Federal and state grand juries are hearing testimony as they consider whether various aspects of Mayor Bill de Blasio's campaign fundraising broke laws, according to a report in the New York Times.
The paper, citing anonymous sources, says that the federal investigation is focused on whether de Blasio and aides carried out pay-for-play arrangements with campaign donors who had business before the city. De Blasio used a nonprofit called the Campaign for One New York to skirt limits on direct political donations, allowing unchecked donations totaling more than $4 million, including from companies and groups dependent on city money and goodwill.
Several witnesses called before the grand jury were reportedly related to the Water's Edge, a now-shuttered Long Island City restaurant owned by Harendra Singh, arrested last year on unrelated bribery charges in Long Island. Singh had meetings with senior City Hall officials as eviction loomed at the Water's Edge because of $1.8 million in unpaid rent and fees for the spot, on city-owned land. Singh and associates gave more than $50,000 to de Blasio's 2013 campaign, and the Times writes that investigators examined whether he used straw donors. In 2015, talks were underway to resolve the restaurant's debt, over the objection of some top officials, when Singh was arrested, according to the paper.
Singh is reportedly cooperating with the feds, and two prominent Nassau County politicians tied to him were arrested in October.
The state investigation is centered around whether de Blasio or his surrogates violated election laws by raising money for upstate state Senate races through county Democratic committees, funneling the funds to candidates in an unsuccessful bid to gain Dem control of the Senate. Party committees can accept donations of up to $102,300 for general use, as opposed to the $11,000 general-election cap on what candidates can receive.
De Blasio spokesman Eric Phillips told the Times the mayor "remains focused on running the city." De Blasio has denied wrongdoing, and on Tuesday he told reporters he has not been called before a grand jury, although he said he could not speak for others.
Mayor de Blasio with his family at his election night victory party. (Mario Tama/Getty)
News of the grand juries directly followed the Thursday announcement that the city Campaign Finance Board fined de Blasio almost $48,000 for improper spending and other campaign finance violations during his 2013 run. The board found that de Blasio had made late filings, accepted donations over the limits, and spent money on things unrelated to the campaign. The latter category included $298 on a flight to Washington, D.C. for de Blasio's son Dante in 2010 to attend a rally hosted by Rev. Al Sharpton, $550 on makeup for TV appearances by de Blasio and his family on election night, and $116,000 to a PR firm after the election.
Regarding the Dante D.C. trip, the campaign claimed to investigators that his attendance at a rally honoring Martin Luther King, three years before the campaign began, offered Dante as "a visible manifestation of how the candidate’s life experience was resonant to the spirit of the occasion." The Campaign Finance Board rejected this and many other attempted rationalizations.
Also on Thursday, the City Council pushed through a package of campaign finance reform legislation aimed in part at stopping nonprofits like de Blasio's from circumventing the intent of campaign contribution limits. The 21 bills include one prohibiting donations over $400 from lobbyists and people with business before the city to nonprofits, the same limit governing contributions to candidates, and requires the disclosure of such donations. De Blasio's Campaign for One New York publicized its donors, but only to reporters who asked. Council Speaker Melissa Mark-Viverito addressed the nonprofit directly in introducing the bill.
"We won’t know for certain what happens to the Campaign for One New York until investigations of its practices have concluded," she said. "But we do know that it exposed loopholes in our election and ethics laws that need to be remedied, and we are doing that with this bill."
The bills also include one eliminating matching funds for contributions bundled by people doing business with the city.
The Campaign Finance Board and good-government advocates criticized the Council for rushing the legislation through—it was introduced last month—without ample opportunity for public input.