ALBANY — A fundraising agreement between a statewide third party and the state Senate's now-defunct Independent Democratic Conference has been deemed invalid by a state Supreme Court justice.

The 2016 arrangement with the Independence Party boosted then-IDC Leader Jeff Klein's ability to raise and spend campaign money, as the new account was able to accept six-figure campaign donations and transfer unlimited amounts to candidates. The increased fundraising muscle was flexed in 2016 and had been expected to play a pivotal role in September, when the eight former members of the conference may face Democratic primaries.

State Board of Elections Chief Enforcement Counsel Risa Sugarman filed the case last August against the campaign fundraising committees set up by the IDC, which broke away from the main Democratic conference in 2011 and allied itself with Republicans. That arrangement ended in April, when the IDC rejoined the main body of Democrats at the urging of Gov. Andrew Cuomo, who faced significant election-year pressure to help his party take control of the chamber.

"I'm very pleased with the decision," Sugarman said. "We have to review the decision to determine what our next steps can be."

She expected to make a determination before November's elections.

The decision from state Supreme Court Justice Kimberly O'Connor requires the committee to comply with state Election Law, which could mean transforming their account to a traditional political action committee or an independent expenditure committee, which couldn't be controlled by Klein. There could also be ramifications for violating contribution and expenditure limits.

"To allow the Independence Party to turn over a party committee to members of the IDC, enrolled Democrats, would open the door to political parties allowing other independent bodies or special interest groups, regardless of party affiliation, to control party committees, have their own housekeeping accounts and receive benefits afforded solely to party and constituted committees under the Election Law," O'Connor wrote in a decision posted by Politico New York.

She concluded that the breakaway Democrats, who created their conference through internal legislative rules, were not entitled to the same free speech protections as a political party.

O'Connor added that fundraising committees should be controlled by members of that political party to prevent "quid pro quo corruption or its appearance." When Klein controlled the campaign account, as well as a housekeeping account able to accept unlimited contributions to be spent on party building, he was enrolled in the Democratic Party.

The court's decision could affect the ability of the former IDC members to fend off primary challenges. Prior to the court's ruling in April, Klein said he would spend what was needed to protect the incumbent members.

The attorney for the Independence Party and former IDC members, Lawrence A. Mandelker, said: "My clients respectfully disagree with Justice O'Connor's analysis, but will follow her directive to bring (the Senate Independence Campaign Committee) into full compliance by filing an amended registration reflecting SICC's status as a party committee."

A spokesman for the fundraising arm of the Senate Democrats did not address a direct question about whether they will spend money on behalf of former-IDC members with primary challenges. He noted that all eight of the senators were endorsed by Senate Democratic Conference Leader Andrea Stewart-Cousins and that they traditionally don't support primary campaigns.

The Senate Independence Campaign Committee reported having about $1.2 million in a January filing with the state Board of Elections. The fate of that money isn't clear, as it will likely be regulated by stricter campaign finance rules moving forward.

In 2016, the campaign account reported spending more than $686,000 on behalf of five senators, including nearly $540,000 for Marisol Alcantara, about $57,000 for Tony Avella and $50,000 for David Carlucci. All of Carlucci's support came in the form of one transfer before the fall election.

The housekeeping account had about $220,000 in January.

This is not the first time Sugarman's unit has investigated the IDC's campaign finances. In 2016, the IDC settled with Sugarman for $27,000 over its political action committee's activities during the 2014 elections helping Avella.

Additional reporting by Chris Bragg.