Sometimes they make it too easy.
The New York Times reported that New York City Comptroller John C. Liu, who is considered a leading contender to replace New York mayor Michael Bloomberg in 2012, is being investigated for possible campaign finance fraud after having built what the Times called “a formidable fund-raising machine” that netted him $1 million in six months, mostly through $800 donations that were matched by the city’s “clean elections” program.
New York has a system of public matching funds for elections, a system that places a number of restrictions on participating candidates. These include serious restrictions on the amount of money a single donor can give to a campaign. But in return, participating politicians can receive a lucrative six-to-one match, out of the public coffers, for many of their campaign contributions. This creates an enormous incentive for some supporters to fraudulently report donors who did not donate as much as claimed, did not donate at all, or sometimes don’t even exist.
The Times’s investigation uncovered evidence that a number of fraudulent donations that were reportedly given by individuals were actually made by companies that the individuals worked for-or, in some cases, did not. “Some two dozen irregularities were uncovered, including instances in which people listed as having given to Mr. Liu say they never gave, say a boss or other Liu supporter gave for them, or could not be found altogether,” the Times reported. In some cases, multiple donor cards appeared to have been filled out by a single person, making a mockery of one of the campaign finance system’s central controls.
Mr. Liu was featured in our report on corruption in New York City’s campaign finance system, having been investigated previously for possible violations of the Campaign Finance Board’s expenditure rules, as well as a failure to return unneeded funds during his 2009 campaign for city comptroller. For his part, Mr. Liu has agreed to launch an internal investigation into his campaign to find out exactly where his “formidable fund-raising machine” was obtaining its formidable funds.
The problem isn’t necessarily Mr. Liu, who may not have had personal knowledge of these irregularities. The problem is with New York City’s public matching funds program. Leaving aside any constitutional infirmities, why would New Yorkers want a system that provides incentives for people to create fraudulent small-money donors to reap a six-to-one funding advantage? And for those who care about real, useful disclosure: wouldn’t you rather have a system that allows a politician’s supporters to provide their support directly and transparently?
Over the course of his political career, Mr. Liu has received over $1.2 million in public matching funds for his various campaigns. In light of these recent allegations, and with the 2012 election season heating up, we can only anticipate the many ways creative and unscrupulous individuals will scheme to obtain their campaign funding from New York’s tax payers.
