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Indictment alleges NYC mayor gamed campaign reform to scam $10 million out of taxpayers

Friday, Sep 27, 2024 - Posted by Rich Miller

* Here’s an official explainer of New York City’s public financing program for local political campaigns

The voluntary public financing program matches small-dollar contributions from individuals who reside in New York City, helping to amplify the voices of New Yorkers in city elections. A $10 contribution from a NYC resident to a participating candidate in the 2021 election could be worth as much as $90 to their campaign.

Who is Eligible?

Any candidate running for municipal office (mayor, comptroller, public advocate, borough president, and city council) may join the program. The program does not cover county district attorney offices or state or federal offices.

To receive public funds, candidates must:

    1. Meet a two-part fundraising threshold:

      o Collect a minimum number of contributions (of $10 or more) from the area they seek to represent. (For instance: candidates for City Council must have 75 contributors from their district; candidates for borough president must have 100 contributors from their borough.)
      o Raise a minimum amount of qualifying contributions from NYC residents (only the matchable portion of the contributions counts towards this threshold).

    2. Certify agreement to and demonstrate compliance with the requirements of the Act and Board Rules.
    3. Be on the ballot, and have an opponent on the ballot.
    4. Submit a personal financial disclosure filing with the Conflicts of Interest Board

* Press release from the US Attorney’s office for the Southern District of New York on the indictment of New York City Mayor Eric Adams

ADAMS sought and accepted illegal campaign contributions in the form of “nominee” or “straw” contributions, meaning that the true contributors conveyed their money through nominal donors, who falsely certified they were contributing their own money. By smuggling their contributions to ADAMS through U.S.-based straw donors, ADAMS’s overseas contributors defeated federal laws that serve to prevent foreign influence on U.S. elections. Wealthy individuals evaded laws designed to limit their power over elected officials by restricting the amount any one person can donate to a candidate. And businesses circumvented New York City’s ban on corporate contributions by funneling their donations through multiple employees, frustrating a law which seeks to reduce corporate power in politics. ADAMS increased his fundraising by accepting these concealed, illegal donations—at the cost of giving his secret patrons the undue influence over him that the law tries to prevent.

ADAMS compounded his gains from the straw contributions by using them to defraud New York City and steal public funds. New York City has a matching funds program that matches small-dollar contributions from individual City residents with up to eight times their amount in public funds, to give New Yorkers a greater voice in elections. ADAMS’s campaigns applied for matching funds based on known straw donations, fraudulently obtaining as much as $2,000 in public funds for each illegal contribution. ADAMS and those working at his direction falsely certified compliance with applicable campaign finance regulations despite ADAMS’s repeated acceptance of straw donations, relying on the concealed nature of these illegal contributions to falsely portray his campaigns as law-abiding. As a result of those false certifications, ADAMS’s 2021 mayoral campaign received more than $10,000,000 in public funds.

The full indictment is here.

As Illinois has discovered time and time again, reforms won’t stop a determined criminal.

       

9 Comments
  1. - Watchdog - Friday, Sep 27, 24 @ 1:42 pm:

    This sounds like a good law to allow those not backed by big monied interests a competitive shot at winning. It may need to be tightened up by requiring small contributors to certify they are contributing their own funds, not $$ given to them by a 3rd person & they understand he penalties for a false certification. But the concept is a good one and should be adopted at the state & local level here. Otherwise, our political system will continue to be corrupted by the purse strings holders.


  2. - Telly - Friday, Sep 27, 24 @ 1:54 pm:

    So the law makes it easier to prosecute improper campaign contributions by making it illegal twice — once for violating campaign finance laws and once again for stealing the matching tax dollars. Doubt that was the intent of the public financing law, but a nice feature.


  3. - Three Dimensional Checkers - Friday, Sep 27, 24 @ 1:56 pm:

    This should throw a lot of cold water on the public financing proposals. I mean, come on, the Mayor spends $30,000 on haircuts. Just think, he could get that money back if his barber donates $3,750. A win, win situation.


  4. - Barrister's Lectern - Friday, Sep 27, 24 @ 1:59 pm:

    === But the concept is a good one and should be adopted at the state & local level here. ===

    Absolutely not. No public funds to pay for campaigns.


  5. - @misterjayem - Friday, Sep 27, 24 @ 3:16 pm:

    “No public funds to pay for campaigns.”

    Because the current system works so well?

    – MrJM


  6. - DMC - Friday, Sep 27, 24 @ 3:18 pm:

    @Barrister - what if it was only public funds at a set amount and corporations weren’t people?


  7. - Socially DIstant Watcher - Friday, Sep 27, 24 @ 3:29 pm:

    ==reforms won’t stop a determined criminal==

    But this also shows that enacting reforms can make it easier to charge a determined criminal with crimes.


  8. - Barrister's Lectern - Friday, Sep 27, 24 @ 3:37 pm:

    === Because the current system works so well? ===

    Mainly because there are plenty of other issues/programs that require funding. I don’t think funds should be wasted on campaigns. Let the candidates raise their own money.


  9. - Barrister's Lectern - Friday, Sep 27, 24 @ 3:49 pm:

    === @Barrister - what if it was only public funds at a set amount and corporations weren’t people? ===

    1. Corporations are people under the law so I am not going to make an assumption that is not based in the current legal reality.

    2. What set amount do you think would be sufficient to fund a campaign? I can tell you that competitive races are extremely expensive. Also, public funding isn’t going to stop corporations, unions or other wealthy individuals from spending as they see fit within existing campaign finance limits. Are you proposing that the public financing would match any private funding that a candidate/opponent would be able to raise?

    Public funding implies that taxpayer funds would be utilized to pay for the campaigns of candidates. I do not think that most Illinoisans would support their taxpayer dollars being spend on television ads or mailers. That is true even for people that agree that there is currently too much influence of corporations and big money donors.

    How much money do you envision would be appropriated to cover public financing of campaigns? As a reference point, competitive State Rep races often cost several million dollars.


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