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SDNY and campaign finance

New York Lieutenant Governor Brian Benjamin (D), appointed less than a year ago, resigned from his position on Tuesday hours after being indicted for a brazen campaign finance conspiracy.

The five-count indictment charging Benjamin said he solicited thousands of dollars in fraudulent campaign donations from a real estate developer in exchange for steering a $50,000 state-funded grant to the developer’s organization. The scheme took place in early 2019, when Benjamin was a state senator, and in 2020 when Benjamin was running for New York City comptroller.

In the DOJ’s press release, the real estate developer is referred to as “CC-1”:

On or about July 8, 2019, BENJAMIN met with CC-1. CC-1 provided BENJAMIN with three checks totaling $25,000 made out to BENJAMIN’s New York State senate campaign (the “Senate Campaign”). Two of the checks were written in the names of relatives of CC-1 who did not share CC-1’s last name, and the third was written in the name of a limited liability corporation that CC-1 controlled (the “CC-1 LLC”). CC-1 made the contributions in the names of two other individuals and the CC-1 LLC to conceal any connection between CC-1 and the contributions.

Benjamin then lied about the true source of the campaign donations, falsifying numerous records during his tenure as Lt. Governor.

Between 2019 up through and including the period of his application for and service as Lieutenant Governor of New York, BENJAMIN and others acting at his direction or on his behalf, engaged in a series of lies and deceptions in order to conceal the bribery scheme and BENJAMIN’s connection to CC-1…

In or about November 2019, the New York State Board of Elections (“BOE”) notified BENJAMIN’s senate campaign that it had failed to file certain forms required to identify owners of certain limited liability companies (“LLCs”) that had made contributions to the Senate Campaign. This included the LLC through which CC-1 had made a $5,000 contribution during the July 8, 2019, meeting. A member of BENJAMIN’s staff sent BENJAMIN an email listing LLCs requiring additional disclosures, specifically identifying the LLC used by CC-1 as being associated with CC-1, and asked BENJAMIN for help obtaining ownership information those LLCs. BENJAMIN responded to that email by asking, “What happens if someone refuses to provide the information?” Ultimately, BENJAMIN’s senate campaign provided the BOE with ownership information about certain LLCs, but not the LLC used by CC-1.

Benjamin entered a not guilty plea in response to the five charges: one count of federal program bribery, which carries a maximum sentence of 10 years in prison; one count of honest services wire fraud, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit those offenses, which carries a maximum sentence of 5 years in prison; and two counts of falsification of records, each of which carries a maximum sentence of 20 years in prison.

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The indictment against Benjamin originated in the Southern District of New York U.S. Attorney’s Office, which also brought charges against former Trump lawyer Michael Cohen…and failed to hold the former president accountable for his role in the campaign finance violations.

As a reminder, Cohen negotiated and facilitated hush money payments to two women at Trump’s direction in the run up to the 2016 election. The women—Stormy Daniels and Karen McDougal—claimed to have had affairs with Trump, disclosure of which could damage his run for the presidency.

Cohen admitted on Tuesday to making payments to two women at the direction of an unidentified candidate for political office who appears to be the president. Those payments, Cohen said, were made to influence the outcome of the election.

While Cohen didn’t name Trump directly during the hearing, his attorney Lanny Davis said shortly afterward that “Donald Trump directed [Cohen] to commit a crime by making payments to two women for the principal purpose of influencing an election.” The Justice Department confirmed late Tuesday that Trump was the unidentified candidate.

Cohen pleaded guilty to one count of causing an illegal corporate contribution in 2016 by working with the CEO of a media company, at the direction of a federal candidate for federal election, to keep information from the public. Cohen said he paid a woman $150,000 “for the principal purpose of influencing the election.”

Despite evidence that Trump directed the illegal payments, he was never charged, even after losing the “prosecution shield” he claimed protected him as president.

• Read the indictment against Cohen, from August 2018.

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FEC and campaign finance

The Federal Election Commission fined the Democratic National Committee and Hillary Clinton’s 2016 campaign last month for obscuring their funding of the “Steele dossier.” The two organizations were cited for misreporting the dossier funding as “legal services” and “legal and compliance consulting” instead of opposition research.

The vote to fine the DNC $105,000 and Clinton’s campaign $8,000 was reportedly 4-2, with all three Democratic appointees voting in favor. Republicans Trey Trainor and Allen Dickerson made up the two dissenting votes.

Just weeks later, the FEC also fined a collection of companies controlled by a Canadian billionaire for donating to a pro-Trump super PAC…but did not fine the PAC or Trump himself. Barry Zekelman, a billionaire steel magnate, received a $975,000 fine for donating $1.75 million to America First Action. U.S. law prohibits foreign nationals from directly or indirectly making a contribution or donation in connection with federal, state, or local elections.

After making the donations, Zekelman attended a private dinner with Trump and aggressively advocated for steel tariffs that Trump eventually imposed.

Mr. Zekelman used the small gathering, in a private room at the hotel, to press Mr. Trump for more than six minutes to use his executive power to curb imports of foreign steel to the United States from Asia, a move that would help his sales. He also asked Mr. Trump, pressing him for another three minutes during the dinner, to re-evaluate highway safety rules that he said were making it hard for truckers in the United States to move his steel tubes.

Reminder: The FEC has declined to enforce campaign finance rules against Trump in 43 instances, 22 of which were filed by attorneys with many years of experience in campaign finance law. He benefited from appointing all three Republican members, and from leaving the Commission without a quorum for over a year. The even 3-3 partisan split means the agency often deadlocks.