New York State Com'n on Government Integrity v. Congel
| Citation | 142 Misc.2d 9,535 N.Y.S.2d 880 |
| Parties | NEW YORK STATE COMMISSION ON GOVERNMENT INTEGRITY, Petitioner, v. Robert J. CONGEL, Robert Ungerer and Bruce A. Kenan, Respondents. |
| Decision Date | 15 November 1988 |
| Court | New York Supreme Court |
New York State Com'n on Government Integrity, pro se by James M. McGuire, and by Simpson, Thacher & Bartlett, of counsel, by Brad Friedman.
Sanford M. Litvack of Dewey, Ballantine, Bushby, Palmer & Wood, New York City, for respondents.
Petitioner New York State Commission on Government Integrity (the "Commission") moves for an order pursuant to CPLR 2308(b) compelling compliance by a date certain with three subpoenas duces tecum and three subpoenas ad testificandum previously served upon respondents. This motion requires consideration of the general rules applicable to administrative subpoenas as well as constitutional claims under the First, Fourth (subpoenas duces tecum ) and Fifth (subpoenas ad testificandum ) Amendments as they arise in the context of this case.
In order to understand and evaluate these quite distinct claims, it is necessary to review the history of, and legal basis for, the Commission as well as the facts of the particular investigation involved here. Respondent's non-constitutional arguments may then be disposed of and, finally, the constitutional issues resolved.
The Commission was created by Governor Cuomo on April 21, 1987 pursuant to Executive Order No. 88.1 (9 NYCRR 4.88) to "investigate weaknesses in existing laws, regulations and procedures relating to campaign contributions and campaign expenditures, and determine whether such weaknesses create an undue potential for corruption, favoritism, undue influence or abuse of official position or otherwise impair public confidence in the integrity of government." Executive Order, No. 88.1, para. II(5). To effectuate this mandate, the Commission was granted limited investigative powers to subpoena witnesses, books and records, as provided by section 63(8) of the Executive Law. Executive Order, No. 88.1, para. IV.
The Commission's power was limited, however, by specifically directing compliance with Civil Rights Law § 73. Executive Order, No. 88.1, para. VI. Further, the Commission was directed to promptly communicate any evidence of the violation of existing law to the appropriate law enforcement authorities and to fully cooperate with prosecutorial agencies to avoid jeopardizing ongoing investigations and prosecutors. Executive Order, No. 88.1, para. VII. The Commission was given no independent prosecutorial power.
In July 1987, the Commission commenced an extensive investigation into the campaign financing practices in the 1985 Town Board Elections in Poughkeepsie ("the elections"). The investigation allegedly had two goals: 1) to determine whether weaknesses and loopholes in the election laws, as illustrated by the elections, created "an undue potential for corruption, favoritism, influence or abuse of official position or otherwise impair[ed] public confidence in the integrity of government", and 2) to review the operations of the New York State Board of Elections and its investigation into earlier allegations of wrongdoing arising out of the elections to determine whether the Board adequately monitored compliance with the Election Law and, if not, whether the Board's ineffectiveness "impair[ed] public confidence in the integrity of government."
Once commenced, the Commission's Poughkeepsie investigation focused upon the role of the Pyramid Companies, a Syracuse based real estate development group ("Pyramid"), several Republican Party committees and a political action committee. Respondents Congel, Ungerer and Kenan are each partners in Pyramid or related entities.
To date, the investigation has already revealed that early in 1985, Pyramid established the Poughkeepsie Galleria Company ("PGC"), a partnership, to build a mall in Poughkeepsie; respondents Ungerer and Kenan were partners in PGC. At that time, there were not enough members of the Poughkeepsie Town Board in favor of the mall project to ensure approval of a required zoning change. Accordingly, a campaign strategist was hired to manage campaign efforts on behalf of selected candidates who were or might be in favor of the mall, apparently without the knowledge or consent of the candidates supported and Pyramid and others affiliated with it then funneled several hundred thousand dollars into the campaigns of these candidates through several political committees, e.g. the Building a Better New York Committee (BBNY), the New York Republic State Committee (RSC) and the New York Republican Federal Committee (the Federal Committee); many of these contributions were not reported as required by the Election Law. Each of these committees, in turn, spent substantial sums in connection with the Poughkeepsie elections. Hundreds of thousands of dollars were also disbursed by various Pyramid companies to at least three vendors that provided election related services.
without any mention that the mall was the underlying issue.
Under present law, contributions made to "housekeeping accounts" of constituted committees, such as the RSC, or party committees, such as the Federal Committee, for the purpose of maintaining a permanent headquarters and staff, are limited only by the $150,000.00 annual limitation in contributions per individual. Election Law § 14-114(1), 14-114(4) and 14-124(3); money donated to such housekeeping accounts may not legally be utilized for the express purpose of promoting specific candidates. Election Law § 14-124(3). Similarly, contributions made to a committee that is not authorized by the candidate that it supports, such as BBNY, are not limited. See Election Law § 14-100(9)(3).
Petitioner's investigation revealed that a large percentage of Pyramid's contributions, if made directly to the candidates and properly reported, would have been severely limited by the Election Law. A number of contributions, including in-kind contributions, were not disclosed as required by the law. The Board of Elections reviewed these matters and determined that although the law had been violated, the violations did not warrant criminal prosecution.
On December 21, 1987, after accumulating this data, the Commission released a report to the Governor and to the press setting forth what it characterized as its "preliminary conclusions." Although this report encompassed what appeared to be extensive and detailed data with regard to the elections, the Commission contends that its investigative duties are far from finished and that it must answer many additional questions before it may reach its final conclusion. Among these questions are:
1. Did respondents intend that the contributions which they made to the "housekeeping accounts" of the Republic Party be passed through to the Poughkeepsie campaign?
2. Did the Pyramid companies reimburse any of the individuals affiliated with them who made these campaign contributions?
3. Are there internal memoranda or other documents which reflect or shed light on any understandings which influenced these contributions?
4. Who, in the Pyramid organization, solicited or arranged for these contributions?
5. Are there any documents which help explain why one of the political committees, Building A Better New York, devoted virtually all its resources to Poughkeepsie candidates?
6. What were the purposes of Pyramid's own company payments to Thomas Spargo 1 and to the campaign strategist who organized the Poughkeepsie campaign?
7. What role did the Pyramid principals play in the campaign, including decisions as to which candidates to support?
8. What was the total amount contributed by Pyramid and its affiliates and/or employees?
9. Were the expenditures made by the Building a Better New York Committee 10. Were post-election contributions promised?
to venders of election campaigns made independently of the candidates?
It is the Commission's position that it must obtain the information subpoenaed from respondents, as well as their testimony, to resolve the fundamental issue remaining open, i.e.
whether the funneling of these vast sums of money was the product of a sophisticated and well-financed effort to take advantage of loopholes in the Election Law, structured on the advise of counsel in an effort to comply with the law, or whether it was a concerted and concealed effort also to violate the law with some degree of confidence that the violations would be undetected or overlooked.
The "knowledge, intent and understanding" of respondents is alleged to be critical to this determination.
Respondents oppose enforcement of the subpoenas on several non-constitutional grounds including
1. that they serve no legitimate purpose and are instead intended to harass;
2. that because of press leaks they violate Civil Rights Law § 73(8); and
3. that they are overly broad.
The general standard for determining the validity of a nonjudicial "office" subpoena is well established. An agency of the government may conduct an inquiry into the affairs of those within its jurisdiction only if it can establish "(1) its authority for engaging in such an investigation and issuing the subpoena; (2) that the evidence sought is reasonably related to the subject of inquiry; and (3) that there is an authentic factual basis to warrant the particular investigation." National Freelancers, Inc. v. State Tax Commission, 126 A.D.2d 218, 220, 513 N.Y.S.2d 559 (3rd Dept.1987), citing Matter of Levin v. Murawski, 59 N.Y.2d 35, 462 N.Y.S.2d 836, 449 N.E.2d 730 (1983); Matter of A'Hearn v. Committee on Unlawful Practice of Law of N.Y. County Lawyers' Assoc., 23 N.Y.2d 916, 298 N.Y.S.2d 315, 246 N.E.2d 166 (1969).
When a subpoena is issued after extensive examination of witnesses and documents, as is...
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