In 2022, the Democratic Socialists of America (DSA) in New York embarked on an ambitious electoral strategy, forming “D.S.A. for the Many” to support a slate of socialist candidates. This initiative led to a record eight socialists winning seats in the State Legislature. However, this electoral success has now plunged the group into a financial crisis following a state election watchdog’s finding that the group failed to properly file authorizations for fundraising and spending.
The watchdog, Michael L. Johnson of the State Board of Elections, has sought enforcement of over $300,000 in penalties in a court in Albany. The core of the dispute revolves around New York’s campaign finance law. The potential damages are significant, equalling the group’s spending in the 2022 elections and amounting to seven times its cash reserves.
Leaders of the democratic socialist movement argue they acted in good faith and followed the advice of the Board of Elections. However, the timing of these legal and financial threats is particularly challenging. The DSA is dealing with backlash over its criticism of Israel following an attack by Hamas, and its national organization is already facing a budget deficit.
Jeremy Cohan, a leader of D.S.A.’s New York chapter, commented, “This is ultimately a case about paperwork and not substance.” The group is now considering asking donors to help with the costs, potentially diverting resources from future campaigns and political organizing.
The issue traces back to an anonymous tip about the group’s legal paperwork. Despite its influence, the DSA, with fewer than 10,000 members in New York, does not qualify as a political party. D.S.A. for the Many was created in 2020 to support socialist candidates for state office and to push the Democratic Party leftward. It registered as a multicandidate committee, which allowed it to coordinate with candidates and spend funds, but only with explicit written authorization from those candidates.
An investigation by Mr. Johnson revealed that the group had not provided the required documentation to prove such authorizations. Consequently, he directed the group to repay $202,068.95 in excessive spending and assessed a $110,000 fine. The candidates involved were not found at fault.
The group has produced evidence suggesting they received contradictory guidance from the Board of Elections. However, a hearing officer for the Board sided with Mr. Johnson, emphasizing the importance of proper authorizations for multicandidate committees.
This legal battle raises significant issues about transparency and campaign finance disclosure. Election lawyer Jerry H. Goldfeder stressed the importance of proper authorizations for voter awareness. The case, now before Judge McDonough, highlights the complexities and consequences of campaign finance laws, particularly for smaller, grassroots political organizations.
