Republicans worry nominating Jacobs in NY-27 invites SDNY fundraising probes

Many right-leaning Republican activists have rejected Jacobs' candidacy and have promised a primary in the event that Langworthy orchestrates Jacobs' nomination from behind the scenes.

New York’s 27th congressional district will have a special election on April 28, in which the party chairmen of the nine counties that comprise the district select a nominee for that office — scheduled just months before the regular primary election on June 23.

Those chairmen are increasingly worried that nominating State Senator Chris Jacobs would invite an FBI investigation into his fundraising practices and his communications with party officials in securing that nomination.  Some critics have suggested that Jacobs may have already privately secured the nomination through improper discussions between the Senator and the wife of the Republican Party’s State Chairman.

Just months ago, Jacobs hired State Chairman Nick Langworthy‘s wife, Erin Baker, to serve as a fundraiser for his campaign — presumably compensated on a commission-like basis. But Jacobs is independently wealthy and has little need for a professional political fundraising staff.  His family’s net worth has been valued upwards of $5 billion by Forbes.

Langworthy still closely wields influence over the Erie County Republican Committee, his old political turf, despite having ostensibly passed that torch onto Chairman Karl Simmeth.

Last month, Jacobs held a fundraiser for his congressional campaign at a Republican woman’s club located in Midtown Manhattan, in the heart of the Southern District of New York — a jurisdiction led by United States Attorney Geoffery Berman, who has prosecuted pioneering public corruption cases.

That detail is important, observers explain, because the Western District of New York is seen as unlikely to investigate Jacobs or his family’s powerful conglomerate.  In the autumn of 2016, the firm hired William C. Hochul, the husband of Lt. Governor Kathy Hochul and former United States Attorney for the Western District, to serve as its General Counsel.  Some speculate that the position came with a salary of several hundred thousand dollars each year.

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Republican Chairman Nick Langworthy, Conservative Chairman Ralph Lorigo, and Senator Chris Jacobs

In recent weeks, some have raised questions about the propriety of Jacobs’ hiring of Langworthy’s wife — a time when the State Chairman has had a determinative influence over the eight County Chairmen who will choose the nominee, with particularly pronounced influence over Simmeth, his hand-picked successor who controls more than 40% of the weighted vote.

That Langworthy’s wife was hired by Jacobs — the political scion of Buffalo’s wealthiest family — to manage his fundraising operation, raises more questions than eyebrows.  It also provides an all-consuming messaging thematic that is sure to define the special election, where Democrat turnout is expected to be high (New York’s presidential primary is scheduled for the same day).

“If — heaven forbid — the SDNY opens an investigation during the election cycle, it would hand the Democrat nominee the seat in the special election, and would leave the party to regroup around a second candidate in a remarkably short period of time,” postulates one longtime political operative.

Democrats have nominated Grand Island Supervisor Nate McMurray, who does not live in the district — though it is unclear if another Democrat will emerge to challenge McMurray in the June 23 primary.  It’s also unclear whether McMurray or Jacobs, in the event that he loses the special election, will step aside to allow another candidate of his party an opportunity to run in the general election.

All of that is likely to consume conversations between the district’s Republican Party chairmen on Saturday, when they are scheduled to interview four prospective candidates: Jacobs, State Senator Robert Ortt, County Comptroller Stefan Mychajliw, and Darien Town Justice Beth Parlato.

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Rob and Megan Ortt.

Jacobs has long argued that his independent wealth makes him most capable of waging a well-resourced campaign in a vast district that involves two media markets.  His family owns the wildly successful Delaware North Companies and the Boston Bruins.

Ortt, who lacks the Jacobs family’s immense wealth, served in Afghanistan and was awarded a Purple Heart.  He has served in the State Senate since 2012, and before that served as Mayor of North Tonawanda and City Treasurer.  Ortt is widely seen as the most conservative of the contenders, and the most unabashedly supportive of the second amendment.

Parlato has fundraised an impressive sum, married well, and is personal friends with Jim and Jill Kelly, who have recently endorsed her on social media.  But some worry that her candidacy could be a repeat of Jane Corwin‘s in 2011.

Mychajliw was once seen as a front runner among the contenders, but his repeated appearances with convicted former Rep. Chris Collins are now seen as too problematic for his candidacy to be viable, considering how aggressively Mark Poloncarz used Collins’ image to smear Lynne Dixon during her campaign for Erie County Executive.

Of the contenders, Ortt’s candidacy is seen as the most resilient to a third party splinter candidacy from the right — which is how Kathy Hochul won the district in 2011 against Corwin.  In that special election, Jack Davis ran on the Tea Party line with an anti-NAFTA message and a libertarian bent.

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Jack Davis split the right-leaning vote with an anti-NAFTA message on the Tea Party line, causing Democrat Kathy Hochul to win the conservative district. Libertarian trial attorney and political operative Jim Ostrowski electioneered that win. Some Republicans are worried that he’s doing it again — this time, on the Libertarian Party’s ballot line.

This year, the Libertarian Party’s Duane Whitmer is waging a very active campaign for the congressional seat — and is doing so with the backing of the local second amendment movement.

Jacobs’ candidacy is seen as the most vulnerable to a Libertarian message, given his support of what many see as ‘big-government policies’ and hostility towards gun owners.

The Conservative Party has offered Jacobs a rating 84%; lower than Ortt’s 100% rating.

Some GOP officials still feel burned by Jacobs’ failure to recuse himself from votes that benefited Delaware North

The timing of a series of campaign contributions from senior members of Buffalo’s most wealthy family to its political scion, the then-freshman Senator Chris Jacobs, is suggestive of a quid pro quo arrangement on Senate Bill 4068, a measure that authorizes the use of state money to expand the nine racetrack casinos that operate in New York.

Jacobs failed to recuse himself from the vote, and then later failed to disclose the public relations issue to party officials who had been screening candidates to succeed Collins last year.

Two of those racetrack casinos are owned by Delaware North, the privately held multi-billion dollar firm owned and operated by Senator Jacobs’ uncle, Jeremy Jacobs, Sr., whose net worth is estimated north of $5.2 billion in an August 2018 Forbes ranking.

Jacobs failed to properly recuse himself from that June 19, 2017 vote.

Zimmer-200x288Dan Zimmer, VP for Corporate Finance and DevelopmentThe timing of campaign contributions also raises concerns.

The non-family executives who manage Delaware North, with well over $3 billion in annual top-line revenue, don’t typically make campaign contributions. Presumably, they are too busy advancing the strategic business interests of the firm to concern themselves with the Jacobs family’s political interests.

But that was not the case for three executives in key roles in December of 2016 — a month after Jacobs won his election to the New York State Senate, but a month prior to the beginning of the legislative session.  Todd Merry, Zimmer, and Eileen Morgan each contributed $500 to Jacobs for State Senate just before the Christmas holiday.

DNC Travel Hospitality Service Inc. is the arm of the conglomerate that manages the firm’s restaurant and concession businesses around the globe.

By February 2, 2017, the bill was referred to the Senate Committee on Racing, Gaming, and Wagering.  Shortly thereafter, Delaware North Companies (the parent holding company), made a $2,000 contribution to Jacobs for State Senate on February 8, 2017.

Days later, on February 14, 2017, the New York Gaming Association PAC made a contribution in the amount of $1,000.  Delaware North funds the New York Gaming Association PAC with the owners of New York’s other racetrack casinos.

Senate Republicans allowed the bill to come out of that committee shortly thereafter, on March 7, 2017. By March 13, the bill had advanced to it’s “third reading,” and had cleared the procedural hurdles required to ready the legislation for a vote on the floor.

But after waiting for nearly two months with no floor vote in sight, four substantial contributions were simultaneously made to Jacobs for State Senate on May 10, 2017:

  • Finger Lakes Racing Association Inc., a subsidiary of DNC Parks & Resorts, owns and operates the Finger Lakes Gaming & Racetrack in Farmington, NY.  It contributed $5,000.
  • Southland Racing Corporation, another subsidiary of DNC Parks & Resorts, owns and operates Southland Park Gaming & Racing in West Memphis, AK.  It also contributed $5,000.
  • Wheeling Island Gaming, Inc, another subsidiary of DNC Parks & Resorts, owns and operates the Wheeling Island Hotel, Casino & Racetrack in Wheeling, WV.  It also contributed $5,000.
  • Delaware North Companies, the parent holding company, contributed $2,500.

On the same May 10, 2017, several senior members of the Jacobs family who serve as officers of the corporation made substantial contributions to Jacobs for State Senate: 

  • Jeremy Jacobs, Jr. is the co-CEO of Delaware North, and the eldest son of Jeremy Jacobs, Sr., the firm’s chairman.  He is responsible for the firm’s long-term strategic direction, determining mergers and acquisitions.  He contributed $3,000 on that day.
  • Lou Jacobs is the co-CEO of Delaware North responsible for positioning the company in emerging markets.  In 1995 he was named executive vice president after serving as president of Delaware North Companies International, during which time he oversaw the subsidiary holdings in the Pacific Rim, Middle East, Eastern Europe, and Australia.  He also contributed $3,000 on that day.
  • Charlie Jacobs, the youngest child of Jeremy Sr., is the co-CEO of Delaware North responsible for the firm’s Boston operations, including the operations of the family’s NHL franchise, the Boston Bruins.  He serves as an Alternate Governor of the National Hockey League. He also contributed $5,000 on that day.
  • Lisa Ann Jacobs also made a $3,000 contribution on that day.

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The following week, Jeremy Jacobs Sr. and Margaret Jacobs, the patriarch and matriarch of the family, each made contributions of $2,500 on May 23rd and May 25th, respectively.

Less than two weeks after receiving those checks, Senate Bill 4068 is suddenly brought to the floor for a vote on June 6, and on June 19.  Jacobs failed to recuse himself from both votes.

Majority Leader John Flanagan (R-Long Island) controls which bills are brought to the floor for a vote and when.  He is Jacobs’ closest ally in the chamber.  Because the 60th is the most Democrat-enrolled district held by Republicans, it is often considered the ‘swing vote’, giving its occupant an outsized level of influence in the chamber.

S.4068 passed the chamber overwhelmingly and was sent to the Assembly, which passed an amended version of the bill on June 21, 2017. Governor Andrew Cuomo signed the bill into law on August 21, 2017.

The venues have since been expanded in grand fashion, with state money.

Jacobs has not yet publicly apologized for failing to recuse himself from that vote.

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Delaware North’s Finger Lakes Gaming and Racetrack.

4 Comments

    • Are there any inaccuracies in the piece? Please do cite any corrections if you notice any inaccuracies! Many thanks.

  1. This is weak. It is definitely a campaign hit piece designed to be critical of Jacobs. There are NO original quotes obtained from Jacobs or his campaign team.

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