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.

Saturday, October 25, 2008

Nora the ignorer

Daily News Editorial, October 25,2008

It will be a wonder if Manhattan Surrogate-elect Nora Anderson lasts a month before she's bounced as a serial ethics violator.

Two new Anderson transgressions came to light on reading materials related to the campaign that helped her win the Democratic primary and run unopposed in November.

As previously revealed here, Anderson bankrolled her election with a loan that amounted to an illegal $202,000 contribution on the day she won the primary.

Then, she tried to clean up the mess with transactions that ran afoul of a rule barring successful judicial candidates from soliciting contributions if they plan to use them to repay campaign debts to themselves.

Through it all, Anderson failed to file required personal financial disclosure information.

And now, it turns out, she exaggerated her credentials. She says on her Web site that the "Independent Judicial Screening Panel," an official state body, deemed her "most highly qualified." There's no such official rating, although Democratic Party screeners used that term to describe all the primary candidates.

Finally, judicial candidates must file a questionnaire with the official screening panel and update it. They must disclose whether they have become the subject of investigation.

The Manhattan district attorney is on Anderson's case. If she hasn't told the panel, it's one more violation.

Wednesday, October 22, 2008

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.

Tuesday, October 14, 2008

Judge Nora Anderson's Money Pit is Full of Ethical Violations

Tuesday, October 14th 2008, Daily New Editorial

By the time she is sworn in as a Manhattan surrogate judge Jan. 1, there may be no canon of judicial campaign finance ethics that Nora Anderson leaves unbroken.

First, Anderson, a trusts and estates lawyer, bankrolled her election in substantial part with a loan from her boss that amounted to an illegal $202,000 contribution on the day she won the Democratic primary last month.

Then, called on it by these quarters, Anderson made a $198,185 personal loan to her campaign treasury so it could refund the improper donation.

Earlier, she had loaned the campaign $170,000, putting her $368,185 in the hole.

(How Anderson can afford this is unclear, as she neglected to list her income on financial disclosure forms.)

Now, Anderson is soliciting contributions that would enable her campaign to give some or all of the $368,185 back to her. Bad move. That puts her in violation of the spirit, if not the letter, of an ethics rule forbidding successful judicial candidates from raising money if they intend to use the proceeds to repay campaign debts to themselves.

The ban is intended to prevent soon-to-be judges from putting the arm on lawyers for money that will wind up in judicial pockets. The prohibition applies once an individual has been elected.

Anderson has no opposition on the Nov. 4 ballot. Her primary win was tantamount to election.

Her campaign stated as much unequivocally on the invitation sent out for a fund-raiser last Monday at Lattanzi, a restaurant on W. 46th St.

"She will be sworn in as our next Surrogate in January," said the appeal for donations ranging from $1,000 to $29,700. And the invitation was explicit as to why Anderson wanted the money: "Celebrate with her and help us retire the debt."

We dropped by, hoping for a word with Anderson, who has declined to return phone calls. We found an open bar, appetizers, chocolate-covered strawberries and a small gathering of lawyers who gave checks to Anderson's campaign treasurer. Someone called her "Judge." Someone jokingly told her, "See you in court."

The boss at Anderson's law firm, Seth Rubenstein, said, "I have nothing to say to the Daily News," before he left the party to get into his Jaguar convertible.

Anderson moved around the room, exclaiming: "I can't believe you crashed my party!" She stood in a corner before someone hailed a cab and she ran for it. We couldn't keep up. But the state Commission on Judicial Conduct and the Manhattan district attorney can.

Monday, October 13, 2008

'JUDGE' FINANCES PROBED

By LAURA ITALIANO and LARRY CELONA, October 13, 2008

The winner of September's primary race for surrogate judge in Manhattan is under investigation for allegedly disguising $270,000 in 11th-hour contributions as a transfer from her own assets, The Post has learned.

Manhattan DA Robert Morgenthau's office is scrutinizing one $100,000 payment Nora Anderson made to her campaign on Aug. 20 and two more, for $20,000 and $150,000, on Aug. 26, according to a source familiar with the probe.

"It's a violation of election law, at the least," said the source. "She devised a way to get hundreds of thousands of dollars."

Candidates may make unlimited donations to their campaigns from their own assets, but contributions from others are capped at $32,000. Investigators hope to finish their probe before Anderson, 56, takes office in January, the source said.

Anderson, a former Surrogate's Court chief clerk, declined to comment on her campaign finances. "I am looking forward to serving all who made it possible to win decisively," she said.

Her campaign manager, Michael Oliva, flatly denied that the money was from an improper source.

"It's absolutely her own money," he said.

Anderson won handily in the Sept. 9 Democratic primary, collecting 48 percent of the vote boroughwide. She defeated John Reddy, the counsel to the public administrator - the office that disposes of the estates of those who die with no heirs - and Milton Tingling, a sitting Supreme Court justice.

She does not face a Republican challenger in the Nov. 4 general election.

The position pays $136,700 annually.

Anderson's finances first attracted negative attention in July, when she declared in a filing that she borrowed $225,000 loan from a colleague.

There is no limit on loans, but funds must be repaid before the election, or they're treated as contributions.

Saturday, October 4, 2008

Daily News Editiorial

Surrogate shell game October 4, 2008

Oh, what a costly web you can weave when you try to evade campaign finance laws and get caught at it.

Exhibit A: Nora Anderson, who is all but guaranteed election as a Manhattan surrogate court judge come November.

Regular readers will recall that we recently pointed out that Anderson circumvented the law by financing her campaign with a $225,000 loan that converted to a donation on Primary Day, violating the legal contribution limit by a mere $200,000.

Anderson took the loan from her boss, trusts and estates lawyer Seth Rubenstein. Friday, she filed paperwork reporting that she had repaid the debt by "loaning" her campaign a total of $198,185 of her own money and sending Rubenstein the same amount.

The transactions boosted Anderson's personal investment in the race to $470,000. Where she came up with the money is anyone's guess because, in yet another violation of the rules, she failed to list her income in personal financial disclosure filings.

(Inexplicably, Anderson just amended her statement to report that her husband received a salary as a Family Court lawyer without also declaring her own pay.)

There's an obvious odor to the math here in that Anderson has put up almost half a million dollars chasing a job that pays $136,700.

Then again, surrogates preside over the estates of the dead and are empowered to dispense millions of dollars in court assignments to lawyers and accountants.

So we repeat our support for probes by the state Commission on Judicial Conduct and Manhattan District Attorney Robert Morgenthau. And we stand confident in knowing they're on the case.