De Blasio’s real estate money trail
Five out of the top ten bundlers for Mayor de Blasio’s re-election</br> campaign are developers
Among the interesting nuggets revealed last month by a far-reaching federal investigation into Mayor Bill de Blasio’s fundraising activities was that a little known developer from Los Angeles was among the top bundlers for de Blasio’s 2013 campaign.
Altogether, Jona Rechnitz, whose company JSR Capital owns a strip mall in Brooklyn as well as a Midtown office building, bundled more than $44,000 for the mayor. While the amount raised by Rechnitz is far from that of the top 2013 bundler for de Blasio — Michael Woloz, an influential city lobbyist who raised nearly $232,000 — his haul was the highest raised by a real estate executive for that election cycle.
Because of contribution limits, bundlers — volunteers who tap their personal and business network for donations — play a critical role in political campaigns. Rechnitz, who along with his fundraising is also being investigated for a possible Ponzi scheme and illegal gifts to police officers, has not been charged with a crime nor has de Blasio. He is also far from the only real estate executive who bundled cash for the mayor. And once again, the industry is turning out to be a big contributor to de Blasio’s re-election campaign. Of the mayor’s 26 bundlers, 16 are either real estate developers or lobbyists who represent them. Moreover, out of the top ten bundlers, five were developers.
In fact, the biggest bundler as of April 22 was an executive at the office sharing company WeWork. Arana Hankin, senior vice president of external affairs at WeWork, raised $68,750 in donations between Jan. 8 and Jan. 11.
The company, which was most recently valued at $16 billion, has fast become one of the biggest office tenants in the city. In November, it signed on to be anchor tenant at the city-owned Navy Yard, which is in the throes of a major redevelopment. WeWork is also expanding into the residential market; last month, it opened the doors to 110 Wall Street, a “co-living” space that will eventually accommodate 600 people. The company spent $150,000 to lobby city officials to grant permits to turn 110 Wall Street into a mixed-use building, according to the New York Post.
Meanwhile, developer Bill Rudin, whose company Rudin Management owns 110 Wall Street, bundled $25,150 in donations during the same period as WeWork. Along with Boston Properties, the company is also developing the aforementioned Navy Yard project which will eventually house WeWork. Plans for the office building were filed in November, but no permit approvals have yet been granted. When asked about the status, City Hall spokesperson Karen Hinton released a statement, saying, “All decisions are based on merit and in keeping with city policies.”
The list of bundlers included those whose interests overlap with de Blasio’s affordable housing initiative. Eugene Schneur bundled more than $30,100. His company Omni New York — which he co-founded in 2004 with former Red Sox baseball slugger Mo Vaughn — specializes in rehabilitating older properties into affordable units and has recently been investing in the Bronx. Similarly, Brooklyn builder Sol Arker, who raised $24,600 for the mayor, has been identified as playing a major role in de Blasio’s mission to create or preserve 200,000 affordable units over the next decade. Last year, his family-run firm closed on deals for 832 affordable units with total development costs of $209 million, according to the Wall Street Journal.
Developer Steven Witkoff, who has been a vocal supporter of Mayor de Blasio and his initiatives, rounded out the top 10 list. He bundled $19,800, as did jeans and sportswear entrepreneur-turned-developer Charles Dayan of Bonjour Capital.
It’s also worth noting that while lobbyists Suri Kasirer and James Capalino —who bundled $56,030 and $44,940 respectively — outraised many real estate players, they collected their donations almost exclusively from real estate and related industries, including Property Markets Group’s Kevin Maloney, JDS Development’s Michael Stern, Taconic’s Charles Bendit, Cammeby’s Avi Schron, and Iron Hound Management’s Robert Verrone. In fact, Chris Taylor, an executive at Ronald Perelman’s investment firm MacAndrews & Forbes who raised $24,750 for de Blasio’s campaign, is the only bundler on the top ten list who didn’t gather donations primarily from the real estate industry.
Over the years, scrutiny on the practice of bundling has increased. Prior to 2007, the New York City Campaign Finance Board defined a bundler as a person who collects donations and then delivers them to a candidate. The board — which limits individual donations to a mayoral candidate to $4,950 — now considers a bundler anyone who solicits donations to a candidate, regardless of whether that person actually collects and delivers them. That means people who host fundraisers or ask a few friends to donate to a politician are required to be disclosed as bundlers.
Bundlers generally seek cash from two sources: friends and relatives, and executives and people or companies who sell services to them, usually dubbed “vendors.” Rudin, for example, stayed mainly within his business network. He bundled $25,000 donations from employees at Rudin Management, law firm Goldfarb and Fleece, which has long represented Rudin Management, and an accountant named Richard Cohen.
Bundling donations from vendors is especially popular because they are less likely to deny the request, explained a New York lobbyist who spoke on the condition of anonymity. “I think it’s kind of understood that people will ask you [for a donation] if you’re a vendor,” the lobbyist explained. “They may say ‘Look, you may not be interested in policy but I’d like you to consider a donation to X.’” Carl Schwartz, head of law firm Hunton & Williams’ real estate practice, said he gets calls from clients a couple times a year asking him to attend a fundraiser for a politician. “If we can help them and we believe in the candidate, then I would do it. I don’t remember a client ever putting pressure on me,” he said.
But one real estate attorney, who also spoke on the condition of anonymity, said he has donated tens of thousands of dollars to politicians like de Blasio and Governor Andrew Cuomo at the request of clients.
“We want to keep the business, so we write the check,” he said.