As some 2020 rivals forgo corporate cash, de Blasio imposes few limits

Bill de Blasio

Bill de Blasio has drawn criticism for the way he raises money for campaigns. | Scott Olson/Getty Images

2020 elections

The mayor told POLITICO earlier this year that he would not rule out taking money from real estate executives in a potential presidential bid.

NEW YORK — Bill de Blasio is entering a crowded 2020 Democratic field full of candidates swearing off corporate donors unpopular with the left wing of the party. But the mayor of New York City sees no need to impose those types of restrictions on himself.

De Blasio has run aggressive and occasionally reckless fundraising operations since the start of his political career, when he was censured for exceeding the legal spending limit in a City Council race. And now that he is vying for president and needs to show the country his fundraising prowess, he is going back to donors who want things from his administration — a practice he readily points out is not barred by law, even though it is the exact behavior that landed him in the crosshairs of federal prosecutors in 2016.

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De Blasio has cast himself as a leader of the progressive wing of his party with a focus on income inequality and getting big money out of politics. But his fundraising practices would appear at odds with that image. The mayor told POLITICO earlier this year that he would not rule out taking money from real estate executives in a potential presidential bid.

He boasted that under his watch, the city’s already stringent campaign finance system was made even more so last year — a reform he sought after being hammered for his record on campaign finance for years.

But as for ruling out specific types of donations, he replied, “That’s very individual. Everyone has to square it with their own values and their own sense of their mission.”

No city officials were charged in the U.S. Attorney’s Office probe of the mayor’s fundraising that closed in 2017, but prosecutors found several instances in which de Blasio and his fundraisers sought money from people with business before his administration and the mayor went as far as to direct city agencies to act on behalf of those donors.

One of his campaign donors pleaded guilty last year to attempting to bribe the mayor in exchange for government help with his property. Last week, construction executive Husam Ahmad pleaded guilty to making straw donations to de Blasio’s 2013 mayoral campaign. And de Blasio donor Jeremy Reichberg was sentenced to four years in prison for his role in an NYPD bribery scheme.

A POLITICO review of thousands of emails released through a Freedom of Information request and interviews with former employees fill in the contours of de Blasio’s fundraising apparatus: Political staffers pushing him to hit up developers and unions seeking something from the city, while lawyers scramble to ascertain the guidelines for such fundraising and whether the mayor himself followed them.

Taken together, they demonstrate what has long become a pattern in de Blasio’s political career — playing fast and loose with established rules for raising and spending money.

“The mayor has repeatedly raised money through various C4 organizations and now PACs [political action committees] from entities and individuals with business before the city, both raising questions of pay to play and undermining the city’s campaign finance limits,” said election reform advocate Susan Lerner, executive director of Common Cause New York. “It’s only barely legal and not outright illegal because the Supreme Court has systematically watered down anti-corruption laws.”

“That’s not the standard we’d hope to see the mayor of New York City hold himself to,” she added.

One week after taking office, de Blasio received a letter from the city’s Conflicts of Interest Board on the fundraising restrictions for Campaign for One New York — an outside nonprofit he established to promote his agenda. He and his aides relied on donations from individuals looking for action from the city on specific projects, and ultimately raised more than $4 million before shuttering it after the federal investigation began.

The ethics board’s advice was clear: The mayor could not personally solicit from anyone with “matters pending or about to be pending” before the city — advice the board codified in a formal rule last week. His staff was free to do so.

Despite the guidance, de Blasio did in fact call donors with city interests, the city’s Department of Investigation discovered during its own probe last year. It referred its determination, which was heavily redacted when made public, to the Conflicts of Interest Board. The board would not disclose whether it issued any penalties.

According to the 2018 Department of Investigation report, the mayor told city investigators he was “not specifically aware” of several fundraising restrictions regarding donors with business before the city.

Three people familiar with the fundraising protocols, who would only speak on background, said that assertion struck them as insincere, since they believe the mayor was briefed on the legal guidance. In fact, de Blasio constantly defends his practices when batting away reporters’ questions by insisting he followed legal protocol.

They said de Blasio would typically call donors to make his general pitch and his fundraiser at the time, Ross Offinger, would follow up with a specific monetary request.

But the vetting process to determine if the donors were within bounds did not become especially rigorous until April of 2014. At that point, City Hall officials and Hilltop Public Solutions, a consulting firm working on Campaign for One New York, began running the names through multiple databases and querying deputy mayors and top government staffers to ensure they did not pose conflicts, one of the sources said.

Multiple former aides and outside advisers told POLITICO they felt that both they and de Blasio had been poorly served by the mayor’s attorneys — whose at-times conflicting advice created confusion around the rules governing communications and fundraising for his outside nonprofits.

Several former aides, who spoke on condition of anonymity, remembered receiving conflicting opinions from different attorneys about how to communicate about de Blasio’s nonprofits. Some lawyers advised using only private email for communications. Others insisted all business be conducted on government email and maintained, incorrectly, that even City Hall staffers’ emails with people who didn’t work in government could be shielded from public disclosure.

The emails speak to that confusion as well.

One exchange from the spring of 2016 showed lawyers for the mayor and the Campaign for One New York furiously workshopping a response to a reporter’s question about whether the mayor personally raised money from donors with business before the city.

“Do you want to tell her the Mayor doesn’t do all the solicitations,” former City Hall counsel Henry Berger wrote in an email on May 2, 2016 to a group of government staffers, outside advisers, the mayor’s private attorney Barry Berke and well-known election lawyer Laurence Laufer, who was representing the Campaign for One New York.

“Then sh[e] will ask which ones he did and we don’t know the answer,” Berger wrote.

Those involved at the time said de Blasio received a warning letter from the Conflicts of Interest Board about his fundraising behavior, after City Hall attorneys flagged that the mayor personally solicited two donations from people who were off-limits, two people familiar with the matter told POLITICO. The New York Times has publicly pressed de Blasio on the warning letter, but he has declined to answer any questions about it or make it public.

One of the donations was from developer and longtime ally Bruce Ratner, who had a matter pending when he gave, the sources said. The city returned that contribution and one other at the time.

Functional successor

In the middle of 2015, de Blasio launched his “Progressive Agenda,” a national policy platform he hoped to use to influence the 2016 presidential election. It was initially run by the Campaign for One New York, but in the summer of 2015, The Progressive Agenda Committee [TPAC] was spun off as a separate nonprofit, with its own executive director, staff and fundraising aims.

De Blasio did not seek any guidance from the city’s Conflicts of Interest Board about how to fundraise for the Progressive Agenda. Interviews with former staffers and emails show that his attorneys and staff considered it to be “functionally a successor” to the Campaign for One New York and generally believed it was governed by the same set of rules.

While multiple news outlets have reported that donors to the Campaign for One New York had business before the city, the emails show de Blasio’s aides suggesting he raise money for The Progressive Agenda from a different list of potential donors, many of whom also had business before the city.

Former City Hall staffers and aides to The Progressive Agenda could not recall whether or not de Blasio called the donors on the list, which was circulated in early March of 2016, just weeks before news would break of the federal probe into de Blasio’s fundraising.

The list included real estate developers like Steve Witkoff, Ron Moelis and David Kramer. Taxi drivers federation head and Manhattan restaurateur Fernando Mateo also was a target, as was Moishe Indig, a prominent leader in the Ultra-Orthodox Jewish community who had regular meetings with City Hall staffers for much of 2015 and 2016 to press for action on issues for his constituents.

A spokesperson for Moelis and Kramer said neither ever received a call soliciting funds from those working for The Progressive Agenda Committee. Mateo, Indig and Witkoff did not respond to requests for comment.

But the emails show that in the beginning, de Blasio did play an extraordinarily hands-on role in identifying donors and soliciting funds for The Progressive Agenda.

The nonprofit reported raising money from just four discrete donors, all of whom de Blasio appears to have solicited himself — the United Food and Commercial Workers, American Federation of State County and Municipal Employees, a grocery chain called Mom’s Markets, and John Stocks, who gave money to the nonprofit through the Sixteen Thirty Fund, a shadowy organization of powerful Democratic donors whose donors aren’t publicly disclosed. Representatives for UFCW, Mom’s Markets and Stocks did not respond to requests for comment. A spokesperson for AFSCME declined to comment.

De Blasio’s de facto direction

Laufer also warned de Blasio’s advisers that the City Charter appears to say the mayor can’t raise money for a nonprofit organization in which he holds a position. And while de Blasio didn’t officially hold a title in either the Campaign for One New York or the Progressive Agenda, the emails show he was a de facto leader of both.

In a March 2016 email to de Blasio’s City Hall counsel, The Progressive Agenda’s executive director Geri Prado asked for advice about how to prepare federal tax documents for the organization that could shield the mayor and the nonprofit from legal problems.

“In light of the Mayor’s prime role in founding and convening the policy agenda but not playing a formal role on paper, I have several questions I’d like to discuss with both of you so we can ensure we are protecting the Mayor and his office as well as the c4 and potential c4 status of the organization,” Prado wrote.

A person with former ties to the mayor’s political operation, who would only speak on the condition of anonymity, questioned the donors de Blasio’s team has been taking money from for his federal Fairness PAC, the precursor to his 2020 campaign.

“If they are called out for the practice a couple of times, I think it’s weird that they continue to run up on that line by fundraising at all from people who may not be on the [city’s official] ‘doing business’ list but clearly do business with the city,” the person said.

The person noted that a construction company hoping to get a development contract with the city hosted a fundraiser last month for de Blasio.

“He may not be on the fucking database, which is probably a pretty bad database, but clearly he wants to do business with the city,” the person told POLITICO.

The mayor is no stranger to fundraising troubles.

In 2007 he received a $50,000 fine from the city Campaign Finance Board for exceeding the spending limit on his 2005 Council race — money that Laufer, who worked for him at the time, defended because it was part of an unsuccessful election to become speaker of the body. The Campaign Finance Board determined that those races were not separate enough to warrant exceeding the threshold.

De Blasio then continued raising money for years for that account to pay down that debt.

After becoming the city’s public advocate in 2009, he used an affiliated nonprofit to raise money for his support of national causes, all while attempting to elevate his own profile as he contemplated running for mayor.

That organization, the Fund For Public Advocacy, raised millions of dollars, including hundreds of thousands from billionaire George Soros. One of the Fund’s biggest projects, ironically, was opposing a Supreme Court ruling that enables unlimited donations in politics.

When he ran for mayor, he raised donations for that race while simultaneously asking the same individuals to give to his 2009 account so he could pay off debt from campaign poster fines.

Faced with perpetual scrutiny over his fundraising practices — not because a politician aggressively raising money is strange, but because de Blasio fancies himself the reformer’s reformer — the mayor espouses an ends-justify-the-means attitude.

“The mayor’s fundraising has helped countless four-year-olds enter free full-day pre-k and create the most affordable housing of any administration,” spokeswoman Freddi Goldstein said. “It was all driven by the goal of helping New Yorkers.”

The mayor actually boasted of his campaign finance reform credentials when addressing the Woodbury County Democratic Party in Sioux City, Iowa on Friday. He referenced a referendum that passed in November that lowered the maximum contribution limits for campaign donors, while increasing the public matching funds.

“You’ve got, for the first time ever, everyday people running for office and they don’t need any big donors in their life. Everything is low-dollar donations, everything is matching funds,” he said. “I would love to see that kind of system for our whole country.”

Emilie Ruscoe contributed reporting.

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