Mendez Role in Lopez Finances Raised

Mendez Role in Lopez Finances Raised

Lower East Side councilwoman played role in campaign flap ensnaring her predecessor

Lower East Side City Councilwoman Rosie Mendez is standing up for her political mentor, former Councilwoman Margarita Lopez, in the wake of a campaign finance controversy that some believe may have torpedoed Lopez’s chances of landing a job in the Bloomberg administration, and convinced her not to make a run at the State Assembly seat recently vacated by Steve Sanders.

In addition, Mendez is defending her own role in handing out checks to individuals after the 2001 election, the finances of which are at issue. Philip Van Aver, a volunteer on Lopez’s District 2 Council re-election campaign that year, in a surprising revelation, told this reporter that it was Mendez who handed him a $300 check at a meeting of the Coalition for a District Alternative (CoDA)—the longtime political home of both Lopez and Mendez—in February 2002, three months after the general election of November 2001.

Post-election payments are impermissible under the campaign finance law.

Lopez left the City Council at the end of last year due to term limits and was defeated in a bid to become Manhattan borough president. Mendez, her handpicked successor, won election to succeed her handily.

After her borough president primary, Lopez crossed party lines to endorse Republican Mayor Michael Bloomberg for re-election, leading many to believe she was possibly in line for a position in his second administration. But two-and-a-half months later, Lopez still hasn’t been tapped to join Bloomberg’s City Hall team. She also surprisingly opted not to run in a special election last month for the vacant 74th Assembly District seat.

This reporter has confirmed that Lopez mortgaged her Catskills country house last year apparently to pay back 10 friends and supporters who loaned her money so she could make a $186,000 payment relating to her campaign finance problems.

Last month, the Campaign Finance Board ruled that Lopez’s 2001 City Council re-election campaign improperly used public funds to make post-election payments to individuals and also made material misrepresentations to the board. The violations are so serious the finance board declared the Lopez ’01 campaign to be in breach of certification — meaning that all $139,000 in taxpayer-funded public matching money Lopez received that year has to be returned. The CFB tacked on additional fines of $31,000, bringing the total amount Lopez was fined to about $170,000.

According to sources, after the 2001 election, the campaign had money left over—about $45,000—and Lopez decided to give some bonuses to “friends,” individuals who had worked hard on the 2001 or earlier campaigns.

At a hearing this January, a half-dozen Lopez ’01 campaign workers—including a former Community School Board 1 member—offered a variety of explanations for why they deposited their campaign checks so late. At the hearing, Lopez indignantly blasted the Campaign Finance Board, saying, “My name have been put through the mud,” while Ann Johnson, her former campaign treasurer, told the CFB, “Margarita and I have both been slandered by you.”

Last November, Van Aver broke ranks with the campaign’s version of events, admitting that he had received a $300 check three months after the general election. As a volunteer, he wasn’t even supposed to be paid. Van Aver said Lopez’s volunteer coordinator even tried to persuade him to sign an affidavit claiming he had been a campaign worker. He refused.

Van Aver last week said that it was Mendez who hand-delivered the post-election check to him in an envelope in February 2002. Van Aver noted that Mendez is an attorney and “very smart” and said he believed she didn’t knowingly do anything wrong.

“Rosie handed me the check and I don’t think she had any idea it was an illegal payment,” he said. “I walked home with Susan Stetzer, who was CoDA co-chairperson then, and I asked her about it, and she looked very upset about it. She expressed amazement [at the lateness of the payment].”

Asked if she indeed gave Van Aver the late check at the CoDA meeting, Mendez said, “I could have—I don’t recall who I gave checks to. It was four years ago—like 15 campaigns ago — it was a while.”

Mendez—a former Democratic district leader who worked on Lopez ’s campaign and was also Lopez’s City Council chief of staff—said she’s confident she, Lopez, and the campaign didn’t knowingly do anything to violate the campaign finance law. In addition to their close political relationship, Mendez and Lopez are personally close, living in the same East 11th Street former Homesteader Program tenement building.

Late-deposited checks and suspect patterns of check serial numbers raised red flags for the CFB, making the board question whether there were impermissible post-election payments. But, Mendez said, taking one’s time to deposit checks isn’t that unusual, particularly among Lower East Side activists.

“It’s been my experience that I’ve seen that happen,” she said. “I’ve known some of my friends to hold onto their checks for a week, a couple of weeks—so I believe it. I don’t know if it’s cultural. I think it’s an individual thing. I’ve seen it in a number of people. I don’t know if it has to do with people being activists. You work a full-time job, you volunteer with all these organizations, you’re raising kids, and sometimes one thing takes precedence over others.”

Having to mortgage one’s country house to pay off a heavy $170,000 fine from the Campaign Finance Board is a bit unusual, though. Last November, according to the Sullivan County Office of Real Property, Lopez mortgaged her home near the Delaware River in Lumberland, New York for $123,500. Records show Lopez brought the property, a 520-square-foot bungalow on 1.13 acres of land, for $49,000 in 1998.

The mortgage was apparently used to help pay back the $166,000 that 10 friends and supporters loaned Lopez in August to help her pay the CFB $186,000 to allow her to get matching funds for her 2005 borough president campaign while the finance board was still completing its audit of her disputed 2001 finances. Mendez and Jerry Goldfeder, Lopez’s attorney, both said they did not know Lopez had mortgaged her house.

New York City’s campaign finance program offers political candidates up to $4 for every $1 they raise. But the money can only be spent on election-related activities and all expenses must be carefully documented. After the election, leftover funds must be returned to the city—not doled out to friends and supporters as gifts or bonuses.

Since the city’s campaign finance program started in 1988, more than 1,000 candidates have participated in the program, according to the CFB, and only six candidates, including Lopez, have been found in breach of certification. Asked how serious a violation must be for the board to declare a breach of certification, Kate Schachern, a finance board spokeswoman, issued a statement saying it’s “only for the most egregious violations”:

“A board finding of breach of certification is essentially a finding that a campaign has so fundamentally failed to live up to its obligation under the certification that the public should not be required to pay public tax dollars, given the campaign’s failure to give the public what the campaign undertook to do,” her statement said. In the 2001 election, 205 New York City candidates received public matching funds to the tune of more than $42 million. After the election, candidates returned more than $5.7 million in unspent public funds to the city. However, according to the finance board, Lopez’s campaign “improperly converted” public funds to make $45,000 in impermissible post-election payments to campaign workers and other individuals, as well as to make a $1,350 payment to Lopez and Mendez’s East 11th Street building.

Mendez did not figure significantly in the CFB hearings on Lopez’s ’01 campaign finances, but her name was mentioned once during the January 12 session when Lopez herself— in explaining how it was difficult to locate some people who were owed checks — said the campaign delivered checks both by mail and hand and that Mendez was responsible for the latter.

“Councilmember Rosa Mendez was the person delivering the checks by hand,” Lopez said in her testimony.

However, Mendez said there was nothing improper about how or when she made the payments.

“Margarita Lopez and Ann Johnson mailed out the checks,” Mendez said last week, “and many checks came back and there were certain individuals that we didn’t have the right addresses. When checks came back or they didn’t have all the information, Margarita asked me to give out the checks.”

Asked how many checks she personally delivered, Mendez said, “I really got no idea. It was four years ago.” Mendez noted that the period of time in question came shortly after 9/11, with impacts felt strongly in Council District 2. She said she is sure, though, she gave out the checks before January 1, 2002, nearly two months before Van Aver said he received his check from her.

Goldfeder, Lopez campaign attorney, said the finance board’s finding that Lopez was in breach of certification was not appropriate, but, rather, selective.

“They charge it all the time,” he said. “My guess is they’ve charged it many, many times — and they’ve only found it in six circumstances. What’s the standard? There appears to be none… This just shows again that the Campaign Finance Board operates on an ad-hoc basis, selectively—enforcing a rule for which there is no standard whatsoever.”

Lincoln Anderson is the associate editor of The Villager, a sister publication of Gay City News, where this story first appeared.