Freeholder Hank Lyon recently found himself before a judge again, accused -- once again -- of violating New Jersey election law. Lyon, who is a candidate for the state Legislature in next week's Republican primary election, could face serious ethical and legal issues in the weeks and months ahead -- and could endanger the seat (even handing it over to a liberal Democrat) if a court finds that, as in 2011, he violated the law.
At issue is Freeholder Lyon's residency and the honesty and integrity of the voting process itself.
We all remember how Hank Lyon won a seat on the Morris County Freeholder Board in 2011. A late infusion of cash from a corporation controlled by his father -- an infusion allowed only because of an election law loophole that says if a candidate still lives at home with his parents, their money is treated as if it was the candidate's own money.
D. Use of Personal Funds Use of a candidate’s personal funds on behalf of his or her campaign must be deposited into the campaign depository and must be reported as either contributions or loans to the campaign in the same manner as all other contributions or loans. If the candidate intends to be reimbursed fully or partially for personal funds used on behalf of his or her campaign, then the funds must be reported both as a loan and as an outstanding obligation to the campaign if still outstanding at the end of the reporting period. Once a candidate’s personal funds are reported as contributions, the funds cannot be later characterized as loans and be repaid to the candidate. There is no limit to the amount of personal funds a candidate may contribute or lend to his or her own campaign (except for publicly funded gubernatorial candidates). See Gubernatorial Public Financing Program Manual for more information. Also, a corporation, of which one hundred percent of the stock is owned by the candidate, or by the candidate’s spouse, child, parent, or sibling residing in the candidate’s household, may make contributions without limit to a candidate committee established by that candidate, or to a joint candidates committee established by that candidate.
That infusion of corporate cash was improperly reported. A judge overturned a close election, a lawsuit followed, another judge overturned the first decision, while an appeal wasn't pursued after the opposing candidate received a gubernatorial appointment. Lyon's campaign still owes a huge amount of money to this corporation -- $75,966.66 -- according to the New Jersey Election Law Enforcement Commission (NJELEC).
Per the NJ election law loophole, this large infusion of corporate cash is only legal while Freeholder Hank Lyon and his father reside in the same household (according to corporate records, Lyon's mother resides in Texas). Here's where the story gets interesting.
Hank Lyon has long chaffed at the idea of his political career simply depending on "daddy's money." He's worked to appear to be outside his father's shadow, going as far as lying on his official Freeholder biography:
"He is a lifelong resident of Morris County, specifically the Towaco section of Montville Township, where he was a member of the Montville Housing Committee. He now lives in Parsippany."
Lyon even pictured his new home in his legislative campaign's advertising, with the words: "Recently bought his first house, pictured above." But if Hank Lyon no longer lived at home with his father, then how is he still using his dad's corporate money and keeping to the law?
In February 2016, Freeholder Lyon did purchase a residential property in the Lake Hiawatha section of Parsippany-Troy Hills. However, Lyon never occupied the property. Neighbors claim to have no idea who lives at 45 Manito Avenue. Mail has piled up and apparently gone unanswered. Repairs and renovations have been pursued in a more or less desultory manner. Then, on April 3, 2017, Lyon executed a mortgage on this property -- borrowing $125,000.
According to the New Jersey Election Law Enforcement Commission (NJELEC), Freeholder Hank Lyon loaned his legislative campaign $35,000 on May 12th and $83,000 on May 16th. His campaign then purchased $99,997 in cable television advertising that began airing on May 19th.
The mortgage stipulates that the borrower (Freeholder Lyon) "shall occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument." This Saturday, June 3rd, those 60 days are up.
When Freeholder Hank Lyon moves, in three days' time, the loan his father's corporation has with him will go sour. It was only allowed while the candidate made his father's home his principle residence. Freeholder Lyon should have paid off the corporate loan that will clearly place him outside normal, ethical, campaign finance limits. Instead, he borrowed more to finance another campaign for political office.
Little wonder then that as a candidate for the Legislature, Hank Lyon supported borrowing and debt to pay for basic road and bridge maintenance. He opposed adjusting the revenue source of the Transportation Trust Fund (TTF) for inflation, despite it having failed to produce enough revenue to fund the state's transportation needs since 1990. Because of this "credit card" policy -- endorsed by Lyon -- by 2015, the revenue source (the tax on gasoline) brought in just $750 million annually, but the interest on the debt to fund all that borrowing cost taxpayers $1.1 billion annually.
Borrowing, paying your bills with a credit card, is not the way of the fiscal conservative... it is madness.