Late campaign reports now online
Councilman Russo submits missing election finance documents
by Amanda Palasciano
Reporter staff writer
Sep 30, 2012 | 4406 views | 2 2 comments | 24 24 recommendations | email to a friend | print
ELEC-TRIC SLIDE – Councilman Michael Russo has turned in three years of missing ELEC reports.
ELEC-TRIC SLIDE – Councilman Michael Russo has turned in three years of missing ELEC reports.
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City Councilman Michael Russo turned in more than three years of missing election finance reports to the Hoboken Reporter and to the state Election Law Enforcement Commission (ELEC) a week ago Thursday in response to questions raised about why the public documents were not available. The 16 documents were crucial because they pertain to a time period during which Russo agreed to accept money from an FBI informant who was part of a major 2009 political corruption sting operation. Russo also presented a large envelope made out to ELEC and said he was going to mail the documents to the state Election Law Enforcement Commission the same day, and in fact, the paperwork was posted on ELEC’s website by the end of last week.

After the Reporter analyzed the ELEC reports last week, Russo was asked for bank statements to corroborate them. After review, the monthly statements from late 2008 through the end of 2009 contained the same information that was in the ELEC reports.

The issue first arose during Russo’s 2011 re-election campaign when a two-year-old FBI video tape surfaced of him agreeing to accept money for his “Russo for Hoboken” account that he’d used to run for council in 2007. The money was offered to him by Solomon Dwek, an FBI informant who met with dozens politicians and candidates in 2009 and offered them money in exchange for their favoritism in his future development projects. Russo did tell Dwek on the FBI videotape that Dwek should make a check out to “Russo for Hoboken.” However, Russo says to this day that once he realized that Dwek wouldn’t follow the rules, he never took any money from him. Russo was not among the 44 officials arrested or indicted in connection with the sting.

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“I take full responsibility.” – Michael Russo

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Russo had largely used his 2007 “Russo for Hoboken” election account for his run for council during that year, so from then on, expenditures and campaign donations for 2009 would theoretically be minimal – unless he chose to add Dwek’s donation to his funds. But since no campaign reports were filed after 2008, there was no way of knowing if any money was ever added to the account.

Last month, several council people, including Russo, sent a letter to Mayor Dawn Zimmer about a different matter, questioning Zimmer’s ethics. Zimmer is up for re-election next year, and Russo and his allies typically oppose her. Their letter asked why Zimmer had used the legal services of then-Council President Ravi Bhalla for a personal legal matter. They said this could be a conflict of interest, and asked her several questions about it.

When Russo and his allies questioned Zimmer’s ethics, Zimmer fired back with a letter questioning Russo’s own ethics, noting that Russo’s campaign reports during the time period he met with Dwek are still missing.

Besides the missing reports, Zimmer also asked what happened to $18,000 that was shown as a balance in the “Russo for Hoboken” account in the 2008 ELEC report.

Russo does have reports on file for his 2011 run for council, but that’s a separate account, the “Russo for Council” account. As of four weeks ago when the Reporter fact-checked the mayor’s letter for publication and began working on a story on the missing reports, there were no “Russo for Hoboken” reports on ELEC’s website after 2008.

The reports for any election fund must be submitted to ELEC quarterly, by state law. They can be found on ELEC’s web site for all municipal candidates.

The sting

In 2009, Central Jersey real estate developer turned FBI informant Solomon Dwek successfully met with many local public officials to offer them campaign donations and to ask for their future help with development projects, in what has come to be known as “Operation Bid Rig.”

The multi-phased FBI sting resulted in 44 arrests and a followup non-fiction book in 2011 called “The Jersey Sting.”

A video was leaked in 2011 in conjunction with the release of the non-fiction book, which was written by two New Jersey newspaper reporters. The tape showed Russo meeting Dwek for lunch in 2009 and telling Dwek to make out a check to “Russo for Hoboken.” Dwek offered to give Russo $5,000, but Dwek he didn’t want his name on the check.

Russo was not arrested or indicted and the FBI never publicly released any other information on Russo’s involvement in the matter. The matter only became public in 2011 because it was discussed in “The Jersey Sting.” Russo was also running for re-election to the council at that time.

When the videotape became public, many residents protested Russo at a City Council meeting in spring of 2011. However, Russo continued his campaign for re-election, and won.

The matter got quiet after Russo won re-election. But it surfaced again this summer when Zimmer asked, in her response to Russo’s salvo about Bhalla earlier this month, why there were no reports. Zimmer said in her letter, “Mr. Russo claims that he never received the money…but we have only his unsubstantiated word that he never received the money.”

After turning in the reports last week, Russo said Zimmer was only bringing up this issue to deflect from his and his council allies’ questions about her ethical dealings.

He said that if the FBI had given Dwek money to give to Russo, the FBI would certainly know about it. The money that Dwek donated to various politicians was supplied by the FBI.

“Enough is enough,” he said. “Don’t you think if a check was made out by an FBI informant, the FBI would have found the check by now?”

Russo also pointed to a 2011 video of the “Jersey Sting” authors holding a public forum about their book, a video the Reporter viewed last week. In the video, someone asks the authors, who received sensitive FBI information for their book, about the Russo incident. Co-author Josh Margolin responds, “Whatever you want to say about Councilman Russo and what he said or did not say on the tape or what he said or did not say about that meeting afterwards, let’s understand he did not take any money. We were surprised there were not more people like that on the surveillance tapes, people that, regardless of the spiel at the diner, he didn’t come back for the cash.”

What’s in the reports

The ELEC reports reflect no deposits during the three years since 2008. They depict itemized spending of $18,010.

Russo’s expenses include payments to the Hoboken Postmaster on July 30, 2008, Aug 4, 2008, Aug 15, 2008, and Dec 28, 2009. A polling fee in the amount of $11,310 was paid to McLaughlin and Associates, a market research company with political polling expertise, on March 14, 2009.

Also on March 14, 2009 a $1000 political contribution was made to Friends of Phil Kenny.

Jersey City Councilman Phil Kenny was a longtime activist who was appointed to the council in spring of 2009 when another councilperson departed. Two months later, an election was held and he ran for and won the seat. He pleaded guilty later that year to accepting $5,000 in contributions from Dwek through straw donors in exchange for future favors like zoning and other approvals. He was the sixth person who pled guilty in the Jersey sting.

Russo said in an interview Wednesday that the niece of Phil Kenny was a longtime family friend, so that’s why he donated.

“His niece is a close family friend,” Russo said. “By way of her, I met Phil Kenny. He became a friend but I was closer to his niece.”

Other expenses include $3,500 spent on flowers for seniors on Dec 22, 2009, $500 for a Little League sign, a $100 donation to American Legion in support for soldiers and a $100 donation to Northern NJ Council all on April 1, 2009, as well as baseball uniforms on April 06, 2010.

Bank statements

The ELEC reports were posted on ELEC’s website by the end of last week. ELEC does not require bank statements to be turned in, but Russo said he has them on hand if ELEC ever requests them.

When asked why Russo did not submit the ELEC reports before, he said that he had assumed they were being submitted. He said, “I take full responsibility. I was under the impression they were being done regularly, but eventually I stopped asking so as not to hound my treasurer.”

Russo said Wednesday that he did not have the original reports. He said the reports submitted to the Reporter and ELEC two weeks ago were reconstructed based on bank statements acquired after he was notified of the issue.

More questions

Hoboken resident and former council candidate Eric Kurta had notified ELEC this summer that Russo’s reports were missing. ELEC responded to Kurta in August, saying the agency had decided to investigate.

Kurta said last week, “I suspect bad record keeping; if it was more I would be surprised. In terms of accounting, it still angers me, especially since John Castellano [Russo’s treasurer] is heading up [another campaign for school board]. But in terms of good government, I would be satisfied” if he finally submitted the reports.

Castellano had been the treasurer for the “Russo for Hoboken” account for the entire time and is the currently a co-campaign manager for the Move Forward campaign in the Board of Election race, which is slated for this coming November. Move Forward is a school board ticket opposing the Zimmer-allied Kids First ticket.

Zimmer’s response

Russo feels that Zimmer’s blame boomerang was thrown to ‘grossly deflect’ her issues.

“I don’t try to tarnish her reputation,” Russo said. “She tries to tarnish mine and maligns my family because she doesn’t want to answer simple questions.”

Russo also said “If [the issue with Councilman Bhalla] was as simple as she says, she would have been forthcoming. Yet the questions still haven’t been answered.”

Russo and his council allies have asked her several questions about Bhalla’s work for her. Zimmer’s response has been that it was a “minimal representation of my family over a leaky roof insurance claim.”

Zimmer was asked at the end of last week for a response to Russo’s allegations of deflection.

“It’s quite the opposite really,” Zimmer said Thursday. “The issues [the council minority] raised are completely contrived.”

When asked if Russo’s filing of all of the ELEC reports would satisfy her, Zimmer said she would like to see the reports and bank statements first. “I am not going to comment on a hypothetical situation,” she said.

In a follow-up, she elaborated. “If Councilman Russo releases all of the bank statements for Russo for Hoboken, and those bank statements exonerate him on having received the money, whether through Mayor Khalil or through straw donors, then I would consider the issue closed,” she said. “Needless to say, if he has received contributions from anyone during the relevant period, then it would be necessary to research those donors before any conclusion could be reached.”

The documents presented do not indicate any contributions, just expenditures.

Russo said on Friday that he hopes the matter is closed. “Enough is enough,” he said. “There was no reason to continue down this road.”

Amanda Palasciano may be reached at amandap@hudsonreporter.com.

Comments
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WESTY
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September 30, 2012
Since we have discovered so much from seeing Michael Russo's FBI video with Solomon Dwek what could we learn from the video of his political partner Beth Mason's meeting with Dwek ?

WESTY
|
September 30, 2012
Considering that John Castellano (son of the Councilwoman and cousin of Michael Russso) was in charge of Russo's campaign finances is also in charge of the Move Forward BOE campaign can we expect late reporting of where their money is coming from too ?

Why were Russo's bank statements not released to the public ? Considering the Hoboken Reporter's alledged past bias can trust their opinion ?