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Vallone asks for study of Hevesi’s war chest

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City Councilman Peter Vallone (D-Astoria) has questioned the contribution practices of rival Democratic mayoral candidate Alan Hevesi and urged the Campaign Finance Board to investigate what he contends are spending irregularities.

Hevesi, the city comptroller who is from Forest Hills, has come under fire from Vallone’s camp because he has run months of television ads and yet spent only slightly more on his overall campaign than Vallone and the two other Democratic candidates.

Vallone, one of the architects of the city’s new campaign finance laws, has been locked in a tight race with Hevesi and Bronx Borough President Fernando Ferrer for second place in the polls. The frontrunner on the Democratic side is Public Advocate Mark Green in the contest to succeed Mayor Rudolph Giuliani.

Frank Barry, a spokesman for the Campaign Finance Board, said the board was not investigating Hevesi but conducting an audit as part of a routine monitoring of all the candidates who are under the city’s matching funds program.

Vallone claims that Hevesi’s campaign consultant, Hank Morris, who has been a friend of the comptroller for more than 30 years, has provided Hevesi with in-kind contributions by forgoing his usual fee to run a campaign. According to the city’s matching fund program, in-kind contributions have to be listed as campaign contributions, which they are not on Hevesi’s filings.

“Allowing one candidate to operate with an illegal advantage could undermine the legitimacy of this campaign,” Karen Persichilli, Vallone’s campaign manager, wrote in a May 23 letter to the Campaign Finance Board. “In order to resolve such questions, I urge you to launch an investigation immediately. Any delay could have serious ramifications for this campaign.”

Morris, a seasoned political consultant, ran the campaign of U.S. Sen. Charles Schumer (D-N.Y.) in his victory over former U.S. Rep. Al D’Amato.

Vallone and other Hevesi opponents contend that since Hevesi’s campaign has been run out of Morris’ office, he has not had to pay large sums of money for office expenses, rent or campaign workers. They maintain this practice has freed up Hevesi financially so that he had the funds to bombard the air waves with campaign commercials while the other three candidates have yet to run a TV ad.

The campaign finance program limits individual contributions to a mayoral campaign to $4,500 and caps total spending for the primary election and for the general election at $5,231,000 each.

The program was designed to lessen the influence of campaign contributors on the candidates, level the playing field and make the information on the candidates’ finances readily accessible.

“These reports about the Hevesi camp’s spending and accounting practices have raised some serious questions,” said Mattis Goldman, a spokesman for Vallone. “We know the Campaign Finance Board is investigating the matter and it is up to the Campaign Finance Board to determine the legitimacy of the Hevesi camp’s operation. But at the very least, there is the appearance of some sort of impropriety.”

Josh Isay, a spokesman for the Hevesi campaign, said Hevesi’s 1993 and 1997 campaigns for city comptroller were run in a similar fashion, and the Campaign Finance Board auditing process found nothing amiss.

“We are running a frugal and smart campaign, spending money to reach the voters and not on an overblown campaign staff,” he said. “We are confident that the CFB will find nothing wrong.”

Barry said the five-member Campaign Finance Board, led by Rev. Joseph O’Hare, will look into the allegations about Hevesi’s spending made by the other candidates. He said as of July 30 no action had been taken and the audit would continue throughout the election.

If the CFB finds any improprieties, it will take action, which could lead to a fine or forfeiture of public funding. The board fined Giuliani in 1997 and former Mayor David Dinkins in 1993 for violating the its rules and regulations.

Barry said the trouble at the moment is that all of the allegations about spending violations are speculative.

“We don’t have all of the facts regarding the relationship between Morris and Hevesi,” he said. “Once we get all of the facts, the board will make a decision.”

As of the last filing July 16 on expenditures with the Campaign Finance Board, Hevesi had shelled out $2,327,807 while Ferrer had spent $1,893,727, Green had laid out $1,683,445 and Vallone had dipped into his funds for $1,448.583. But Hevesi has spent $1.3 million on TV advertisements, leaving a relatively small $1,027,807 for the rest of his expenditures.

The differences in the candidates’ outlays can also been seen in the amount they have spent for office space, office expenses and campaign workers.

Hevesi has not been forced to lay out money for office space. He uses the Manhattan office of Morris’ firm — Morris, Carrick and Guma — as his campaign headquarters. While Ferrer has dropped $63,303 for rent on his campaign office, Green has spent $115,969 for rent and Vallone $51,000, according to the latest filings.

To keep his headquarters in office supplies Hevesi has spent only $3,686 — far less than Ferrer, who has shelled out $157,549 to keep his office in pens and paper. Green has spent $195,601 and Vallone $156,240.

Hevesi has paid out only $17,788 for campaign workers, while Ferrer’s workers have earned $156,488. Green’s staff has been paid $461,355 for his campaign staff and Vallone’s workers have received $78,629.

Reach reporter Adam Kramer by e-mail at Timesledger@aol.com or call 229-0300, Ext. 157.

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