Sign up for “THE CITY Scoop,” our daily newsletter where we send you stories like this first thing in the morning.
Federal Election Commission officials have raised another red flag over Mayor Bill de Blasio’s use of a state political action committee to pay for expenses tied to his failed presidential run.
It marked the second FEC letter issued this week that informed a de Blasio federal political committee of potential problems with its financial transactions.
In the new letter, posted online Thursday, the FEC questioned a nearly $53,000 September payment from the de Blasio 2020 committee to the state committee he launched last year, known as NY Fairness PAC.
The payment served as reimbursement for “Travel Expenses, Digital Advertising, Rent” that had been paid for by the state PAC prior to the official mid-May start of the mayor’s presidential campaign, according to correspondence de Blasio 2020 sent to the FEC explaining the funds transfer.
The FEC letter suggests those initial payments by NY Fairness PAC for expenses connected to de Blasio’s presidential run could run afoul of federal election law.
“NY Fairness PAC appears to be a committee established by the candidate for a nonfederal election campaign,” reads the FEC letter. “Contributions and/or transfers from a candidate’s nonfederal committee to his or her federal committee are prohibited.”
Jon Paul Lupo, a de Blasio 2020 treasurer who now consults for the Fairness PAC, said the committee will continue to work with the FEC to resolve the issue.
“As we have previously communicated to the FEC, De Blasio 2020 has fully repaid and properly reported the debt to NY Fairness PAC because NY Fairness PAC had paid some expenses on the eve of the Mayor’s candidacy that it believed at the time were exploratory, though in retrospect they should have been attributed to the candidacy rather than to exploratory activity,” he said.
In a separate action Monday, FEC officials raised concerns over the timing of a $123,000 reimbursement from the de Blasio 2020 committee for polling costs paid for by a second affiliated committee — his federal Fairness PAC.
As THE CITY reported, the FEC noted that because the reimbursement wasn’t made within 30 days of the campaign launch, as required, the Fairness PAC’s initial payment for the polling fees counts as a contribution.
Such a donation would violate the $5,000 annual contribution limit, according to the FEC.
Unorthodox Fundraising Pattern
The mayor has said he launched Fairness PAC and NY Fairness PAC in July 2018 to support Democrats in elections across the country and in state races in New York, respectively.
But both committees were used as de facto presidential exploratory committees — a move that also allowed de Blasio to accept more dollars than federal election law limits would allow from each donor, as well as to spend more money than his presidential campaign reported.
Those giving to de Blasio’s presidential run included a significant number of donors who were seeking favorable treatment from the city.
When THE CITY first reported in July that de Blasio had used his state PAC to support his presidential run, a number of campaign finance experts and an FEC spokesperson told THE CITY that such an arrangement was atypical — if not unprecedented.
The mayor’s unorthodox fundraising subsequently prompted at least two complaints to the FEC. Both maintained that de Blasio’s presidential campaign broke federal campaign finance rules by failing to report tens of thousands of dollars in donations and expenses to federal regulators.
De Blasio dropped out of the Democratic primary on Sept. 20, but said he would continue raising money for the two PACs.
The next filings for those committees aren’t due until January.
Want to republish this story? See our republication guidelines.
Think Locally, Act Locally
You just finished reading one of the more than 500 stories produced by THE CITY since we launched April 3.
Our team strongly believes that democracy begins with local news, which is crucial to holding politicians and other decision-makers accountable. We also believe local news should be free and accessible to everyone. That’s why we don’t have a paywall, charge a subscription fee or clutter our articles with ads that have nothing to do with you or our city.
We’ve been incredibly fortunate to gain the generous support of leading funders who believe in our mission at a time when local news in New York and beyond has taken some staggering hits. We’ve assembled a team of 18 dedicated journalists, joining the growing ranks of more than 200 nonprofit newsrooms that have sprung up across the country.
Support on all levels is essential to our long-term success and growth.
We’re in the midst of our first-ever membership campaign. Because you value local, independent accountability reporting, please support us today.
We need your help to make THE CITY all it can be.