Paladino as donor has it both ways - The Buffalo News

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Paladino as donor has it both ways

For a guy who professes to despise politicians, Carl P. Paladino sure likes to shower them with money.

Take Gov. David A. Paterson. Paladino has called him "pathetic" and a "drug addict" -- after his companies steered $10,000 to the governor's campaign coffers in a single day in December 2008.

Or former Gov. George E. Pataki, a "degenerate idiot," in Paladino's words, and the recipient of $52,000 in contributions when he resided in the Executive Mansion.

Or Rep. Brian Higgins, who Paladino in August derided as "arrogant and elitist," but who was previously the recipient of $9,350 in contributions.

Add it all up, and Paladino and 20 of the companies he owns have contributed since 1999 to 156 candidates and 15 other campaign committees, most of them linked to the Republican and Democratic parties, a Buffalo News analysis shows.

Those contributions total $468,787.

"He's a serious player in the political system because of his money.

Any time you funnel half a million dollars into the system, people tend to notice," said Blair Horner, legislative director of the New York Public Interest Research Group, which recently did its own study of Paladino's contributions.

Paladino's donations reflect his passion in politics.

But they also can be regarded as good investments, providing him access and, in some cases, influence, with federal, state and local elected officials with whom he does business as one of Buffalo's largest developers, commercial landlords and parking lot operators.

While there is no documentable link between Paladino's contributions and the government contracts he has garnered -- including $10.1 million a year in office rents -- there is a clear pattern: The more Paladino has given to politicians, the more government contracts he has been awarded.

The News analysis is based on contributions reported to the state Board of Elections and the Federal Election Commission from January 1999 to Sept. 24 of this year.
It represents the most comprehensive study of Paladino's contributions, which have emerged as an issue in his race for governor as the Republican nominee against Democrat Andrew M. Cuomo.

Among The News' key findings:

  • Paladino has found a way around contribution limits by using 20 companies he controls to make donations that supplement what he gives as an individual.
  • These contributions are coordinated and have involved Paladino and his companies giving as much as $20,000 to a candidate in a single day.
  • Most of Paladino's donations go to politicians whose governments do business with his companies.

For example, Paladino and his companies have given more than $80,000 to the last three governors, whose administrations have leased office space in Paladino-owned offices that involve $5.1 million in annual rent payments.

While Paladino and his companies have given to a wide range of candidates, a dozen politicians and party committees account for slightly more than half of his contributions. He has given more to Pataki than anyone.

The Republican Party, at the local and national level, is another large recipient. Others include Erie County Executive Chris Collins and a committee he controls, former Rep. Thomas M. Reynolds and State Sen. Michael H. Ranzenhofer. Former Gov. Eliot L. Spitzer is the highest among Democrats on this list of top recipients.

Paladino, of late, has given more money to Collins than anyone.

He has contributed almost $60,000 in the past three years to the county executive's campaign account, candidates he supports and political committees he influences, if not outright controls.
Paladino declined an interview request for this article, with Michael R. Caputo, his campaign manager, sending an e-mail telling the reporter "to pound salt."

'Bundles' the money

Paladino is a self-made real estate magnate, headquartered in Buffalo, with holdings across upstate New York and western Pennsylvania.
Much of his cash flow is generated by leases he has with the state and federal governments, as well as Erie County and several other local entities. He recycles some of that income into campaign contributions.

While he has given a lot individually -- $120,971 since 1999 -- he has given more through companies he owns. The News analysis found that 20 companies gave $347,816.

His strategy of "bundling" contributions -- that is, giving candidates multiple contributions from a number of connected companies -- gives him an advantage over those who don't have expansive business holdings.

The practice is legal, although many advocates of good government consider it an exploitation of a loophole in campaign finance laws.

"He's using every available tool in his checkbook to funnel large donations into the system, and he's doing it in such a way that the public doesn't know what he's doing," said Horner of NYPIRG.

A review of contributions shows a clear pattern. When Paladino contributes to a candidate or committee, he often makes donations from a number of his companies on the same day.

For example, on July 5, 2002, Paladino wrote a check to Pataki for $5,000. Three companies he controls did likewise, providing the governor with a total of $20,000.

On Dec. 3, 2008, six companies he controls wrote checks totaling $10,000 to Paterson's campaign committee.

These coordinated contributions are the norm. For example, in 2009, Paladino and his companies made 116 contributions.

Ninety-three involved multiple contributions on the same day from Paladino and/or two or more of his corporations to the same candidate or committee.

Paladino spreads his money around to both Democrats and Republicans, although he tends to favor the GOP.

He gave $1,000 or more to 69 candidates and committees. Republicans received $249,521; Democrats $172,544.

Pataki heads the list of Republican recipients, while Collins, the county executive, is his current favorite.

Paladino and his companies gave Collins $38,650 through both Collins' campaign committee and Taxpayers First, which the county executive established in 2009 to fund the campaigns of political allies.

Thomas M. Reynolds, who represented Western New York in Congress before retiring two years ago, received $17,675.

Michael H. Ranzenhofer is another Republican recipient of Paladino's largess. He has received $14,800 to fund his campaigns for Erie County Legislature and then, in 2008, the State Senate.
Paladino and his companies also have been generous to Republican Party committees.

He has given $44,300 to the Erie County Republican Committee since the contributions have been reported to the state Board of Elections in 2006 and $18,650 to the Republican National Committee and two related committees that promote the election of party members to the Senate and Congress.

Among Democrats, Paladino has been most generous to Spitzer, giving $19,858, most of it for his 2006 race for governor.

Since 2006, Paladino has given $13,300 to the Erie County Democratic Committee, which leases space at his Ellicott Square.

Paladino gave $12,000 to Common Council Member Michael P. Kearns of the South District, most of it last year when Kearns challenged Mayor Byron W. Brown in the Democratic primary.

The News analysis found other trends:

  • Paladino donates to candidates pursuing offices big and small.
  • He has given money to presidential candidates, including Hillary Rodham Clinton, $9,800; John McCain, $4,600; George W. Bush, $3,000; Rudy Giuliani, $2,300; Al Gore, $2,000; Richard A. Gephardt, $1,000; and John F. Kerry, $500.

Hedges his bets

At the other end of the spectrum, he has contributed to the candidates running for Amherst supervisor and Town Board and a number of town judgeships elsewhere. In between are donations to candidates for the U.S.

Senate and House; governor, State Senate and Assembly; county executive, county comptroller, county clerk, sheriff, district attorney and Legislature; mayor and Common Council; and judge at the local and state levels.

Most contributions involve public offices in Western New York, but Paladino money sometimes reaches beyond the region, funding candidates in recent years for mayor of Syracuse and Onondaga county executive.

Paladino sometimes likes to hedge his bets by contributing to competing candidates.

For example, in the 2007 race for Erie County executive, he gave $6,000 to Paul T. Clark and $4,000 to James P. Keane when they were vying in the Democratic primary.
Keane won, and Paladino gave him an additional $2,200 for his general election race against Collins, who he, in turn, gave $2,400.

A year later, he gave $1,800 to Assemblyman Sam Hoyt and $900 to Barbra Kavanaugh, who was challenging Hoyt in the Democratic primary.

This year, in the Republican primary for the State Senate seat being vacated by Dale M. Volker, he gave $1,000 to James P. Domagalski and $750 to David J. DiPietro.

While Paladino gives mostly to incumbents or front-runners for vacant seats, he has walked away from several entrenched politicians, although he has continued to give to party committees in a position to support them. State Sens.

George D. Maziarz, William T. Stachowski and Volker saw their last money from Paladino in 2000, 2003 and 2004, respectively. Assemblywoman Crystal Peoples-Stokes was cut off after 2002 and Assemblyman Robin L. Schimminger in 2003.

Paladino's immediate family members -- his wife, son, brother, daughter and son-in-law -- have contributed $123,769. That money is not included otherwise in The News analysis.

His wife, Mary Catherine, gave $5,400, all to Reynolds and his successor in the House, Chris Lee.

His son William, chief executive officer of Ellicott Development, one of Paladino's primary companies, gave $26,550 to assorted candidates.

Paladino's younger brother, Joseph, senior vice president of leasing for Ellicott Development, contributed $11,704.

Paladino's daughter, Danielle Jacobs, and her husband, Luke Jacobs, are the biggest givers in the family outside of Paladino himself, contributing $79,450 between them.

Luke, an attorney and brother of Christopher L. Jacobs, a developer and member of the Buffalo Board of Education, accounts for $64,800 of those contributions.

The contributions from his relatives mirror those made by Paladino and his companies.

As a group his family has contributed the most to Reynolds, $19,600; followed by the Republican National Committee, $11,400; Higgins ($11,300); Kenneth F. Case, a candidate for Erie County district attorney, $10,350; Lee, $9,000; Christopher Jacobs, $8,000; and Spitzer, $7,000.

Much goes to City Hall

The News analysis did not take into account contributions Paladino and his companies made to candidates for local office prior to 2006 because donations to local candidates and political committees were not reported to the state Board of Elections until then.

However, Paladino contributed large sums to most of the region's top-tier officeholders prior to 2006.

He has invested particularly heavily in City Hall, starting with James D. Griffin when he was mayor.

When Griffin stepped down in 1993, Paladino gave to both Anthony M. Masiello and Eugene M. Fahey in the 1993 Democratic primary, then went on to become one of Masiello's biggest financial supporters in his 12 years as mayor.

Paladino tried hard to elect Masiello's successor in 2005 in his underwriting of Republican Kevin J. Helfer's campaign.

Paladino and his companies gave Helfer $37,500, while family members and business associates gave another $27,000, but Helfer lost to Brown.

Paladino also spent heavily in his long-standing battle with former Common Council President James W. Pitts.

He gave David A. Franczyk of the Fillmore District about $25,000 when he challenged Pitts in 1999, then donated about $20,000 in support of a referendum in 2002 that led to a downsizing of the Council and the elimination of the separate president's seat.

Paladino's giving extended beyond City Hall. For example, he and his companies were one of County Executive Dennis T. Gorski's biggest contributors during his 12 years in office.

The absence of centralized records makes it impossible to calculate how much Paladino contributed to local candidates and party committees prior to 2006.

But, based on newspaper accounts, The News estimates that his contributions came to at least $200,000 -- and could have been substantially more.

Then there are $54,350 in contributions Paladino and his companies made to federal candidates from 1989 to 1998, which also were not included in The News analysis.

Add it all up, and it's probably safe to say Paladino's individual and corporate contributions over the years total at least three-quarters of a million dollars.

Alliance with Collins

Paladino's current favorite is Collins, who took office as county executive in 2008.

While Paladino put most of his money on Collins' opponent in the 2007 election, their alliance is not surprising, given that they both come from a business background and share conservative political beliefs.

Paladino, through his companies, has donated $28,650 to Collins' campaign committee, all but $2,400 of it since he won election in November 2007. But the contributions have not stopped there.

Paladino contributed another $31,145 to committees Collins controls or influences, including Taxpayers First and the Erie County Republican Committee, and six candidates for county office he has supported.

Four of them won election last fall, including Sheriff Timothy B. Howard and freshmen Legislators Lynne M. Dixon, Raymond W. Walter and Kevin R. Hardwick.

The election of those three lawmakers, coupled with the defection of Democrats aligned with Brown, led to the formation of a majority coalition early this year that is aligned with Collins.
Altogether, Paladino and his companies have given $59,795 to Collins and his committees and candidates in the past three years.

During that time, Paladino companies negotiated one lease extension with the county for office space on Main Street to house a portion of the operation of the Department of Social Services.

Those contracts provide Paladino companies with $2.3 million a year in rent.

The leases, first entered into in 1992, were extended at a time when the county was otherwise trying to consolidate operations in county-owned buildings to save money.

In addition, since Collins took office, the Erie County Industrial Development Agency, which he heads and controls through his power of appointment, has approved tax breaks for three Paladino projects that will save him $770,000.

Government contracts

Paladino's lease renewals with the county are just the latest in a long line of transactions he has made with local, state and federal officials that reap his companies $10.1 million a year in rental income, according to a News investigation published in April.

Paladino is state government's biggest landlord in Western New York, holding half of the 52 leases the state has taken out on offices in Erie and Niagara counties, The News found.

The oldest leases date from 1994, but most were originally awarded earlier this decade while Pataki was governor. About one-third have been renewed or awarded since Spitzer and then Paterson were governor.

Among the three, Paladino has contributed $81,058 to their campaigns. Paladino gave Pataki more money than any candidate, while Spitzer ranks third.
While cost is an important consideration, the state does not automatically award contracts for leased space to the lowest bidder. Other factors, such as location, also come into play, The News found in its April investigation.

Three federal leases, including FBI offices in Buffalo and Niagara Falls, bring him another $1.9 million in annual rents.

Paladino secured the lease for the FBI building in Buffalo in the mid-1990s, at a time when he was a heavy contributor to a host of federal elected officials, including President Bill Clinton, Sen. Alfonse M. D'Amato, Reps.

Bill Paxon, Jack F. Quinn Jr., John J. LaFalce and Reynolds, as well as the Democratic National Committee, which received $11,000 from Paladino companies in 1992-93.

Paladino's companies also lease space to the Buffalo Board of Education and the Erie County Fiscal Stability Authority and the Erie County Water Authority, both independent of county government.

The News investigation also determined that Paladino owns an estimated 20 properties that have received tax breaks -- including property and sales taxes -- that amounted to at least $12 million from 2003-08.

He has received at least $1.6 million in additional tax breaks since then on four other properties.

Horner, of NYPIRG, said it's tough to prove a quid pro quo when it comes to contributions, contracts and economic-development subsidies.

"You never know in Albany's play-to-pay culture, but he must believe it doesn't hurt," Horner said. "Why else would he keep doing it?"

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