NEW YORK—Democratic mayoral candidate John Liu is heading into the final 35 days of campaigning financially hamstrung. On Monday, the city’s Campaign Finance Board (CFB) denied Liu just over $3.5 million in matching funds claims—five weeks shy of the Sept. 10 primary.
The matching funds program awards candidates $6 of taxpayers money for every $1 donated, up to $175 donated.
CFB records show Liu’s coffers to have just over $1.5 million without the matching funds. By comparison, leading Democratic candidate Christine Quinn has over $6 million, before she receives matching funding.
The final month is a time when candidates purchase crucial television advertisements, which can run up to several hundred thousand dollars for a 30-second spot.
The funds were denied because of the campaign’s “inability to demonstrate it is in compliance of the law,” said Campaign Finance Board Chair Joseph Parkes at a board hearing on the issue on Aug. 5.
“The evidence suggests that the potential violations are serious and pervasive across the campaign’s fundraising,” Parkes said.
“The candidate is ultimately responsible for the campaign’s compliance with the law,” Parkes said in a statement released after the meeting that involved deciding the matter of Liu’s qualifying for funds.
The CFB also said in its statement its decision was based not only on evidence revealed during the prosecution of Liu’s former campaign treasurer by the U.S. Attorney’s Office, but also through the board’s own “thorough investigation.”
In early May, Liu’s campaign treasurer, Jia “Jenny” Hou, and a fundraiser, Xing Wu “Oliver” Pan were found guilty of attempting to defraud New York City by using straw donors to illegally obtain public matching funds for the 2013 mayoral campaign.
During the trial, Sharon Lee, who was Liu’s press secretary during his run for city comptroller, admitted to offering to reimburse donors, which is illegal. She was not charged.
Yi-Lang (Alex) Lu, who was the special assistant to the President of W&L Group Construction Inc., Wuang Meng (Thomas) Hua, admitted in court that he recruited straw donors for Liu’s campaign on behalf of W&L. He raised $15,200 for Liu, and made the campaign eligible for an additional $19,950 in public matching funds.
In a Sept. 8, 2011, email shown to the court, Hou told a businessman that the Liu campaign would be publishing ads for his company in all the major Chinese newspapers.
During the trial, witnesses from Chinese businesses confirmed they received print ads as a “thank you” and to reimburse their donations.
The scheme to reimburse businesses with print ads fits with a discussion between Pan and an undercover FBI agent, which was captured on July 27, 2011, by a hidden video camera.
Following the indictment of his former campaign staff, support for Liu plummeted. In a July 29 Quinnipiac poll, support for Liu was only six percent.
With additional reporting by Joshua Philipp