Follow the money
Questions linger about Councilman Russo’s campaign funds
by Amanda Palasciano
Reporter staff writer
Sep 16, 2012 | 5868 views | 22 22 comments | 129 129 recommendations | email to a friend | print
Pictured: Michael Russo
Pictured: Michael Russo
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After four members of the City Council wrote a letter three weeks ago questioning the ethics of Mayor Dawn Zimmer, Zimmer responded with a letter saying that Councilman Michael Russo, one of her critics who signed the letter, has his own ethical dilemmas to answer for.

The war of words started last month when, in a letter to Zimmer, four members of the council said that the mayor’s recent use of Councilman Ravi Bhalla as her personal attorney for a family legal matter might be unethical. The letter was also published in the Hoboken Reporter.

Zimmer is up for re-election in 2013, and four of the nine members of the City Council typically oppose her initiatives. They are said to be discussing who among them will run against Zimmer next year.

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Russo said that the “Russo for Hoboken” account was never closed.

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After receiving the letter three weeks ago, Zimmer sent the council members a letter in response, defending the fact that she and her husband used her political ally, Bhalla, for a personal matter. The mayor also posed new questions about a 2009 incident that occurred involving Russo and an FBI corruption sting, questions that were not asked in 2011 when the matter came up during Russo’s re-election bid to the council.

Where’s the $18,000?

In 2009, the U.S. Attorney’s Office undertook a sting operation that brought down politicians and political candidates statewide. They directed a Central Jersey developer, Solomon Dwek, who was facing fraud charges, to offer bribes to politicians and candidates in exchange for their promise to help him with future development projects. The now-famous “Operation Bid Rig” resulted in more than 40 arrests of public officials, candidates, and religious leaders, including Hoboken’s newly-elected mayor, Peter Cammarano.

Councilman Russo was not running for office at the time and was never arrested or indicted. However, two years later, during the spring of 2011, at the same time as he was running for re-election to the council, a non-fiction book about the sting operation revealed that Russo had met with Dwek in 2009 and discussed accepting a campaign donation from Dwek.

Russo never met with Dwek after that initial fundraising meeting, according to Russo, and never accepted the money. In the book, the authors theorized that Russo was subsequently warned away from Dwek.

When the book was released in spring of 2011, the Star Ledger also posted a leaked FBI video of Russo’s 2009 lunch with Dwek. In the video, Russo tells Dwek to make a check out to “Russo for Hoboken” and Dwek says he doesn’t want his name on the check. Russo does not explicitly say he will favor Dwek in exchange for a donation, but does boast of his power and talks about how someone might favor an associate.

In Mayor Zimmer’s recent letter to the four council members, she made accusations that give rise to new questions about Russo’s campaign dealings.

“Mr. Russo claims that he never received the money and therefore did nothing wrong, but we have only his unsubstantiated word that he never received the money,” said Zimmer in her letter dated Aug. 30.

Zimmer then charged that Russo never filed the required state reports for his campaign funds after September of 2008. Russo’s lunch with Dwek occurred during the FBI sting in 2009.

Thus, Zimmer noted, there is no way of noting whether campaign funds came into Russo’s coffers in 2009. If Russo directed Dwek to make a check out to “Russo for Hoboken” in 2009, and there are no campaign reports for that account after 2008, what happened to that account?

In 2009, Russo was not running for council (he ran in 2007 and 2011). However, Russo still had a “Russo for Hoboken” fund as of Sept. 30, 2008.

A check of on-line records for the state Election Law Enforcement Commission (ELEC) last week showed that, indeed, while fundraising records were submitted to the state for Sept. 30, 2008 for a new “Russo for Hoboken” fund, nothing appears for that account afterward.

The next state ELEC record for Russo is for the “Russo for Council” fund, which submitted reports for 2009 and 2011.

Zimmer notes in her letter that the last documentation for “Russo for Hoboken” on Sept. 30, 2008 indicates a cash balance of $18,420.81. If the account disappeared, how was the $18,420.81 spent?

Russo’s response

When contacted by phone on Wednesday, Russo said that the “Russo for Hoboken” account was never closed, contrary to Zimmer’s statement.

Russo submitted a photo of a bank statement dated last month showing that the “Russo for Hoboken” account remains open with a small balance of $1,190.81.

When asked where the rest of the money is, Russo said it was “used through the years for different things” related to campaigning. Russo said he would talk to his campaign treasurer to find out whether subsequent reports were filed properly. He also said he would provide canceled checks to show where the money went.

However, no further information was provided by press time Friday.

Russo said that the initial “Russo for Hoboken” account was used for his campaign for council in 2007 and was not related to later accounts for when he was considering running for mayor or when he ran in 2011 for re-election to council.

In her letter, Zimmer wrote, “The Russo for Hoboken account seems to have just disappeared, together with the $18,420.81 cash balance. Councilman Russo later formed a brand new account with a zero balance, with no mention of the prior Russo for Hoboken account or the missing $18,420.81.”

Not just the mayor

The mayor is apparently not the only person asking questions about Russo’s election reports. Longtime local campaign finance watchdog Eric Kurta, who ran unsuccessfully for council in 2011, was sent a letter by ELEC in August stating that ELEC is now looking into “the filing requirements of Michael Russo” in response to a request from Kurta in June.

The letter, dated July 20, 2012, says that at its meeting on July 17, ELEC “decided to open a review for compliance with the provisions of the New Jersey Campaign Contributions and Expenditures Reporting Act. Nothing contained in this letter is intended to indicate the outcome of the review or any action to be taken by the Commission.”

Zimmer said in her letter that Russo’s actions with Dwek might be in conflict with the public interest, but “Councilman Bhalla’s minimal representation of my family over a leaky roof insurance claim was not.”

Russo did not return a subsequent phone call and a text on Friday by press time for more information.

A version of Zimmer’s letter appears this week on the Reporter letters page.

Amanda Palasciano may be reached at amandap@hudsonreporter.com.

Comments
(22)
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Masonop#9
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September 20, 2012
Shouldn't the HR be fixing their story instead of criticizing another that hit it dead on target.

Focusing on others who got the story right out of the gate and nailed the fact that the deposits are the heart of the story with an investigation going back to the biggest corruption case in NJ does in fact look to be thee story.

We wish the Hudson Reporter would stop carrying water for the Old Guard and ask Russo the questions they should. Pointing elsewhere is not helping.

Do the job right. If it was a member of Reform, you'd be ALL OVER IT.
WESTY
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September 20, 2012
Was Michael Russo's absence from the City Council

last night have anything to do with not wanting to answer any questions about his campaign finances ?

bloomfeldblockparty
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September 19, 2012
Sorry Smarty but for you to repeat the news story and mayor's letter does not impress anyone. There is nothing exclusive or investigative about writing your opinions on what could have happened. I can think of the same theories without your help. You did not do anything to investigate . As it stands you do nothing but think up theories every day and you have left us no closer to getting corrupt politicians out of office. And here is where it was in the reporter story, starting with the quote in the line, Mr. Russo claims that he never received the money and therefore did nothing wrong, but we have only his unsubstantiated word ...

Write what you want but do not pretend you did any work. I wish you would. Maybe if you see Russo at the council meeting today you can ask him
VoteHoboken
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September 19, 2012
Councilman Michael Russo is again under suspicion for his actions and is now in the unenviable position of having to prove that he has not done something either unethical or illegal.

CeeLoJay
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September 19, 2012
All I'm saying is that they reported it the way it was reported in every other press to this day and unfortunately the feds wasted time on this one. The HR did not give an opinion, they said it was not explicit which was unfortunately the truth. And as I said I don't always agree with them. If he agreed to a bribe the feds would have arrested him, instead they wasted our time. You and I can split hairs here all you want, show me in any press were they were able to say he accepted it and I will eat my shorts today. I was on the court this morning so they do not smell too good. I would like to believe that he accepted a bribe on there too but it did not happen. Find the Star Ledger story and you'll remember they said the same and those were the 2 guys who wrot the book.
DancingRudy
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September 19, 2012
Not true Ceelo. I did not see a single press account that stated that Russo had NOT agreed to provide favors in exchange for development. It is fair to say that a responsible journalist would not state asa fact that Russo had so agreed, but it is equally wrong fora paper to state as fact their OPINION that he had not.

Those newspaper accounts did accept and report as fact Mr. Russo's claim that he did not receive the money, probably because the authors of the Jersey Sting believed that as well.

It is now pretty obvious that reporting as fact Mr Russo's claim that he did not receive the money was not the best journalism since minimal due diligence would have revealed Russo's missing ELEC filings. I imagine those journalists writing those stories would have written them differently had they known what the HR now knows.

It seems like the HR doesn't quite grasp the import of their own story. They reported that they asked Mr. Russo questions and he failed to answer. The bank statements answer all the questions. Implicitly the refusal to provide them does as well.

Hopefully this story will not be one and done since the real story, that either exonerates or implicates Mr. Russo, has yet to be written. Accepting Mr. Russo's "word" at this point that he didn't receive the money and reporting as fact your opinion uneducated by any legal research of what he did or didn't agree to isn't reporting, it's shilling.

Hopefully the HR will step up to the plate and behave like the "fourth estate" is supposed to, go to wherever the evidence leads and report it. And if Mr. Russo refuses to provide the bank statements, at least from April 09 until July 09 (when the sting broke) that refusal is both news and evidence.
DancingRudy
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September 19, 2012
And please stop saying if he agreed to a bribe they would have arrested him. If he received the money then the Jersey Sting reporters were lied to by their FBI sources and the only reason they would lie is to hide the fact that they cut a deal that left a corrupt politician in office. The story was supposed to be "he never got the money." If he got the money the whole story is BS.

Unless the bank statements are released and exonerate Mr. Russo, a pretty unlikely occurrence in my opinion, there's a really big story here - the kind of stuff reporters and newspapers win awards for. How the HR handles this remains to be seen. They can prove the skeptics wrong or prove them right. There's not much middle ground left.
HobokenLeaks
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September 19, 2012
"Russo never met with Dwek after that initial fundraising meeting."

Fundraising meeting? Do you refer to mob hits as personnel reduction meetings?

CeeLoJay
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September 18, 2012
Have to disagree with your Rudy and Smarty. I do not always agree with the HR but they are right in this case. It has been said before and it is true, if you watch the tapes Russo appears to just be yessing whatever Dwek says; and what Dwek says before "aboslutely" is not enough. Dwek should have been directed to use the right language and he did not. If you remember a year ago when we were at City Hall protesting Russo the Star Ledger and Times and other press also failed to say Russo agreed to the ilicit request, so if they would do it i doubt the reporter will. If you can show me where they did report that then I will stand corrected.

I feel that the fed's should have better directed Dwek instead of wasting our time.
DancingRudy
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September 19, 2012
Sorry CeeLoJay but the HR stated cetegorically asa FACT that Russo did NOT agree to provide favors when at best that represents their opinion. You say that Russo was just yessing Dwek. That is your opinion - one a jury might agree or disagree with if this case was prosecuted. That's why we have trials.

In evaluating whether the HR has mistakenly reported their opinion, with which many reasonable people disagree, as fact, you might want to consider that Peter Cammarano was also arguably just "yessing" Dwek and in fact his agreement to provide favors was, if anything, less overt than Russo's.

Yet Peter and his very experienced and skilled criminal lawyers evaluated their case and decided it was better for their client to cop a plea than to take their chances selling that theory to a jury.

The fact that he accepted cash was surely part of theequation as well, but Russo is on tape discussing how the illegal campaign contributions would be laundered through straw donors and that's not all that less damaging.

Conversations are two sided and pretending they are not is not an objective way to evaluate what has been said. At trial, the full conversation would be presented to a jury and the jurors would have the opportunity to evaluate the full context.

Try showing the transcript to a lawyer with experience in corruption prosecutions and ask whether the transcript provides a record sufficient to support a conviction if the money indeed changed hands.



Smartyjones
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September 18, 2012
Incorrect sorry but the related story on MSV focuses on the deposits of the Russo for Hoboken campaign like a laser, especially during the period of when FBI Solomon Dwek was all over Hoboken politicians in the spring of 2009.

The Hudson Reporter has continuously reported Russo as not agreeing to aid Dwek which is contrary to what appeared in the video when the request for support is made and Russo replies, "Absolutely," to the illicit request.

Russo then also goes on to say he will arrange to bring Dwek in further by arranging a meeting with Russo's council colleagues, again with the intention to see Dwek's development project reach fruition.

That's as clear as day.

The Hudson Reporter has repeated the fiction Russo did not agree to back Dwek's Hoboken development project over and over. Was Dwek offering a series of bribes for nothing? Of course not.

The editors at the Hudson Reporter do this all the time.

In this story, they NEVER raise the topic of the deposits in the Russo for Hoboken account. Since they don't the issue of whether the deposits would reveal further evidence of a relationship with Solomon Dwek is NEVER broached.

As to MSV's comfort zone, no matter how many times people don't reply to uncomfortable questions, we've done it from the Mayor to members of the council.

Since the Hudson Reporter failed to ask the right questions and directly ask them of Mike Russo, our exclusive investigative report covered new and important ground.

Good luck to them if they even bother doing so.

Here's our follow up:

http://www.hobokenhorse.com/2012/09/is-michael-russo-fbi-snitch-or-just.html#idc-container

BobbyMo
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September 19, 2012
Stop referring to yourself in the first person plural - "we", "our", "us". It doesn't make sense.
bloomfeldblockparty
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September 17, 2012
The Distorter asked the same question, it was repeated below in Yankee's comment. I Just went and read that story you linked to and it is a rehash of the mayor's letter and the distorter story, but you call it an exclusive investigative report. That is funny but I think you seriously believe when it is neither. I believe you could start to do some good in town if you ask the right questions instead of repeating things without talking to anyone outside your comfort zone. As to Anonymous, many voters do not need convincing do they.
Smartyjones
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September 17, 2012
Unfortunately, the main part of the story is missed but Mile Square View got to the heart of the it:

http://www.hobokenhorse.com/2012/09/russo-for-hoboken-missing-bank-data.html#IDComment442778778

It's not what happened to the monies in the account, it's what happened to the unaccounted deposits at the time of Solomon Dwek's massive handouts.

Did Maher Khalil the Jersey City bagman launder money with straw donors into the Russo for Hoboken account as he did for Jersey City Council President Mariano Vega?

That and other questions all covered at MSV.

Mike Russo has not surfaced. Will he continue to break the law as the alternative of revealing the bank deposits into Russo for Hoboken is untenable?

What does that mean about Russo and the FBI?

BobbyMo
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September 18, 2012
"Unfortunately, the main part of the story is missed but Mile Square View got to the heart of the it:"

First of all, the fact that you're pushing your writing on readers, on someone else's website, under someone else's story who probably actually worked really hard on it, speaking to multiple people, with a grammatical mistake in the first sentence is bad enough. You're a for-profit website now, right? Selling subscriptions, etc. Okay, so then either take an ad out or don't spam other websites. You are the web equivalent of someone who puts their business cards under a windshield, which is extremely annoying to everyone, and everyone just wishes it would stop.
anony_mous
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September 17, 2012
Did Mayor Zimmer bring this all up in an effort to convince the voters that all the politicians in city hall are crooks? Job done.
WESTY
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September 18, 2012
Hoboken has had two of it's last four mayors convicted of felony corruption (Russo and Cammerano) and a long list of other city officals from their administrations also convicted for corruption.

Despite the the best efforts of the City Council minority and the Hoboken's OLD GUARD politicos trying to manufacture scandals the Zimmer Administration has cleaned up Hoboken's City Hall.

Yanks1977
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September 17, 2012
Yes. These lines from this story are worth repeating.:

there is no way of noting whether campaign funds came into Russo’s coffers in 2009. If Russo directed Dwek to make a check out to “Russo for Hoboken” in 2009, and there are no campaign reports for that account after 2008, what happened to that account?

davidd
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September 17, 2012
Bank statements 2008-present Mr. Russo. Anything less is an admission of bribe taking and illicit expenditures.
VoteHoboken
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September 17, 2012
Councilman Michael Russo should have been fully transparent about his financial dealings with Solomon Dweck before the FBI video was first made public.

Mr. Russo failed to do that, not doing so gives the appearence of wrong doing being covered up and leaves the door open to questioning all his campaign funding.



DancingRudy
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September 17, 2012
The HR says: "Russo does not explicitly say he will favor Dwek in exchange for a donation, but does boast of his power and talks about how someone might favor an associate."

Mayor Zimmer points out: " Mr. Russo agreed to accept the “contribution” after Mr. Dwek stated with respect to his development projects, “I don’t want to be left on the bottom of the pile … That’s why I do what I got to do with the right people” and Councilman Russo replied “absolutely.”

Newsflash to the HR - this is more explicit than anything Peter Cammarano was reported to have said and easily enough to support a criminal conviction if the money changed hands and the US Attorney elected to proceed.

There is no question whatsoever that Russo agreed to accept the money after Dwek described the quid pro quo andRusso agreed to the terms of the deal.

The only actual questions are:

1. Did he receive the money? This is a question that can ONLY be answered by a review of the Russo for Hoboken bank statements since April 2009 when the Dwek meeting took place. Since the bank statements include only information that Russo is legally required to disclose anyway in his ELEC filings, the only plausible reason for refusing to release the bank statements is that he is hiding the information that would be revealed .

2. Assuming, as seems likely given this new information, that Russo did, indeed receive the money, why was he not prosecuted? This, too has only one plausible answer. If Mr. Russo did indeed receive the money then he entered into a cooperation agreement with the US Attorney. If this is the case the US Attorney not only left a criminal in public office, it allowed him to run for reelection presumably because a more powerful Russo would be in a better position to provide them with information about others.

Who could they be targeting? Brian Stack? Nick Sacco? Albio Sires? Mark Smith? Bob Menendez? I'll bet an awful lot of people will be declining to take Mr. Russo's calls going forward.
WESTY
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September 16, 2012
More question's about Michael Russo's ethics.

Check the similar stories the HR lists.