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Latest News - October 2013

October 2, 2013
Teachers union paid $370K to fake consultant
Source: Crains Insider
Chris Bragg

A super PAC formed by the powerful city teachers' union paid more than $370,000 to an apparently fictitious political consulting firm, which was actually the well-known New York firm the Advance Group, records and interviews show.

The listing of the phony firm, "Strategic Consultants Inc.," in campaign filings, obscured that Advance Group was being paid both to promote candidates for the United Federation of Teachers' independent political action committee and to work as the main campaign consultant for several of those same candidates. Super PACs have no spending limits but must not coordinate with individual campaigns.

The teachers union's payments raise new questions about potentially improper coordination between outside spending efforts run by the Advance Group, and the firm's own clients.

In August and September, the teachers union's so-called super PAC, United for the Future, paid more than $370,000 to "Strategic Consultants Inc.," which produced mailers touting candidates in races across the five boroughs. But there is no corporate record in New York for a firm of that name, nor has such a firm ever been paid before in a New York election. A Google search did not yield any results for such a company.

In state campaign finance records, however, there is a Manhattan address listed for Strategic Consultants: 39 Broadway, which is also the address of the Advance Group. And in one campaign filing, a suite number is listed: 1740, the suite number of the Advance Group.

A knowledgeable labor source told The Insider that the Advance Group was involved in the teachers union's independent expenditure efforts. A spokeswoman for the Advance Group did not return repeated requests for comment.

In a statement, a teachers union spokesman declined to address why the union is listed as making payments to Strategic Consultants, rather than the Advance Group. "The UFT followed [Campaign Finance Board] guidelines in setting up firewalls between the union and the independent expenditure; we also received written assurances from our vendors that they set up their own internal firewalls that complied with CFB regulations," the spokesman said.

But one good-government group called for an investigation after this article was initially published Wednesday.

"It appears from the expenditure report that the UFT took pains to conceal a coordinated effort with a paid consultant for several union-backed candidates," said Susan Lerner, executive director of Common Cause/NY. "This is a disturbing end-run around the campaign finance laws designed to limit the influence of big-dollar donors on the political process. The Campaign Finance Board should promptly investigate the UFT and the Advance Group to quickly determine whether any violations of the independent expenditure regulations took place and hold the culpable entities accountable."

Last week, The Insider wrote about the Advance Group's independent expenditure campaign for the animal rights nonprofit NYCLASS, which the firm ran while serving as the primary campaign consultant for several council candidates supported by the NYCLASS spending. That included Brooklyn's Laurie Cumbo and Manhattan's Mark Levine, who won their primaries.

As Mr. Levine, Ms. Cumbo and losing Manhattan borough president candidate Robert Jackson were paying the Advance Group, their campaigns also got outside help from the teachers union's spending through mailers designed, printed and sent out by Strategic Consultants. The union's super PAC paid the apparently fictitious firm more than $12,000 for mailers promoting Mr. Jackson, more than $18,000 to promote Ms. Cumbo and nearly $3,000 in support of Mr. Levine.

As in the case of the NYCLASS spending, that raises issues of potentially illicit coordination, because the Advance Group was the consultant for both the teachers union's political action committee and those campaigns.

Potential coordination between candidates and outside groups is subject to investigation by the city's Campaign Finance Board, an agency that has levied stiff penalties in an effort to level the playing field for candidates enrolled in the city's taxpayer-funded campaign system. City Council candidates seeking taxpayer matching funds cannot spend more than $168,000. In a required post-election Campaign Finance Board audit, if the agency finds coordinated spending between a campaign and an outside group, that spending counts against the cap, which can result in heavy repayment penalties and fines.

It's not clear why the Advance Group would have wanted to have been listed as being paid through Strategic Consultants Inc. instead of collecting checks in its own name. One political insider briefed on the arrangement speculated that it was to avoid scrutiny over the "coordination" issues from the city's Campaign Finance Board.

In its work on behalf of another outside group called the City Action Coalition, the Advance Group and Strategic Consultants both took in payments. In late August, the Advance Group received $36,558.20 from the group. In early September, Strategic Consultants got the exact same amount. The Advance Group's work for the socially conservative coalition was also odd because the consulting firm touts itself as one of the most progressive in the nation. Its founder and president, Scott Levenson, has worked in the past for former Public Advocate Mark Green and former liberal advocacy group ACORN.

Last week, The Insider also reported that the Advance Group's work on behalf of City Action Coalition-backed candidates conflicted with its work for two of its own council clients. And the outside work for the teachers union raises another potential conflict: the Advance Group not only produced mailers promoting Manhattan council candidate Yetta Kurland for the NYCLASS independent expenditure, but Strategic Consultants produced mailers touting her opponent, Corey Johnson, that were paid for by the teachers union. Mr. Johnson won the primary.

The Advance Group also was the consulting firm for "New York City Is Not For Sale," a campaign that helped sink the mayoral candidacy of Christine Quinn. The group collected campaign contributions that far exceeded state limits.



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