Skip to comments.Paladino campaign reneges on debts
Posted on 03/13/2011 6:48:05 AM PDT by SubGeniusX
Carl Paladino's campaign stiffed about a dozen consultants, vendors and staff members for some $130,000 in salaries, fees and expenses, according to numerous veterans of his failed gubernatorial bid.
They are pressing for payment from a campaign committee, Paladino for the People, that is deep in debt. Public records show the committee has a balance of only $5,305 and debts of $6.1 million, most of them loans from the candidate.
"I would have expected a nice thank-you from Carl for all the hard work I had contributed, but instead I got screwed," said Tim Suereth, who first served as manager of internal operations and later as an unpaid volunteer.
While the campaign paid him $31,912 in salary, the millionaire businessman through direct correspondence has refused to reimburse him for $6,300 in expenses, Suereth said.
"There are a lot of people who didn't get paid, and for many of the people who got paid, it took a while, and some did not get full payment," he said. "It's outrageous."
William Rey said he is one of them.
The Paladino campaign paid him only $9,205 of the $14,031 he billed in late October for video production, Rey said. The check, he said, noted a "credit" to explain the difference.
"I don't know if it's a credit; it's more like thievery if you ask me," Rey said.
Michael Johns, who crisscrossed the state for two months as the campaign's director of Tea Party outreach, said the campaign has refused to reimburse him for about $8,000 in expenses. Johns is a former White House speechwriter under President George H.W. Bush and a national Tea Party leader.
"I'm not sure I could explain their position in not paying this, it was so illogical and incomprehensible," Johns said.
Paladino campaign veterans identified at least 11 vendors and staff members owed money and cautioned there could be many more. Some owed money are from the Buffalo area, while others are from out of town, brought in to provide experience to the campaign of a first-time candidate.
"I've gotten the sense this problem is very widespread," Johns said of the unpaid bills. "It's a widespread, systematic decision to not live up to specified terms."
Michael R. Caputo, who was Paladino's high-visibility campaign manager, said he is owed about $38,000 in fees, but declined to comment further for this story.
The Paladino campaign filings with the state Board of Elections show Caputo's public relations firm received $492,175 from the candidate through Oct. 8, more than three weeks before the Nov. 2 election. It shows no record of payment for services provided during the final weeks of the campaign. Caputo has said in the past that most of the fees he received were subsequently spent on legal, research and media services related to the campaign.
Others due money in amounts ranging from $1,200 to about $35,000, include an attorney, a researcher, and a half-dozen campaign staffers and media producers, according to the former campaign aides, consultants and vendors.
Several of those owed money described a frequent pattern of behavior by Paladino when he was approached for payment.
Paladino at first failed to respond, and then offered a disputed history of the terms originally agreed upon. Paladino sometimes contended that, regardless of terms, he paid people what he felt they were worth, the former aides and consultants said. And, they added, Paladino often became insulting and confrontational.
"He seems to be picking fights with people he owes money to and not paying," Suereth said. "He's looking for every reason to not pay people he owed money to at the end of the campaign."
Paladino did not respond to three requests from The Buffalo News for an interview. On Friday, he released a statement that declared:
"There are people who didn't get paid for good reason. Everyone who deserved to be paid was paid."
If others feel they are deserving, he said, "They can go to court if they have a complaint."
Paladino also criticized The News and warned a reporter: "I caution you to be careful."
Paladino, in a memo to Suereth in December in which he rejected his request for reimbursement for expenses, insisted he had settled his debts to members of his campaign.
"I have paid all valid claims and staff salaries," he wrote to Suereth.
Paladino also characterized Suereth as a bodyguard -- he never worked in a security capacity -- and wrote in his response: "Caputo told me the bull.... that I needed a body man. I don't need a body man. I have a gun."
Unilateral pay cuts
Campaign staff members characterized Paladino as a penny pincher from the start of the campaign, agreeing to employ a relatively small staff for modest wages.
Those wages were cut twice prior to the September primary after Paladino spent several hundred thousand dollars in nonbudgeted advertising to counter news reports that he had a history of sending racist and pornographic e-mails to friends.
Suereth said his $12,000 monthly salary was cut to $8,000 in April, then to $6,000 in May, and that many other staff members also saw their pay unilaterally reduced.
"Carl then made the cut retroactive from the last time anyone had gotten paid, which was a month behind, effectively shorting us all again," Suereth said.
"Cutting salaries retroactively is unconscionable and probably illegal."
A spokesperson for the state Department of Labor said "it is illegal to reduce pay retroactively."
Suereth was the first staff member Caputo hired and early on served as a jack-of-all-trades, organizing campaign events, producing video, even serving as co-pilot of the plane that ushered Paladino around the state. He, Caputo and Paladino traveled together extensively during the early months of the campaign before Suereth resigned from his paid position after the second pay cut. He stayed on as a part-time volunteer through the general election.
"At the very beginning, Carl was nice and friendly, but gruff. But as the campaign progressed, he got increasingly more crazy and unhinged," Suereth said.
"He would make comments that he was told time and time again to not say."
Senior staff, he said, devised a plan for Paladino to issue video statements and release them on his campaign website as a way of minimizing his outbursts in public. The thinking as described by Suereth: "He's getting too out of hand, we've got to contain him and keep him on message without him going off."
The problem persisted, however, and over the course of the campaign, Paladino threatened a New York Post reporter, denounced gays, suggested Cuomo was a womanizer and said Assembly Speaker Sheldon Silver was a criminal who should be beaten by the public en route to prison.
Paladino routinely responds that his remarks, as well as the controversial e-mails, are not "politically correct."
A review of Paladino's campaign finance reports shows he loaned the campaign $6 million in a series of 14 loans and collected $3.7 million in contributions.
The campaign spent $9.8 million and had $5,305 in the bank as of Jan. 15. Debts totaled $6.1 million. All but $34,151 of that debt involved Paladino loans.
Debt not involving loans includes $16,698 owed to a Washington, D.C., firm for fundraising and $17,453 in wages and office expenses due Ellicott Development Co., Paladino's primary business.
The report does not list any of the debts cited by former staff members, consultants and vendors.
The disclosure report does not list any loans aside from those made by Paladino.
But Suereth and one other member of the campaign staff said Paladino borrowed about $3 million in the final weeks of the campaign from an undisclosed outside source.
"Everybody close to the campaign knows that," Suereth said.
Whether a failure to report a source of a loan is a violation of election law is uncertain, one legal expert said.
While Paladino has claimed he is worth $150 million, most of that wealth is in real estate holdings, and aides speculate that he lacked the liquidity to finance his campaign beyond the $3 million he loaned the campaign earlier on.
The campaign's efforts to raise contributions from individual and corporate supporters fell well short of its goals. That, coupled with Democratic candidate Andrew Cuomo's fundraising success, made it necessary for Paladino to find additional sources of campaign funds.
While some of those owed money sound resigned to never getting paid, Suereth and Johns, of the Tea Party, said they intend to pursue the matter.
"It's a black-and-white issue. I had terms that were not lived up to," Johns said. "I'm at the point where the filing of a lawsuit is probable."
Board of Elections record shows the Paladino campaign paid Johns $12,699 in October. Johns said he was paid a salary and reimbursed for two weeks of expenses. The campaign has refused to pay seven other weeks of expenses, he said, which involved his travel around the state to rally more than 100 Tea Party organizations around Paladino's candidacy.
Suereth said he intends to file a complaint with the New York State Bar Association alleging unethical conduct by Paladino, who is an attorney, as well as a developer and one of downtown's biggest commercial landlords.
"I am certain he is unfit to hold a law license, but the New York Bar will soon need to make that determination," he said. "He uses it as a tool to intimidate, threaten and take unfair advantage of others who do not hold a license to practice law."
< crickets >
Paladino also characterized Suereth as a bodyguard -- he never worked in a security capacity -- and wrote in his response: "Caputo told me the bull.... that I needed a body man. I don't need a body man. I have a gun."If that's Neil Caputo, Paladino would start calling him "Neil the Squeal", it would fit his wannabee mobster vibe.
Heh. Now we know why part of the reason why Paladino lost... he clearly didn’t hire advisors smart enough to insist on cash up front.
A man should pay his debts; it’s an issue above politics. It goes to character.
Paladino lost and is finished in politics. He has nothing to lose in stiffing people, especially the pricey help these campaigns attract, unless a court says different.
A truly dreadful candidate. Hard to believe that so many folks actually thought this guy could be a serious candidate for Governor of NY.
I find it stunning that little Tim was paid $12,000 a month for making a few videos and pretending to be a security guard. He should be grateful to Paladino for paying a year’s worth of his mortgage payments, and for living high off the hog at someone else’s expense, instead of whining it wasn’t enough.
It’s stunning too that fellow Tea Partier Michael Johns couldn’t find enough money in his $12,000 a month salary to pay his expenses.
We all made sacrifices in hopes off seeing some positive changes in NYS government, instead of Cuomo’s window dressing, and I’m certain of at least 10 volunteers who were paid nothing, and were worth far more than little Tim, Michael Johns and Caputo combined.
Half a mil for Caputo? $12,000 a month for just two less than stellar staffers? One has to wonder what everyone else was paid.
And we wonder why the campaign didn’t have enough money to run decent ads.
Tim? He was known as Tim Smith in the campaign, his wife is Diane Thorne who was in charge of scheduling who also worked for most of her years with Roger Stone. They were paid incredible amounts of money. Brought in by Caputo they were told of their salaries before Carl was informed of what they would be paid. Their son was brought in at the beginning of it all and was driving Carl a couple times and the campaign was charged 800 bucks a day, plus hotel stays. When Carl had to sign paychecks is only when he found out what these people were getting paid, he got angry, as did I.... They were all from Florida not from here, we had plenty of people from here willing to volunteer and or work for the campaign for much less money and to be honest could have done a better job.
They were all told if they wanted to continue working for the campaign it would be for much less money. They had a choice and some stayed on at a lesser salary. Tim was hired early on, he drove once and scared the crap out of Carl with his erratic driving. I moved in to the drivers seat and continued for 35,000 miles until the republican hacks came in at the primary and worked to get me and the tea party out. They took over and drove the campaign in to the ground. Put Carl in situations some think to blow his chances of winning. The republicans do not like Carl and worked to keep him out including many big name hacks that are all about protecting their kingdoms.
Michael Johns? Holy crap I cannot believe what he was paid and for what? He was suppose to report to me, he was never around. He was doing what I started out doing but I was more involved in the senior staff and the running of the campaign. He wrote a couple speeches and did some research. When I needed him he was no where to be found. He would call me and all he would do is bitch, moan and complain about everything and saying he should have been brought in earlier. He was supposed to put together a report working with another person with all the tea party, 9-12 groups etal and report back to us. I never got the final report. I was hearing from the person he was supposed to be working with saying he was no where to be found.
In any campaign you are going to find disgruntled people who think they are the only ones that can do a particular job, they have egos that will make you sick to be honest. But for Heaney to search out only these people really tells me that the Buffalo News is only out to GET Carl. Of course Carl is in their face with the billboard on the 190, the articles he is writing about them and sending to thousands. They hate him and will do everything possible to take him down and destroy the support he has here. After all he took 70% of the vote in WNY...
Heaney is an ass, if he had called me as he should have, he would have gotten an earful and the truth. But there will be no truth in any of their articles.
He is a footnote now, not more.
Baited with his fat purse, they mistook his bluster for sagacity and his arrogance for ability. They refused to listen to dissent, slapping down anyone who said the emperor had no clothes. Now he's just a bad example for the enemies of the tea party movement to point to and gloat.
Despite his banana republic campaign, some of my best friends voted for him. For lack of a better candidate, I voted for Ronald Reagan.
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