Lauder had threatened to use his money and influence to block Bloomberg's bid to get the City Council to change the law and add another term to the two-term limit. Lauder supported the mayor's sticking around, but wanted the term-limit change to be temporary, while Bloomberg said it had to be permanent to hold up to legal challenges.
To win him over, Bloomberg offered Lauder a post on a commission that will study the issue again in 2010 and let the voters have a say.
"We believe that Mayor Bloomberg has used his position in a prohibited manner to obtain personal advantage in a quid pro quo deal with Ronald Lauder," Common Cause wrote in the letter.
The group argued that Bloomberg gained by removing Lauder as a potential roadblock to his plan. Lauder is largely responsible for financing the voter referendum that created the existing term-limits law in 1993. Should the new proposal pass, Bloomberg reaps the additional benefit of having the chance to run again for mayor in 2009.
The Conflicts of Interest Board did not return a call; the panel does not typically comment outside of its rulings, which can take weeks.
The bill to change the law was introduced in the City Council on Tuesday. Two hearings are set for next week and the 51-member body could vote as early as Oct. 23.
Separately Thursday, a lawyer for two City Council members filed a separate request with the Conflicts of Interest Board, asking the panel to rule on whether it is a conflict for lawmakers to enact a term-limits law that directly affects their own political careers.
Those council members oppose Bloomberg's plan.
Bloomberg spokesman Jason Post dismissed the complaints as a "publicity stunt" and said "there is no conflict whatsoever."