In lobbying probe, ethics commission spokesperson faces $4 million threat

ALBANY — In early 2021, a lobby group bought more than $850,000 worth of television ads airing across New York City encouraging residents to contact their state senators and oppose tax increases.

Deep-pocketed lobby groups typically must disclose donors providing more than $2,500 — under a state law designed to expose those who seek to influence the government. Yet in a filing last July, “Don’t Bankrupt New York” revealed little about its six-figure spending and said the group had received no contributions over $2,500.

The person responsible for this paperwork was David Grandeau, the state’s pugnacious former lobbying regulator. In private practice for 15 years, Grandeau works as a compliance lawyer for the kind of deep-pocketed interest groups he once targeted. Far from operating in the shadows, Grandeau has openly touted his ability to obscure the sources behind client lobbying spending, tweaking state lobbying regulators for allegedly failing to keep up with his pace.

“If someone hires me and doesn’t want to disclose who is funding them,” Grandeau said in 2014, “I forgot 10 different ways to do it who [the Joint Commission on Public Ethics] doesn’t even know.”

Such tactics have now put Grandeau in the crosshairs of the beleaguered commission, a much-criticized ethics and lobbying enforcement body that risks disappearing within a month.

On March 29, JCOPE commissioners voted to open a full investigation into “Don’t Go Bankrupt in New York” for allegedly submitting a series of false lobbying statements. They are threatening to fine Grandeau an unprecedented amount of more than $4.2 million.

Grandeau argues that it is JCOPE that is corrupt, arguing that the commission’s actions are retribution for its decade of inflammatory criticism of the body and its commissioners and staff.

“I criticize them because they’re a bunch of corrupt, incompetent clowns,” Grandeau said in an interview last week.

Unable to resolve the dispute, Grandeau provided the Times Union with his correspondence with JCOPE about the investigation, which had not previously been made public.

Grandeau said he was tapped to work for “Don’t Bankrupt New York” by Jamestown Associates, a Virginia-based National Republican firm that creates and places political television ads. The Jamestown CEO was the primary creator of ads for President Donald J. Trump’s 2016 and 2020 campaigns. In New York, Jamestown worked for a campaign spending group in 2013 whose biggest donor was billionaire David Koch now deceased conservative, known for his obscure policies. expenses.

When Grandeau first spoke to Jamestown over the phone about lobbying compliance, the company asked for advice “regarding different ways to join the lobbying group.” One “path to disclosure” Grandeau said he suggested was to create a “coalition” to disclose spending as part of a measure put in place by JCOPE in 2019.

JCOPE’s extensive lobbying regulations that year were intended to make state government more transparent. Still, Grandeau says the “coalition” aspect was drafted to allow for the kind of disclosure filing presented by “Don’t Bankrupt New York.”

The coalitions were a “mythical name that they created in the bylaws — a name that serves to hide the identity of the members,” Grandeau said. “By definition, that’s what a coalition is.”

The commission’s bylaws define a coalition as a group of “otherwise unaffiliated” members pooling resources to engage in lobbying. The regulations stated that members of a “structured” coalition – of the type formed by Grandeau – were not required to be listed.

In the spring of 2021, Grandeau filed a case revealing that Jamestown Associates was a party benefiting from lobbying by his coalition. Grandeau was recorded as the group’s “administrative director”, which Grandeau claims makes him a leaked second member. Other members of “Don’t Bankrupt New York” – including those who presumably paid Jamestown to produce the ads – were not listed.

In a March 8 letter outlining a potential case against Grandeau, JCOPE associate attorney Megan Mutolo wrote that because Grandeau refused to identify other members, “Don’t Bankrupt New York” was not a coalition – and that the structure was being used “to prevent required disclosure” of the real customer who provided the $850,000.

His letter said Grandeau had filed a false report stating that the group had not received any donations over $2,500. Jamestown Associates was “misused as an intermediary in the contribution process,” she wrote.

A lawyer who represents Grandeau, Peter Moschetti, said Grandeau followed the rules as written by the commission.

Grandeau claims that, to its knowledge, Jamestown Associates paid for the advertisements it produced. He believes JCOPE never contacted or subpoenaed Jamestown for more information; the company did not respond to a request for comment.

Grandeau is aware of the existence of other members of the coalition, but has refused to reveal their identities, arguing that he is under no obligation to do so.

“If JCOPE wanted to know the members or group of entities that constituted a coalition, they would have required that information in the bylaws and designated a lobby app to list those groups or members,” Moschetti wrote to the commission. “Because there is no statute, rule or regulation that requires a coalition to list its members, a filing cannot be false where a coalition does not list its members.”

The maximum fine for a false deposit is five times the amount incorrectly declared, which means Grandeau could be fined more than $4.2 million.

Walter McClure, a commission spokesman, said he could not comment on the investigation. But McClure generally pointed to guidelines issued by the commission a year ago that a member of a structured coalition contributing more than $2,500 must be disclosed.

Grandeau countered that the guidelines are not formal regulations and that by the time they were issued he had already officially terminated “Don’t Bankrupt New York” as a lobbying entity. McClure said the guidelines were based on several regulations that were issued before the lobbying expenses occurred.

Grandeau argues that a “coalition” is by definition not an entity that holds formal legal status, such as a corporation. “Don’t Bankrupt New York” did not have a bank account, Grandeau said, and therefore did not have the capacity to accept a donation greater than $2,500.

For a dozen years, Grandeau aggressively pursued business as the state’s top regulator, including covert lobbying spending, while angering politicians in both parties. When he lost his position as executive director of the temporary state Commission on Lobbying in 2007, a good government group lamented the loss of “the true sheriff of Albany.” Critics portrayed him as a self-centered hound who investigated in the press.

He became an incendiary critic of his successors, whom he considered too influenced by the lawmakers they were supposed to regulate – a criticism of JCOPE among many lawmakers and good government groups. After JCOPE was founded in 2011, Grandeau regularly wrote sarcastic and offbeat blog posts on his law firm‘s website, coining the term “J-JOKE” to describe the agency. He regularly attended monthly meetings in Albany, muttering criticism, while fighting the commission on behalf of well-heeled clients.

In 2016, a situation with similarities to the current case unfolded when JCOPE began investigating a Grandeau client called “Pledge 2 Protect”. The nonprofit funneled more than $1 million in lobbying expenses through the escrow account of a Manhattan boutique law firm, obscuring the original source.

In a 2017 settlement with the commission, the group admitted being funded by Glenwood Management, the real estate giant that was the state’s biggest political spender and at the center of two major corruption trials in Albany. Pledge 2 Protect did not pay any fines as part of the settlement, but acknowledged that Glenwood Management had received advice from a lawyer – Grandeau – regarding “how to comply with lobbying law while maintaining the anonymity of certain donors”.

Grandeau quit blogging in 2019, but remained antagonistic. In August, he filed a lawsuit accusing JCOPE executive director Sanford Berland of submitting a late financial disclosure filing and McClure of covering it up. Two months later, Grandeau received a letter asking about “Don’t Bankrupt New York.”

Grandeau’s lawyer argues that 35 other lobbying coalitions have not revealed their members, but that only Grandeau’s is apparently targeted.

“The allegations appear to be retaliation,” Moschetti wrote to the commission, “especially given Mr. Grandeau’s past actions in filing ethics complaints against JCOPE’s executive director and a former commissioner, as well as his public criticisms. .”

In June, Moschetti demanded a hearing before the commission, as well as documents. He said he intended to sue if the commission took punitive action and to subpoena a number of commissioners and staff to testify, including Berland. Grandeau intends to invite the media to attend these sworn depositions.

Still, JCOPE is unlikely to ultimately decide the matter. On July 8, the commission will be replaced by a new body, the Commission on Ethics and Lobbying and Government, created in the April budget. However, several current JCOPE commissioners are hoping to earn places on the new 11-member panel, and current staff may also stay. Grandeau’s probe could survive the transition.

Grandeau argues that the new entity will fail again if the same people are involved. At the same time, JCOPE’s main critic could be a somewhat calmer presence going forward – once this latest battle with regulators is over.

“It’s never comfortable when a corrupt government tries to take $4 million, but I have great faith in the justice system,” he said. “I’m 63 – and this is my last fight. But I’m going to show how corrupt they are.”

About Charles D. Goolsby

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