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De Blasio’s budget overshadowed by finance probe

Stephon Johnson | 4/28/2016, midnight
New York City pundits could be talking about Mayor Bill de Blasio’s executive budget, which was presented this week. But ...
Bill deBlasio

New York City pundits could be talking about Mayor Bill de Blasio’s executive budget, which was presented this week. But they’re talking campaign finance issues instead.

De Blasio’s executive budget includes tripling the number of intensive-care mental health units on Rikers Island as part of the City’s overhaul of mental health care for inmates in city jails, contributing $2 billion in funding to address Health and Hospital funding gaps, $21 million in capital funding for new snow-removal equipment to improve snow-clearing operations and even a new ferry service.

But City Hall is stuck in a brouhaha over a federal and state probe into campaign financing.

The New York State Board of Elections submitted a report to Manhattan District Attorney Cy Vance that accuses the mayor’s associates of “willful and flagrant” violations of campaign finance law because of actions during the 2014 State Senate race.

Back in 2014, the mayor helped fundraise for three upstate Democrats who were campaigning for State Senate. The BOE accused de Blasio’s team of deliberately violating campaign finance loopholes to raise more money.

According to New York State campaign finance laws, legal donations to candidates in races such as those for the State Senate are capped at $10,300, but donations up to $103,000 can be made to county political committees. The committees can then transfer those funds to individual campaigns.

Board of Elections Chief Enforcement Counsel Risa S. Sugarman claims that the fundraising team for de Blasio sought donations of more than the $10,300 limit for the Ulster County and Putnam County Democratic committees and the Senate Democratic Campaign Committee. Funds were then transferred to the campaigns of State Senators Terry Gipson and Cecilia Tkaczyk and State Senate challenger Justin Wagner. The Putnam County Democratic Committee sent $367,000 and $273,000 to Wagner and Gipson, respectively. Tkacyzk got $330,000 via the Ulster County Committee.

All three candidates lost their races.

Sugarman referenced an email exchange between Matthew Lerch, Tkaczyk’s campaign manager, and Hayes Clement, the treasurer of the Ulster County Democratic Committee, in which Lerch provides banking information with a request to transfer $60,000 from the New York State Nurses Association “ASAP please.”

“This pattern of activity indicates that the committees already had committed to these expenditures prior to receiving the funds,” wrote Sugarman in a report originally obtained by the New York Daily News.

“The filing of campaign finance disclosure statements that falsely characterize contributions or fail to report contributions or the keeping of such false records may constitute the crimes of offering a false instrument for filing and falsifying business records, respectively, in violations of Penal Law article 175,” the report continued. “The evidence obtained in this case demonstrates that the de Blasio team took an active role in soliciting contributions and coordinating specific candidates’ campaigns and campaign expenditures in connection with 2014 State Senate elections.”

When asked about the memo and the allegations during a Monday news conference, de Blasio maintained his innocence and questioned the nature of the state BOE’s memo.

“It’s outrageous, and again, I don’t know what’s motivating it,” said de Blasio. “My predecessor and so many other people lived by those exact same standards. I think it speaks for itself. Unfortunately it’s the law of the land right now, so that’s what we deal with.”

In a letter obtained by the Associated Press, De Blasio’s campaign lawyer, Laurence Laufer, echoed similar sentiments. He said the state BOE is engaging in politically motivated enforcement and purposefully leaking confidential information to the media.

It didn’t take long for de Blasio’s political opponents to pounce.

State Senator Terrence Murphy, a Republican from Westchester County, wants de Blasio to remove all City Hall staffers and campaign workers who are currently on the payroll until the probe is over. Murphy called for an investigation into de Blasio’s campaign finance practices 14 months ago.

“Can you say ‘pay to play?’” said Murphy at a news conference this morning. “Like I said in 2014, this was a shakedown by Mayor Bill de Blasio on business owners in New York City. … The Hudson Valley is not for sale. Go back to New York City. There’s enough on the plate in New York City to worry about than to come up to the Hudson Valley.”

The talk from City Hall this week could have been about the executive budget, but de Blasio’s again dealing with public relations nightmare.