Days after he called for "major reforms" of New York City's Board of Elections, Mayor Bill de Blasio has been accused of "willful and flagrant" violations of campaign finance law in a report that chronicles a system of slush fund-style evasion of campaign donation limits.
The purported violations took place during the 2014 State Senate race, during which de Blasio helped fundraise for at least three upstate Democrats—all of whom lost their races. New York state campaign finance laws cap legal donations to candidates in such races at $10,300. However, donations ranging up to $103,000 can be made to county political committees, which may legally transfer unlimited funds to individual campaigns. The BOE report, which was submitted to Manhattan DA Cyrus Vance Jr. in January and was published in full Friday by the Daily News, alleges that de Blasio's political team knowingly and repeatedly manipulated these loopholes.
In the report, the Board of Election's enforcement counsel Risa S. Sugarman alleged that de Blasio's fundraising team deliberately sought donations larger than the permitted $10,300 limit, instructing donors to instead send checks to the Ulster County and Putnam County Democratic committees, as well as the Senate Democratic Campaign Committee. Those committees then quickly transferred funds to the campaigns of Sen. Terry Gipson, Senate hopeful Justin Wagner, and Sen. Cecilia Tkaczyk, said Sugarman. As the News points out, large and influential unions including SEIU 1199 and the Communications Workers of America, in addition to wealthy businessmen like John Catsimatidis, made large 2014 donations to the county committees named above, despite having never done so in the past.
Once donations were made, the report describes a process of shuttling donation checks from local committees to Senatorial candidates, orchestrated by de Blasio aide Emma Wolfe, fund-raiser Ross Offinger, and the mayor's own Campaign for One New York nonprofit. "The evidence demonstrates that the de Blasio team coordinated its fund-raising activities" alongside Gipson, Wagner, and Tkaczyk's campaigns, and used the committees "in order to evade contribution limits and to disguise the true names of the contributors." The report alleges that some checks made out to the statewide Senate Democratic Campaign Committee even included memos reading, "Donation per Mayor."
"I have determined that reasonable cause exists to believe a violation warranting criminal prosecution has taken place," Sugarman wrote. "The violations discovered by this investigation can only be described as willful and flagrant."
De Blasio denied breaking any laws in a WNYC interview with Brian Lehrer Friday: "We've said from the beginning, if there's any kind of investigation going on, we'll happily participate. We'll support it. We want to get everything out. We want every fact uncovered."
"From my vantage point, everything was done legally and appropriately," the mayor said. Last week, the FBI announced an investigation of de Blasio's own 2013 mayoral campaign after backers of anti-carriage horse legislation were suspected of making oversize donations to Campaign for One New York.
The specificity with which the mayor's 2014 committee-to-campaign donation system operated is exemplified in an October 2014 email exchange from between Tkaczyk's campaign manager, Matthew Lerch, and Ulster County Democratic Committee treasurer Hyes Clement. "Below is our banking info, we need the 60 transferred over ASAP please," Lerch wrote, referring to a $60,000 check from the state Nurse's Association, written out to Clement's committee.
"This pattern of activity indicates that the committees already had committed to these expenditures prior to receiving the funds," Sugarman wrote, alleging that the exchange is proof that Tkaczyk's campaign was well aware of the limit-breaking donations that were earmarked for its own use. In sum, $330,000 was transferred to Tkaczyk's campaign from the Ulster County Democratic Committee over a period of just a few days. Senator Gipson's campaign received $273,750 through a similar transfer system, while Wagner's team was given $367,000.
“We are confident that all of our efforts were appropriate and in accordance with the law at all times,” de Blasio spokeswoman Karen Hinton told the Times. “We will cooperate fully with the investigations.” In the wake of the BOE's report and Sugarman's allegations, some are calling for the mayor to step down. "If he cares about this city the way he says he does, he needs to step down immediately and save us the continued national embarrassment," former National Action Network member Tony Herbert told the Post. "There are a lot of levels to this corruption."
Read the full report, obtained by the Daily News, below.