Sunday, October 31, 2010

Manhattan DA Cyrus Vance Jr. lays out case against Bloomberg, but decides not to follow through

Adam Lisberg

Sunday, October 31st 2010, 4:00 AM

Manhattan District Attorney Cyrus Vance Jr. has not brought a case against Mayor Bloomberg for possibly breaking campaign finance law last year.
Smith for News
Manhattan District Attorney Cyrus Vance Jr. has not brought a case against Mayor Bloomberg for possibly breaking campaign finance law last year.

Manhattan District Attorney Cyrus Vance Jr. last week laid out in his clearest language yet how Mayor Bloomberg may have broken campaign finance law in funding his reelection bid last year.

Somehow, though, Vance doesn't see it as a case worth pursuing.

He filed legal papers Friday bolstering his indictment of John Haggerty, the election aide accused of pocketing $1.1 million Bloomberg spent for Election Day poll-watching.

Bloomberg funneled that money through a special "housekeeping account" of the state Independence Party, one that can accept unlimited donations and doesn't report them until two months after Election Day.

State law says housekeeping money can only be used for day-to-day party activities, not to benefit any specific candidate. Haggerty, though, claims he spoke directly with Bloomberg about how it would help the mayor's campaign.

Here's where it gets sticky for Bloomberg.

Haggerty's lawyers say that if Bloomberg's $1.1 million was truly a donation to the Independence Party, then prosecutors can't claim it was stolen just because they don't like how the party spent it.

In last week's filing, though, Vance scoffs at the idea Bloomberg's money was a donation to the party.

"This argument seeks to mischaracterize the nature of the transferred funds," prosecutors wrote. "Haggerty deceived Bloomberg and his staff into sending the money to pay for a fictitious ballot security operation."

If Bloomberg's $1.1 million wasn't really a party donation, it should presumably have been reported as part of his campaign spending.

"That's the conundrum here," said Dennis Vacco, one of Haggerty's lawyers. "It's either a contribution or it's an expenditure."

Bloomberg even filed a state Board of Elections form called a CF-16 promising that "all financial activity related to my campaign, including my own," would go through his official Bloomberg for Mayor 2009 campaign.

That's not what happened, though.

Vance and his office will not comment on why - or whether - they haven't tried to pursue a case against Bloomberg.

However, the law about housekeeping accounts is mushy and much-abused.

Bloomberg has some very high-powered lawyers who could presumably explain to Vance how all their decisions fell just inside the loopholes.

A freshman prosecutor with big visions for the future, taking over from a legend like Robert Morgenthau, might have balked at starting his tenure by bringing a difficult case against a popular mayor.

Whatever happened, Bloomberg appears to be in the clear. He has poured at least $6.2 million into Republican and Independence housekeeping accounts in the past nine years - and if he's spending more right now to influence Tuesday's election, we won't know for months.

"Any contributions that we may have given or may choose to give," said Deputy Mayor Howard Wolfson, "will be disclosed at the appropriate time."

alisberg@nydailynews.com

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