December 18, 2015

Risa Sugarman, Esq. Chief Enforcement Counsel Division of Election Law Enforcement New York State Board of Elections 40 North Pearl Street, Ste. 5 Albany, NY 12207-2729

Re: $1.14 Million in Over-Contributions to the SRCC

Dear Ms. Sugarman: I write to bring your attention to a disturbing and blatant misuse of taxpayer money to make dramatic over-contributions to the Senate Republican Campaign Committee (“SRCC”) in gross excess of allowable limits. On October 9, 2015, several media outlets reported that former New York State Senate Republican Majority Leader Joe Bruno was “closing out his campaign and his legal defense funds, donating the bulk of the $1.5 million that is left to the Senate Republican Campaign Committee.”1 Purportedly, Mr. Bruno controlled two or more committees registered with the State Board of Elections (“BOE”), and would be contributing an aggregate of $1.4-$1.5 million to the SRCC from these accounts.2 It is important to note that the vast majority of these funds were obtained from public monies given to these committees to cover legal defense costs associated with former Senator Bruno’s criminal defense.3

1 Bruno closing out campaign, legal funds, giving most to GOP, Albany Times Union, October 9, 2015, Rick Karlin. 2 Bruno donates $1.4 million to Senate Republican campaign panel, The Buffalo News, October 9, 2015, Tom Precious. 3 The Committee to Re-Elect Senator Bruno (A465) has not filed a disclosure report with the BOE since July 2015. As part of the July 2015 filing, the committee disclosed receiving a total of $1.53 million from a law firm that represented Mr. Bruno in legal proceedings, explaining the receipt as “Wire Transfer Of Reimbursement Received From New York State For Legal Fees Paid Relating To Senator Bruno's Trial.”

At the time, the information was reported based on an announcement made by a spokesperson for Mr. Bruno which noted that “Senator Bruno’s committee, The Committee to Re-Elect Senator Bruno, a political action committee he established, Creating NY Jobs Now, and a legal defense fund established to support him . . . will be closed down,” and the funds would be distributed. Since then, however, the SRCC and Creating NY Jobs Now (“CNYJN”) have filed disclosure reports with the BOE that provide more specific details about the transactions between the SRCC, CNYJN, and the committee initially established to promote then-Senator Bruno’s reelection efforts. Based on these filings, it is evident that Mr. Bruno used political committees he controlled to make campaign contributions to the SRCC far in excess of the permitted party/constituted committee contribution limit of $109,600. In fact, it appears that if the donations are appropriately treated as contributions, the Committee to Re-Elect Senator Bruno will have made nearly $1.03 million in contributions to the SRCC during calendar year 2015, and also, in an attempt to further evade contribution limits, moved $500,000 to CNYJN with the intent of then contributing an additional $109,600 to the SRCC.

As you know, the New York State Election Law broadly defines “contribution” to include “any gift, subscription, outstanding loan (to the extent . . . [that such loan is not repaid by the date of the election]), advance, or deposit of money or any other thing of value, made in connection with the nomination for election, or election, of any candidate, or made to promote the success or defeat of a political party or principle, or of any ballot proposal.”4 Furthermore, “[a]ny payment” made in support of a candidate’s nomination or election, “including but not limited to compensation for the personal services of any individual which are rendered in connection with a candidate’s election or nomination without charge,” will be deemed a contribution, unless such service was provided “by a person or political committee independent of the candidate or his agents or authorized political committees.”5 Finally, a contribution includes “any funds received by a political committee from another political committee to the extent such funds do not constitute a transfer.”6 Based on the foregoing, funds given by one political committee to a party or constituted committee shall be treated as a “contribution” subject to limitation, unless the funds given to the party or constituted committee is a “transfer.”

Transfer is narrowly defined as “any exchange of funds or any thing of value between

political committees authorized by the same candidate and taking part solely in his campaign, or any exchange of funds between a party or constituted committee and a candidate or any of his authorized political committees.”7 The Election Law is very limiting in what types of transactions may be treated as transfers, and provides for only two types. The BOE uses the illustration of the “NYS Republican State Committee [providing funds] to Friends of Smith, or vice versa,” as an example of a “Type 1 Transfer.”8 The BOE has described a “Type 2 Transfer” as when Friends of Vincent Smith moves money to Citizens for Vincent Smith.9 Money moved between two candidate committees that were not authorized by the same person, however, is not

4 N.Y. ELEC. LAW § 14-100(9)(1). 5 N.Y. ELEC. LAW § 14-100(9)(3). 6 N.Y. ELEC. LAW § 14-100(9)(2) (emphasis added). 7 N.Y. Elec. Law § 14-100(10) (emphasis added). 8 NEW YORK STATE BOARD OF ELECTIONS 2015 CAMPAIGN FINANCE HANDBOOK, p. 130; see also N.Y. ELEC. LAW § 14-114(3). 9 Id.

a transfer and would be subject to all candidate contribution limitations.10 Thus, in order to properly determine whether two entities may engage in a transfer, one must understand whether the entities at issue are committees authorized by a candidate for public office, “political committees,” “party committees,” or “constituted committees.”

The current fact pattern involves the SRCC, CNYJN, and the Committee to Re-Elect

Senator Bruno. The SRCC is a party committee, provided for in the rules of the New York State Republican Committee – a constituted committee of the New York State Republican Party. Thus, the SRCC may accept transfers from SRCC candidates or committees authorized by SRCC candidates. CNYJN is neither a committee authorized by a candidate, nor a party or constituted committee. As such, it is clear that the law does not allow it to engage in transfers. The third relevant entity involved in these transactions is the Committee to Re-Elect Senator Bruno. Although it would appear from the name of this entity, and the fact that it was initially formed as a candidate committee, that it would be entitled to receive and make transfers of the type at issue here, the relevant Election Law provision indicates that it cannot be treated as an entity that may engage in transfers.

The purpose of the Election Law “transfer” provision is to enable candidates actively

supported by a given party to provide funds to the party to spend on the candidate’s election, or to invest in that party’s continued efforts for other similarly situated candidates. It would be inappropriate, however, to let committees controlled by individuals who are not candidates, and have not recently served as candidates, for a political office to be able to make unlimited transfers to a party. Where the committee is controlled by an individual who can no longer be deemed a candidate, the committee must be subject to contribution limits like any other donor.

It is inconceivable that the law contemplated allowing for this kind of political activity.

Over the years, the press has highlighted the fact that so-called “ghost committees” – campaign accounts of either deceased or long-retired politicians – continue to make contributions to other candidates for public office. While committees affiliated with deceased or retired politicians may make contributions, it cannot possibly be permissible for these ghost committees to make unlimited transfers in order to avoid any campaign contribution limits whatsoever.

In the last few months, however, two committees controlled by Mr. Bruno made

contributions to the SRCC totaling approximately $1.14 million. The funds from the Committee to Re-Elect Senator Bruno were classified by the SRCC on its November 2015 disclosure filing as a $1.03 million transfer. Mr. Bruno, however, has not been a candidate for office in nearly a decade. Indeed, not only has Mr. Bruno not campaigned for any public office in almost ten years, he also expressly indicated that he has no intention of ever again being a candidate for any elected position.11 Thus, despite the original purpose of the Committee to Re-Elect Senator Bruno, it cannot be viewed as “a candidate[’s] . . . authorized political committee” as is required by Election Law § 14-100(10). In fact, the only inference that can be made from the recent disclosure filings is that the SRCC and Mr. Bruno conspired to use an otherwise inactive

10 See Feldman v. Pataki, 616 Misc. 2d 176 (Kings County 1994) (finding that funds moved from a committee deemed to be authorized by Candidate A to a committee explicitly authorized by Candidate B was a contribution and not a transfer). 11 Bruno closing out campaign, legal funds, giving most to GOP, Albany Times Union, October 9, 2015, Rick Karlin.

committee to collect public funds provided to cover criminal defense costs incurred by Mr. Bruno, and then contribute this taxpayer money to the SRCC for the benefit of Republican candidates for the State Senate.

For all of the foregoing reasons, I respectfully request that you, in your capacity as Chief

Enforcement Counsel, investigate the campaign finance activities of the Senate Republican Campaign Committee, the Committee to Re-Elect Senator Bruno, and Creating NY Jobs Now, to determine whether SRCC conspired with Mr. Bruno to use his political committees to evade and exceed contribution limits, and whether SRCC must divest itself of the contributions that grossly exceeded all legal limits. Thank you for your attention to this important matter.

Sincerely,

Michael Gianaris

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