Last year, for the first time in decades, Democrats had a real shot at taking over the New York State Senate. And that meant toppling a few well-entrenched incumbents, including Republican Roy Goodman of the Upper East Side. In Liz Krueger, a highly respected, well-financed progressive firebrand, the Democrats had a candidate who could actually make that happen.

But old habits are hard to break. Some of the Democrats’ hardcore power players–namely, organized labor–feared Republican retribution should they make a serious effort to swing the Senate into Democratic hands. And so they declined to take part in the overthrow. It was exactly the sort of realpolitik that the Working Families Party, a fledgling third party trying to push New York’s staid Democrats leftward, was supposed to be against.

Then the time came for an endorsement in the Goodman-Krueger race. According to sources present at the endorsement meetings, some Working Families leaders called for restraint. Like the unions, they contemplated remaining neutral in these races, even working behind the scenes with the Republicans, hoping that a non-endorsement might lead to GOP support for a minimum-wage raise the WFP supported. Krueger “was an excellent candidate,” says one source, “but there was a feeling that we needed to look at the bigger picture, that we needed to work with the Republicans.”

It was only after the folly of that approach became evident–when the Republicans killed a minimum-wage bill in June–that the WFP got on board with the Krueger campaign. “By the time we endorsed her, her campaign was in full gear,” the source says. “All we could do was function as mere volunteers.” It ended up being one of the closest races in New York City’s recent history. After the absentee ballots were counted, Goodman retained his seat by only 200 votes, out of 127,000 cast.

Dan Cantor, executive director of the Working Families Party, denies that its backing was ever going to anyone but Krueger. “We were always endorsing her,” he says. “That one was never on the table.” But he acknowledges that the party was negotiating with Republicans last year, and that it was seeking to use endorsements as leverage. “This was not a secret thing–it was posted on our web site,” he adds. “We had very intense negotiations. They wanted endorsements. We wanted the minimum-wage bill.”

If last year’s three New York City State Senate races provided some dilemmas for the Working Families Party, this year is destined to force an all-out identity crisis. City government will undergo a near-total overhaul starting in September, as the offices for mayor, comptroller, public advocate, four borough presidents and nearly 40 City Council seats go up for grabs. No longer can the WFP just get behind the Democratic nominee as it has done in the past. Now, it must enter the fractious world of Democratic primary politics, likely leaving a few bodies along the way.

In April, Working Families issued nine endorsements for City Council, including incumbent Christine Quinn and labor leader Arthur Cheliotes. But picks in some of the most hotly contested council seats have been postponed until this month, a move that has a few party faithful complaining that the WFP is slow to get off the blocks in races where it could really sway the results.

Working Families now has to make some harsh choices between pragmatism and principle–between maverick reformers and well-supported Democratic insiders. Will the party stick with loyal WFPer Errol Louis, the economic development activist running to represent Fort Greene and Clinton Hill, or side with Letitia James, an aide to Attorney General Eliot Spitzer who has the backing of Brooklyn’s Democratic organization and many of the area’s major pols?

In Park Slope, two candidates with sterling progressive credentials–longtime Legal Aid activist Steve Banks and election attorney Jack Carroll–are up against a slew of candidates with big backers: Bill de Blasio, Hillary Clinton’s campaign manager and Andrew Cuomo’s man in New York during the gubernatorial candidate’s stewardship of HUD; Craig Hammerman, a community board district manager supported by Borough President Howard Golden; and Paul Bader, husband of local Congresswoman Nydia Velazquez.

And in Maspeth and Woodside in Queens, the WFP will have to choose between Joe Heaphy, executive director of the housing group, New York State Tenants and Neighbors Coalition, and Elizabeth Crowley, a twentysomething union member with an impressive pedigree–her cousin is the area’s congressman, and both her parents were councilmembers in the same district.

In the year when the party is poised to shape city government as it never has before, there is a very good chance that, in at least some key races, Working Families will throw in its lot with highly connected frontrunners in its Democratic primary picks. “I’ve supported losers in the past, and it’s not fun,” says Bob Master, co-chair of the party and the political director of the Communications Workers of America. “I want to be with some winners.”

It’s words like that that have some party activists bracing for a letdown. “The great fear we have is that the leadership is going to be tempted to go down the path of the Liberal Party–insiders rather than activists,” says one prominent WFP associate. “This could be a transformative election year, but I’m not sure that the leadership is committed to making that transformation–other than their elevation to citywide power brokers.”

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Third parties have traditionally flourished in New York, thanks to election laws that allow “cross-endorsements” between parties, building what are known as “fusion” tickets. Like Working Families, left-of-center New York third parties in the past–notably the American Labor Party and its successor, the Liberal Party–were founded on the theory that the Democrats were too conservative and needed pressure from their progressive wing. Both wore the banner of reform and enjoyed spells of great success: American Labor elected some Congressmen and was a major part of the Fiorello LaGuardia coalition, while the Liberals elected John Lindsay to the mayoralty in 1969 and played a crucial role in bringing Rudolph Giuliani to power in 1993.

But American Labor fell victim to Cold War politics. The Liberal Party, faced with declining membership, has become nothing more than a patronage outlet for its leader, Ray Harding, a close ally of Mayor Giuliani’s.

Fusion can be a mixed blessing. While it gives insurgent parties a chance to make an impact, it also effectively turns them into subsidiaries of the major parties. Indeed, trying to form an independent party while not antagonizing the Democrats has been a dilemma for the WFP from the beginning. In order to comply with New York’s complex election laws, the party must register voters–it has about 3,600 in the city–but it’s also wary of taking too many voters away from the Democratic party, which would undermine a progressive Democrat’s chance of winning a primary.

But Working Families also offers the Dems a sweet deal. The party was founded in 1998 by such left-flank stalwarts as Congressman Major Owens, former City Councilmember Sal Albanese and former Dinkins deputy mayor Bill Lynch. The party’s impressive shows of strength–claiming 50,000 votes for Democrat Peter Vallone in the 1998 governor’s race to win a ballot line, and pulling in twice that for Hillary Clinton last year–have made WFP the largest minority party in New York City and the second-largest statewide, trailing only the Conservatives. In last year’s Senate race, Working Families got more votes than the Independence, Green and Right to Life parties combined.

In its three years backing candidates and promoting legislation like the minimum-wage hike, the Working Families Party has pushed for important causes that Democrats do little more than pay lip service to. It has built a populist, multicultural grassroots base, from unionists to public school teachers to hospital workers to environmentalists, from UAW mechanics in Buffalo to ACORN activists in the Bronx. The party focuses nearly entirely on economic issues. “What we say to people is, ‘You can have all of your cultural issues, but we want to talk around building a party that will make your life better, ‘” says Larry Hanley, the WFP’s treasurer and president of the Amalgamated Transit Union. “If we can shift 10 to 15 percent of the electorate to think that way, we’ll be in good shape.”

Working Families is counting on unions to help pull in those kinds of numbers. In all these races, the WFP’s decisions will likely be heavily influenced by its close connections to organized labor. The delegates in the New York City coordinating council, the group that will in effect make endorsements, are overwhelmingly union, including Communications Workers of America, AFSCME District Councils 37 and 1707, Mason Tenders District Council, Painters and Allied Trades, United Auto Workers, UNITE and Service Employees International Union.

And not everyone thinks that’s such a good thing. While labor must undoubtedly be an integral part of any progressive party, union politics has to be kept in check like any other powerful group’s. And some party activists worry that may not happen. In Woodside, the party was ready to endorse housing advocate Heaphy–until the leaders of Painters’ District Council 9 got wind of the decision. The union persuaded the party to hold off. “We didn’t think that was smart,” says Jack Kittle, political director of DC 9, referring to the WFP’s readiness to endorse Heaphy. “Out of respect for our organization, we said this race should not get an early endorsement.”

And so none came. Indeed, some party activists fear that the WFP’s fealty to labor could come at the expense of other important elements of party-building, such as forming political clubs. Even though there was talk of opening clubs, there have been only a few to date. A Manhattan club started in the wake of Eva Moskowitz’s 1999 election to the City Council hasn’t coalesced, while two others in Brooklyn are still getting off the ground. (Cantor says others will be opening soon.)

“There’s no real sense of how this party is making anything more than a coalition of community groups and unions,” says the party member who witnessed the Goodman-Krueger debate. “And that brings with it all the union jealousies and rivalries. I worry that this party will be less than the sum of its parts.”

WFP leaders, however, say the careful consideration of endorsees and balancing of party interests are all unavoidable parts of the democratic process. “What makes the party interesting is what makes it complex,” says Cantor.” The party has institutional heft. We’re not some free-floating left-wingers.”

Candidates under consideration for this year’s endorsement have been interviewed by the coordinating committee, which is made up of some 80 delegates representing the party’s affiliates (each of which has acquired affiliate status by delivering at least 50 dues-paying members to the party). After a vote is reached–in meetings that can drag on to agonizing length–it goes before the executive committee for approval.

“I would call it complex, not convoluted,” says Cantor. “Look, it’s a pain in the neck. It’s time-consuming, but the price of democracy is lots of meetings.”

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Since its founding, the WFP has talked about cultivating activists from within the party to run for office. If there was one candidate who fits that bill, it’s Errol Louis. A candidate for City Council twice before, Louis has solid standing in his community, cofounding the Central Brooklyn Federal Credit Union, a community-owned and-run institution, and now heading the Bogolan Merchants Association in Fort Greene. He campaigned tirelessly for Working Families during the 1998 election, first rounding up–even paying–petition-gatherers, then mobilizing voters. Since then, he has done everything from phone-banking to giving speeches and organizing rallies for the party.

In the past, Louis has had to contend with longtime incumbent Mary Pinkett. Now he’s up against a candidate with widespread support among Brooklyn’s Democratic powers–quite a feat given the borough’s legendary infighting among its political leaders, and a testament to her diplomatic skills. Leticia James, who runs Attorney General Eliot Spitzer’s Brooklyn office, was once a legislative aide for the powerful Assemblymember Al Vann. She is also close to Clarence Norman, Brooklyn’s Democratic party leader, and has the backing of Congressman Major Owens. By all accounts, she’s a strong candidate and made a convincing impression in her endorsement interview earlier in the year.

But until this spring, many friends of the party expected the nod to go to Louis, because of his loyalty to the WFP and track record in neighborhood investment. “I thought there would be no problems with Errol,” one participant says. “Evidently, there were problems.” Party insiders say it is likely that James will get the Working Families endorsement.

Well aware of how fraught these endorsement decisions are, Working Families leaders say that the party’s influence has to be understood on a larger scale. “We need to force issues onto the agenda,” says Master. “People at the bottom have seen their incomes decline, while people at the top have seen theirs skyrocket. This has not been a debate in this city, and that has to change. To me, that is far more important than any individual’s campaign.”

As a vehicle to change that equation, WFP supports legislation now before the Council mandating that any firm doing business with the city pay its workers at least $10 an hour [see “The New Wage Movement,” March 2001]. Master points to success the party has already had on that front: At a March mayoral forum, all four Democratic candidates pledged to support the new living-wage bill (though some were more ardent than others). “That’s a modest step, but an important one,” says Master.

But the party does have an electoral strategy for the fall, which sets out to prove that it can do more than piggyback on the Dems. According to Cantor, the party will go all-out to elect James Sanders, a school board president running in southeastern Queens, and Arthur Cheliotes, a longtime union activist vying for the Bayside seat now represented by Republican Michael Abel. Neither candidate will likely be supported by Queens’ all-powerful Democratic machine, so the WFP will have to provide each candidate with an organizational base.

Come fall, Working Families may have to make a critical decision. If Cheliotes loses the Democratic primary, the party could decide to run him again, this time on the Working Families ballot line. In the resulting three-way race, Cheliotes could take enough votes from the Democratic nominee that it would get a Republican elected.

The prospect of being a spoiler has dogged third-party movements long before “Nader” became Democrats’ favorite four-letter word. This year, though, Working Families is more likely to face dissension from its own ranks than from Democrats. And that’s only the beginning of the fledgling party’s battle for influence. “We’ll lose more than we win,” predicts Cantor. “But that’s befitting a challenger.”