Disclosure dysfunction

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Common Council Majority Leader Demone A. Smith, whose wife pleaded guilty to fraud charges last week, has legal problems of his own.

Smith’s campaign committee has not paid $1,842 in judgments filed by the state Board of Elections for its failure to file disclosure reports in a timely fashion.

In addition, another campaign committee that lists Smith as its treasurer hasn’t paid $1,121 in judgments involving late and missing disclosure reports.

Smith’s campaign committee has had problems meeting disclosure requirements since he first ran for public office in 2005. Investigative Post has determined that while the Committee to Elect Demone Smith has done a better job of filing on time the past two years, its record remains spotty.

Most, but not all, periodic reports due every January and July have been filed close to on time, but six reports related to his re-election campaign late year were not on file as of Wednesday morning

Meanwhile, East Buffalo Associates, an unrelated committee for which Smith is treasurer, has filed only one of three required reports.

The late and missing filings have prompted the Board of Elections to file six judgments against the two committees, none of which have been paid.

Smith maintains his campaign committee in recent years has done a better job complying with disclosure laws.

“We’ve pretty much been on time,” Smith said.

Council President Richard Fontana said Smith “definitely needs to” file disclosure reports on time.

“I will meet with him in private and see how I can help him,” he said.

Fillmore Common Councilman David Franczyk, who voted against Smith for majority leader in January, said the continuing problems make him unfit for a leadership position.

“This adds to what I’ve been saying all along,” Franczyk said. “One late filing can be an honest mistake, but this shows a pattern of contempt for the state’s election laws.”

Smith’s problems date to 2005 when he ran for Erie County Legislature. He was required to submit seven reports during that election year, but didn’t file any paperwork until the summer of 2006, and only after the failure prompted press coverage.

Smith ran for the Council in 2007 and again failed to file any of the required seven reports until December of that year, after the election was over.

Semi-annual reports were required in 2008 and 2009, non-election years, and those disclosures were filed late, according to records.

His failure to file on time was the subject of a Buffalo News story in January 2010. The paper reported that the Board of Elections had obtained three judgments against his campaign committee totaling $1,282. Smith had failed to pay the judgments, contending he was unaware of them.

“I definitely have to do better and take it more seriously,” Smith said at the time.

His campaign committee’s track record since has been hit and miss, Investigative Post found.

A report due January 15, 2010 wasn’t filed until March 25 of the following year—some 14 months late. Reports due in January and July 2011 were each filed three days late. A report due January 15 of this year was filed on February 1.

His campaign committee failed to file six reports due last year related to his race for re-election. Reports were due 32 and 11 days prior to the September 13 Democratic primary, as well as 10 days afterwards. Other reports were due 32 and 11 days prior to the November 8 general election, as well as 27 days after the content.

John Conklin, a spokesman for the Board of Elections, said Smith’s committee unsuccessfully attempted to file the six reports electronically on December 12. By that point, all were late, by up to four months. The committee, as of Wednesday morning, had still not filed the reports.

Smith said he was of the understanding the reports had been filed on time and was planning to meet with his campaign committee treasurer to discuss the matter. He noted that his primary opponent, Demario Badger, failed to file disclosure reports, a fact confirmed by the Board of Elections.

Smith was treasurer of a group that formed another campaign committee, East Buffalo Associates, that registered with the Board of Elections on August 23, 2010. Smith said the group was formed to support candidates running for Democratic committee seats. A report due January 15, 2011, was filed March 28 of that year. Reports due in July of last year and January of this year were not filed, according to the Board of Elections.

Smith said the committee ceased activity after the committee elections. But Smith, as treasurer, was obligated to either file reports or submit paperwork to terminate the committee. He did neither.

“We didn’t close it out correctly,” he conceded.

Six judgments involving late and missing filings for East Buffalo Associates and the Committee to Elect Demone Smith total $2,963, plus interest.

Why have the debts not been paid?

Smith at first maintained he had not received notice from the Board of Elections.

“They never contacted us and we never contacted them,” he said.

But Conklin of the Board of Elections said delinquent committees receive two written notices regarding their failure to file and a certified letter when a judgment is filed.

When pressed, Smith said, “there’s no good reason” for the non-payments.

“We’ll have to settle them,” he said, adding that he wants to negotiate a reduced penalty with the Board of Elections.

Conklin said the board sometimes negotiates a settlement, but only after all the proper filings have been submitted.

Failure to file campaign disclosure reports on time is a civil violation of state election law. Why haven’t the authorities been more aggressive in dealing with Smith’s committees, given the pattern of non-compliance?

In recent years, both officials at the Board of Elections and Erie County District Attorney Frank A. Sedita have said they lack the staff to pursue such cases.

Conklin told Investigative Post: “When the Legislature expanded our jurisdiction over local filers (effective 2006) they gave us no additional resources. Our filers went from about 1,100 to more than 12,000 and we have the same four auditors we had before. We have no way of tracking local election cycles, as a result, enforcement becomes extremely difficult.”

Sedita told the News in 2010: “We will do investigations, but we have to decide what we can do because of our limitations. My dilemma is: As district attorney, do I do the felony case where we’re trying to get a six-figure restitution, or do I fool around with something that ends up being a misdemeanor?”

Smith has had other problems involving finances.

In 2000, the state attorney general placed a lien against Smith for $972 for failure to pay for a course he enrolled in and subsequently withdrew from at the University at Buffalo. He disputed the claim, arguing he never attended the class, but paid the lien in 2007.

In February 2009, the state Department of Taxation and Finance filed a lien against Smith for $6,012, claiming he had not paid state income taxes in 2000 and 2001. He contested the lien and he subsequently settled on terms that neither Smith nor the state fully disclosed.

Smith’s wife, Jayme, pleaded guilty last week to federal bank fraud charges. Jayme Smith, according to the plea deal, last year drafted and mailed some $564,000 in fraudulent checks, some of which she printed at home. Four banks lost about $20,100. She will be sentenced in July.

Demone Smith said earlier this week that he was unaware of his wife’s activities and portrayed her as “a victim of an online predator” and someone who was “duped.”

Numerous Councilmembers said earlier this week that Jayme Smith’s legal problems will not affect her husband’s standing on the Council. Smith, in addition to his post as majority leader, serves as chairman of the budget, education, and minority business enterprise committees.