Tuesday, March 17, 2009

Nonprofits Give to NY State Campaigns, Despite Law

The New York Times reports that a review of campaign-finance and federal tax records shows that at least 81 New York tax-exempt charities have given contributions to legislative candidates since 2005, with some organizations giving more than once to multiple candidates. While the amounts were not eye-popping, the contributions often flowed to lawmakers who helped the charities secure state money.

The State Board of Elections said it did not have the jurisdiction to screen contributions by nonprofit groups, calling it a matter for the IRS. The IRS would not comment on the activities of specific charities. Attorney General Andrew M. Cuomo’s office oversees charities on the state level, and a spokesman said the office can take action when there is evidence of systemic abuse of charitable money. Federal law prohibits nonprofits classified as 501 (c) 3 organizations from making political donations or participating in campaigns. Those that do risk losing their tax-exempt status.

Asked about the contributions last week, legislators and charity officials offered several responses, including apologies, suggestions of clerical errors, and defiance. Some of the contributions were given as the cost of admission to political fund-raisers, which some donors said they did not realize counted as campaign contributions. Some politicians insisted it was legal to accept the money even if the charities were barred from giving it. Since 2005, 55 legislative candidates — a vast majority of them incumbents — received at least one contribution from charities. Legislators insist there is no connection between their acceptance of these donations and any actions they might take to support the charities’ interests. The charities say they are supporting legislators who do good work, without regard to any assistance they may have provided.

Blair Horner, legislative director for New York Public Interest Research Group, said the Board of Elections should be required to monitor such contributions and that state law should be changed to make it explicitly illegal for politicians to accept them. Currently, the responsibility of avoiding such donations appears to fall solely on the nonprofit organizations.

“All I can say is, ‘Mea culpa, mea culpa, mea culpa,’ “ said Fred W. McPhilliamy, president of Helen Keller Services for the Blind, which donated $2,000 in February 2008 to State Senator Carl L. Marcellino, a Long Island Republican who helped win $55,000 in state aid for the group last year. “We goofed.” He said that representatives of his group bought tickets to a campaign fund-raiser for Senator Marcellino in Albany at the urging of a lobbyist but “never thought of it as a political contribution.” Senator Marcellino, who the records showed also accepted money from other nonprofit groups, said, “It was a dumb mistake on our part, and they shouldn’t have done it either.”

There have been periodic efforts to overhaul Albany’s campaign finance system, which is considered among the nation’s weakest, including a push by Gov. Eliot Spitzer in 2007. But little momentum has been generated, despite the pleas of government watchdog groups, and the issue of charities giving to lawmakers’ campaign accounts has not received broad attention. At least one national campaign finance watchdog said the situation in New York appeared unique. “I’m not aware of any situation where 501 (c) 3 groups have made contributions because it so obviously does not comply with campaign finance laws,” said Fred Wertheimer, founder of Democracy 21, a government watchdog group.

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