Recently discovered errors in independent aldermanic candidate Nick Shalek ’05’s campaign finance forms have forced Shalek staffers to amend the filings to avoid being fined by the state’s Elections Enforcement Commission.
Two errors were discovered on the forms, said Geraldine Gassam ’07, Shalek’s treasurer. The initial filings listed a $1,383.40 contribution of mouse pads from Nancy Shalek, Shalek’s mother, as well as a donation of office space from the Yale Entrepreneurial Society valued at $385. The donation from Nancy Shalek exceeds $250, which is the maximum an individual is allowed to donate, and YES, as a 501(c)3 non-profit organization, is not permitted by state law to make contributions directly to a political campaign.
Shalek said the errors were insignificant mistakes that represent no significant violation of the state’s campaign finance laws. His campaign is already in touch with the state’s Election Enforcement Commission about how to fix the errors in the filings, he said.
“This is just a slight error made by my treasurer, and we’re going to fix it with the state,” Shalek said. “We called the Secretary of State’s office, and we’re waiting to follow up.”
Ward 1 Alderwoman Rebecca Livengood ’07, Shalek’s Democratic opponent, said following campaign finance laws should be a priority for all candidates.
“Campaign finance laws exist for a reason,” she said. “I hope that Nick will take steps to correct this.”
Shalek said he, not his mother, had paid for the mouse pads, and that he had spoken with a lawyer who told him that YES’s donation would be considered an in-kind contribution. Gassam said the $1,383.40 donation had not caused concern because she had thought that in-kind donations of goods or services were exempt from the $250 limit.
“The receipt that I received said they were purchased by Nancy Shalek, but Nick was the one that paid for them,” Gassam said. “So that was something that Nick spent, but I was under the impression that it was an in-kind contribution from Nancy Shalek.”
Albert Lenge, managing director and attorney for the state’s Election Enforcement Commission, said 501(c)3 non-profits are not supposed to support candidates directly, either through monetary donations or donations of goods and services, which are known as in-kind contributions. To do so, he said, could jeopardize their non-profit status.
“They’re supposed to distance themselves from politics, so to be making in-kind donations … could raise questions about their tax status,” Lenge said. “Any entity to make a contribution to a campaign would first have to form a committee, a political action committee.”
Benjamin Boese GRD ’07, a co-president of YES, said YES has not been donating space to Shalek’s campaign, but has instead been renting space to his campaign on the same terms that it rents to other student groups. The entry on Shalek’s campaign finance forms that identified the use of YES’s space as a donation was an error, he said.
“There’s an arrangement between Nick and YES to pay for renting a small space, but no donation was made,” Boese said. “There was a mistake made apparently by Nick’s treasurer in how she filed it with the state.”
Boese said he is aware that as a 501(c)3, YES is not allowed to donate to political candidates.
“As far as I know, being a non-profit we’re not in a position to make donations to anything,” he said. “We’re a charity, essentially.”
But Lenge said in-kind donations, as well as monetary contributions, are considered when calculating whether an individual has exceeded the donation limit of $250.
“Contributions are defined as anything of value … in-kind and cash are only differentiated in how they’re reported,” Lenge said. “If the additional in-kind is true, it would take her over the contribution limit.”
While campaign treasurers are personally liable for up to $2,000 per offense, Lenge said the state Elections Enforcement Commission has discretion in determining the actual penalty, and it takes into consideration the experience level of the treasurer and candidate.
“You want new people, you want first-time candidates to come in, you want first time treasurers to be serving in that quasi-public service capacity,” he said. “If someone recognizes something wasn’t done just right, and they find out about it, sometimes it’s fixed within days of the error.”
Lenge said his commission reviews a number of complaints regarding municipal campaigns, and most are resolved through consent agreement with very little dispute.