The New York Law Journal by Daniel Wise - April 2, 2010
Manhattan Surrogate Nora S. Anderson and a co-defendant, Seth Rubenstein, were acquitted yesterday in a verdict that could blow a hole in the contribution limits under the state's campaign finance law. After deliberating for about eight hours over two days, the jury found that the prosecution had failed to prove beyond a reasonable doubt that the judge and Mr. Rubenstein had lied in campaign filings about $250,000 pumped into her 2008 primary campaign for Manhattan surrogate. Surrogate Anderson sobbed with relief as the verdicts were announced. Prosecutors had contended that Mr. Rubenstein was the source of the $250,000 and that, as a candidate, Surrogate Anderson had falsely reported the funds as coming from her. The defense contended the funds were a gift and a loan and that the candidate was free to use them as she chose. The verdict frees Surrogate Anderson to assume her seat, possibly as early as Monday. She has been suspended with pay since Jan. 1, 2009. David Bookstaver, a spokesperson for the court system, said "we will assure an orderly transition in the coming days." Bronx Supreme Court Justice Troy K. Webber (See Profile) has been serving as the interim Manhattan surrogate.
The prosecution presented undisputed facts to back up a strong case that the source of the $250,000 had been masked by Mr. Rubenstein and Surrogate Anderson: In the month before the 2008 Democratic primary, Mr. Rubenstein twice transferred funds into the candidate's personal accounts: $100,000 on Aug. 12 and $150,000 on Aug. 25. On Aug. 19, Surrogate Anderson donated $100,000 to her campaign and on Aug. 26, she loaned her campaign $170,000, $20,000 of which prosecutors acknowledge was her own. Manhattan Assistant District Attorney Daniel G. Cort argued that the money came at a critical time for the cash-strapped campaign with vendors refusing to carry out vital tasks without an up-front payment. With Mr. Rubenstein having the needed funds but unable to make them available without exceeding campaign contribution limits, and Ms. Anderson lacking the assets needed to reinvigorate her campaign, Mr. Cort contended that it would take an "Olympic leap of mental gymnastics" to find a legitimate purpose for funneling Mr. Rubenstein's funds through Ms. Anderson. The acquittal on those facts essentially eliminates the limits on the amount of money individuals may make to candidates, several election law experts said. In the 2008 Manhattan primary, the limit was $33,122. Amounts loaned to a campaign are treated as contributions if not repaid by primary day, which in 2008 was Sept. 9. Henry T. Berger, an election law expert, said the verdict "effectively means there are no campaign limits. Anyone who wants to can evade the limits by making a gift to the candidate, as long as they pay the gift tax and don't require that the money be spent in the campaign." Another expert, Lawrence A. Mandelker, of Kantor, Davidoff, Wolfe, Mandelker, Twomey & Gallanty, said the verdict creates a hole in the disclosure law which "the Legislature will have to address." He added that the prosecution's case had been made more difficult after Acting Justice Michael G. Obus (See Profile), who presided over the trial, had dismissed eight of 10 counts in the indictment. All of the counts alleging direct violations of the election law were dismissed, and only the two false filing counts were allowed to go forward because the filing took place in Manhattan while the underlying acts occurred at Surrogate Anderson's headquarters, which were located in Mr. Rubenstein's office in Brooklyn.
The question of ownership was harder to prove under the filing counts, Mr. Mandelker said, than under the dismissed charges, which make any gift or loan "in connection with an election" a crime. The two defense lawyers—Gustave H. Newman for Surrogate Anderson and Frederick P. Hafetz for Mr. Rubenstein—during trial hammered away at reasonable doubt stressing inconsistencies and ambiguities in both the state Election Law and the prosecution's expert witness, William J. McCann, the lawyer at the Board of Elections in charge of enforcing the state campaign finance laws. Yesterday morning the jury asked for a read back of Mr. McCann's testimony which took close to an hour and a half. About an hour of the read-back dealt with Mr. McCann's cross-examination by Mr. Hafetz. Roughly 20 minutes after the read-back was completed, the jury informed Justice Obus that it had a verdict. Read Mr. McCann's direct testimony and testimony on cross examination. Messrs. Newman and Hafetz during the trial cited numerous ambiguities in the election law and the way it is administered. Mr. Hafetz delivered a particularly harsh attack on Mr. McCann, calling him "pompous," the "professor of presumptions" and "a walking definition of reasonable doubt." In one instance cited by the two defense lawyers, Mr. McCann testified that the handbook prepared by the board to assist candidates in filling out disclosure forms was "wrong" when it stated that gifts from a candidate were not considered contributions. In another, they pointed out that Mr. McCann had categorized Ms. Anderson as the agent of her campaign committee. That categorization, Mr. Hafetz told the jury, was essential to "bootstrap" Mr. Rubenstein's gift to the candidate into a contribution to the committee. The problem, Mr. Hafetz related, was that there was no mention of a candidate being a committee's agent in the 2007 version of the handbook, which was the only one available to the Anderson campaign.
Expected to Take Bench
Richard Godosky, who represented Surrogate Anderson in opposing her suspension while she fought the criminal charges, said "I assume she will take the bench on Monday and Justice Webber will return to the Bronx." Gary Spencer, a spokesman for the Court of Appeals, said Wednesday that Surrogate Anderson's suspension would dissolve by its own terms upon acquittal. The surrogate won a three-way Democratic primary race in 2008, defeating Manhattan Justice Milton A. Tingling (See Profile) and John J. Reddy Jr., counsel to the Manhattan public administrator. She then coasted to victory without opposition in the general election. The Court of Appeals suspended her three days before she was scheduled to take office. If convicted, Surrogate Anderson, 57, and Mr. Rubenstein, 82, could have been sentenced to prison for a maximum term of 1 1/3-to-4 years. Surrogate Anderson was also represented by Richard A. Greenberg. Daniel Wise can be reached at firstname.lastname@example.org.
The New York Times by JOHN ELIGON - April 1, 2010
A jury decided on Thursday that a judge in Surrogate’s Court in Manhattan, along with her mentor and former boss, did not break the law by making transactions that ended with a $250,000 contribution to the judge’s campaign. Judge Nora S. Anderson, 57, was acquitted of two felony counts of intentionally filing false campaign reports. Her former boss, Seth Rubenstein, a lawyer in Brooklyn, was acquitted of the same charges. The verdict means that Judge Anderson, who was suspended as soon as she took office on Jan. 1, 2009, because of the charges, will be permitted to take her seat, said Gary Spencer, the spokesman for the New York Court of Appeals, the state’s highest court. The actions at issue in the case were never in dispute. During Judge Anderson’s 2008 race for Surrogate’s Court, which handles wills, estates and adoption matters, Mr. Rubenstein twice gave money to her — $100,000 on one occasion and $150,000 on another — and she directed that money to her campaign war chest. Prosecutors said that Judge Anderson lied on financial disclosure reports filed with the city that listed her as the source of the money. Mr. Rubenstein, 82, funneled the money this way to avoid exceeding the individual donor limit of $33,122.50, the prosecution said. Defense lawyers conceded that Mr. Rubenstein gave Judge Anderson the money as a gift with the hope that she would use it for her campaign. But once he had given it to her, they said, it was hers to spend as she pleased, so the statements on the disclosure reports were true. The jurors said little as they left the courtroom. “There were certain things that were unclear” about the case, said the foreman, John Wilson. He declined to offer details, adding only that “there was enough reasonable doubt among the minds of the jurors.” Some experts said Thursday that the verdict underlined the need for Albany to reform campaign finance laws. “This just eviscerates campaign contribution limits,” said Henry T. Berger, an election lawyer. “Anybody can give as much as they want to the candidate they want simply by giving it to the candidate, and not the campaign, as long as they pay the gift taxes on it.”
Judge Anderson sobbed as the verdict was read. As she left the courthouse, she was all smiles. “I’m very happy,” she said, declining to comment further. “Feels terrific,” said her husband, Tony Levell. “It was an arduous ordeal for her.” But Judge Anderson is not in the clear yet. Before the case went to trial, Justice Michael J. Obus, who presided over the case in State Supreme Court in Manhattan, threw out several of the prosecution’s charges, saying that they were out of the Manhattan district attorney’s jurisdiction because the transactions between Ms. Anderson and Mr. Rubenstein occurred in Brooklyn, where his office is. Now, the Brooklyn district attorney’s office plans to investigate the charges, said Jerry Schmetterer, a spokesman for the office. The state’s Commission on Judicial Conduct also has the authority to bring ethics sanctions against Judge Anderson. Robert H. Tembeckjian, the commission’s administrator, said he could not comment on whether the commission would pursue a case. “The law is clear that people are allowed to give gifts” to candidates for office, said Jerry H. Goldfeder, an election lawyer who was a consultant for the defense on the case. “That’s what the law is. Is it good policy? That’s a different issue.”
Laurence D. Laufer, another election lawyer who advised the defense, said the trial had exposed three ambiguities in the state’s campaign finance law. “When does a personal gift become a contribution? When should that be disclosed? Who should make the disclosure?” he said. “The bottom line is it’s time for the Legislature to get serious and seriously consider an overhaul that provides clarity and simplicity about what is required under campaign finance.” Although this case exposed a loophole in campaign finance law, it is not as large as people might think, said Lawrence A. Mandelker, an election lawyer who also was a defense consultant. There may still be a case to be made over whether the transactions in Judge Anderson’s case were illegal contributions. A provision of campaign finance law defines a contribution as a gift or loan made in connection with an election, Mr. Mandelker said. But the jury did not have to consider that because the related charges were among those that Justice Obus had dismissed. Instead, the central question for jurors was to whom the money belonged once Mr. Rubenstein had given it to Judge Anderson. “The jury would view the actions of these defendants as innocent,” Mr. Mandelker said, “not done with the intent to defraud, but with the intent to legally structure the transactions in a way that would not violate the law.”