The labor-backed Working Families Party has engaged in “an audacious scheme to violate the law” to help the party’s favored political candidates get elected, a sweeping new lawsuit charges.
The first-of-its-kind suit says the WFP created a political outfit, Data and Field Services, that it is using to “circumvent state election and local campaign finance laws.”
The way the scheme works, according the suit, is that the WFP gets involved in local races, backing its favored candidates, who in turn hire DFS for vital campaign services, such as phone banking, polling and get-out-the-vote efforts.
But under the plan, the WFP-endorsed candidates pay only “a nominal sum, well below fair market value,” for those services — giving those candidates a major, unfair advantage over their opponents, whose spending is limited by law.
“This is a case about an audacious scheme to violate the law by using corporate subterfuge to hijack our local election process,” says the suit, which was filed in Staten Island.
“It goes to the very heart of our local democracy and undermines the fairness and integrity of our local elections.”
The suit, filed on behalf of five aggrieved Staten Island voters, highlights the relationship between the City Council campaign of Debi Rose, a WFP-backed candidate, and DFS.
The court papers provide a case study for how the WFP, which has been increasing its influence, operates.
Two WFP candidates, Bill de Blasio and John Liu, are expected next week to be elected as public advocate and comptroller, respectively, and the party scored recent wins in a number of key council races.
The lawsuit charges that he Rose campaign — which bested incumbent Democratic Councilman Ken Mitchell in the primary last month — paid a mere $19,000 to DFS in that contest.
The real value of the campaign services in a council race is at least $100,000, according to the legal papers.
DFS provided aid to Rose’s campaign, including polling, phone banking and petitioning in the primary, according to court papers.
“Something doesn’t fit. Somebody’s cooking the books,” attorney Randy Mastro said.
“It would appear DFS was created as a corporate veil to shield the WFP, [which is] funneling campaign contributions to candidates they support.”
Since corporations are limited to giving political candidates $5,000 worth of services or cash in a calendar year, the discounted DFS rates are tantamount to in-kind political contributions that never get reported, the suit says.
Mastro, a former deputy mayor under Rudy Giuliani who said he is working free of charge, alleged: “The Working Families Party is using its captive corporate shell, DFS, to launder illegal campaign contributions to candidates the party supports. Debi Rose’s campaign is a perfect example of how this works.”
Spokesmen for the WFP and the Rose campaign insisted she paid a much higher rate for DFS’s services.
“We fairly compensated them, paid them close to $45,000. This was entirely politically motivated. There’s no other reason — the numbers are there,” said Rose campaign spokesman Roy Moskowitz.
City Campaign Finance Board filings from Rose show she paid $45,000 as of last week.
“The lawsuit is baseless and fraught with error. The facts it alleges are false. This is nothing more than a desperate attack one week before Election Day,” said WFP spokesman Dan Levitan.
Mastro implied the payments were a sham, noting filings showed she had paid only $19,000 several weeks ago for DFS services.
“They subsequently just last Friday reported more? But we’re in a general campaign now. Something doesn’t add up,” he said.
Campaign Finance Board has officially declared DFS as an arm of the party and said any campaign activities that the WFP undertakes beyond what DFS does should be reported as contributions.
Mastro and Levitan said this is the first suit ever filed against DFS.
Mastro is asking the judge to prohibit DFS from providing Rose any additional services in her race, though Levitan said she did not use the corporation in the general election.
Mastro is also demanding Rose’s treasurer pay DFS the full value of the campaign services.