Party dissidents demand outside audit of jumbled Democratic books – The Buffalo News


Erie County Democratic Chairman Jeremy J. Zellner acknowledges that his committee’s campaign finance records are a mess.

“Clerical errors,” he explains, adding that painstaking efforts to correct years’ worth of duplications, unreported contributions, unrecorded expenses and inputting mistakes are now underway.

But that’s not how a pair of party dissidents view it.

James J. Eagan and Rich Horner, critics of Zellner’s leadership, claim the sheer volume of six or seven years of mistakes that they uncovered constitute either “gross incompetence or malfeasance.” They say party leaders should demand that an independent auditor examine the party books to determine if any money is missing.

If the Erie County Board of Elections fails to refer the problem to its state counterpart for investigation, they promise to demand one themselves. They claim that contributions of almost $200,000 were not reported (including one for $25,000), that $55,000 in loans disappeared as a liability to paint a rosy picture of party finances, and that the party never documented transfers between various internal accounts. Their review of the books indicate there were 2,213 contributions and 869 expenditures previously not reported.

“I think he’s trying to cover up the fact that he has no money,” Eagan said, “or create some slush fund to cover expenses.”

Horner, a veteran consultant to Democrats around the state, adds that he wants to believe the discrepancies stem from “just incompetence.”

“But there is just so much of it,” he said. “Without any accounting, it leads one to believe that there’s some sort of malfeasance.”

Zellner insists the problems rise only to the technical level, dismissing any hint of impropriety.

“Entry errors and software issues resulted in on-paper imbalances,” he said, “but at no time were funds removed, illegally transferred, or otherwise manipulated.”

Eagan and Horner have been raising concerns for about two months. The Buffalo News reported in June that Eagan, a financial consultant who is a former commissioner of the Niagara Frontier Transportation Authority as well as secretary of the Democratic State Committee, was demanding an accounting.

Since then he and Horner have analyzed reams of campaign finance records submitted to the State Board of Elections. They say Erie County Democrats were forced to send scores of amendments to the state board, making new revisions as recently as Wednesday.

State Board of Elections officials say they are working with Erie County Democrats to bring their records into compliance. Spokesman John W. Conklin said beginning in June when Eagan and Horner first complained, the party has filed 115 amendments dating to 2012.

“I don’t know that we’ve encountered anything that’s serious, or that they have not been able to fix, or we’ve given them a way to fix,” he said.

Indeed, Zellner cites the state board’s involvement for his refusal to open party books, noting he recognizes the problems and is accepting the corrections.

“With respect to an outside audit, the New York State Board of Elections is the proper oversight agency in this matter,” he said, “and our work and cooperation with them is ongoing.”

Still, Eagan questions whether the complaint he submitted in June will get an impartial hearing because of Zellner’s dual role as party chairman and Erie County Democratic elections commissioner.

“I send a complaint about the chairman to the commissioner, but he’s the commissioner and the chairman,” Eagan said. “What’s he going to do — police himself? Shame on him.”

Zellner, who has been part of the local Democratic organization since his college days and chairman since 2013, said he and new Treasurer Eric Weyant began scouring party books soon after Eagan’s initial accusations. He admits to problems.

“The buck stops with me, I take full responsibility for this,” Zellner said during a lengthy interview at Democratic Headquarters. ”But in no way is there any money missing. For anyone to say so is just wrong.”

And Weyant says party accounts have never been in the red.

Zellner insists it “makes no sense” that he would rig numbers to hide a negative balance or misused funds because the campaign finance reports would always be open to scrutiny. He added nobody from law enforcement has contacted him nor has he hired an attorney.

“No motive for any alleged criminal or unethical behavior has been presented,” he said. “Where is the gain in deliberately executing the errors that have come to light? Who benefits?”

The problem, he says, stems from the increasing volume of reports demanded by state election law. The party is now seeking outside services.

“I’ve raised $3 million since becoming chairman, and we’ve simply become too big to handle this in-house any more,” he said. “And there have been several different people doing these reports, so there was no coherency. But they all come down to input and software errors — putting something in Column A that should be in Column B.”

The financial discrepancies follow an April report by Spectrum News that the State Workers Compensation Board placed a stop-work order on the Erie County Democratic Committee for failing to secure workers’ comp and disability benefits coverage. Party officials blamed the situation on a disgruntled former employee who stopped opening mail at headquarters.

Zellner, meanwhile, also lashes out at Eagan’s desertion of the party in recent years. He points to the former state party official’s support of former Syracuse Mayor Stephanie Miner over incumbent Democrat Andrew M. Cuomo in last year’s gubernatorial election. And he says Eagan’s motive for the new criticism may stem from his support for Republican Erie County executive candidate Lynne M. Dixon, to whom he has contributed $20,000 this year.

“I’m angry that these guys call themselves Democrats but have undermined our organization from Day One,” he said.

Backed by his analysis of the records, Eagan now hopes a local review expected to be conducted in the near future will spur Republican county Elections Commissioner Ralph M. Mohr to seek a state probe. If not, Eagan vows to send his complaint to the state board’s independent enforcement counsel, Risa Sugarman — though the state official usually needs a referral to launch a probe.

“If he has nothing to hide, he should send it off to Sugarman and make me look like a fool,” Eagan said.

Though Zellner continues to attract criticism for running the party as well as holding the $115,000 elections commissioner post, he has always insisted his oath of office precludes him from showing favoritism. And he notes that Republican Mohr acts as a check.

“If Commissioner Mohr sees smoke or fire he will ring the bell, though I don’t see anything here,” Zellner said. “If he wants to send this to the state board, I am happy to go along with it.”

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