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Queens Chronicle

John Liu may not get matching funds in NYC mayoral race

$3.5M in taxpayer campaign money at stake, with 5 weeks left in primary

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Posted: Friday, August 2, 2013 5:31 pm | Updated: 12:48 pm, Mon Aug 5, 2013.

Staffers at the city Campaign Finance Board are reportedly recommending that Comptroller John Liu not receive matching funds in his race for mayor, a decision that would cost his campaign $3.5 million.

The CFB will determine which candidates in this year's city elections are entitled to matching funds at a public meeting on Monday morning. Taxpayers provide $6 in funding for every $1 in eligible contributions raised by candidates.

A board spokeswoman declined Friday to comment on reports that CFB staff are going to recommend against giving matching funds to Liu, who is seeking the Democratic nomination. If the board does say no, it would be due to questions of impropriety.

Liu's former treasurer, Jia Hou, and a contributor, Oliver Pan, were each convicted on May 2 of multiple charges related to a straw donor scheme, in which people make contributions above the legal limit by saying they came from other people. The more funding a campaign receives through contributors, the more it's entitled to in matching funds.

At the time of the convictions, U.S. Attorney for the Southern District of New York Preet Bharara said in a prepared statement, “As the jury found, Jia Hou and Oliver Pan stuck a knife into the heart of New York City’s campaign finance law by violating the prohibition against illegal campaign contributions, all to corruptly advantage the campaign of a candidate for city-wide office."

Liu, who was never charged with any wrongdoing, says his campaign has been dogged by a federal investigation for nearly four years. Meeting with the Queens Chronicle editorial board on Thursday, he defended Hou, saying she had "made one stupid mistake" and never should have been charged — though the jury saw otherwise. He said he has kept in touch with her and that her family continues to volunteer for his campaign.

Hou and Pan are set to sentenced on Sept. 20.

He also said that during the trial it was discovered that only 14 contributions totaling $11,000 turned out to be straw donations, a drop in the bucket considering that the campaign has received more than 6,000. The campaign did not know the contributions were illegal and returned them once it found out, he said.

The investigation "really has been a witch hunt for which there is no witch," Liu told the Chronicle, adding, in a phrase he has used before, "I am proud to be the most thoroughly investigated candidate in the history of New York City."

The Liu campaign issued a statement Friday touting its fundraising practices and saying it is entitled to $3,534,300 in matching funds under the law.

"We are disappointed with the reported recommendation issued by the CFB's staff, but we hope the board does the right thing — not only for this campaign, but for the thousands of New Yorkers who deserve to have their political contributions matched, as they expected," said Bill Lynch, the campaign manager for Friends of John Liu.

The campaign says it has received funds from 6,339 contributors, 6,259 of them individuals. Of those 4,799 are city residents whose contributions are eligible for matching funds, it said, adding that the average donation is $535. That means Liu has received a greater proportion of small donations than any of his rivals for mayor, according to his campaign.

Liu had $1,519,500 in his campaign account as of the last filing with the CFB on July 15. Among his rivals for the Democratic nomination, City Council Speaker Christine Quinn (D-Manhattan) had $6,021,446; former Rep. Anthony Weiner had $4,802,002; former Comptroller Bill Thompson had $2,350,723; Public Advocate Bill de Blasio had $2,245,368; and former Councilman Sal Albanese had $41,927.

Asked about the deficit between his account balance and those of his major rivals during the meeting with the Chronicle, Liu said the matching funds would make the difference, and that he is entitled to more than any of the others.

Primary Day is Sept. 10.

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