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Halloran owes money from ‘09 race

Even as City Councilman Dan Halloran (R-Whitestone) testified before a federal grand jury Monday about his claims that city Sanitation Department workers in northeast Queens engaged in a deliberate work slowdown in the aftermath of the Dec. 26 blizzard, he was still fighting the financial battles of his 2009 campaign.

The freshman legislator has not paid tens of thousands of dollars in debts owed for services rendered by at least three vendors — including two campaign consulting firms — during the hard-fought race, which ended 15 months ago, the two firms said Monday.

As of Tuesday, Halloran owed The Traz Group, of Marlton, N.J., more than $50,000, according to Ed Traz, the company’s president. Halloran owes Advantage Inc., of Arlington, Va., $10,688.45, according to the company’s vice president, Aris McMahon. Both consulting firms are preparing to sue Halloran, Traz said, though several other vendors said his campaign had settled debts with them in full.

“I’ve sent missive after missive to Dan, and its always, ‘the money’s coming, you’re going to get paid,’” Traz said. “I have vendors I have to pay, who I’m stringing along because I owe them money, and I can’t pay them because he can’t tell me when the money’s coming.”

Steve Stites, a spokesman for Halloran, said the councilman plans to eventually pay for the work. But Stites said Halloran would be forced to give up more than $100,000 in public matching funds if he were to pay the debts before the city Campaign Finance Board concludes its standard post-election audit of him and his Democratic opponent, Kevin Kim.

Neither the board nor Stites could say exactly when that will be.

“If he raised the money and paid it from a separate account, he wouldn’t be eligible for the money from the CFB to which he is legally entitled,” Stites said.

But Eric Friedman, a Campaign Finance Board spokesman, said Halloran could have settled with the vendors without jeopardizing any public matching funds for which he is eligible.

“There’s nothing that prevents him from borrowing money to pay them off. He can go to a bank and get a loan and say, ‘I need to pay off these vendors,’ and then give that to the vendors,” Friedman explained. “He could get a loan from a bank to pay the previous debt from the campaign and that wouldn’t preclude him from getting paid.”

Friedman could not comment on whether Halloran could persuade a bank to lend him money based on his campaign finances.

On another front, claims Halloran made in the days after the Dec. 26 snowstorm have become the center of a federal investigation.

He appeared Monday before a federal grand jury in Brooklyn to discuss his allegations that some Sanitation Department workers took part in a deliberate work slowdown in northeast Queens after the Dec. 26 snowstorm.

Mayor Michael Bloomberg, city Sanitation Department Commissioner John Doherty and several Queens legislators have questioned Halloran’s allegations of a slowdown.

Halloran describes himself as a fiscal conservative, and he told TimesLedger Newspapers during the 2009 race, “I think I can honestly bring a voice of fiscal responsibility and integrity,” to the city council.

To fund his campaign, he accepted public financing while Kim did not, and the councilman was thus eligible to receive city matching funds based on how much Kim raised.

Kim raised enough money to qualify Halloran to receive the highest level of matching funds, Friedman said.

But the campaign has yet to receive a large portion of that money because much of Kim’s fund-raising was reported on post-election disclosure forms and the Campaign Finance Board has not yet ruled on what additional funds Halloran will receive.

Halloran has contended since the months after the November 2009 election that Kim purposely under-reported his donations to his campaign in order to keep Halloran from getting matching funds until after the race ended.

“The city owes the councilman his money, the reason he didn’t get it is his opponent played a political game with him,” Stites said, adding later in an e-mail, “the vendors can thank Kevin Kim’s campaign for their situation.”

But Kim said Tuesday that Halloran was trying to take attention away from his outstanding debts by smearing Kim’s campaign.

“He is falsely accusing our campaign without any shred of evidence — something that no one else has accused us of — to distract everyone,” Kim said.

Around the time he began to make the accusations against Kim, Halloran sent a letter to Advantage. The Jan. 25, 2010, letter further explained his financial obligation to the consulting firm, which he hired to handle telephone advocacy, voter identification and other tasks.

The letter was accompanied by a $1,000 check to begin paying his debt to the company.

“We thank you for the services provided and apologize for the delays in payment. We are aware of the past due amount of $11,688.45 and are submitting this check for reduction to a balance of $10,688.45,” the letter said. “We will be sending another payment shortly.”

Another check never arrived, McMahon said.

Halloran met with two sanitation supervisors at his council office in the days immediately following the storm, according to a source close to the investigation. One is named Carl Curto, the source said, while Halloran does not have the other’s name.

He also ran into three Sanitation Department workers on Bell Boulevard in the days following the storm, according to the source, who said they asked him what trouble they could be in if they were aware of a slowdown. The councilman suggested they seek other legal representation, the source said. Halloran, who is a lawyer, has since claimed attorney-client privilege on the advice of the New York State Bar Association in withholding the three workers’ names from investigators, according to the source.

Reach reporter Connor Adams Sheets by e-mail at csheets@cnglocal.com or by phone at 718-260-4538.

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