Cash News
I missed the boat on Nvidia and the near 200% explosion of its stock price in just one year, with a market capitalization about to eclipse the entire London Stock Exchange.
I thought I was sharp, but my Charles Schwab portfolio is only rivaled in its failings by my DraftKings sports betting account and its emphasis on struggling golfers and West Ham United.
However, there’s one investment scheme where my political friends and I are Wall Street Apes: the New York City campaign-finance system.
Cha-ching!
One glance at the indictment against Mayor Adams shows how the system is ripe for abuse.
Despite the hype, taxpayer-funded elections are not a prophylactic against political corruption, but instead have often enabled it.
The reason is plain. If you think Nvidia had a meteoric rise, buckle up while I tell you about the guaranteed payouts of the NYC Campaign Finance Board.
No financial market on earth, no pump-and-dump, no meme stock can match its return on investment.
First implemented in 1988 as a dollar-for-dollar match to ward off corruption, the city’s campaign-finance spending has ballooned — like all government programs — into an eye-popping 8-to-1 match.
By the way, that’s 8-to-1 for the primary, and another 8-to-1 for the general election. A $250 donation could be worth up to $4,250 months later.
Eyeing a 16-to-1 money line on your campaign burn is better odds than blackjack.
And in this table game, not only does the player make out, but so do the dealers — the consultants, fundraisers and bundlers.
To be sure, it isn’t the Campaign Finance Board that has caused the problem. The agency is chock-full of public servants who genuinely believe in its mission and strive to avoid the abuse of the city’s treasury.
But the system was devised and its rules outlined by its very beneficiaries: Politicians like me, ever-focused on raising money for the next race.
That’s like allowing stockbrokers to make up their own rules — and making the public guarantee their returns.
Imagine if you could invest up to $250 in a stock with a surefire return of 1,700%.
You would buy it. Your spouse would, too. So would your kids, grandma, grandpa, Aunt Matilda, and Mrs. McGillicuddy next door.
Heck, you’d even front them the money!
Which is where the crimes — and later the prosecutors — come in, via illegal straw-donor schemes that falsely break large donations from wealthy fat cats into small contributions that are eligible for matching funds.
You get the point, and so do the politicians chasing that cheddar. But in real life, it’s your taxpaying family paying for the gains. The system cost taxpayers $127 million in 2021.
And too often in its history, there have been misdeeds.
In 2012, Democratic District Leader Albert Baldeo was charged with a campaign-finance straw-donor scheme. He served 18 months in jail.
In 2013, while running for City Council, Albert Alvarez received straw donations involving stolen funds from a shady Bronx nonprofit organization. He pleaded guilty.
That same year Jenny Hou and Oliver Pan, respectively the treasurer and fundraiser for John Liu’s failed mayoral campaign, were convicted in a similar scam, though the candidate himself was not implicated.
In 2018, after his arrest in another case, prosecutors alleged restauranteur Harendra Singh attempted to bribe former Mayor Bill de Blasio with straw donations made through Singh’s employees. He was sentenced to four years.
Hui Qin, a billionaire Chinese film magnate, recently pleaded guilty to a 2021 straw-donor scam to benefit multiple candidates at the local and federal level, beginning with the mayoral race that year.
At the same time, Dwayne Montgomery and Shamsuddin Riza conspired in a straw-donor scam to benefit Adams. Both pleaded guilty earlier this year.
Former Lt.-Gov. Brian Benjamin resigned following his indictment in a straw-donor con during his 2021 comptroller bid. He is currently fighting the charges.
“Bling Bishop” Lamor Whitehead, a scandal-prone Brooklyn pastor, was accused of orchestrating a scam to benefit his 2021 borough presidential bid.
And these are just some examples from roughly the past decade. The corruption goes back much further.
Would you believe the good-government gaga who helped pass the original campaign finance law was later convicted of his own straw-donor conspiracy in 2003? Look up Sheldon Leffler.
Despite this history of abuse, Albany politicians have expanded public campaign financing to include all state elective races.
Sure, these criminal incidents represent a small percentage of the candidates who have received campaign-finance dollars. But if you find just a couple of ants crawling about your kitchen counter, do you think they’re the only ones you have in your house?
It’s time to demand the repeal of these tainted systems, state and city both, that waste our money without ensuring our politicians’ virtue.
Joe Borelli is the minority leader of the New York City Council.