Follow the Money: Nonprofit Campaign Soup

By Flickr user Bill de Blasio (Flickr) [CC BY-SA 2.0], via Wikimedia Commons

April 9, 2018; New York Times

A New York state ethics panel announced this week that part of the ongoing investigation into matters involving Mayor Bill de Blasio and his Campaign for One New York would end in settlements. CONY is a now-defunct nonprofit de Blasio founded to advocate for his policies, especially around affordable housing and universal preschool. The Joint Commission on Public Ethics, which enforces state lobbying laws, was concerned that contributions may have been made in exchange for political favors, and that de Blasio’s organization was not sufficiently transparent about receiving the money.

In one settled case, James Capalino, a lobbyist, was alleged to have made a campaign contribution to the nonprofit that exceeded the state’s contribution limits for registered lobbyists. The New York Times’ J. David Goodwin reports,

Mr. Capalino agreed to pay a fine of $40,000 for making a $10,000 donation to the nonprofit and raising another $90,000 from his other lobbying clients at a time when he was a registered lobbyist. State rules bar lobbyists from giving gifts of more than $75 to elected leaders or to a charitable organization at the behest of the elected official.

While the cases against the donors have settled, the commission still has not determined whether the 501c4 Campaign for One New York actually violated the lobbying law. The panel explained that “The commission’s investigation relating to donations to CONY is continuing.” Laura Nahmias reported that “Politico New York analyses have shown that a majority of the donors to the nonprofit had business before or labor contracts with City Hall, or were trying to secure approval for a project when they contributed.” It seems that many of CONY’s donors and contractors were either also contracted with the city or were affiliated with other groups that had a stake in decisions made by the mayor’s office.

An earlier story by Politico reported that CONY and similar organizations have “been a windfall for the handful of consulting firms with close personal ties to de Blasio.” For instance, Bill Hyers, CONY’s board chair, is a partner at Hilltop Public Solutions, which earned over $400,000 from de Blasio’s organizations, including $156,010 just from CONY in 2014. Former secretary Stephanie Yazgi also came from Hilltop.

The rules related to nonprofit lobbying and advocacy are meant to ensure that the public’s dollars are used responsibly and not to create a circle of self-interest that counters the service mission of nonprofits, something de Blasio likely knows well. If this is a case in which the mayor was unaware that his organization was operating with these conflicts of interest, it seems a rather extreme oversight. The mayor claimed that CONY was shut down in 2016 because it had accomplished its goals but had to be compelled by a judge to release its communications.—Jeannie Fox and Erin Rubin