Paladino Uses Campaign Money In Business
The New York Times reports:
If Carl P. Paladino comes up short in his run for governor against Andrew M. Cuomo, he will not have thrown his money away. At least not all of it.
Of the $3.8 million that Mr. Paladino, a Republican, had spent as of Sept. 27, nearly $2 million has gone to companies he owns or controls, records show — most of it to a company he set up to produce his own television and Internet advertisements.
Mr. Paladino’s campaign, based in Buffalo, also houses out-of-town guests in a budget hotel he owns, leases cars from a rental agency he owns, parks cars in a garage he owns and uses the services of an accountant whose other job is at Mr. Paladino’s real estate development company.
When Mr. Paladino, who has said he will spend as much as $10 million of his fortune on the race, cannot put campaign money back in his own pockets, he at least steers it to people he does business with. He buys handbills, signs and other materials from companies that lease space from him, and his campaign treasury is deposited in a bank branch that also pays him rent.
Michael R. Caputo, the Paladino campaign manager, acknowledged that the businesses Mr. Paladino owns charged his political committee deeply discounted rates.
“When we get an owner’s rate at the Staybridge Suites, it’s like a 30 percent discount,” he said, referring to one of the hotels Mr. Paladino owns. “Is being a businessman an unfair advantage? Yes, it is.”
But Mr. Caputo insisted that the rates the businesses charged were not so low as to break state election law. “Carl has partners in all these businesses, and it wouldn’t be fair for him to run his campaign on the backs of his partners,” he said. “They’re in it to make money. You can see what their consternation would be if we were not paying for this stuff.”
Such an approach is allowable under state election law as long as Mr. Paladino’s campaign pays a “reasonable fair-market rate,” said John Conklin, a spokesman for the State Board of Elections.
But state law does not define what would be considered a sweetheart deal, Mr. Conklin said. “For our purposes, there would have to be a complaint, and we would make an assessment,” he said. “But the law makes the campaign treasurer decide what’s reasonable or fair-market value, just as the treasurer decides the value of an in-kind contribution.”
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