Surrogate-gate

By Jason Boog, jasonboog@judicialstudies.com, Posted 10-21-2008 Judicial Reports

Presumptive Surrogate Nora Anderson is under investigation for her campaign finance practices. But even if she followed the rules, her donor list is disturbing.

Nora Anderson swept the Manhattan Surrogate primary by a virtual landslide, but the price of victory — both literal and figurative — is proving steep.

Reportedly, the Manhattan DA’s office is investigating whether Anderson actually paid $270,000 to her campaign from her own pocket or if the money came from another source. If it came from another source, it would likely constitute an illegal donation; if it came from Anderson, then she is prohibited from repaying herself with proceeds from any of the feverish rounds of fundraising that she has undertaken since her primary victory.

In an added twist, Judicial Reports has learned that the McManus Democratic Association was served with a subpoena yesterday as part of an investigation into the campaign.

“They asked for all records between Nora Anderson and ourselves,” said District Leader James R. McManus. “But there were no records. She used the club for her campaign. It was a handshake.”

McManus declined to provide more detail.

PARSING THE MONEY

Whatever the nature of Anderson’s problems with campaign law compliance, the lineup of her donors — both before and after primary day — is rife with attorneys who have every reason to believe they might be in a position to receive lucrative appointments from Anderson once she takes the bench.

According to the New York State Board of Elections, Anderson raised $238,344 in private donations leading up to the primary. She also received a loan of $225,000 from her employer, estate lawyer Seth Rubenstein.

Political consultant Jerry Skurnick from Prime New York said that outstanding loan would raise red flags in a typical campaign.

“In past campaigns, I’ve been told that if a loan is not repaid by the date of the primary it becomes a contribution,” he explained. Skurnick’s belief is confirmed by the 2008 Election Law:

“A loan made to a candidate or political committee, other than a constituted committee, by any person, firm, association or corporation other than in the regular course of the lender’s business shall be deemed, to the extent not repaid by the date of the primary, general or special election, as the case may be, a contribution by such person, firm, association or corporation.”

If that $225,000 contribution was categorized as a donation after the primary, it is one that exceeded the $32,000 limit under law. As of a September 19 post-primary filing, the campaign still listed $197,000 of the Rubenstein loan as outstanding.

On October 2, her campaign filings reported that Anderson made a loan of $368,000 to her campaign from her own finances. According to that October report, Anderson now owes herself $368,000 and had repaid the remaining $197,000 of Rubenstein's loan.

THE NEVER-ENDING FUNDRAISER


According to one published excerpt from Anderson’s invitation to a post-election fundraiser, she was asking for contributors to give between $1,000 and $29,000: “Celebrate with her and help us retire the debt,” read the invitation.

When asked how Anderson was coping with campaign donations from attorneys who work in Surrogate Court, campaign manager Michael Oliva said he couldn’t speak to how the judge would deal with financial matters, urging a call to Anderson herself.

Neither Anderson nor Rubenstein returned calls for comment.

According to the 2008 Judicial Campaign Ethics Handbook, Anderson’s post-primary politicking is legal — and will remain so for a half-year after she takes the bench, as long as she is repaying debts to donors other than herself or family members:

“A judicial candidate’s campaign committee may, within the applicable window period, hold a post-election fund-raising event, the proceeds of which will be used to satisfy outstanding election debts to third parties. The campaign committee may not, however, sponsor an event for the purpose of repaying loans made to the committee by the candidate or the candidate’s relatives, or where it is intended that any funds remaining after payment of campaign debts would belong to the political party organization.”

The handbook also states that this behavior is only permissible within a special “window period.” By law, that window opens nine months before the primary, judicial convention or official nominating meeting for the judgeship; and, by the same law, closes six months after the general election for the Surrogate Court.

LEGAL LUCRE

These fundraisers are all permissible, but exploring Anderson’s campaign war chest ($238,000 in total contributions) illustrates the contradictions inherent in the Surrogate Court election system.

Even if she has followed the rules, Anderson’s committee accepted contributions from 13 different lawyers who had received many coveted guardianship assignments in the New York Surrogate Court during the last year. Leading that list was New York attorney Charles Gibbs, who received three guardianship appointments in Manhattan Surrogate Court last year — earning more than $198,000 in fees.

Collectively, the donors in question received 26 guardianships and earned $368,700 in guardianship fees in the Manhattan Surrogate Court — in the last year. (For a complete list, click here)

In addition to those individual contributions, 17 other gifts came from law firms that included estate law, elder law, guardianship, and other Surrogate Court practice areas. In all, Anderson received nearly $30,000 in contributions from these types of firms. Greenfield Stein & Senior contributed $6,800 and Finkelstein & Virga contributed $5,000, and both firms included Surrogate Court practice. (For that list, click here)

In an arcane election law twist, all New York judges are permitted to hold fundraisers and interact with contributors — but they are not supposed to know who contributed to them. The law reads:

“A judicial candidate may attend his/her own fund-raising event and may actually see and acknowledge individuals in attendance, but the identities of those who contribute to a judicial candidate’s campaign should otherwise be kept from the candidate except to the extent legally permissible.”

During the heated primary season, the losing Surrogate candidate John J. Reddy, Jr., offered to restrict his contributors in a dramatic way — removing all campaign contributors from his list of eligible attorneys for guardianship assignments.

In an interview this week, Reddy guardedly spoke of political donations. “I think more likely a large number of [Surrogate law attorneys] are contributing only because it is their aspiration that the court will better be served by a [particular candidate]. I don’t think you can look at the contributions and say that these people anticipate appointments,” he said.

“At the same time, I thought it was better to be up front about [my contribution policy]. And that didn’t dissuade many attorneys from contributing,” he concluded, alluding to the more than $600,000 collected during his failed Surrogate bid.