NEW YORK, NY — Attorney General Eric T. Schneiderman today announced that his office and the New York City Campaign Finance Board (CFB) have settled an investigation into The Advance Group (TAG), a consultant for New York City political campaigns. The joint investigation centered on the 2013 New York City election cycle, specifically whether TAG improperly engaged in unlawful coordination by serving as both an agent for individual candidates for public office as well as for entities making independent expenditures on behalf of some or all of those candidates. The Attorney General’s investigation found that TAG’s leadership made virtually no effort to ensure that there was any separation—commonly known as a “firewall”—between TAG staff who worked for candidates and TAG staff who worked on advocacy campaigns that made expenditures in support of those candidates. As a result, TAG has agreed to pay roughly $26,000 in total to New York State and the CFB, as well as agree to properly maintain future firewalls and comply with the law.
The agreement released today does not allege any violations of the law by any TAG clients.
“New York voters deserve elections that are fair and free of coordination that distorts the democratic process,” said Attorney General Schneiderman. “The law preventing coordination between candidates and advocacy campaigns is clear. Today’s agreement sends a clear message that campaign coordination is unacceptable in New York city and state politics.”
Board Member Mark Piazza said, “We have been watching with dismay as outside groups and candidates at the federal level test the boundaries, and often cross the line, of coordination. New Yorkers have been clear that they do not want that happening in our city elections. Strong enforcement is the only way to ensure that it doesn’t.”
Under the New York City Campaign Finance Act, the New York City Campaign Finance Board enforces the law governing campaign spending in elections for New York City public office. Candidates must abide by the requirements of the Act and CFB rules, which include limitations on the amount of contributions a campaign may receive from any single contributor. CFB Rules also apply to expenditures made by outside parties on behalf of, or in opposition to, campaigns.
Expenditures that are made without the cooperation of a campaign are referred to as “independent.” The Act defines “independent” activity as that in which a candidate or a candidate’s committee “did not authorize, request, suggest, foster or cooperate.” Expenditures made with the cooperation of a campaign may not be reported as independent; such expenditures are in-kind contributions, which are subject to eh contribution and expenditure limits and must be accounted for and reported by campaign. Campaigns may not accept contributions, including in –kind contributions, from corporations.
In December 2013, the Office of the Attorney General (OAG) opened an investigation by subpoenaing TAG and other entities for documents and information relating to TAG’s consulting work during the 2013 election. OAG’s investigation identified independent expenditures made on behalf of political candidates while both the spenders and the candidates were TAG clients, making TAG liable for violations of the New York City Campaign Finance Act and CFB rules.
OAG’s investigation further found that TAG created an alter ego, Strategic Consultants, to act as its public face in connection with one advocacy campaign client in order to obscure its coordination. One invoice sent by Strategic Consultants to the client included TAG’s logo. Furthermore, TAG employees reported that they had never heard of Strategic Consultants, which shares an address with TAG, including the same suite number, indicating that it was not a real entity.
OAG’s investigation also found that TAG clients were regularly in and out of its offices.
When CFB sent letters to certain TAG clients in September 2013, informing them of its concerns about possible coordination, a TAG staffer was directed to draft the response to be sent on behalf of the campaigns.
As part of the settlement agreement, TAG will pay $10,800 to New York State, and $15,000 to the CFB. Moving forward, TAG has agreed to follow all relevant laws and rules, and to seek guidance from the relevant regulatory agency on how to establish a firewall that can serve as a safe harbor when a campaign client and a third party spender engage the same consultant.