Real estate developer Michael Joseph is a big fan of the Erie County executive. And his support can be counted in greenbacks.
Joseph, the owner and chief executive of Clover Management Group, a local company that builds and manages thousands of rental and condo units, contributed roughly $1 out of every $10 raised in County Executive Mark C. Poloncarz’s re-election campaign since January.
Campaign finance laws limit corporations to contributing up to $5,000 to a candidate. But because of loopholes in campaign finance law, a larger company’s subsidiary groups and limited liability companies can make contributions on the parent company’s behalf and effectively render the $5,000 contribution limit meaningless.
That has enabled Michael Joseph to pour $46,000 into the Democratic incumbent’s campaign coffers, with 23 different subsidiary companies and LLCs contributing $2,000 each, according to a News review of campaign finance disclosure reports.
In 2013 and 2014, Joseph gave Poloncarz $5,000 directly in Clover Management’s name.
“In an election year, I want to do more to help,” he said. “I gave in other ways that I was legally able to do.”
While Joseph is certainly not the only business person to spread out his contributions this way, his donations make him Poloncarz’s single largest private contributor.
Poloncarz’s Republican opponent Ray Walter says no individual or corporation should be able to take advantage of weak campaign finance laws and buy a candidate’s favor.
Poloncarz has abstained from voting on Joseph’s projects before the Erie County Industrial Development Agency. But the agency instituted a policy in June – and Poloncarz moved the approval at the meeting – that makes certain for-profit senior housing projects eligible for tax breaks. Senior housing comprises a portion of Clover’s business. The new policy was controversial because these housing projects create few jobs.
Joseph responded that he and Poloncarz are friends and that he has not won – nor does he expect to win – favors from the county executive in exchange for his sizable contributions. Joseph was the chairman of Poloncarz’s transition committee in 2011 and 2012.
“I think he’s done a great job,” Joseph said. “I’ve been a supporter of his since he ran the first time.”
His company does no work with the county, he said.
Joseph also added that Clover Group has not submitted any projects for tax break consideration before the Erie County Industrial Development Agency in years because rising rents make tax breaks for his local projects unnecessary, and most of his current development work is done out of state in places like Cleveland, Cincinnati and Pittsburgh.
The last senior housing project Clover Group developed locally was Transit Pointe Senior Apartments in Clarence, which broke ground in 2013 and received no tax breaks, he said.
A News review of three years of ECIDA votes found no tax breaks for Joseph’s companies.
Joseph is an investor in three projects that would convert vacant, former Catholic school buildings into market-rate apartments. So far, the ECIDA has approved tax breaks for two of those projects. But Poloncarz abstained from voting in both cases, citing the fact that Joseph was a member of his transition team, a major contributor to his current re-election campaign and co-chair of his campaign finance committee in 2011.
“I did abstain because of him being a close personal friend,” Poloncarz said.
Yet, Walter questions whether Poloncarz is influence-free. He pointed out Poloncarz supported the new ECIDA policy in June that makes certain for-profit senior housing projects eligible for tax breaks.
“It certainly benefits one of his biggest contributors,” Walter said.
Though the development agency could offer tax breaks under a less restrictive basis prior to the new policy, such a move was considered controversial because market-rate housing projects create few jobs and are aimed at tenants who can afford the rents.
Poloncarz moved the approval of the new policy a few days after Joseph made the bulk of his contributions to Poloncarz’s campaign fund.
The county executive said that policy had been in the works for a year and that he supported it because it offers guideline restrictions on what can qualify for tax breaks and would give consideration to low-to-moderate income seniors who seek housing in underserved areas.
“That’s not the kind of work Michael does,” Poloncarz said.
“I don’t like the policy,” Joseph said. “I think the restraints on that policy, the requirements of that policy, make it very difficult to do the kind of projects my companies have been doing. That is not a policy that I was in favor of.”
He also said his company currently has no future projects scheduled that would seek ECIDA assistance.
Walter said he remains skeptical that Joseph may not benefit from the new senior housing policy down the road. He also took Poloncarz to task for being willing to accept so much money from one private company, adding that as an assemblyman, he voted for legislation to close the corporate contributions loopholes. That LLC finance reform bill has passed the Assembly but stalled in the State Senate.
“It’s still unseemly that you’re taking all this money from one donor and using these LLCs to hide from the public where you’re getting this money from,” Walter said.
Poloncarz responded that if anyone is hiding where he’s getting his money from, it’s Walter. He referred to the fact that in Walter’s most recent campaign filing, the state Republican Committee sent $80,000 to the local party, which, in turn, passed the money on to Walter. The original contributors of that “dark money” are unknown to the public, he said.
“My opponent’s not raised a lot of money, but most of that money has come from the state party, and who knows where that money’s coming from?” he said. “All my donations are open, no question about that. My opponent’s are not.”