HOLY HYPOCRISY PART II

Member items help grease political machine
State senator from Bronx used straw donors for campaigns, ex-loyalists say

By JAMES M. ODATO, Capitol bureau
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First published: Sunday, June 11, 2006

ALBANY -- Three people who worked at Bronx charities created by Sen. Ruben Diaz Sr. say the state senator secretly gave them currency or money orders and instructed them to personally contribute the cash into his or his son's campaign accounts. Two of the charities have been heavily financed by special legislative grants of taxpayer money -- called "member items" -- arranged by the senator's son, Assemblyman Ruben Diaz Jr. State law makes it unlawful for a person to give money in someone else's name to a candidate's campaign, but that is exactly what Sen. Diaz did, three former loyalists said in interviews.
Hundreds of dollars in campaign donations from the three appear on the Bronx Democrat's state and city campaign disclosure reports, as do thousands of dollars more from dozens of employees and former employees of not-for-profit organizations Sen. Diaz controls.

"He would hold a fundraiser and go to the employees and give them cash or money orders," said Edward Padilla, executive director of Soundview Community In Action. "It wasn't the employees' money."

Sen. Diaz and his son, Assemblyman Ruben Diaz Jr., both refused to comment.

Soundview Community in Action is a Bronx nonprofit group that formerly employed Sen. Diaz, his wife and his former wife, the mother of Assemblyman Diaz. Soundview received hundreds of thousands of dollars in so-called legislative "member-item" funds through the senator's son while his family members were employed.

That act apparently violated Assembly guidelines that render an organization which employs an elected official's relative ineligible for such funds. A recent story in the Times Union about the Diaz family's use of member item money prompted Assembly Speaker Sheldon Silver to give Assemblyman Diaz a stern lecture, according to a source familiar with the confrontation.

Silver said he has since bolstered oversight of member-item spending by bolstering monitoring staff and investigatory resources.

Soundview employees had begun to rebel at being used as political tools when Diaz Sr. rose from his position as a city councilman to become a state senator in 2003. Both the senator and his assemblyman son then began steering hundreds of thousands of dollars in member-item money to Christian Community Benevolent Association, another Diaz organization. Its staff is closely affiliated with Christian Community In Action, which employs Sen. Diaz's wife.

State records show Soundview's director, Padilla, contributed two checks of $500 each in 2002 to Assemblyman Diaz's campaign -- money Padilla said came from the senator. Sen. Diaz's filings for his last City Council campaign also list Padilla, misspelling Padilla's first name but using his Bronx address, as providing a total of $1,120 in June of 2001 in three checks -- money Padilla says he did not provide from his own pocket.

A woman who worked for Christian Community In Action, whose name is being withheld by the Times Union to protect her from retaliation, said she also received money from the senator, who also is a minister, to make contributions. She is listed as contributing to Assemblyman Diaz in 2000.

The woman also is listed as contributing to the Rev. Diaz's City Council campaign in 2001.

That source said the orders to donate and a supply of money orders came from the elder Diaz. "He's the only one with the audacity," she said.

A third source, who still works for one of the charities, said he received money to donate to campaigns as well. He is listed in 2002 filings as having given hundreds of dollars to both the senator's and assemblyman's campaigns. That worker said the senator provided the cash for the contributions.

"He would make money orders and just ask us to put our name on it," he said.

The allegations that Sen. Diaz has used straw contributors were corroborated by a fourth source who worked with Diaz, but they were disputed by several employees at Christian Community In Action, when reached at work. Those employees say they donated their own money to both the senator and his son.

Even while earning less than $30,000 a year, some gave hundreds or thousands of dollars to Diaz campaigns. They insisted the money came from their own funds. Many more would not comment and several others refused to take calls. Finally, a woman identifying herself as a lawyer for the group threatened legal action and demanded the Times Union stop contacting workers.

In recent years, Padilla and others who worked for Soundview complained to Attorney General Eliot Spitzer that the senator forced the nonprofit employees to work on voter campaigns, raise election funds and fill out money orders for campaigns, Padilla said. Spitzer, Sen. Diaz's filings show, donated $150 in 2002 to the elder Diaz's city council campaign. A spokesman for Spitzer could not explain the donation.

Spitzer's office concluded its investigation of Sen. Diaz by allowing the senator to use his campaign treasury to reimburse the state and federal government for misused public grants. Those grants, intended to help Soundview keep kids off the streets, were used to buy furnishings and audio speakers found at the senator's district office.

James M. Odato can be reached at 454-5083 or by e-mail at jodato@timesunion.com.