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N.Y. politicians face pressure to return money to controversial donor

new york state capitol at night
Matt Ryan
/
New York NOW
The New York state Capitol building at night.

A left-leaning group is asking the state’s top politicians to give back donations from a hedge fund manager who made racially charged comments against New York’s only black female legislative leader. But so far, most — including Gov. Andrew Cuomo — have held on to the money.

Daniel Loeb, the founder and chief executive of the multi-billion-dollar hedge fund Third Point LLC, received attention when, in a Facebook post, he compared the leader of the state Senate Democrats, Andrea Stewart-Cousins, to the Ku Klux Klan.

Loeb was commenting on an argument over which faction of the divided state Senate was best equipped to lead the chamber, and he said that Stewart-Cousins, who is African-American, has done “more damage to people of color than anyone who has ever donned a hood.” The post was later deleted. Stewart-Cousins called the comments “outrageous and offensive.”

Loeb is a major campaign donor to the state’s top politicians. He gave over $170,000 to Cuomo, more than $19,000 to Lt. Gov. Kathy Hochul and $50,000 to the Senate Republican Campaign Committee, as well as tens of thousands of dollars to individual GOP senators’ campaigns. He also donated $50,000 to the breakaway Democrats who form a ruling coalition with the Republicans, the Independent Democratic Conference. He did not give money to the regular Senate Democrats.

Michael Kink is with the progressive group Hedge Clippers, which lobbies for campaign finance reform. He said Loeb’s comments are “beyond the pale.”

“All of them should give the money back,” Kink said.

Only New York City Comptroller Scott Stringer has acted so far. Stringer, at a rally held earlier this month in Harlem in support of Stewart-Cousins, said he’s donating the $9,000 he received from Loeb in 2011 to a mainstream Democrat, Robert Jackson, who is challenging a member of the breakaway Democrats, Marisol Alcantara, in a primary next year.

Both Cuomo and Senate Independent Democratic Conference Leader Jeff Klein immediately repudiated Loeb’s remarks after they became public, but so far have not returned any money. Neither one responded to a request to comment.

Loeb also gave more than a million dollars to a super PAC that promotes charter schools. He sits on the board of New York City’s Success Academy, which operates several charter schools.

Charter schools got a boost at the end of the legislative session, when part of a last-minute deal included adding more charter schools in New York City. And, as a result of a 2016 agreement between Cuomo and lawmakers, a State University of New York Board of Trustees committee is now considering whether to ease teaching requirements to make it easier for charter schools to hire teachers.

Kink, with Hedge Clippers, said Loeb is far from the only wealthy person to give very large donations to politicians and political causes in New York. He said the state’s relatively lax campaign finance laws encourage the practice.

“Regular people can’t get these kinds of things from government,” Kink said. “Because regular people don’t give millions of dollars in campaign contributions.”

To complicate matters, Loeb also has donated to some left-leaning advocacy groups including the Center for Reproductive Rights, which fights for a woman’s right to choose abortion, and the Human Rights Campaign, a group that lobbied to get marriage equality enacted in New York in 2011.

Kink said the donations are not the same because the groups don’t actually make policy. And his group is not calling on the nonprofits to give the money back.

“Elected officials are the ones that make public policy,” Kink said. “Nonprofits just aren’t in the same boat as when you’re giving cash to the people who can pass or sign the laws.”

Hedge Clippers also is not calling on charter schools, which are more associated with conservative causes, to return donations they have received from Loeb.

Kink said his group plans to continue to keep pressure on the state’s top politicians to return the Loeb donations and will “bird-dog” Cuomo and other elected officials at public events this fall. 

Karen DeWitt is Capitol Bureau chief for the New York Public News Network, composed of a dozen newsrooms across the state. She has covered state government and politics for the network since 1990.