The Leffler Trial: CAUGHT ON TAPE
Former Councilman Sheldon Leffler was found guilty of defrauding the City’s Campaign Finance Board.
Tribune photo by Dee Richard
The 90 minutes of tape obtained from the Manhattan DA’s office begins with Stark luring Leffler to her Jamaica Avenue office during an Aug. 10, 2001 phone call in which she claimed to be interested in making another contribution.
At this point, investigators said, Leffler’s campaign had already accepted a series of 38 money orders and two personal checks from Stark, all in the amount of $250 and most bearing the names of her relatives, employees and tenants.
Three days later, when Leffler met with Stark to discuss another contribution, she was wearing a wire for DA investigators. He acknowledged that she was already over the limit in what she could personally contribute to his campaign.
Leffler: But you have what they call, you’ve already contributed personally, eh, you know, in amounts of – you individually can’t be matched any more.
Leffler: You can contribute, each individual can contribute up to $3,500, but only the first $250 is matched.
Leffler: Obviously, to the extent that you have friends that contribute, and they haven’t contributed before up to $250 and they are city residents, then that could be matched and will be matched. We – you can see by what’s happened so far that we know how to comply with the system – we have essentially complied, not completely.
As the conversation continued, Stark raised the issue of her last contribution. “We did it in the 250s,” she said, referring to the money orders. Stark added, “Between you and me, I can’t see giving you money if it can possibly be broken down and used more effectively.”
Leffler replied, “Oh yeah, that’s the best way to do it. But it has to be done right, it has to be done right.”
Money Order Problem
The conversation quickly turned from the possibility of a new contribution to problems with Stark’s previous gifts. “We have not gotten any match on most of the money that you got together, except for the checks,” Leffler said.
The explanation for the withholding by the CFB, Leffer explained on the tape, is that the contributions organized by Stark came in the form of money orders, and details about these money orders drew the suspicion of CFB auditors.
Leffler: The problem with the money orders, I believe and I’m not sure this is the case for all of them, was that when they are sequential money orders – like you know one goes through and gets one, two, three, four, five – then they raise questions, they raised questions as to whether these were really taken by Joe Smith and Paul Jones and Mary Blackburn, or whether they were essentially done by one person. I believe that’s the question that they’ve raised.
Stark: That is the – that’s exactly what happened! One person did get all of them.
Stark: I got all of them.
Leffler: We’re trying to do it right if we do it at all. The thing to do is to do it so that we avoid any problems which have occurred in the past.
Not A Dime
Leffler addressed incomplete “contribution cards,” which are forms that must accompany every donation made via money order. According to CFB rules, the cards must bear the name and signature of each donor.
In this case, however, a number of the contribution cards submitted to the CFB lacked the signatures and even the first names of the supposed donors.
Stark asked Leffler how to approach these donors, who, she acknowledged on the tape, had no knowledge that she had contributed in their names.
Leffler: I mean, can’t these individuals be asked if they, you know, just explain to them and ask if they would be good enough to sign? I assume you know these people.
Stark: Yeah, but they don’t know, they don’t know that.
Leffler: They don’t have to contribute a dime, all they are asked to do is sign these cards. I mean, if they are told you made a contribution on their behalf, it doesn’t cost them anything, would they just be good enough to sign.
Stark: All right. Listen.
Leffler: I mean if you have a relationship, you’re not asking them to contribute a penny. Why don’t you say that the contribution was made on their behalf, and um, it’ll be a big advantage if they signed? Also, to get their first names. You may know their first names.
Stark: Sure I know their first names. That’s not an issue.
Leffler: […] I mean each one is worth, um, $1,000 in matching funds, so I mean I think it’s worth asking these people.
The Makings Of A Conspiracy
Leffler masterminded a plot to defraud the CFB by instructing Stark to disguise her $10,000 contribution to his campaign as 40 smaller donations by 40 different people.
Under the terms of campaign finance laws, candidates opting into the system earn $4 in matching funds from the city for every $1 donated to their campaign by a private citizen.
The system, however, forbids gifts from any individual over $3,500 and stipulates that only the first $250 of any person’s contribution could be eligible for matching funds.
By masking Stark’s lump sum contribution as 40 smaller gifts, Leffler allowed Stark’s entire contribution – which was too large to begin with – to be matched by the city.
Stark’s money order contributions were investigated by CFB auditors because they were consecutively numbered. Prior to the guilty verdict, Leffler and his attorney claimed that Leffler had no knowledge of the illegal contributions. Stark avoided legal blame, however, by cooperating with the Manhattan DA.
Prosecutors argued in court that Leffler’s remarks on tape not only showed a disregard for the spirit of New York City’s campaign finance system, but also directly violate Section 14-120 of State Election Law.
That law forbids donors from making any contribution, direct or indirect, under any name but his or her own, while also placing a heavy onus on candidates. “[N]or shall any…candidate,” the law states, “knowingly receive a payment or promise of a payment…in any name other than that of the person or persons by whom it is made.”
— Liz Goff contributed to this story.
Who Is Rita Stark?
Even before becoming the star witness in finance fraud trial against Leffler, Rita Stark attained a high profile in Queens for what many have called the consistent disrepair and overwhelming neglect exhibited in her vast real estate holdings throughout the borough.
Jonathan Gaska, district manager of Community Board 14, told the Tribune that Stark is “one of the main causes of the downfall of the Far Rockaway Shopping Center area.” Neighbors have been lobbying to have the mall, which is owned by Stark, condemned by the state.
This pattern persists throughout Stark’s vast holdings, which she manages from an office in Hollis. Stark did not return calls for comment.
Stark inherited her buildings – which total 28, according to the Department of Finance – from her father Fred Stark, who was considered the foremost real estate investor in Queens at the time of his death in 1988. The Stark and Leffler families have been close friends for at least two generations.