Commentary

NYC Mayor Eric Adams faces thousands in fines for potential campaign finance violations

GOTHAMIST, Gwynne Hogan, March 15, 2023

New York City Mayor Eric Adams is facing tens of thousands of dollars in fines for three alleged violations of campaign finance law based on issues stemming from his 2021 Transition and Inauguration Entity — a fund that recently elected candidates use to cover expenses after they win an election and before they officially take office.

Members of the city’s Campaign Finance Board have accused Adams of accepting prohibited donations, failing to respond to requests for information and documentation, and failing to close the fund once Adams became mayor in 2022.

The charges were published in an advisory and while the board didn’t disclose the exact amount Adams might have to pay during their public meeting Wednesday morning, it could range between roughly $20,000 to $50,000, based on the fines outlined by the board guidelines.

At the public hearing Wednesday board members and Adams’ attorneys discussed five allegations of “prohibited donations” amounting to a total of $15,600. Among those donors were four who had business before the city and were thus barred from donating to the mayor-to-be: a real estate developer, an architect and the head of a private carting company.

Adams attorney Ardian Tagani said the campaign had refunded the donations of concern, though some took months to return due to a clerical error. He argued that given Adams’ transition and inauguration entity raised more $1.9 million in total, the donations in question were “not problematic” since they represented just a fraction of funds collected overall.

“Given the overwhelming rate of compliance, the TIE argues that the amount recommended in the penalty is entirely excessive and overly punitive,” Tagani said, arguing the board should reduce the proposed penalty.

The heftiest of the fines could come from Adams’ failure to respond to the board’s requests for documentation.

“We heard nothing. There was no response,” said Bethany Perskie, general counsel for the campaign finance board, said at the hearing. She described sending letters and warnings to the mayor’s fund on May 16, June 22, June 19, followed by a warning about fines he would face on Aug. 15, by which time the office still hadn’t received the requested documentation.

But after members of the board mulled the issue Wednesday, campaign finance chair Frederick Schaffer announced they’d voted to give Adams’ attorneys more time to provide underlying documents before doling out any fines.

“We really regret this [Transition and Inauguration Entity’s] late submission of information,” he said. “But this is a case of significance and of public interest and induces us to accept this late offer of information so that the record will be complete.”

John Kaehny, the head of the good government group Reinvent Albany, raised concerns about the delay.

“The whole point of this exercise is disclosing what you’re doing. That’s the best defense against bribery and pay-to-play,” Kaehny said. “Why are they getting this last second reprieve?”

Adams is far from the only elected official facing campaign finance fines. Last month the board voted to fine Public Advocate Jumaane Williams $7,524 for failing to document transactions, accepting contributions over the legal limit, and taking money from corporations among eight charges stemming from his 2019 campaign for public advocate. In January, the board fined Brooklyn Borough President Antonio Reynoso $6,922 for issues with his Transition Inauguration Entity.

When Adams opened his transition and inauguration entity, he quickly amassed $1.9 million from a who’s-who of power players in New York politics and business. Ronald Lauder of the Estée Lauder empire, billionaire Mets owner Steve Cohen, and hedge fund manager Daniel Loeb were among more than 200 people who all donated the maximum $5,100 to the mayor’s transition fund, records show.

While Adams canceled his inauguration gala amid a surge in COVID-19 cases and returned $866,000 in funds to donors, the entity still spent $1.7 million on consulting and attorney fees, payroll and other expenditures for the two-month period after the election and before Adams took office.

New York City’s Campaign Finance Board has strict rules about how much money political candidates can take in from individual donors and what that money can be spent on during campaigns. There are even more stringent rules about who can and cannot donate to transition and inauguration entities to avoid any appearance of impropriety for an incoming elected official. The entities aren’t allowed to take donations from political campaigns, corporations or LLCS or from anyone who has business before the city on its Doing Business database.

“Contributions from people associated with entities that do business with city government are regulated in order to reduce the potential for, and appearance of, ‘pay-to-play’ corruption,” Timothy Hunter, a spokesperson for the city’s Campaign Finance Board.

Funds raised during that window have to be spent on inauguration parties or transitional expenses and can’t be used to pay campaign bills.

Adams’ mayoral campaign has yet to be audited by the campaign finance board.

Many past mayors and mayoral hopefuls have found themselves in hot water with the board: from former Mayor Bill de Blasio who was fined at least $48,000 for improper spending during his 2013 campaign, to former Mayor Michael Bloomberg who the board found violated “the spirit” of the city’s laws when he paid $1.2 million to the Independence Party which subsequently donated to his campaign. Former MTA chairman Fernando Ferrer faced a penalty of $223,000 for his failed 2001 mayoral campaign.

Source: Gothamist