Klein is Told to Refund $1M in Funds

ALBANY – State Senate candidate Jeffrey Klein of the Bronx improperly financed his campaign with more than $1 million he raised to run for other offices, a state judge ruled this week.The judge ordered Mr. Klein, the winner of a hard-fought Democratic primary last month, to refund more than $1 million to a committee he set up to run for attorney general and almost $4,000 to his Assembly campaign account.Mr. Klein’s Senate account had less than $250,000 in cash and almost $200,000 in debts as of last week.The decision adds a new twist to the battle to replace former Senator Guy Velella, a Republican who gave up the seat shortly before going to jail for accepting bribes. The three-way race pits Mr. Klein against a Republican, John Fleming, and a Democrat who is running on the Conservative and Independence tickets, Stephen Kaufman.Senate Democrats are counting on a victory by Mr. Klein to help them chip away at the 37-24 Republican majority in the Senate. They were also hoping Mr. Klein could finance his own campaign, so the Senate Democratic Campaign Committee could devote its limited funds to other competitive races.Democrats predicted the court ruling would be overturned on appeal, and said it would not prevent Mr. Klein from running an effective race in any case.“The Klein campaign sought guidance from the Board of Elections prior to making those transfers, and the Board of Elections indicated this was an appropriate procedure,” Mr. Klein’s attorney, Stanley Schlein, said yesterday. “It has been done this way for at least a dozen years.”However, Mr. Kaufman – who lost both the Democratic and Republican primaries -charged that fund-raising violations by Mr. Klein had “tainted” the election.“The court has to determine whether or not there should be a new election or whether he should be removed as the candidate,” he said.The ruling against Mr. Klein “shows the public that either he’s sloppy or he’s willful in what he did,” Mr. Kaufman said. “Either way I don’t think that’s what people want representing them.”Mr. Klein, a member of the Assembly for the past 10 years, had raised more than $1.2 million to run for attorney general in 2006. After Velella quit in May, however, he shifted most of that money into a new Senate campaign account.Mr. Schlein said the campaign followed Board of Elections guidelines in transferring the money, by excluding the portion of any individual contribution that exceeded $13,900, which is the cap on donations to a Senate race.In his ruling on Monday, however, Judge Thomas McNamara ruled that the contribution cap should apply to the entire amount of money moving from account to another, since the accounts set up to pursue entirely different offices. He ordered Mr. Klein’s Senate account to repay all but $13,900 of the more than $1 million it received from his attorney general account, and all but $13,900 of the $17,700 it received from his Assembly account.Mr. Schlein said the ruling conflicts with the common practice among candidates of both parties.“It’s the first time anybody has ever interpreted the law in that fashion,” he said. “We’re hopeful the Appellate Division will certainly rule in our favor.”A Democratic election lawyer not involved in the race, Jerry Goldfeder, said he though the judge’s ruling was “probably wrong.” “It seems to me should they choose to appeal they will win,” Mr. Goldfeder said.

Klein is Told to Refund $1M in Funds

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