No. 2009-7 (August 6, 2009).
Independent Activity
On October 16, 2009, CFB staff sent the Campaign a letter regarding alleged non-
independent activity that occurred at or involved the GRBDC (see Exhibit VII). An
affidavit by the Candidate was submitted in response on November 4, 2009. In the
affidavit, the Candidate asserted that the activity “at the GRBDC does not constitute non-
independent activity that benefited the Campaign” and addressed several of the factors in
Board Rule 1-08(f)(1) for determining whether third party activity is independent.
However, the Candidate did not address the factor in Board Rule 1-08(f)(1)(vi): whether
the candidate, any agent of the candidate, or any political committee authorized by the
candidate shares or rents space for a campaign-related purpose with or from the person,
political committee, or other entity making the expenditure.
People for Leroy Comrie 23 July 25, 2012
The Campaign must address the applicability of the factor in Rule 1-08(f)(1)(vi)
to the circumstances described in the October 16, 2009 letter and responded to in the
November 4, 2009 affidavit. The response to this finding must be separate from the
Campaign’s response to other findings in this Draft Audit Report, in the form of a
verified answer (sworn to or affirmed by the candidate, the treasurer, and/or any agent of
the Campaign with relevant knowledge).
Previously Provided Recommendation
Campaign’s Response
In response to the Draft Audit Report, the Campaign submitted an affidavit from
the Treasurer, Tyrone Sellers, dated October 11, 2011. The Treasurer stated therein that
activities on or around September 14, 2009 and September 15, 2009 by SEIU Local 1199,
Local 32 BJ or any other union did not constitute non-independent activities on behalf of
the Campaign. The Treasurer also stated that, in the absence of other factors, the mere
renting of space in the same facility that another group has rented is insufficient to
support a finding of engaging in non-independent activity.
In its response to the Alleged Violations and Recommended Penalties Notice, the
Campaign asserted that “it was an error to presume that the [Campaign] and 1199 SEIU
were sharing space” because “[w]hatever arrangements that 1199 SEIU and the
[GRBDC] made” are unknown to CFB staff and to the Campaign. With regard to
Campaign literature, the Campaign argued that because its palm cards were distributed by
unpaid union volunteers, the “activity cannot constitute coordination with a third party
expenditure since volunteer activities are not an expenditure in the first place.” With
regard to the critical mass of union members observed by CFB staff, the Campaign
People for Leroy Comrie 24 July 25, 2012
argued that because CFB staff does not know whether the union members were paid for
their services to the Campaign, “the observations were insufficient to create a
presumption that any third party expenditures had been made at all.” The Campaign
further argued that in the interest of due process, the burden set forth by CFB Advisory
Opinion No. 2009-7 should shift to CFB staff once a campaign produces a responsive
affidavit.
In its appearance at the June 21, 2012 Board meeting, the Campaign reiterated
these arguments.
The Board’s regulations place the “burden of demonstrating” the independence of
third-party activity on campaigns because “the information about whether campaign-
related activity has been discussed or otherwise coordinated between a campaign and a
third party is uniquely within the campaign’s possession” (see CFB Advisory Opinion
No. 2009-7). The Board found the Campaign in violation and assessed a $3,750 penalty.
Board Action
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Exhibit I
People for Leroy Comrie
2009 Elections
Contributions Over the Limit
(1) The Campaign refunded this portion of the aggregate contribution prior to notification from the CFB and therefore it was not subject to penalty.
Notes:
Statement/
NameSchedule/ ReceivedTransaction ID
RefundedDate Date Amount
DCC2, LLCNotes
3/ABC/R0000650 05/30/07 $1,000.00DCC2, LLC 4/ABC/R0000757 08/24/07 $4,000.00DCC2, LLC 4/M/R0000820 01/11/08 ($1,150.00) (1)DCC2, LLC 10/M/R0002076 07/24/09 ($1,100.00)Benjamin, Stephen 10/ABC/R0002108 07/24/09 $1,100.00Benjamin, Stephen 10/M/R0002109 07/24/09 (1)($1,100.00)
Total $2,750.00
IUOE Local 14-14B 3/ABC/R0000616 05/30/07 $500.00IUOE Local 14-14B 4/ABC/R0000753 08/24/07 $1,000.00IUOE Local 14-14B 4/ABC/R0000856 11/09/07 $500.00IUOE Local 14-14B 5/ABC/R0000911 02/01/08 $1,000.00IUOE Local 14-14B 10/M/R0002077 07/24/09 ($250.00)
Total $2,750.00
New York State Laborers' PAC 4/ABC/R0000791 07/19/07 $2,000.00New York State Laborers' PAC 5/ABC/R0001177 03/27/08 $500.00New York State Laborers' PAC 9/ABC/R0001955 07/11/09 $1,000.00New York State Laborers' PAC 10/M/R0002078 07/24/09 ($750.00)
Total $2,750.00
Exhibit II
People for Leroy Comrie
2009 Elections
Advances
(see Finding #2)
Name
Statement/
ExplanationSchedule/ Invoice
Transaction ID DateSeto, Chung
AmountFood, beverage 3/F/R0000699 05/31/07 $5,060.00
Seto, Chung Thank you cards 3/F/R0000681 06/05/07 $435.00Seto, Chung invitation design 4/F/R0000892 07/24/07 $180.00Seto, Chung mailing invitations 4/F/R0000875 08/01/07 $335.00Seto, Chung reimbursement for food 4/F/R0000890 08/29/07 $2,600.00Seto, Chung invitation design 4/F/R0000900 09/24/07 $240.00Seto, Chung postage for event 4/F/R0000896 10/11/07 $683.00Seto, Chung reimbursement for event 4/F/R0000902 11/07/07 $3,565.00Seto, Chung Event expenses 5/F/R0001192 03/07/08 $2,141.32
Exh
ibit
III
Peop
le fo
r L
eroy
Com
rie
2009
Ele
ctio
ns
Inte
rmed
iary
Sta
tem
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and
Pos
sibl
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nrep
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term
edia
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(see
Fin
ding
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306
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239
07/3
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as, M
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pson
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tens
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/31/
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15
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���������Comrie, Leroy G (ID:420-P)5 (City Council)
2009
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Total Reported Primary Expenditures:
Claimed Exempt Expenditures:
$141,330.10
���2
$0.00
$96,186.37
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$0.00
Less Prior Year Expenditure Limits ($43,000.00)
Prior Year Amounts Over the Limit $53,186.37$53,186.37
Pre-Elect Expenditures Attributable to Primary Election $0.00
$194,516.47
($161,000.00)
4��56�.789
Adjusted Expenditures
Less Current Year Expenditure Limit
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November 30, 2010People for Leroy Comrie
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