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Hoffman fined for '09 finance breach

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Republican Douglas L. Hoffman paid a $6,930 fine to the Federal Elections Commission for violating a rule about disclosing large, last-minute campaign contributions 37 times during last fall's special election.

The penalty was paid Aug. 1, according to the candidate's recent financial disclosure report.

The Saranac Lake accountant, who ran as the Conservative Party candidate last year in the 23rd Congressional District, was required to note any contribution in excess of $1,000 that arrived between Oct. 15 and Oct. 31.

Robert H. Ryan, the candidate's spokesman, blamed, the campaign's Internet credit card processor, for the missing reports.

"We received an avalanche of money in the final weeks of the campaign," he said Tuesday. "When it hit zenith, the credit card processor could not handle the volume."

Daniel A. Ehring, an Albany lawyer representing Mr. Hoffman, said the campaign started noticing discrepancies in its actual and reported contributions on Oct. 20 — one day after FreedomWorks chairman and former House majority leader Richard Armey endorsed Mr. Hoffman.

By Oct. 24 — two days after former vice presidential candidate Sarah Palin backed Mr. Hoffman — the candidate's staffers were receiving numerous phone calls from "irate campaign contributors" who were double and triple billed. Others, the attorney said, were charged $1,000 when they gave $100.

This continued until Nov. 2, the day before the election, Mr. Ehring said in a letter soon after the last election to Northern Merchants Services, SecurePay's parent company.

Despite numerous phone calls from the campaign, Mr. Ehring said the number of billing issues only increased before the vendor ceased all communication with Mr. Hoffman's team.

The commission noted on Dec. 24 that Mr. Hoffman had failed to disclose all of his last-minute contributions and warned him that he could face a civil penalty because of it.

An FEC spokeswoman said Wednesday that she would not comment about the fine because the particulars of the commission's findings had not been made public. She offered no timeline on when that ruling may be disclosed.

Mr. Ryan said the campaign opted not to sue its vendor "because it would have been throwing good money after bad. We figured it was easier to settle up with the FEC and move on."

Both Mr. Hoffman and his campaign manager, Patrick Gerhart, would not discuss the fine — or admit that it was a penalty — when asked about it Tuesday. His Republican opponent, Matthew A. Doheny, seized on the error and the apparent lack of transparency in a news release Wednesday.

"This FEC controversy has to make people wonder, if he can't keep his own campaign books straight, how will he run his Congressional office?" asked Alison M. Power, Mr. Doheny's spokeswoman. "If he can't directly answer reporters' questions as a candidate, how often will he hide if elected to Congress?"


Mr. Doheny reached into his own pocket to lead fundraising during the last two months.

The Watertown portfolio manager loaned $250,000 to his campaign in August and took in an additional $41,456 from July 1 to Aug. 25.

Rep. William L. Owens, D-Plattsburgh, raised $127,250 in the nearly two-month period, split almost evenly between individual contributions and those from political action committees.

Mr. Hoffman again had success courting small donors, with 51 percent of his $36,784 in contributions this period coming from those who gave $200 or less.

Mr. Doheny spent the most of the three candidates: $511,198. Greener & Hook, an Arlington, Va. consulting firm, received about half of that amount — $259,861 — for producing and purchasing media advertisements. The candidate had $471,463 on hand as of Aug. 25.

Mr. Owens spent $96,372 during this period. He paid $11,250 on July 24 to Global Strategy Group, New York City, for "campaign strategy research." The company agreed in April to pay a $2 million fine for acting as an unlicensed broker. Attorney General Andrew M. Cuomo, who also was once a client, alleged the firm had received $1.3 million for helping facilitate state pension fund investments in two firms' private equity funds.

Mr. Owens had $599,805 on hand as of Aug. 25.

Mr. Hoffman paid $98,129 this period, mostly for campaign staff, consultants, credit card fees and hotels. The Conservative Party designee had $151,900 on hand as of Aug. 25.

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