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Cheliotes Stuck for
$75G
Union Head's Race A Costly
Education
By GINGER ADAMS OTIS
Arthur Cheliotes, president of Communication Workers of
America Local 1180, is struggling to pay $50,000 in legal fees accrued while
defending himself against a $147,000 fine levied by the Campaign Finance Board
over his 2001 bid for a City Council seat in Queens.
 | | ARTHUR CHELIOTES: Sees 'anti-labor animus.' |
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Mr. Cheliotes contested the fine, arguing that he'd been disallowed expenses that were granted to other candidates not backed by labor. The board eventually reduced the fine to $25,000, leaving Mr. Cheliotes with obligations totalling $75,000.
'Misunderstood Labor' The New York City AFL-CIO Central Labor Council was Mr. Cheliotes most prominent backer in the 2001 campaign. He was one of several candidates encouraged to run by the organization in an attempt to increase labor's involvement in city politics.
Ed Ott, public policy director for the CLC, said the Campaign Finance Board hadn't singled out Mr. Cheliotes, but had held all labor candidates to a different standard than other contenders.
"It's because they don't understand how the labor movement is structured - they gave fines over volunteers, donations, a lot of issues, and it's because of a lack of understanding," he said. "Arthur is one of the nicest guys I know in the labor movement, and he's in trouble over something that's not his fault."
 | | FRITZ SCHWARZ: 'No pass for special interests.' |
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'Lacked Documentation'
A spokeswoman for the Campaign Finance Board denied that labor candidates were assessed differently.
"Any campaign showing over-the-limit expenditures is required to respond to
Board requests and provide documentation showing specific exempt expenditures to
prove that the spending was within applicable limits," said the spokeswoman,
Kate Schachern. "In this case, the campaign exceeded the gross primary spending
limit and failed to provide documentation off sufficient expenditures to show
that it had not exceeded the limit. The Board's action in this case, as in all
cases, reflects a non-partisan assessment of the facts on the merits and has
nothing to do with any affiliation of this or any campaign."
Campaign Finance Board regulations limit candidates who want public matching funds from spending more than $40,000 the year before the race and $137,000 during the election year.
Certain administrative expenditures, however, can be excluded from the final tallies, allowing candidates to raise more then the permitted amount to offset some overhead costs. Mr. Cheliotes said his campaign followed the board's guidelines carefully and checked with its staff several times to make sure rules were being interpreted correctly.
'Singled Us Out' "We did have a few late filings that resulted in some late fines, and those were legitimate," he said. "But in other cases, they fined us for deducting expenses that had been deemed permissible for other candidates."
In one instance, he said, a $10,000 fee to a petitioning firm was denied, even though the same firm had been used by other candidates and the board had approved those expenses.
"It is a very arbitrary process. The initial assessment was that I was over the cap by some $40,000, and then the rule is to treble the damage, so I was looking at quite a bit of personal debt," Mr. Cheliotes said.
Ms. Schachern said the penalties were imposed because Mr. Cheliotes exceeded the primary spending limit and failed to properly document his expenditures.
Mr. Cheliotes got a lawyer and arranged for a hearing with the Campaign Finance Board, and that process almost ended up in court when Mr. Cheliotes discovered that he was expected to make his case and exit, while the auditors who had inspected his filings were able to sit in on the board's deliberations.
'Outrageous Process'
"We said at that point we would accept a review from an independent
panel, and we were ready to fight it all the way because it just was
outrageous," he said.
The board eventually reduced his fine to $25,000, but by then Mr. Cheliotes had spent twice that amount on legal fees. He said the entire process left him disheartened and disillusioned about community involvement in public policy.
"This goes beyond me, this issue. What if someone from a community organization wants to run for office and they don't have the money to hire an accountant, or they get hit with fines and can't afford a lawyer? It's really awful how this works," he said. "They could end up with liens on their houses, if they own one. I really think serious reform is needed within the Campaign Finance Board. They should stop looking at themselves as a revenue-generating agency, number one. But also, who are its employees, how are they appointed, and what kind of experience do they have? It should all be looked into."
Board's Makeup The Campaign Finance Board was created in 1988 as an independent, nonpartisan city agency. It administers the Campaign Finance Program, publishes the Voter Guide, and oversees the Debate Program. The board has five members: two are appointed by the Mayor, two by the Speaker of the City Council, and one, the Chairman, by the Mayor after consultation with the Speaker. City law requires that the Mayor's and the Speaker's two appointees must come from different political parties. Board members serve staggered, five year terms.
The current Chairman, Frederic A. O. Schwarz, Jr., was appointed in 2003 by Mayor Bloomberg. A highly regarded Corporation Counsel under Mayor Ed Koch, he had one heated clash with Mr. Bloomberg, but union officials distrust Mr. Schwarz because of his push to alter a CFB rule to limit the amount of donations unions can make to candidates.
Testifying at a City Council hearing last November, Mr. Schwarz argued that campaign contributions from different locals within a parent union - Locals 1180 and 1181, for example, of the CWA - should be counted as one donation.
Good Gov't or Anti-Labor?
Opposing the change, he said, would weaken the "city's Campaign Finance
Program by creating a loophole for one special interest group."
Mr. Cheliotes pointed to the effort to limit union political donations as an
example of the "anti-labor animus" within the board. It showed a profound lack
of understanding, he said, of the diversity within the labor movement.
"Each local has its own membership, and they make up their collective mind about what's best for them," he said. "We don't always endorse the same candidates, and sometimes we even back opposing candidates running against each other."
The Central Labor Council has planned a fundraiser to
help cover Mr. Cheliotes's costs March 2 at Campanile Restaurant in Manhattan,
30 East 29th St., from 8:30 to 10:00 a.m.
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