New York City Mayor Bill de Blasio is no stranger to
fundraising scandals, even if the allegations never fully stick. Just last
week, The City reported on a previously undisclosed investigation by the city
Department of Investigation into potential conflict of interest violations in
relation to de Blasio’s fundraising. Earlier this month, the mayor received
scrutiny for receiving donations from the lawyer at the heart of a controversial
real estate deal between the city and shady landlords.
Around the same time, de Blasio also made headlines for a
questionable fundraiser hosted by Suffolk Construction in Boston, a company
that is currently looking to expand its business in New York City and recently
hired de Blasio’s former public housing commissioner Shola Olatoye. De Blasio
did not publicize the fundraiser and did not disclose the host when asked by
reporters – but everything was still above board, he later argued, even if the
lack of transparency made it seem like de Blasio was “violating the spirit” of
his own promise not to accept campaign cash from donors with business before
the city, as WNYC’s Brian Lehrer said while interviewing the mayor.
Here are the other times de Blasio’s fundraising tactics
have gotten him into hot water:
Federal campaign finance investigation
In 2013, de Blasio set up a nonprofit called the Campaign
for One New York to support his agenda. The now-defunct organization came under
federal investigation for possible campaign finance violations in 2016. Federal
prosecutors from the Southern District of New York subpoenaed thousands of
emails and documents from the mayor, his aides, donors to both his 2013 mayoral
campaign and the Campaign for One New York to see if donors received favorable
treatment from the de Blasio administration. The investigation led to the
indictment of two de Blasio donors who became cooperating witnesses –
restaurateur Harendra Singh, who admitted to attempting to bribe the mayor
through straw donations made to his actual campaign account, and real estate
developer Jona Rechnitz, who pled guilty to conspiracy charges and later
testified about his close relationship to de Blasio and other benefits as a
result of his donations and fundraising. At the investigation’s conclusion in
2017, federal prosecutors did not press charges against de Blasio, but did say
that he acted on behalf of donors who sought favors.
Rivington House lobbying
De Blasio and his administration received extensive scrutiny
from both New York City Comptroller Scott Stringer and the city Department of
Investigation for how the city handled the sale of Rivington House, a former
nonprofit health care facility, which is now being developed for residential
purposes. A for-profit nursing home company, Allure Group, bought the property
in 2015 and paid the city $16 million to lift a deed restriction that required
the property to remain a nonprofit health care facility, with the expectation
that the company would instead build a for-profit nursing home. Instead, Allure
sold the property to Slate in 2016, which plans to convert the building to
residential use and build condos. The city admitted that it had been “misled”
by Allure. Prominent lobbyist and frequent de Blasio donor James Capalino
represented both the original owner and Slate. Capalino steered $40,000 to de
Blasio 2017 reelection campaign and cut a check for $10,000 to Campaign for One
New York after pressuring the city to change the deed.
State campaign finance investigation
The state also investigated the Campaign for One New York,
although it took a more narrow purview and focused specifically on de Blasio’s
fundraising efforts on behalf of state Senate Democrats in 2014, which was only
one part of the federal inquiry. State prosecutors, in conjunction with federal
prosecutors, sought to determine if de Blasio attempted to circumvent campaign
contribution limits by giving donations solicited by de Blasio to smaller
county committees, which have no contribution limits. Rechnitz testified that
both Ross Offinger, a former campaign fundraiser for de Blasio, and the mayor
personally asked him to donate over $100,000 to bolster those efforts. Like in
the federal investigation, Manhattan District Attorney Cyrus Vance Jr. did not
press charges against the mayor in 2017, but did say that while there was not
enough evidence to indict de Blasio, his actions “appeared contrary to the
intent and spirit of the laws that impose candidate contribution limits.”
JCOPE lobbying investigation
The state Joint Commission on Public Ethics also looked into
de Blasio’s Campaign for One New York for nearly three years, trying to
determine if donations made to the nonprofit were in fact illegal gifts to the
mayor himself. It has not yet drawn any conclusion as to whether the
organization violated state lobbying laws, although The City reported the probe
is still ongoing. JCOPE did reach a settlement with top lobbyist and de Blasio
ally James Capalino in 2018, who agreed to pay $40,000 without admitting any
wrongdoing. Capalino had personally donated $10,000 to the Campaign for One New
York, and solicited another $90,000 from several of his clients, then scheduled
a breakfast meeting with de Blasio and the clients who made donations. That
meeting was not listed on de Blasio’s disclosure of lobbying meetings. JCOPE
also reach a $10,000 settlement with New Yorkers for Clean, Livable, and Safe
Streets, a group that donated to the Campaign for One New York and lobbied de
Blasio to ban horse carriages in the city, for failing to file as a lobbyist.
City conflict of interest investigation
In a previously undisclosed report from the city Department
of Investigation obtained by The City, investigators found that de Blasio
violated conflict of interest rules by seeking donations for Campaign for One
New York from individuals or organizations seeking favors from his
administration after repeated warnings that he stop. Those included developers
Toll Brothers and Park Towers. Toll Brothers saw positive movement with a
development shortly before de Blasio asked for donations, and Park Towers received
millions in tax credits and tax breaks related to a Brooklyn development after
writing a $50,000 check to Campaign for One New York. This came at the
conclusion of a two-and-a-half year probe that ended in October. The report
also questioned de Blasio’s process for vetting donors, which the DOI found to
be lacking. It also offered the most insight into de Blasio’s fundraising
practices and his personal involvement in contacting donors.
Controversial real estate deal
New York City recently purchased 17 buildings from the
Podolsky brothers, a pair of landlords infamous for their many building code
and rent law violations, for $173 million. Many scrutinized the deal because
the final price was so much higher than the $50 million city for which
officials had originally appraised the property. An ensuing private appraisal,
kept secret by the city, put the value at $143 million, leaving questions about
both the increased value and how the city reached its final number. The lawyer
representing the Podolskys, Frank Carone, is a long-time ally of de Blasio who
emails show had influence in City Hall and donated the legal limit of $5,000 to
de Blasio’s Fairness PAC, which the mayor is using the explore a presidential
run, during the real estate negotiations. He also solicited donations from
others on behalf of de Blasio shortly before the deal closed as well.
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