Another speaker faces probe
New York City Council Speaker Melissa Mark-Viverito and one of her former political consultants are subjects of a city ethics probe, Crain’s has learned.
The investigation is noncriminal, unlike the one that snared Assembly Speaker Sheldon Silver last week. Conducted by the city's Conflicts of Interest Board, it centers around free advice Ms. Mark-Viverito got during her 2013 race for speaker, two sources with knowledge of the matter said.
The speaker's campaign fund recently paid $20,000 to Ballard Spahr Stillman & Friedman to represent her before the Conflicts of Interest Board, which has been deposing figures in the investigation.
In the competition to succeed Christine Quinn as speaker, the Daily News reported that Ms. Mark-Viverito's pro bono help from the Advance Group could violate a city ethics rule. Citizens Union called for the Conflicts of Interest Board to investigate.
The Advance Group had helped Ms. Mark-Viverito prepare for debates and network with council members and county leaders, who helped decide the leadership race. Ms. Mark-Viverito's speaker bid had advantages, including support from Mayor Bill de Blasio, but she was not especially popular with council colleagues—from whom she needed 26 votes—or county bosses, who controlled many members' votes.
The ethics question arose because as a public servant, Ms. Mark-Viverito is prohibited by the City Charter from taking a "valuable gift" from a firm that intends to do business with the city. Lobbyists are also prohibited from providing such gifts. The Advance Group has extensive lobbying business before city government, including the powerful speaker.
A public official found to have violated the rule can be fined up to $25,000, and someone providing improper assistance up to $5,000.
By law, the Conflicts of Interest Board cannot confirm or deny whether a probe is ongoing. But a campaign spokesman for Ms. Mark-Viverito said, "Although the Campaign Finance Act permits individuals to volunteer their time to support a candidate, in order to demonstrate that the campaign was conducted fully aboveboard, legal counsel experienced in these matters was engaged."
An Advance Group spokesman said, "We are proud to have played a role in the historic victory which elected Melissa Mark-Viverito speaker of the City Council."
The Advance Group was not the only lobbying firm to help. Early in Ms. Mark-Viverito's speaker bid, an employee from another lobbying firm close to Ms. Mark-Viverito, the MirRam Group, handled an inquiry from Crain's for a story about her past refusal to recite the Pledge of Allegiance. MirRam also was not paid for work on the speaker race.
MirRam maintains the work was related to Ms. Mark-Viverito's 2013 City Council bid—for which MirRam was paid—though that campaign had ended weeks before the Crain's inquiry. MirRam has since successfully lobbied Ms. Mark-Viverito on behalf of other clients.
In light of the scrutiny of Advance Group's pro bono work, Ms. Mark-Viverito said in December 2013 that she would stop accepting free help from the firm during her speaker bid. The New York Observer later reported, however, that an Advance Group employee later played a role in brokering the deal that made Ms. Mark-Viverito speaker.
After the split with the Advance Group, Ms. Mark-Viverito made hefty payments to other consultants (including lobbying and compliance firm Pitta Bishop) that aided her speaker bid. In a novel move, Pitta Bishop set up a 2017 campaign account for an unspecified city office, and Ms. Mark-Viverito raised more than $100,000.
That led another good-government group, Common Cause/NY, to charge that she had exploited loopholes in state election law. Ms. Mark-Viverito's opponents in the speaker race did not similarly set up campaign funds to hire staff. But officials from Pitta Bishop say the move was fully vetted by the city Campaign Finance Board and state Board of Elections.
The recent legal fees have eaten up much of Ms. Mark-Viverito's fundraising during the past six months. The legal case might have been the primary purpose of her fundraising, given that her prospects for the 2017 election appear dim: She is term-limited, and no seats for borough president or citywide office are expected to be open. She recently began raising funds at the level allowed for citywide candidates, but a source said she was not considering running for one of those offices. She could run for retiring Rep. Charles Rangel's seat in 2016, but could not directly transfer city campaign funds to a congressional account.
The Advance Group is also facing scrutiny for campaign activities in 2013, including from the Campaign Finance Board, which recently fined former Advance Group client and animal-rights group NYCLASS $26,000 for illicitly coordinating campaign activities with Advance Group.
A version of this article appears in the January 26, 2015, print issue of Crain's New York Business.