Mayor Bill de Blasio violated conflict of interest rules after being warned repeatedly not to solicit donations from individuals actively seeking tax breaks, deed transfers and other favors from his administration, according to a Department of Investigation report obtained by THE CITY.

The finding followed a two-and-a-half year DOI probe that ended in October but was never made public. THE CITY secured the 15-page “closing memo” — which the DOI heavily censored — via the Freedom of Information Law.

During the probe, DOI investigators questioned de Blasio about warnings by both the city Conflict of Interest Board (COIB) and his own counsel. The mayor claimed he wasn’t aware of such warnings – and said he couldn’t recall any details of conversations he had with several developers who recounted his personal requests for checks.

The report reveals DOI substantiated the allegation that de Blasio sought checks for the now-defunct Campaign for One New York fund from individuals “who had or whose organization had a matter pending or about to be pending before any executive branch of the city.”

The nonprofit formed as de Blasio arrived at City Hall in 2014 and hired consultants to press for support for his pet programs, such as universal Pre-K and affordable housing.

The closing memo was heavily censored by DOI, which cited protecting the privacy of witnesses and not wanting to reveal unsubstantiated allegations. The entire section marked “Conclusion and Recommendations” was blacked out.

Illustration of redacted text. Credit: Kazi Awal/THE CITY

The revelation of the DOI conflict-of-interest finding comes as de Blasio toys with a run for the White House. The mayor told WNYC’s Brian Lehrer last week he has “not ruled it out,” and his advisors have made clear he intends to make up his mind soon.

The mayor’s office, which has had the DOI report since Friday morning, did not respond to detailed questions submitted by THE CITY Wednesday morning.

Instead, a spokesperson released a brief statement: “These questions are asked and answered. Fundraising for the now-defunct Campaign for One New York was thoroughly reviewed by multiple parties and it was determined there was no wrongdoing. It’s been said a million times: the Mayor acted lawfully and ethically.”

Slipshod Vetting Process Cited

In its report, DOI questioned the competence of de Blasio’s system for vetting possible donors for conflicts, stating “how the system was overseen remained unclear, as did whether the vetting research was conducted thoroughly and completely.”

The report noted that “there does not appear to have been any particular individual who exercised supervision over the vetting process.” And it revealed aides couldn’t agree on who was supposed to be doing the vetting to avoid conflicts.

De Blasio, for example, told DOI his then-general counsel, Maya Wiley, and another aide “owned” the vetting process. But Wiley told DOI investigators she had “no significant involvement” in that process after issuing an April 2014 memo spelling out specific areas of conflict that would constitute a violation of city ethics rules.

Another unnamed aide told DOI that a colleague was responsible for vetting potential donors – but that colleague then “denied any significant role in the vetting process.” That aide “did not know who was responsible for overseeing the vetting process.”

The DOI inquiry began April 13, 2016, shortly after de Blasio shut down Campaign for One New York.

Investigators interviewed dozens of witnesses, including the mayor, multiple donors, attorneys and lobbyists who helped raise funds for Campaign for One New York, and public relations and political consultants hired by the mayor’s group: SKDK Knickerbocker, AKPD Message & Media, Berlin Rosen and Hilltop Public Solutions.

The investigation wasn’t formally closed until Oct. 22, 2018. Four weeks later, de Blasio fired DOI Commissioner Mark Peters.

It’s not clear whether de Blasio was briefed on DOI’s findings when the closing memo was filed. Peters, once de Blasio’s campaign treasurer, had recused himself from any investigation of the mayor’s fundraising.

The DOI investigation paralleled an inquiry by the Manhattan U.S. Attorney’s Office, which in March 2017 announced no charges would be filed, but declared the mayor had “solicited donations from individuals who sought official favors from the city, after which the mayor made or directed inquiries to relevant city agencies on behalf of those donors.”

The U.S. attorney, however, did not reveal any of the specific donors or what they were seeking. Nor did the prosecutors address whether de Blasio had violated the conflict of interest rules that apply to all city employees.

An Inside Look at Mayor’s Fundraising

Despite the agency’s censorship efforts, the report obtained by THE CITY provides the most extensive portrayal yet of de Blasio’s fundraising tactics as he sought out five- and six-figure checks for the Campaign for One New York.

The mayor set aside weekly “call times” in which he “walked around the block as he called potential donors on his cell phone.” By the summer of 2015, he was making six to 10 such calls each week. Aides would instruct him on which donors he could request money from. With some he’d simply seek “support,” and an aide would follow up soon after with a specific money request.

At the very start, de Blasio’s lawyer, Laurence Laufer, asked COIB for advice on whether the mayor could personally solicit checks. COIB wrote back on Jan. 8, 2014, stating that the mayor can raise funds, but must not target donors with pending business before the executive branch.

COIB also noted that under city conflict rules, the mayor must inform all potential donors during these calls that their contributions won’t influence City Hall’s actions.

Despite that warning, the Campaign for One New York at first didn’t even bother to check whether potential donors called by the mayor were doing business with the city, DOI found.

Then on April 4, 2014, Wiley issued a memo outlining a new protocol to comply with the conflict-of-interest rules, highlighting the prohibition on fundraising from individuals with matters “pending or about to be pending” before the city.

The DOI report does not spell out why she felt the need to do this four months after the COIB letter, and she declined comment to THE CITY.

Wiley’s memo went to Campaign for One New York staff and de Blasio’s chief of staff, who at the time was Laura Santucci. But by then the Campaign had already raised more than $1.3 million, including six-figure checks from several individuals actively doing business with City Hall.

Despite the January COIB letter and the April memo, the mayor told DOI “he was not specifically aware of the restriction against soliciting individuals with a matter pending or about to be pending before an executive branch agency.”

The mayor also claimed he was unaware of the requirement that he notify all potential donors their checks would have no influence on City Hall’s decision making. The donors interviewed by DOI said he never offered up such a caveat.

This contrasts with the mayor’s repeated public insistence that he carefully followed all conflict of interest rules when soliciting funds for CONY. During a May 2016 press conference, for instance, he told reporters, “There are very clear guidelines of how you look at the question of whether someone is on the doing-business list, or what their status is, and how to approach it. So, we follow that guidance consistently.”

DOI said aides said that, after Wiley’s memo, de Blasio stopped asking directly for donations and would simply request “support.” Typically a Campaign for One New York aide would then call the potential donor and seek specific dollar amounts.

But in at least one case, the DOI suggests that de Blasio directly sought a contribution from a donor doing business with City Hall, even after Wiley’s memo.

Developers Contacted

DOI interviewed multiple donors – including three developers who had, at the time de Blasio contacted them, significant pending business with his administration.

All of the developers’ identities are blacked out in the DOI report, as are the details of the projects they were working on when the mayor reached out for money. THE CITY was able to identify two of the three via other public records.

One of the developers, the national builder Toll Brothers, was approached twice — first in February 2014, before the Campaign for One New York began checking to see whether donors had business with the city. At the time, the developer was seeking permission from the city Landmarks Preservation Commission to build a co-op on a parking lot in Greenwich Village owned by the Episcopal Diocese.

The neighborhood was fighting the planned building as too tall, arguing it didn’t fit in. The developer told DOI that while this development was pending before Landmarks, someone “affiliated with Mayor de Blasio” called him and asked him to donate to the mayor’s fund.

Toll Brothers wrote a $25,000 check to the Campaign for One New York on Feb. 12, 2014. That May, the commission approved the project for 29 market-rate co-op apartments going for $4 million to $14 million in the church parking lot after Toll Brothers addressed some of the commission’s concerns.

The Pierhouse development in Brooklyn Bridge Park, April 15, 2019. Credit: Ben Fractenberg/THE CITY

But Toll Brothers also had another big project on the Brooklyn waterfront that had run into problems. The first phase of Toll Brothers’ luxury Pier House hotel/condo in Brooklyn Bridge Park had risen high enough to block the view of the Brooklyn Bridge from the Promenade, infuriating area residents.

On Jan. 26, 2015, city buildings inspectors issued a partial stop-work order on the project while the city looked into the complaints, records show. On Feb. 13, the Department of Buildings rescinded the orde – then found it was rescinded in error. After Toll Brothers submitted new plans, DOB fully lifted the stop-work order and work resumed on the Toll Brothers’ project.

That happened on Feb. 17. A few weeks later, the developer told DOI, the mayor called.

De Blasio, the developer said, asked him to donate to his group.

“Although (the developer) could not recall the exact language Mayor de Blasio used, (the developer) told DOI that he was confident that Mayor de Blasio asked for a donation,” the report states.

The developer also noted de Blasio “did not provide any disclaimer that a donation would have no impact on [his] current or future City business.” Toll Brothers wrote a second $25,000 check to the mayor’s group on April 3, 2015, records show.

Toll Brothers declined comment.

The DOI report said the mayor “recalled speaking with (the developer) but remembered no details of the communication.”

De Blasio did recall speaking with another developer who said the mayor hit him up for money — but again, the mayor couldn’t remember the details of their talk.

A $50,000 Check for Mayor’s Group

In the spring of 2015, the development firm Park Towers was negotiating with several city agencies about subsidies to build a big luxury condo complex in Brooklyn called Greenpoint Landing that would include affordable apartments. Park Towers CEO George Klein declined to comment.

The developer told DOI that a business associate invited him to a meeting with de Blasio in February or March 2015. The developer said during the meeting with the mayor, which lasted about 20 minutes, the business associate “mentioned raising money for Mayor de Blasio’s policies.”

The developer couldn’t remember whether he was asked to donate during the meeting or in a phone call from a de Blasio aide that followed shortly after. But on March 16, 2015, Park Towers wrote a $50,000 check to the mayor’s group. The project, which included creation of 4,100 market-rate and 1,400 affordable units, received millions of dollars in tax credits and tax breaks.

A third developer, whose identity also was blacked out by DOI, was dealing with the city in late 2014 on a housing development to be built on city land with city subsidies.

DOI found that the city transferred ownership of the land to the developer in December 2014, and around the same time the city Department of Housing Preservation & Development (HPD) finalized loans for the project.

Soon after, the developer got a call asking if he wanted to speak with the mayor. He said yes. On Feb. 15, 2015, he told DOI, he got a call from de Blasio.

“They talked generally about City politics for most of the 10-minute call. Near the end of the conversation, Mayor de Blasio mentioned CONY and informed him that he would receive a follow-up call from” an aide, the DOI report states.

The developer couldn’t recall if de Blasio “explicitly asked for a donation to CONY during this call, or whether [the aide] was the first to solicit a donation.” The report said the developer wrote a check to the Campaign for One New York, for an amount blacked out by DOI, in March 2015.

De Blasio said he did not recall speaking with that developer, according to the report.

The consultants hired by the Campaign for One New York had also done political campaign work for de Blasio, so DOI was asked to look into whether money raised for the organization wound up paying for political expenses, which would be illegal.

DOI found it could not substantiate such a scenario. A large section of the final report that is blacked out concerns this aspect of the investigation, according to a source familiar with the investigation who was not authorized to speak publicly on it.

The DOI report did note that by the summer of 2015, “many of the consultants began to question CONY’s effectiveness and considered shutting it down.”

One consultant, whose name investigators blacked out, “recalled that Mayor de Blasio initially opposed CONY’s closure but later agreed to its dissolution.”

De Blasio pulled the plug on the Campaign for One New York in early 2016 shortly after the government watchdog group Common Cause filed a complaint with the city Campaign Finance Board alleging the mayor’s group was misusing its donations for political purposes.

The Campaign Finance Board ultimately ruled that the Campaign for One New York was not independent of de Blasio’s campaign, but because of the timing of the donations after the election was over, the board found no violations.

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