 |
| Attorney General Eric Schneiderman |
I-Team:
Why Did Former Playboy Playmate Donate $65K to Attorney General Eric
Schneiderman?
By Chris Glorioso and Ann Givens, NBC
So far in 2016, the
biggest single campaign contribution to Attorney General Eric Schneiderman
comes from a Texas model who holds the title of 2010 Playboy Playmate of the
Year.
 |
| Hope Dworaczyk |
Hope Smith, formerly
Hope Dworaczyk, donated $65,100 to Schneiderman's re-election campaign on Jan.
13, according to campaign finance records.
Why is a model from
Texas interested in the re-election of New York's top law enforcement officer?
Calls and emails to
Smith were not immediately returned, but the former Playboy model recently married a billionaire who has donated heavily to Schneiderman's political
campaign in the past.
 |
| Robert Smith |
Her husband, Robert
Smith, is the founder of Vista Equity Partners, a private equity fund that has
attracted nearly $1 billion in investments from the New York Common Retirement
Fund, a public pension, over the last seven years.
During that same time,
Robert Smith donated more than $150,000 to the attorney general’s war chest.
Most of the donations came after 2012, when Schneiderman launched an
investigation into the fees that private equity funds charge clients.
To date, there have
been no charges or settlements related to the private equity probe, and there
is no evidence Robert Smith’s private equity fund was ever subpoenaed.
Robert Smith did not
respond to the I-Team’s request for comment about his donations.
Schneiderman’s office
said political donations have had no influence on the private equity
investigation or any other probe launched by the state’s top prosecutor. Damien
LaVera, a spokesman for Schneiderman said the state’s top prosecutor has a
record of pursuing investigations regardless of whether he has taken donations
from companies or industries under investigation.
“Attorney General
Schneiderman has fought throughout his career to combat fraud and provide New
Yorkers the open and honest government they deserve, which is why he has
prosecuted more than 70 corrupt officials and their cronies, proposed the most
comprehensive set of ethics and campaign finance reforms the state has ever
seen, and taken on some of the worst offenders on Wall Street," LaVera
wrote in an email to the I-Team.
As a policy, he said
the attorney general requires political donors “to certify they and the
entities they own or control have no matters currently pending before or
recently resolved by his office.” LaVera did not say whether there were any
policies on returning donations to companies or individuals that may not know
they are under investigation.
James Tierney, a
former Maine attorney general who now directs Columbia University's National
State Attorneys General Program, said he believes Schneiderman and other
elected prosecutors make ethical decisions without regard to campaign
contributions.
But he also said there
are real concerns about the appearance of conflicts of interest when hedge fund
and private equity donors could benefit greatly by attorney general
investigations into their competitors.
“This poses a very
difficult public policy problem and does create the kind of perception of
inappropriate behavior that we all have to live with in an increasingly cynical
world,” Tierney said. “It’s a matter of great concern for the attorneys
general.”
Compounding the
problem, Tierney said, hedge funds and private equity firms are not transparent
about their investments. That means the funds can allege some sort of
wrongdoing about another company - and it is impossible for prosecutors to know
if a resulting investigation could be seen as posing a conflict of interest.
“They will attempt to
spin an investigation to a law enforcement official,” Tierney said. “You don’t
know whether they’ve bought long or short” and may stand to benefit from any
probe.
Despite accepting
campaign donations from wealthy financiers, Schneiderman has been a champion of
campaign finance reform. Last year, he proposed sweeping legislation that would
lower contribution limits and create public financing for candidates running
for state office in New York.
Still, the I-Team
found other examples where Schneiderman has taken campaign cash from the very
people and industries affected by his investigations.
The attorney general’s
investigation into Airbnb could benefit the hotel industry. Hotel owners and
hospitality companies have donated nearly $100,000 to Schneiderman since
2010. His investigation into online sports betting sites DraftKings and
FanDuel could benefit traditional casinos. The I-Team found the casino industry
has donated more than $48,000 to Schneiderman since 2010.
The attorney general’s
office said both of those investigations were launched because of clear
wrong-doing by the companies.
NBCUniversal, the
parent company of NBC New York, owns a stake in FanDuel. NBCUniversal also
donated $10,000 to Schneiderman.
In one of
Schneiderman’s most recent announcements, he touted a cash settlement with
Barclays and Credit Suisse after his office investigated high frequency trading
platforms owned by the banks. After the investigation was launched, Barclays
and Credit Suisse lost market share, while IEX – another trading platform –
gained market share.
Two Schneiderman
donors, activist hedge fund investors David Einhorn and William Ackman,
benefited from the investigation because their hedge funds own stakes in IEX.
Einhorn and Ackman have donated more than $177,000 to Schneiderman since he
first ran for office.
There is no evidence
the decision to investigate competitors of IEX had anything to do with
political donations from IEX investors. A representative of Einhorn said he
would not comment. Ackman has not responded to the I-Team’s request for
comment.
Schneiderman's office
said the high frequency trading case began with a whistleblower tip within the
investment bank.
His office also pointed
to a recent probe into cable internet speeds as an example of Schneiderman
investigating the very companies that have donated to his campaign. Targets of
the cable internet investigation have donated more than $100,000 to
Schneiderman.
“The examples provided
for this story paint a clear picture of an attorney general who will go after
anyone who tries to take advantage of New Yorkers no matter how rich or
powerful they are, or to whom they have given political contributions,” LaVera
said.
Though Schneiderman’s
plan for campaign finance reform has been well received by good government
watchdog groups, some have expressed unease about his acceptance of political
donations from Wall Street, when the New York Attorney General’s Office is
often thought of as a “sheriff of Wall Street.”
“That what he is doing
is not illegal shows why we need to reform our campaign finance system and take
the questionable gifts and conflicted money out of the system,” said Dick
Dadey, Executive Director of Citizens Union.
“Almost every state
elected official has such conflicts when raising campaign money, but it doesn’t
make it any more right.”
Published at 6:10 PM EST on Feb 18, 2016
