Politico: FEC finds fault with de Blasio’s campaign finances

By Joa Anuta

Mayor Bill de Blasio’s presidential campaign is over, but concerns over his fundraising practices linger on.

An official with the Federal Election Commission sent a letter to the mayor’s presidential campaign, which ended Friday, highlighting a problem that has been the subject of multiple POLITICO reports and two formal complaints from watchdog groups.

In a July public filing, the de Blasio camp noted a $52,852 debt owed to the NY Fairness PAC, a state political action committee controlled by the mayor. The campaign had argued that this was a permissible loan from one organization to another. But the FEC’s senior campaign finance analyst, Robin Kelly, wrote this week that the practice is not allowed by campaign finance rules.

Such transfers are capped at $5,000 per election cycle, Kelly’s letter said, meaning the campaign took more than ten times the permissible amount from the state PAC and spent it on travel and advertising. Kelly mandated that the campaign refile an amended report by late October that corrects the transfer, and noted that an audit of the campaign may follow.

The campaign repaid the loan Thursday, the day it received the FEC’s letter, spokesperson Jaclyn Rothenberg said.

Last year, de Blasio created a federal political action committee called Fairness PAC — ostensibly to fund his trips around the country advocating for progressive causes and to offer financial support to other left-leaning Democrats. However, the mayor also quietly created a state committee called NY Fairness PAC and used both to fund exploratory efforts for his own presidential campaign.

Last month, the Campaign Legal Center filed a complaint with the FEC illustrating why it found this practice problematic. Essentially, donors who had already given the max to de Blasio’s presidential campaign were also donating to both of his PACs. And PAC money was being shifted back into the presidential warchest.

“[The campaign] appears to have concocted a shell game to arrange for a small number of wealthy donors to support de Blasio’s presidential run above and beyond legal contribution limits,” the group’s complaint said.

Thursday’s FEC letter did not delve into the issue of contribution limits, but simply requested the campaign amend its public reports.

The mayor ended his presidential run Friday morning. However, the federal Fairness PAC will live on and his former campaign treasurer and top City Hall aide Jon Paul Lupo will consult for the action committee. If history is any indication, that leaves the door open for the mayor to continue a practice that has raised questions from political observers: soliciting money from businesses, people and communities who want action from city government.

In fact, Thursday’s letter came on the same day that the state’s Joint Commission on Public Ethics issued a notice that it had settled with three donors to the Campaign for One New York, de Blasio’s erstwhile nonprofit that was investigated by federal prosecutors and the Manhattan district attorney.

Just hours after the JCOPE settlement was announced, the mayor released the final policy proposal of his White House bid: campaign finance reform.

Read the full story on Politico.