Fund-Raising by City Comptroller Is Investigated

NYT: By and

Oct 2011: City Comptroller John Liu visits Chanina Sperlin in his Sukkah

Federal authorities are investigating the fund-raising operation of the New York City comptroller, John C. Liu, seeking records from his campaign and from a city contractor whose employees were listed as having contributed thousands of dollars to his campaign, people with knowledge of the matter said.

Grand jury subpoenas issued last week in the inquiry followed a report in The New York Times last month detailing a number of fund-raising improprieties, including questions about the sources of Mr. Liu’s donations, whether people listed as contributors had actually given their own money and whether some donors listed even existed.

It is unclear whether the current inquiry is related to an investigation begun by Manhattan federal prosecutors and the Federal Bureau of Investigation in late 2009. That investigation, which had not previously been made public, focused on whether foreign money flowed into Mr. Liu’s 2009 campaign for comptroller, two people with knowledge of the inquiry said.

Five people discussed the inquiry into Mr. Liu’s fund-raising with The Times; three of them spoke on condition of anonymity because the proceedings of a grand jury are bound by secrecy.

Mr. Liu, a Democrat and a rising star in the city’s political world who has been viewed as a mayoral contender in part because of his fund-raising prowess, said in a brief interview on Monday that his campaign would fully cooperate with the investigation.

He added, “I am confident that my fund-raising efforts were proper at all times.”

The subpoenas issued to Mr. Liu’s campaign and the company, Dynasty Stainless Steel, say that the records are being sought to determine whether there have been violations of federal wire fraud and conspiracy laws.

Dynasty, in Maspeth, Queens, was ordered to produce personnel records for nine people who, according to city campaign finance records, each gave $800 to Mr. Liu in January. All nine – one is Dynasty’s president – were listed on campaign records as company employees.

But at least four have said they did not work for the company, and two of those said they did not give money to the campaign, The Times found.

The same pattern was found at other companies that gave to Mr. Liu. For example, Mr. Liu’s campaign records show that 11 employees of Farewell International, a seafood company in Brooklyn, each gave him $800 earlier this year.

But on Monday, an official at the company, who identified himself as Peter Zhang, said in a telephone interview that the company only had three employees and that he was puzzled by the information contained in Mr. Liu’s campaign report.

“They put other peoples’ names under our company,” Mr. Zhang said. “We don’t know why.”

To protect against so-called straw donors, candidates in New York City are required to vouch for the identity of each individual contributor and ensure that they are personally making the donations listed on the campaign finance records. But in the article by The Times, several people listed as donors to Mr. Liu said an employer or relative had given on their behalf. In addition, all the donor cards accompanying the Dynasty contributions bore the same handwriting, suggesting they were filled out by one person.

The Times also found that Mr. Liu had failed to comply with a city requirement that he disclose the names of so-called bundlers – well-connected individuals who collect contributions for a candidate from friends, relatives, business associates and others. After initially pledging to disclose the identities of those bundlers, Mr. Liu has declined to do so.

Mr. Liu has reached out to a prominent criminal defense lawyer, Paul L. Shechtman, a former senior federal and state prosecutor who served as Gov. George E. Pataki’s criminal justice coordinator; Mr. Liu is expected to hire him in the coming days.

As criticism of his fund-raising practices mounted, Mr. Liu asked a former state attorney general, Robert Abrams, to conduct a review of his campaign practices. But on Monday evening, Mr. Liu said he was considering suspending that review.

“I’m sorting it out with Bob,” he said. “I would not want the review Bob is conducting to interfere with this investigation.”

Mr. Liu said he was unaware that an inquiry had begun in 2009.

That investigation was conducted, as the current inquiry is, by public corruption units in the United States attorney’s office in Manhattan and the F.B.I.‘s New York office. Representatives of the United States attorney, Preet Bharara, and for the F.B.I. declined to comment.

A lawyer for Dynasty, Steve Zissou, said, “We are going to comply with the subpoena.”

Mr. Zissou said he had done his own investigation of the contributions attributed to Dynasty employees, which “revealed no wrongdoing whatsoever on the part of the comptroller or his campaign organization.”

The company’s president, Ming Kun Lee, has repeatedly declined requests for comment in recent weeks and on Monday, Mr. Zissou said, Mr. Lee had no comment.

Mr. Liu, the first Asian-American elected to citywide office in New York, is a hero to many in the city’s heavily Chinese neighborhoods and businesses. His picture adorns the walls of many Chinese stores and restaurants and his election to comptroller two years ago set off excitement that he would someday rise to become mayor.

Also See: Why Are The Politicians Coming To Crown Heights…


5 Responses to “Fund-Raising by City Comptroller Is Investigated”

  1. A Fund-Raiser for New York City Comptroller Under Arrest Says:

    News Source: Reuters

    A fund-raiser who has contributed to New York City Comptroller John Liu was charged with wire fraud and conspiracy on Wednesday for evading campaign donation rules, dealing a blow to the comptroller’s mayoral hopes.

    The charges against the fund raiser, Xing Wu Pan, did not mention Liu, but said Pan illegally raised $16,000 for a candidate in a 2013 citywide race, according to a statement from the U.S. Attorney for the Southern District of New York and the New York Office of the Federal Bureau of Investigation.

    Liu is expected to stand for mayor in the 2013 elections.

    A spokesman for the U.S. Attorney for the Southern District of New York, Preet Bharara, declined to identify the candidate who received the illegal contribution.

    “Pan is accused of engaging in a fraudulent scheme that involved the use of ‘straw donors’ to funnel a large, illegal campaign contribution to the campaign of a candidate … for citywide elective office in 2013,” Bharara and the assistant director-in-charge of the Office of the Federal Bureau of Investigation, Janice Fedarcyk, said in a statement.

    The fund-raiser, also known as Oliver Pan, was a campaign donor for the comptroller in 2006, according to the New York State Board of Elections Financial Disclosure Report.

    Pan could not be immediately reached.

    In a statement, Liu said he was saddened, adding: “If it is true, then the conduct was clearly wrong and my campaign was not told the truth.”

    Liu, who served in the City Council before he was elected comptroller, is one of the most prominent contenders to succeed Mayor Michael Bloomberg, whose third and final term ends in 2013. The list of Democratic rivals also includes Liu’s predecessor, William Thompson, City Council Speaker Christine Quinn and Public Advocate Bill de Blasio.

    Pan’s $16,000 contribution exceeded the amount individuals are allowed to contribute, which is one basis for the fraud charge, the federal officials said. The scheme also illegally boosted the amount of matching funds for which Liu qualified, they said.

  2. NYC Comptroller's Lawyer Quits Amid Donor Probe Says:

    News Source: Reuters

    A prominent lawyer tapped by New York City Comptroller John Liu to review questions about Liu’s fund-raising abruptly quit the probe on Thursday, a potential setback to the comptroller’s ambitions to succeed Mayor Michael Bloomberg.

    Liu, a Democrat, was widely considered a top contender to replace Mayor Michael Bloomberg in the 2013 election until Wednesday, when federal prosecutors charged one of his campaign donors with wire fraud and conspiracy for evading campaign finance rules.

    The prosecutors said the fund-raiser used “straw donors” to funnel cash to a candidate they did not identify, but Liu confirmed the donor was one of his supporters.

    Robert Abrams, a former New York state attorney general, quit on Thursday, in a letter to lawyers for the comptroller and his campaign committee.

    Liu had recently hired Abrams to conduct an in-depth investigation of his campaign’s fund-raising efforts after articles in The New York Times revealed possible wrongdoing.

    The reason he quit, Abrams said, was that Liu’s lawyer had asked him to suspend his work until the federal probe ended.

    “Your request that I suspend my work on this matter is untenable, as it compromises my independence, and my ability to do a thorough and effective job,” Abrams wrote, adding the federal government had not made that request.

    Abrams was not immediately available for comment.

    Paul Schechtman, a lawyer who represents the city comptroller, told Reuters: “I remain surprised that Mr. Abrams does not appreciate that it’s in no one’s interest, including his own, to conduct two simultaneous investigations.”


    Liu, who was born in Taiwan, tapped the Chinese-American community in New York City for campaign donations.

    Abrams’ desire to continue his probe, which included interviews of 30 people in English, Mandarin and Cantonese, puzzled legal experts. The former attorney general was being paid more than $900 an hour, a source said.

    Abrams’ investigation would not have had the benefit of any additional information the federal prosecutors uncovered, such as review of an undercover agent’s taped conversations with Liu’s fund-raiser.

    Martin Connor, the lawyer for Friends of John Liu, the campaign committee, said: “It really doesn’t make sense to have two investigations to be going on at once, and it’s terribly expensive, and I think the federal government has more than enough resources to get all the information that’s needed and they have subpoena power, and Mr. Abrams doesn’t.”

  3. Smelly Fish Says:

    any politician which has come within 200 feet of the CHJCC/Sperlin family should be investigated.

  4. John Liu’s transgressions Says:

    John Liu was never suited for public office. But last week, his continued service as city comptroller became wholly untenable.

    He needs to resign. Immediately.

    That sad fact became indisputable following the arrest of a top Liu fund-raiser on conspiracy and wire-fraud charges.

    Truth is, Liu’s unfitness for high office was obvious from early on.

    His first two years as comptroller revealed Liu to be an unhinged egoist — and an unambiguous puppet of labor, serving his union benefactors at taxpayers’ expense and subverting his role as chief financial officer in the process.

    The feds have now deepened their 2-year-old investigation of his crooked campaign books. But whatever they find, Liu would do the city — and himself — a great favor in stepping down. Here’s why:

    Illegal Donations: This summer, Liu trumpeted the $1.5 million in small sums he received for his then-all-but-announced run for mayor in 2013.

    But the feds are exhuming a scheme in which networks of phantom “straw donors” appear to have illegally “washed” campaign cash from big contributors. Each such donation could earn Liu up to $1,050 in public “matching funds” — constituting a direct theft from the public purse.

    Indeed, such shenanigans by Liu & Co. seem apparent: On June 8, Liu reaped thousands of dollars in donations — including 17 suspicious gifts from apparent straw donors working at a Queens plumbing business.

    The feds are also eyeing possible illegal foreign donations in 2009, when he took $1.35 million in public funds.

    A Bizarre Character: While running for comptroller, Liu claimed he “had to work in a sweatshop to make ends meet” as a 7-year-old — a lie his own parents exposed.

    Once elected, he demanded that his staff rise when he entered the room and address him as “Mr. Comptroller.”

    His egotism undid him when he tried to strong-arm The New York Times by refusing to divulge his donation numbers unless the paper “focused heavily on him.”

    Comrades: Liu’s good buddy (and policy director) John Choe was an anti-American loon and unabashed booster of North Korea’s murderous Stalinist regime.

    Choe, who honeymooned in Pyongyang, was fired after The Post reported allegations that he also runs a pro-communist front group controlled by Pyongyang.

    Reform-Killer: One of Liu’s chief roles is as a trustee of the city’s pension funds. But — to please the municipal unions — he subverted his duty to taxpayers, hiding the effects of skyrocketing pension costs.

    Liu filed two reports arguing against public-pension reform, even though the pension burden on city taxpayers has exploded to $8.5 billion a year, up from just $1.1 billion a decade ago.

    Conflicts of Interest: In June, Liu announced a purely discretionary audit of Central Park’s Boathouse restaurant — just after attending a rally where he smeared the Boathouse’s owner for attacking the “dignity” of its employees.

    The point, frankly, was to pressure the heretofore non-unionized restaurant to accept a union, which it then did.

    Contract Abuse: Liu blocked a $150 million police pension-fund investment contract from the Blackstone Group after an executive there criticized unions in public, as The Post reported.

    His real goal was to kill debate about pension costs — and control what private citizens can say in public.

    He also steered two no-bid contracts for $144,000 to pro-labor groups.

    Sins of Wages: A Manhattan judge had to order a recalculation of the “absurd” pay scale that Liu — using his authority to set “prevailing-wage rates” — created for movers hired by the city.

    Liu’s hanky-panky would have doubled the city’s costs — inflating rates to 80 percent above actual marketplace wages.

    Transparency: Liu rammed through a rule change to hide the names of tens of thousands of city pensioners from public scrutiny and block access for watchdogs.

    That little doozy ended a decades-long custom of city sunlight, infuriating good-government groups.

    Now, this page has been sounding the alarms from the very first. As we wrote the week before his 2009 election: “Heaven help New York” if John Liu wins.

    Alas, he won. The city lost.

    Now, evidence of criminal manipulations is growing.

    His mayoral aspirations are surely over.

    But so, too, should be his days watching New York’s $65 billion budget and $100 billion pension funds.

    As one wag noted, “The person who’s supposed to protect the city from fraud can’t be under investigation for fraud.”

    And yet, he seems not to get it.

    “I want to run for the highest office in New York,” he said defiantly last week.

    It’s pure delusion.

    John Liu needs to pack it in. Now.

    And never unpack.

    Read more:

  5. Facing Scrutiny, Liu Will Disclose Names of Fund-Raisers Says:

    Published: December 2, 2011

    The New York City comptroller, John C. Liu, whose campaign finances are under federal investigation, plans to reveal the names of his biggest fund-raisers sometime next week, a spokesman said Friday.

    Mr. Liu had resisted calls to immediately release the names of those people, known as bundlers, after a report in The New York Times raised questions in October about the source and legitimacy of some of his campaign contributions.

    But three weeks ago, federal prosecutors arrested Xing Wu Pan, a fund-raiser for Mr. Liu, saying Mr. Pan had sought to help an F.B.I. agent posing as a businessman to circumvent campaign contribution limits.

    Mr. Liu called the accusations of improprieties “quite embarrassing” and promised a full accounting.

    And on Friday, his campaign promised to release the names of bundlers.

    “It won’t be today, but we’re hoping for next week,” George Arzt, a spokesman for the comptroller’s campaign, said.

    Mr. Liu, 44, has not been accused of wrongdoing. But whatever information he provides could help investigators assess the legitimacy of his donations.

    The complaint and subpoenas issued by federal prosecutors suggest that investigators are trying to find out whether donors who are determined to give sums larger than allowed under the city’s campaign finance rules are funneling money to the campaign using fictitious donors.

    The issue has become a distraction for Mr. Liu, who had hoped to spend this period laying the groundwork for a campaign for mayor in 2013.

    Mayor Michael R. Bloomberg, asked on Friday whether Mr. Liu’s troubles were affecting a recent proposal between him and the comptroller to streamline the city’s pension boards, said: “I’m sure that is going to make it more difficult to do that. So hopefully he can take care of his problems and address the issues and get back to working on this.”

    Mr. Liu still has strong support in the city’s booming Asian-American neighborhoods, and is continuing his political activity. He is scheduled to appear at a fund-raiser in Chinatown on Dec. 19.

    The person helping to coordinate that event, according to the Chinese-language newspaper The World Journal, is Mei-Hua Ru, his chief scheduler in the comptroller’s office, who has emerged as a central figure in the investigation.

    Matt Flegenheimer contributed reporting.

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