May 5, 2016 By Christian Murray
A representative of State Sen. Michael Gianaris’ office has been caught up in the campaign finance investigation that has embroiled the de Blasio administration.
Matt Lerch, an Astoria resident who represents Gianaris at community board meetings and local events, took on the role of being the campaign manager to reelect State Sen. Cecilia Tkaczyk in 2014, one of the three Democrats that de Blasio’s fundraising team backed to put the State Senate in the hands of the Democrats.
The State Board of Elections presented a campaign e-mail sent by Lerch as a key piece of evidence supporting its allegation that de Blasio’s fundraising team, the Democratic Senate Campaign Committee—headed by Gianaris — and two County Democrat committees were acting in concert to skirt campaign finance rules to get big contributions into the hands of the three must-win Senate candidates.
The Board of Elections alleges that de Blasio’s team—aided by the DSCC—was able to convince donors to contribute to the DSCC and the two County committees, because the maximum donation permitted to those groups is much higher than the maximum permitted to individual candidates ($102,300 as opposed to $10,300).
The committees in turn, the BOE alleges, would transfer these big contributions to the individual candidates.
The Board claims that the donations to the committees were “straw donations,” arguing that they were essentially made to the individual candidate.
The Board passed its findings to Cyrus Vance, the Manhattan District Attorney, on Jan. 4 which has sparked a criminal investigation that has also brought in the Federal government. In the past two weeks, members of the de Blasio administration have received subpoenas.
The orchestration of the alleged scheme was presented by BOE investigators by showcasing an e-mail that Lerch wrote, which indicated that he knew a donor was about to contribute funds to an Ulster County committee, which in turn would be passed on to to Friends of Cecilia Tkaczyk.
This e-mail was sent to Hayes Clement, the treasurer of the Ulster County Democrat Committee, asking about funds from a donor.
“Hayes, I am just following up…Has the check for $60K cleared? Below is our banking info, we need the 60 transferred over ASAP please,” Lerch wrote.
The e-mail was sent by Lerch on Oct. 16, 2014.
State campaign finance records show that the Ulster County Democratic Committee received a $60,000 contribution from the New York State Nurses Association on Oct. 14.
“This email shows that representatives of Friends of Cecilia Tkaczyk were aware Ulster County Democrat Committee had received a check from NYSNA, knew those funds would be passed on…and previously had discussions about this matter,” according to the BOE’s findings.
A similar scenario occurred with the DSCC. The DSCC would wire funds into Friends of Cecilia Tkaczyk for, say, $225,000, and that same amount would then be wired out to a consulting firm that same day. This happened repeatedly.
Gianaris, who was named the head of the DSCC at the end of 2010, had the primary role of raising funds and creating an infrastructure to ensure senate Democrats win races.
The treasurer of the DSCC in 2014 is listed as Gretchen Werwaiss, who worked as the treasurer for the now inactive Gianaris for New York fundraising committee and whose family owns dozens of properties in western Queens.
The BOE argues that checks made to the DSCC based on de Blasio’s fundraising outreach would be sent to a separate address or would have a notation on the check such as “donation per mayor.”
Such notations are not unusual, according to Mike Murphy, the spokesman for the DSCC and a former Gianaris staffer in Astoria.
“People are always raising money and want to take credit for it…like bundlers,” he said. Furthermore, de Blasio was upfront that he wanted to raise money to support Democratic candidates, Murphy added.
Despite claims that the DSCC and de Blasio were working closely, Murphy said that Gianaris was just conducting his usual role in 2014 of raising funds in an attempt to secure Democratic victories.
“I don’t know what they are talking about,” Murphy said. “We talk to people and coordinate with everyone. This is standard stuff.”
Election lawyer Laurence Laufer, who is representing some of the people mentioned by the BOE, panned the report and claimed that state law allows party committees to coordinate in support of the party’s candidates.
Laufer pointed out cases where Republicans engaged in the same practice.
Murphy would not comment as to whether Gianaris or the DSCC had received a subpoena. He was not sure whether Lerch had been served with one.
The BOE claims that the de Blasio team, DSCC and the candidates all coordinated who would work on campaigns and who would pay for each aspect of the campaign.
The investigation was prompted by complaints from Republican officials in Putnam and Ulster Counties.
Lerch, who had earned $38,000 as a regional coordinator for the State Senate in 2014, works out of Gianaris’ office most days.
Lerch was put in charge of Tkaczyk’s reelection campaign, which was expected to be a tough one since she only won the district by a razor thin margin in 2012.
Lerch was paid $7,250 for his work on Tkaczyk’s campaign, according to the 2014 Friends of Tkaczyk’s campaign finance records.
He also spent $7,477 of personal funds on the campaign, which he was later reimbursed, according to expenditures reported by the Friends of Cecilia Tkaczyk.
The DSCC made payments to five committees in October of 2014, with $462,000—or 35 percent of its funds—funneled to Friends of Tkaczyk. The Ulster County Committee steered $330,000 her way.
Despite these efforts, Tkaczyk lost, as did the other Senate Democrats that de Blasio backed.