NYC Indy Party in Trouble over Bloomberg Money

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New York's Independent Party has found itself embroiled in controversy after being accused of a cover-up.

Prosecutors accused the state's third largest political party of obscuring a $1.1 million theft by political consultant, John Haggerty. The party has not been criminally charged but the judge in the case has frozen their bank account.

The large sum was a contribution from Mayor Bloomberg for poll-watching back in 2009 in the weeks running up to his city re-election bid.

Manhattan prosecutors say, Haggerty was the point person for handling the donation. The party paid him $750,000 for poll-watchers and other expenses and he allegedly used the money to buy a $1.7 million home, pay for legal services and plane tickets instead, the Washington Post reports. Haggerty has pleaded not guilty to grand larceny and other charges.

Independence Party chairman, Frank MacKay doesn't seem too worried, saying his party will deal with the situation and then move past it. The party's lawyers have said the financial freeze will be a real strain.

Supreme Court Justice Martin Shulman would not lift the three-week financial freeze which includes barring payment of the party's bills, party lawyers said.

The New York Independence Party has been around for 16 years but it's not the first time it's made controversial news. In the mid-2000's it went head to head with one of its earliest and more controversial leaders Lenora Fulani, who was accused of making anti-Semitic remarks. In 1988, she was the first woman and first black candidate to get on the ballot in all 50 states and then accused the party of trying to be "all white."

The party weathered that bumpy controversy, but political experts say this controversy with Haggerty could cause more trouble for them in the future.