Nutbusterz

http://www.nytimes.com/2009/12/16/nyregion/16wfp.html

THE NEW YORK TIMES
December 16, 2009
By DAVID W. CHEN

Federal prosecutors have subpoenaed documents from the New York City-based Working Families Party, which has been criticized in recent months over its campaign financing activities.

The labor-backed party made a splash this year by helping the incoming public advocate, Bill de Blasio, and several City Council candidates win competitive races.

But their tactics also drew accusations that the party’s for-profit arm, Data and Field Services — which provides staff members to knock on doors, call potential voters and hand out campaign fliers — was charging significantly lower fees than is usual for such services. Party officials have denied the accusation.

Such an arrangement, critics said, constituted an unfair and possibly illegal financial advantage. News of the subpoena, which was delivered on Monday, did not come from the United States attorney’s office, but from the Working Families Party itself on Tuesday afternoon, in what some political consultants saw as an attempt to get in front of the story.

In a statement, Dan Cantor, executive director of the party, said, “We welcome this inquiry, and are confident that it will ultimately demonstrate what we have said before: Our work has complied with both the spirit and letter of New York City’s Campaign Finance Law as well as all relevant state and federal election laws, tax and not-for-profit corporation laws.”

People close to the party who spoke on condition of anonymity because they were not authorized to talk on the matter said that they did not know the scope of the subpoena, but said they were taking the investigation very seriously.

A spokeswoman for the United States attorney’s office would not confirm or deny the existence of an investigation.

If there is indeed an investigation, however, the party’s actions in future elections could be curtailed. The party has been hoping to use its increased clout in the city to play a role in statewide races, like those for governor, attorney general and state comptroller. The legislative contests in Albany are sure to be a top priority, too.

But if the party is forced into a defensive crouch, candidates may be reluctant to accept its endorsement or support, according to political analysts. The party’s problems came into focus this summer, after the city’s Campaign Finance Board warned the party that it would be watching its finances closely.

In October, Randy M. Mastro, a former deputy mayor who is now an election lawyer, filed a lawsuit in State Supreme Court on behalf of private citizens on Staten Island claiming that the Working Families Party had unfairly aided their preferred candidate, Deborah Rose, who ended up winning her race. The case is due to go to trial in January.

Then, shortly after the election, the Working Families Party announced the hiring of Judith S. Kaye, former chief judge of the Court of Appeals, and her firm of Skadden, Arps, Slate, Meagher & Flom to review their operations.