John Liu’s Campaign Fraud Goes Deeper Still, Says Report

August 6, 2013 Updated: August 5, 2013

NEW YORK—A just released investigation into the 2013 mayoral campaign of comptroller John Liu reveals a new list of potential straw donors, missing intermediaries, and likely fraud. Yet, even with the new findings, researchers noted there is likely much more that can still be uncovered.

The Campaign Finance Board (CFB) commissioned the third-party report from Thacher Associates (TA). When the CFB announced on Aug. 5 that Liu will not receive public matching funds, the TA report was provided to Epoch Times as evidence, alongside the CFB’s own investigation of Liu’s campaign records, and evidence from the trial of Liu’s aides.

“Thacher Associates’ research and interviews found evidence of potential campaign finance law violations, including reimbursed contributions and falsified documents,” the report states. “In addition, Thacher Associates found evidence that raised concerns regarding the reporting of campaign activity by the Liu campaign.”

“The interviews and research conducted by TA at the behest of the CFB also suggest that further investigation could reveal additional potential violations of campaign finance law,” it states.

Two of Liu’s aides, his former treasurer Jia “Jenny” Hou, and a fundraiser, Xing Wu “Oliver” Pan, were found guilty on May 2 for attempting to defraud New York City by using straw donors to illegally obtain public matching funds.

Under the public matching funds program, an additional $6 of taxpayer money is given to a candidate for every $1 donated, up to $175 in donations per individual. Only New York City residents are eligible, however.

The CFB had reviewed close to 6,500 of Liu’s contributions, and flagged close to 550 of them. The trial, which revealed straw donors and fraud, was based on 50 contributions.

TA investigated the flagged donations that were not included in the trial, and looked into 85 of them in detail. They were able to interview 22 contributors, 19 family members of contributors, and also spoke with neighbors and current residents at the addresses.

Even with the small pool of flagged contributions, however, TA found cases of businesses reimbursing donations made by employees to Liu’s campaign, bad addresses, intermediaries who were not named, among other issues.

At Great Wall Supermarket, “A former cashier told Thacher Associates that her $800 contribution had been reimbursed by her boss,” the report states. “This contributor did not know the name John Liu and said that she had only contributed because her boss had asked her to and had told her that he would reimburse her.”

It notes the above case was just 1 of 15 contributions made by Great Wall Supermarket employees—each of whom donated $800, which was the limit set by Liu’s campaign.

A former bookkeeper at McCormick & O’Brien told TA “she had been directed by one of the firm’s partners to tell employees that they were required to contribute to the Liu campaign, but they would be reimbursed,” according to the report. Three employees there donated $800 each, yet allegedly cancelled the donations after a paralegal mentioned the investigation into Liu’s campaign.

At Yang Shing Trading Co. a “key employee” of theirs was reported by a contributor as an intermediary. The contributor also told TA he was reimbursed for his $800 contribution. The same intermediary was reported for contributions by 13 Yang Shing employees and 5 other individuals, each of whom made an $800 contribution.

The report adds that while they specifically focused on contributions not brought up during the trial of Hou and Pan, “unanticipated connections were found between some contributors we interviewed or attempted to interview and even and/or individuals that were part of the trial of Hou and Pan.”

Despite their findings, TA states in the report that there is likely more to be found. Aside from the flagged donations they were not able to look into, investigations into the 85 donors “revealed red flags that suggest that additional research and interviews could identify additional potential violations of campaign finance law.”

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