With final election reports still coming in, it looks like the recent spate of municipal elections has cost political organizations in town hundreds of thousands of dollars.
This is nothing new for Hoboken, but it has kept a local debate alive that mirrors one on the state level, over whether contractors who donate large checks to incumbent administrations give the appearance of doing it in exchange for a contract.
It is not illegal for a business to get a contract after donating to a politician unless it is a "quid pro quo," or a direct result of the contribution. But it does seem that the handful of law firms, architects, engineers, and accountants who get many of the city’s contracts also happen to be administration’s biggest campaign contributors.
Recently in Hoboken, thousands of voters went to the polls to elect six City Council members and three Board of Education members.
As is typical with almost every municipal election statewide, the administration in power is able to raise the most money, and also spends the most. That trend held true in Hoboken with Mayor David Roberts’ Hoboken United team leading the way in both fundraising and campaign spending in all of the races. More than $410,000 was spent in support of Roberts’ candidates since Jan. 1.
It is common knowledge that the vast majority of this administration’s, and past administrations’, campaign funds come from vendors who have contracts or are seeking contracts with the city, or developers seeking approvals.
With state legislation having been proposed to cut any perceived relationship between such donations and municipal contracts, some Hoboken residents are saying the practice of city vendors donating big bucks needs to be looked at.
Big money game
Since Jan. 1, the Hoboken political machine has been rolling to collect funds for the election of candidates supported by Roberts’ Hoboken United Team. Together, the Hoboken Democratic Party, which Roberts chairs and has city Business Administrator Robert Drasheff as the treasurer, and a group called the Friends of David Roberts, have spent more than $410,000 on the council and Board of Education races.
Approximately 7,600 people voted in the general City Council election held on May 13, in which six of the council’s nine seats were up for grabs. If the administration were to divide $410,000 equally between every person who voted, Hoboken United could write 7,600 checks for $54.
Additionally, the year before, in 2002, the Hoboken Democratic Party raised over $160,000, much of which went to prepare for this year’s election.
Roberts isn’t unusual. Former Mayor Anthony Russo and former mayors Pat Pasculli and Tom Vezetti all raised big bucks for their campaigns over the years, often from area law firms, architects, engineers, developers, and other vendors, making some complain that contractors feel they must donate to get rewarded.
Others could make the case, however, that there’s no pressure for these firms to donate, and that obviously contractors who are doing business with an administration would want to contribute to see its good work continue.
Lopsidedness
Because the administration in power usually secures the most contributions, this year and in years past there’s been a great disparity between the amount the administration is able to raise and that of its opponents.
Before Roberts became mayor, the Hoboken Democratic Organization was controlled by then-Mayor Anthony Russo’s wife, Michele. In the 2001 mayoral campaign, Russo had a war chest of $534,078 as of late April, with the Hoboken Democratic Party being by far the biggest contributor. The party contributed more than $132,000.
This year, Russo successfully ran for council, but without that huge war chest. This time around, he only reported collecting $35,399.
While some local businesses and vendors have contributed, most campaign money comes from personal loans.
The same is true of recently re-elected independent incumbent 1st Ward candidate Theresa Castellano. Now on the outs with the current administration, she raised $30,252, most of which came from loans.
The Hoboken Alliance for Good Government, which ran candidates in all six wards and got candidates into runoffs in the 1st, 2nd, and 6th wards, reported collecting $81,930, most of which was provided by their own candidates out of their own pockets.
It should be noted that some of the anti-administration candidates benefited from contractors’ contributions in past years when they ran with the administration.
The Hoboken First Slate and its three candidates reported raising a total of $45,200.
Does this disparity make a difference in the election’s outcome?
Roberts said Thursday that there is an advantage for the incumbents, but not an unfair one.
"The incumbents certainly have an advantage in terms of fundraising, but it doesn’t ensure victory," said Roberts. He pointed to two examples of high-profile races in Hoboken’s recent past where a light-spending opponent beat the better-funded incumbent. One was in the late 1980s, when eccentric but likeable Vezetti beat incumbent mayor Cappiello, who outspent Vezetti several times over.
The other example he gave was the 2001 mayoral election between himself and Russo. "We were decisively outspent, and we won decisively," said Roberts.
But there are still many people who believe that amount of money a political organization has to spend has a large impact on an election at the municipal level.
"It’s a communication issue," said defeated 2nd Ward Hoboken Alliance candidate Beth Mason. "It costs money to get out your message, and the less money you have, the more it hinders your ability to get your message heard."
She added she does not believe the playing field will be level until there is some sort of campaign finance reform that makes the amount of money spent on a campaign more equitable for all candidates.
One of Mason’s teammates, Ron Rosenberg, agreed there should be reform.
"[By taking large contributions from vendors] they’re saying ‘support us and we will come back and help you out,’ " he said. " ‘Don’t support us and it is going to be difficult to do business with the city.’ "
He added that not only do vendors give more to the administration, but they are also hesitant to give to other candidates because of fear of political retribution down the line.
Possible future reform
Right now, "pay-to-play" legislation is working its way through the state legislature. The framework of such legislation states that businesses and professionals such as engineers and law firms who hold contracts of $17,500 or more would be prohibited from donating to candidates, office holders, party committees and Senate and Assembly leadership committees.
The bill would also bar individual professionals from submitting bids or negotiating contracts if, in the previous year, they had given $400 to any candidate or committee in that municipality. Businesses that gave $5,000 to candidates and committees in the past year would likewise be disqualified from bidding for contracts. The idea is to cut down on the appearance that a business might have contributed to get contracts, and to lessen pressure on contractors to contribute.
Re-elected 4th Ward Councilman Chris Campos, who was that top vote getter in the May 13 election and on the Hoboken United ticket, says that he understands that money is a factor – but he said that knocking on doors and real campaigning is the difference in elections, not money.
"I’m not going to say that money doesn’t have an impact," said Campos, "but it’s a copout to say that it’s the key to success. There are plenty of precedents in Hudson County and statewide where the party or group with less funding is effective in getting their message out and has been victorious despite having less money."
Roberts said that, for the most part, he is content with the current system, but is gladly willing to participate in open debate on the subject.
"I think a public debate on the topic should take place," said Roberts. "I’m willing and ready to engage in an exchange of ideas. The public has a great deal of concern with the current system, but I also see problems [with completely overhauling the system]."
He added that he is in favor of full disclosure of all contributions, and pointed out that the public can visit contributors online.
"We need to explore in a rational setting what possible changes could be made," said Roberts.
While Roberts’ team spent hundreds of thousands of dollars, they also had five out of six of the slots on their ticket filled with council incumbents, so those candidates already had name recognition and reputations in office. The sixth Roberts-backed candidate, a political newcomer, lost out to Castellano.
Ron Hine, the executive director of the community lobbying group, The Fund for a Better Waterfront, said that campaign finance reform is needed.
"The fact that the administration is able to spend several times as much money as its opposition creates a playing field that is not level," said Hine. "No matter how unpopular a candidate or administration is, they are going to have a tremendous advantage. Such a disparity works against the democratic system because the administration now has a mountain of political debt. With all of these firms contributing, what chance do regular citizens have of getting their voice heard?"
He added that he is in favor of some sort of future pay-to-play legislation, but it might be difficult to pass because the people most adversely affected would be the lawmakers in power.
Hine said, "It might not ever pass, because the people that are going to have to pass it are the ones who are going to be hit the hardest."
Victory coincides with contracts and approvals
What troubles some residents is the fact that it seems like certain vendors get many of the city’s contracts. Some of those, however, have been in town a while and have built a reputation.
The two groups that appear to benefit most from their campaign are the developers, who rely on permits and approvals to get their projects built, and the professional service companies – the lawyers, accountant, engineers, and consultants looking for city contracts.
While some city services must be awarded to the lowest bidder, in other cases, a category known as "extraordinary unspecified services" allows the company that is best-qualified to be hired regardless of a bid.
Under revised laws adopted by the state last year, any purchase or contract exceeding $17,500 must go through a public bidding process, and a government body must seek at least three proposals. However, due to the state’s "Extraordinary Unspecified Services" clause, certain professional service contracts can be exempt. This allows the governing body to hire companies that cannot easily be evaluated by price alone, such as experienced engineering firms and attorneys.
Many critics of the process say that large campaign contributions are one way in which these firms can persuade the administration to throw the contract their way. Therefore, critics say, it has often become a question of how deep the contractor’s pockets are, and how long reaching their political connections, rather than how qualified the firm is.
Lawyers have been some of the biggest contributors to the Roberts team. For instance, political power broker Donald Scarinci of the firm of Scarinci & Hollenbeck donated $11,000 in the past four months. Scarinci & Hollenbeck is special counsel for the city, and according the city’s corporation counsel, Joe Sherman, Scarinci & Hollenbeck is currently arguing in dozens of open cases on behalf of the city. The firm also serves as general counsel for the Board of Education.
The 13-year-old firm is well known for its political connections. One of its partners is Donald Scarinci, a close personal friend and political ally of Rep. Robert Menendez (D-13th Dist.) Menendez is also a close political ally of Roberts and State Sen. Bernard Kenny.
Other big contributors are the law partners at Sarkisian, Florio & Kenny, who have contributed $17,500 since August, 2002. The firm also serves as special counsel to the city and the lawyers for the Board of Education as it relates to workers’ compensation cases.
Kenny has also been in Trenton lobbying hard for over $100 million state Abbott money for school construction, for Hoboken and several million in state Green Acres funds. Several of the contractors selected thus far to complete those projects have been generous contributors to Roberts, Kenny and Menendez.
Some of the other big contributors have been contributing to Hoboken campaigns for many years.
Drasheff has stated on the record multiple times that just because there are campaign contributions from persons holding contracts in Hoboken, it doesn’t mean that there is intrinsically a cause-and-effect relationship. "Hoboken is in a very unique situation, because it’s a small town where neighbors have known each other for a long time," Drasheff said in May. "The vast majority of people contribute because of friendship or a shared belief in common political ideology, rather than for the purpose of doing business."
Developers
For several years, activists in town have also complained that developers have too much of an influence on politics. They have said that it might look like contributions are being given in exchange for a variance to exceed zoning guidelines, or in exchange for designation as the redeveloper of a blighted area in town.
A redevelopment site is one that usually has been blighted and is rezoned by the city. For those sites, the administration has the authority, by state law, to choose a developer at its discretion. One example is the city’s South Waterfront Development Project. Yet, with such proposals, the city always does advertise publicly for proposals before choosing the project they like best, and there is usually much debate and discussion among city officials before choosing a developer.
In the case of the south waterfront development currently being constructed by the Applied Companies and SJP Properties, the city and the Port Authority of New York and New Jersey were involved in discussions of future development at the site.
But regardless of the process, it remains true that when it comes to town politics, the biggest developers certainly have money to donate.
For instance, Michael Sciarra of the URSA Development Group wrote $10,000 in checks to Roberts’ political organizations on April 7. In March, URSA contributed $2,000 to Hoboken United for Education, and Sciarra’s partner, Mark Settembre, gave $4,000 to the Hoboken Democratic Party in October. In February, URSA, along with Tarragon Realty of New York City and the city of Hoboken signed a developers’ agreement to build approximately 400 units of housing in the city’s Northwest Redevelopment Area.
Developer Daniel Gans of the Hoboken Brownstone Company and Inner City Construction has contributed a total of $17,500 to the mayor’s three political organizations since last fall. Hoboken Brownstone, on Dec. 23, got approvals for 832 units of market rate housing on one of the city’s last pieces of unused waterfront property, commonly referred to as the old Maxwell House site. The city is currently investigating whether it wants to deem the Maxwell House site a redevelopment area.
Stephen Pozycki of SJP properties has contributed $4,900 over the past two years, and Michael and David Barry of the Applied Companies have donated a total of $5,000 to Roberts’ organizations since last fall. SJP and Applied were recently designated by the city at the discretion of the mayor to build a 450,000 square-foot, Class A office building, and 275-room hotel respectively on the city’s coveted southern waterfront. Pozycki and Applied had already been working on other buildings on that site. Applied is also the developer of the Shipyard project uptown (which was not a city-designated redevelopment site) has built hundreds of units of low-income and market-rate housing in Hoboken over 30 years.
Roberts emphatically said that at no point during his political career has he promised future contract for a campaign donation.
"In the end, it comes down to the individual’s personal integrity, and their ability to make sure that when they are soliciting funds that it is done in an open and proper way," he said.
Proponents of campaign finance reform, such as Mason and Rosenberg, argue that a system that relies on the personal integrity of politicians with few checks and balances is an ineffective one.