Additional reporting by Savannah Jacobson
Mayor Bill de Blasio spent more on his presidential run than he reported in federal campaign filings this week, an analysis by THE CITY found.
The extra support came out of a state political action committee de Blasio launched in 2018 to help New York Democrats — but which recently doubled as an exploratory committee for his presidential run.
The mayor’s NY Fairness PAC spent $68,000 on pre-campaign polling that wasn’t reported to the Federal Election Commission. The de Blasio campaign promised Thursday to amend its federal disclosures after THE CITY raised questions.
THE CITY identified another $55,000 that de Blasio’s state PAC paid to a firm that does digital fundraising and marketing. The campaign said that a portion of that expense will appear in a future federal filing.
The spending underscored what some experts called an unusual approach that taps a state PAC for presidential expenses amid strictly regulated federal spending and reporting rules for exploratory committees.
De Blasio’s set-up also allows his state PAC to collect donations that don’t get reported in his federal campaign filings — and don’t count toward the $2,800 contribution limit in the presidential primary.
That’s because de Blasio campaign officials categorized all the contributions to the state PAC as donations meant to help elect Democrats in New York State — not as support for his presidential run.
A Triple de Blasio Donor
THE CITY identified 17 contributors who gave the max to de Blasio’s presidential run in the first half of 2019 while donating $2,500 each to his NY Fairness PAC. Meanwhile, the next public filings for de Blasio’s third fundraising arm — his federal Fairness PAC — aren’t due until July 31.
The mayor has benefitted from donors like Queens real estate developer Michael Cheng, who gave $2,500 to the NY Fairness PAC on March 31. He told THE CITY he believed he was supporting de Blasio’s potential presidential run.
Around the same time, he hosted a fundraiser at his Flushing home to raise money for the mayor’s federal PAC. In June, he donated $2,800 to de Blasio’s 2020 presidential committee, FEC records show.
“He’s doing great things for the city,” Cheng said of de Blasio.
De Blasio campaign officials said they know of no donations to the state PAC that were intended to support the mayor’s consideration of a White House run. They added the mayor had been clear in his fundraising pitches at the time.
“The mayor was consistent in his public and private comments: He wanted to ensure the issues affecting working families were in the national dialogue, and had not ruled out a run — but it would ultimately be a family decision,“ said campaign spokeswoman Olivia Lapeyrolerie.
NY Fairness PAC reported raising nearly $305,000 between mid-January and mid-July, according to campaign disclosures released Tuesday by the state Board of Elections.
Some $267,500 of that came in contributions of $2,500. Among the high-dollar donors were fashion designer Diane von Furstenberg and her husband, Barry Diller — a billionaire media magnate who is developing Manhattan’s Pier 55 — and Abigail Disney, granddaughter of the The Walt Disney Company co-founder.
During that same time period, the PAC reported spending nearly $336,000, leaving it with a little over $2,000 on hand.
Strict Federal Campaign Rules
If a candidate declares a run for office, the donations and expenditures of exploratory committees must be reported to the Federal Election Commission in a candidate’s first federal filing, according to FEC officials.
The de Blasio 2020 FEC-registered presidential committee produced its first filing on Monday night, reporting $1.1 million contributions, and $359,000 in spending. The campaign reported an additional $80,000 in exploratory expenses paid for by the NY Fairness PAC — but there was no mention in the FEC filings of any donations received by the state PAC.
The filings with the state Board of Elections show NY Fairness PAC accepting $213,075 in donations during the 10-week exploratory span leading to the May 16 launch of the mayor’s presidential bid.
FEC officials couldn’t recall an instance where a presidential candidate had used a state-registered PAC as an exploratory committee, said Myles Martin, an agency spokesperson. He declined to say whether de Blasio’s approach violated any regulations, noting the agency might have to make a ruling on the matter at some point.
He added that federal campaigns typically include all exploratory expenses and donations in the first filing.
“If a person ultimately becomes a candidate, all of the activity that he or she has engaged in prior to candidacy to test the waters is reportable on the candidate’s first FEC report, including donations received and payments made for activities such as polling and travel,” Martin said.
Various Expenses Reported
In its FEC filings, de Blasio’s presidential campaign committee detailed $80,000 in expenses paid by the state PAC for his staff and consultants, his team’s testing-the-waters travel to early primary states, rent for a shared office space in Brooklyn and for the making of his announcement video.
When asked which funds covered those exploratory costs, de Blasio campaign officials said they used donations made to the state PAC in support of local Democratic candidates — which, they say, is allowed under rules governing state committees.
A state PAC can purchase goods or services for a candidate, but this would have to be reported as an in-kind contribution to a candidate’s city, state or federal committee, and would be subject to contribution limits, said John Conklin, a spokesperson for the state Board of Elections.
If the de Blasio campaign accepts an $80,000 in-kind contribution from a state PAC, they can expect “future correspondence from their FEC reports analyst and, perhaps, a call from the FEC’s Enforcement Division, to discuss federal contribution limits,” said Michael Columbo, a former FEC attorney who works at the California law firm Nielsen Merksamer.
The de Blasio campaign maintains that most of the other costs incurred by the state PAC — but not reported to the FEC as exploratory committee expenses — were not campaign-related.
But in late March, NY Fairness PAC paid Washington-based Brilliant Corners Research & Strategies $68,000 for polling, state campaign finance records show.
De Blasio’s state committee also paid a combined $55,000 to Trilogy Interactive, a Washington-based company that does marketing and digital fundraising for campaigns.
Trilogy — which had previously been hired to assist de Blasio’s national Fairness PAC — received a $46,000 payment in mid-April from NY Fairness PAC for a “digital media buy” and more than $9,100 on July 1 for “digital services.”
Neither company replied to requests for comment.
The mayor’s 2020 FEC filings also show $123,000 for polling costs paid on June 30 to reimburse his federal Fairness PAC. That PAC was established to help elect progressive Democrats across the country and fund the travels of de Blasio and his wife, Chirlane McCray — not bolster his presidential campaign.
De Blasio officials acknowledged the federal PAC shouldn’t have paid for the polling — which is why the group was reimbursed and the expenses disclosed in the FEC filings.
Additionally, the filings show a $52,851 debt owed by the de Blasio 2020 committee to NY Fairness PAC for payments made by the PAC for digital services, travel and an office lease.
Experts Raise Questions
Federal election experts raised questions about de Blasio’s use of his state PAC.
“I don’t see how this is OK,” said Brendan Fischer, director of the federal reform program at the Washington-based Campaign Legal Center.
He added that any expenditures made while “testing the waters” for a presidential run — along with contributions that paid for the expenses — must be reported to the FEC.
Another campaign finance law specialist noted that the use of a dual-purpose state PAC to serve as an exploratory committee created unnecessary confusion.
“The accounting mess of attributing some money to state candidates and some to his presidential campaign could have easily been avoided by running all presidential fundraising and expenditures through a single transparent federal candidate committee,” said Ciara Torres-Spelliscy, a professor at Stetson University College of Law in Florida and a Brennan Center Fellow.
A History of Fundraising Issues
De Blasio’s fundraising has come under repeated scrutiny from state, federal and city investigators since he became mayor in 2014.
The city’s Department of Investigation determined in 2018 that de Blasio had violated conflict of interest rules by personally soliciting donations from individuals who had business matters pending with his administration.
The mayor had been seeking donations for his now-defunct Campaign for One New York, which he launched early in his first term to back his agenda. The creation of the nonprofit also allowed de Blasio to pay the same consultants who worked on his 2013 mayoral campaign for their continued advice.
The mayor’s fundraising for the Campaign for One New York also had been the subject of a year-long investigation by the Manhattan U.S. Attorney’s Office, which concluded in March 2017.
While prosecutors declined to bring charges, they noted that 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.”
That same month, the Manhattan District Attorney’s office closed its own probe of the mayor’s fundraising on behalf of state Senate Democrats in 2014. That investigation, which also ended with no charges, concluded the mayor’s team had violated the “intent and spirit” of state elections laws that were meant to limit contributions and prevent corruption.
The mayor still owes roughly $300,000 in personal legal fees to the firm that represented him — and which lobbies his administration on behalf of clients.
Last year, de Blasio championed a successful ballot referendum that lowered contribution limits for New York City political campaigns.
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