Monday, October 27, 2008

No Competition for Seat, but Facing Investigation

By JOHN ELIGON, Published: October 26, 2008, NY Times

When Nora S. Anderson rode a well-financed campaign to victory in the Democratic primary for Manhattan Surrogate’s Court judge last month, it should have cleared a smooth path to the office. She will face no challenger in the Nov. 4 election.

Nora S. Anderson won the Democratic primary for Manhattan Surrogate’s Court.

Instead, her fund-raising efforts have drawn the attention of the Manhattan district attorney’s office.

Prosecutors have issued several subpoenas, including two to well-connected political players, in an investigation of Ms. Anderson’s finances and whether she improperly put money into her campaign fund, according to several people briefed on the case.

In April, Ms. Anderson, a Brooklyn lawyer, received a $225,000 campaign loan from Seth Rubenstein, her friend and campaign chairman and the head of the law firm where she works, according to financial disclosure reports. The loan was not repaid by the Sept. 9 primary and could be treated as a contribution under election law, which limits the contribution an individual may give a candidate to $32,000.

According to the most recent disclosure report, filed on Friday, all but $5,900 of the loan was shown as having been paid back. One matter under investigation is how Ms. Anderson acquired the money for the repayment, the people briefed on the case said.

“I guess the question was the loan, and how the loan was paid off,” said Michael Oliva, Ms. Anderson’s former campaign manager, who said he had received a subpoena for records and was interviewed by a prosecutor.

The district attorney’s office would not comment on the case. Ms. Anderson did not return telephone calls seeking comment, and Mr. Rubenstein declined to be interviewed.

Ms. Anderson, 56, has come under investigation before she even has won the position or taken the bench. As the handlers of wills, estates and guardianships, surrogate judges have the power to appoint lawyers to lucrative cases and their work can be highly scrutinized.

Ms. Anderson, a former chief clerk in the Manhattan Surrogate’s Court, defeated John Reddy and Milton Tingling in the primary, clearing the way to become one of two surrogate judges, at a salary of $136,700 a year.

A disclosure report filed 10 days after the primary showed that $197,000 of Mr. Rubenstein’s loan to her campaign was outstanding. If considered a contribution, it would far exceed the legal maximum.

Exceeding contribution limits is a misdemeanor under election law. But the district attorney’s investigation goes deeper, into how Ms. Anderson repaid the loan, people briefed on the case said.

In the weeks before the primary, large deposits made to Ms. Anderson’s personal bank account triggered suspicious-activity reports within the bank, according to a person briefed on the investigation, who requested anonymity because he was unauthorized to speak on the matter. The bank reported the deposits to the district attorney’s office, he said.

In August, Ms. Anderson made two large deposits to her campaign account under her own name, according to disclosure reports. One was listed as a contribution of $100,000, on Aug. 20; the other was listed as a $170,000 loan she made to her campaign, deposited on Aug. 26, the reports said.

A disclosure report filed on Oct. 2 noted that Ms. Anderson lent her campaign $153,589.33 on Sept. 22 and $44,596 on Sept. 26, the same days her campaign wrote checks to repay part of Mr. Rubenstein’s loan.

Intentionally exceeding contribution limits or concealing the source of campaign money could result in various charges, including filing false records, a felony. Such charges could be hard to prove; even if prosecutors find that Ms. Anderson received large sums of money in her personal account, they must show that those sums were intended as campaign donations, not personal gifts.

Mr. Oliva said he believed that she paid off the loans with her own money and that she had until the day of the general election to repay Mr. Rubenstein’s loan before it could be considered a contribution.

Mr. Oliva said his company, M & M Consulting, was subpoenaed for records pertaining to Ms. Anderson’s campaign finances. He said he was not able to produce any because he did not deal with campaign money.

James R. McManus, the head of the McManus Democratic Association, one of the party’s most influential local organizations, said he also received a subpoena for correspondence with Ms. Anderson. Although he endorsed her, Mr. McManus said, he had no written correspondence with her and did not contribute money to her campaign.

“I had nothing to do with her campaign,” Mr. McManus said.

While the campaign fund-raising rules for any office are voluminous, they are particularly strict for judicial candidates in New York State. According to the Judicial Campaign Ethics Handbook, candidates for the bench may not solicit their own campaign contributions or even know who is donating money. Their fund-raising must be handled by campaign committees.

If Ms. Anderson does take the bench, she will join a court that has had its share of scandals over the years. In 2005, Michael H. Feinberg, a surrogate judge in Brooklyn, was removed after the State Commission on Judicial Conduct found that he had awarded $8.6 million in fees to a friend without verifying that the lawyer had done the work.

In July, The Daily News reported that the city was investigating Lee Holzman, the Bronx surrogate judge, for fees he awarded to politically connected lawyers.

David Bookstaver, a spokesman for the State Office of Court Administration, said the rules governing the appointment of lawyers to handle estates or trusts were rewritten in 2003 and 2006 to make the process more transparent.

“Many of the alleged weaknesses in Surrogate Courts were addressed,” Mr. Bookstaver said. And statistics show that the Surrogates’ Courts have not been inordinately corrupt. Surrogate judges make up 6.8 percent of the state’s judges. Of the full-time judges disciplined by the State Commission on Judicial Conduct during the past 30 years, roughly 7 percent of them were with the Surrogate’s Court, said Robert Tembeckjian, the commission’s administrator.

“There’s no special disciplinary problem with surrogate judges as opposed to any other kind of judge,” Mr. Tembeckjian said.

He added that he could not say whether the commission would investigate Ms. Anderson.


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