Shortly before Mayor Bill de Blasio scrapped his White House bid, the Federal Election Commission sent a letter to his presidential campaign committee.
It requested information about a $52,852 debt to his state political action committee and noting that contributions over $5,000 are barred.
The fed’s letter to the mayor’s campaign underscored that he ended his presidential run as he began it four months ago: dogged by persistent questions and investigations over his unorthodox fundraising methods.
In the run-up to the campaign and then during it, the mayor and his campaign utilized a pair of state and federal political action committees — founded to help progressive Democrats in New York and around the nation — to help fuel his presidential ambitions.
That, as THE CITY has reported, has created a tangled web of money and donors — many of them with pending business before New York City government. Use of the PACs shielded some fundraising and spending from federal oversight, and permitted some fundraising above per-donor limits set by the Federal Election Commission.
The PACs’ activities prompted at least two complaints to the FEC, contending 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.
Aides to the mayor indicated on Friday that the federal and state political action committees, called NY Fairness PAC and Fairness PAC, will continue raising money to support political campaigns of progressive Democrats.
Here’s a recap of de Blasio’s political fundraising and spending habits, which he and his aides have vigorously defended.
Double Duty for a State PAC
A state political action committee launched by the mayor in 2018 to help elect New York Democrats doubled as an exploratory committee for his presidential run.
The unusual approach allowed NY Fairness PAC to collect donations that went unreported in de Blasio’s presidential federal campaign filings — and didn’t count toward the $2,800 limit on each donor’s contributions to a candidate in a presidential primary.
Federal Election Commission officials and campaign finance experts couldn’t recall an instance where a presidential candidate had used a state-registered PAC as an exploratory committee.
The PAC’s spending also sidestepped federal boundaries. NY Fairness PAC spent $68,000 in pre-campaign polling that wasn’t reported to the FEC — a filing the de Blasio 2020 campaign promised to amend 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 those expenses would appear in a future filing.
Among one of the expenses paid for by the state PAC was the three-minute presidential announcement video that launched de Blasio’s campaign and is featured on his campaign website. The mayor’s campaign insisted that the campaign launch video was not a campaign expense — but rather an exploratory expense because the video was going to be produced “regardless of whether or not the mayor ran.”
The expenditures made by the state PAC to pay for expenses during the mayor’s exploratory period and his subsequent presidential campaign would constitute as an excessive in-kind contribution, which de Blasio 2020 accepted, according to the Campaign Legal Center, a Washington-based campaign-finance watchdog group.
On Friday afternoon, the FEC requested additional information about the nearly $53,000 debt de Blasio 2020 owed the NY Fairness PAC. In the letter, the commission notes that a committee “may not make a contribution(s) to a candidate for federal office in excess of $5,000 per election.”
Failure to “adequately respond” about the “nature of this translation” by Oct. 24 could result in an audit or enforcement action, the FEC wrote.
The de Blasio campaign declined to comment on the FEC letter.
Donors Doing City Business
Those donors whose contributions to NY Fairness PAC allowed them to zoom past the $2,800 cap included a developer seeking approval to construct a new 20-story hotel. The developer obtained long-sought building permits shortly after hosting a fundraiser for the mayor’s federal PAC.
The de Blasio campaign declined to say how much Fairness PAC collected from the fundraiser. But federal campaign finance records show that the PAC brought in about $34,750 from 19 individuals around the same time as the party.
Among other contributors to the mayor’s various committees are the owners of the Chelsea Hotel, who need City Hall’s approval to turn the historic landmark into a luxury inn.
Owners Ira Drukier and Richard Born held a March fundraiser for the de Blasio days after they sought the administration’s go-ahead to renovate the Chelsea Hotel. The fundraiser netted $90,000 to de Blasio’s Fairness PAC.
Drukier and Born, along with their wives, family members and employees of their hotel empire raised more than $50,000 for the mayor’s longshot presidential bid and his two PACs.
De Blasio and his campaign said they refused contributions from individuals in the city Doing Business Database, a listing of executives with current or pending contracts or certain other matters before City Hall. None of the hotel developers appear on that list.
Mayor Reaps ‘Fairness Benefits’
Along with the NY Fairness PAC, de Blasio launched a federal committee last year to help progressive Democrats running for office around the nation. The pair of committees wound up most aiding him, records show.
De Blasio’s federal Fairness PAC and the NY Fairness PAC have allocated just 16% of their combined spending in the last year toward Demcratic candidates or committees.
As of August, $200,000 of the PACs’ $1.2 million in combined spending went to other candidates or committees, THE CITY’s analysis of state and federal campaign finance records found. Much of the remaining $1 million was spent after the November elections and before de Blasio’s May 16 declaration that he would run for president.
That includes at least $200,000 used for polling, travel and staff in the run-up to his big announcement. An additional $123,000 tab for polling and research, which was initially picked up by de Blasio’s federal PAC, was only recently reimbursed by his 2020 presidential campaign committee.
A big chunk of the rest of the PAC money went to legal, fundraising and consulting firms that also worked on his pre-announcement exploratory committee, records show. A number of those firms also worked on his presidential campaign.
Campaign finance experts called the intermingling between de Blasio’s two PACs and his presidential campaign an unusual setup that allowed the mayor to spend more on his longshot bid and rake in more contributions from donors.
Roughly two dozen individuals who gave the maximum contribution to de Blasio’s 2020 campaign also contributed $2,500 apiece to the Fairness PAC and NY Fairness PAC, the committees that have mostly aided the mayor.
Mayoral Funds Still Under Review
Scrutiny of de Blasio’s political fundraising isn’t new. It also followed de Blasio’s Campaign for One New York nonprofit beginning in 2014, which became the subject of a Justice Department. The investigation ended without charges, though then-interim U.S. Attorney Joon Kim, however, noted that de Blasio and his aides had taken steps to help certain donors.
Also probed was his fundraising to support state Senate Democrats, which Manhattan District Attorney Cy Vance said violated the spirit, if not the letter, of campaign finance law.
On Thursday, as the mayor pledged to combat the influence of money in politics, a state ethics commission announced three new settlements with developers who made donations in 2015 to the mayor’s now-defunct nonprofit as they sought business with his administration.
The four-year-old probe of the Campaign for One New York is ongoing, state officials said.