Analysis: The Case of The Phantom Contributors

The mayoral election of 2013 is more than two years away – but the city comptroller, John Liu, is working very hard to raise money for that campaign.

And now The New York Times, in a comprehensive article, raises some questions, saying:  “There is much about Mr. Liu’s campaign money that does not add up.”

The Times says nearly 100 homes and workplaces of donors listed on Liu’s campaign finance reports may not all exist. The reporters, Raymond Hernandez and David Chen, claim to have uncovered “two dozen irregularities.” Among these are: people on the list who say they never gave  or that the boss of their company gave for them.  And some contributors, the Times says, could not be found at all.

Liu says he’s launching an internal investigation of his campaign fund raising to see whether these charges are true. Meanwhile, the Campaign Finance Board is supposed to do an independent investigation of the charges.

In 2009, Michael Bloomberg spent more than 108 million dollars of his own money:  to change the law so he could run for a third term – and to win the election. Liu is raising millions to succeed Bloomberg. 

In the light of recent history, it seems inevitable that the candidates who try to win City Hall will be raising money at a feverish pace.  The multi-billionaire mayor set the standard.  He lived up to the Vince Lombardi motto: winning isn’t everything. It’s the only thing.

Now, his would-be successors will try to follow in his footsteps, but with a big difference. They can’t find their money in their own pockets. They need dollars from donors, big and small.

The U.S. Supreme Court has ruled that free speech protects corporations in their right to spend big sums of money on elections. That decision seems to have opened the floodgates to heavier campaign spending and, lamentably, New York will continue to spend big in the post-Bloomberg era. That means candidates who don’t have big war chests will have a tough time getting their ideas listened to and their campaigns off the ground.

Susan Lerner of Common Cause told me that “it’s appropriate that Mr. Liu is conducting an internal investigation and that the Campaign Finance Board is investigating too.”

She says “it’s a real challenge to raise money without violating campaign restrictions. There’s always a possibility that your supporters can go overboard in trying to win. And there is reluctance by some supporters of candidates to fill out paper work. There need to be strict controls at the campaign level.”

There can be cultural obstacles to getting people to follow rules.  One Chinese-American told me: “there’s a reluctance by some immigrants to sign papers or open themselves up to scrutiny by outsiders. That’s why it invites political fund raisers to sign papers for them.”

And that’s why,  in Liu’s campaign, it’s alleged, one person appeared to fill out cards for multiple donors. Liu told reporters he was baffled by the findings.

Yet, whether or not Liu failed to be vigilant, the situation points up the continued difficulty of keeping the playing field level. Raising big money and practicing democracy are not always compatible.