In Campaign Fundraising Probe, NYC Mayor Gets Scolded Instead of Charged

New York City Mayor Bill de Blasio got a double dose of good news Thursday as federal and local prosecutors in Manhattan announced they were ending -- without filing charges -- grand jury investigations into his campaign fundraising, lifting a dark cloud from his re-election campaign.
by | March 17, 2017 AT 12:20 PM

By John Riley and Matthew Chayes 

New York City Mayor Bill de Blasio got a double dose of good news Thursday as federal and local prosecutors in Manhattan announced they were ending -- without filing charges -- grand jury investigations into his campaign fundraising, lifting a dark cloud from his re-election campaign.

The outcomes were seen as likely after the mayor met with prosecutors over the past few months and voluntarily answered questions. De Blasio greeted the news by declaring in an upbeat radio appearance, "We did everything within the law, everything in clear ethical standards."

But the end of the twin probes was far from a complete exoneration.

Manhattan District Attorney Cyrus Vance, whose office investigated the funneling of donations to upstate State Senate races to skirt contribution limits, said the mayor and aides couldn't be prosecuted because they acted on "advice of counsel," but still engaged in an "end run" around state laws.

"This conclusion is not an endorsement of the conduct at issue," Vance said in a letter to the state Board of Elections, which referred the case. "Indeed, the transactions appear contrary to the intent and spirit of the laws that impose candidate contribution limits."

Acting U.S. Attorney Joon Kim, who closed a probe of whether de Blasio traded favors for contributions from donors that included Long Island restaurateur Harendra Singh, said prosecutors found "several circumstances" where the mayor "made or directed inquiries to relevant City agencies" on behalf of donors seeking "official favors."

But he said recent legal changes -- a reference to a 2016 Supreme Court decision narrowing federal corruption laws -- and the "difficulty in proving criminal intent in corruption schemes where there is no evidence of personal profit" made prosecuting inappropriate.

"After careful deliberation . . . we do not intend to bring federal criminal charges against the Mayor," said Kim, who replaced U.S. Attorney Preet Bharara -- fired Saturday by President Donald Trump.

The two probes began nearly a year ago. Vance's investigation was triggered by the Board of Elections' referral questioning whether de Blasio or his campaign team broke the law when funneling donations to Democrats in a failed bid to flip control of the State Senate from the GOP -- and enhance de Blasio's influence -- in 2014.

The mayor's team coordinated six-figure donations totaling nearly $1 million to county Democratic committees, which could pass through larger donations to candidates than they could receive directly from donors. Vance said the scheme had been approved by campaign lawyer Laurence Laufer, but urged the legislature clarify the law.

The federal probe explored a range of reported donor favors, from City Hall's stance on carriage horses to its role in a controversial real estate deal and a trash bag contract, to allegations that the mayor's office applied pressure in a dispute over Singh's lease of the city-owned Water's Edge restaurant property in Long Island City.

Singh of Laurel Hollow is currently facing federal corruption charges on Long Island. He was linked to more than $50,000 in donations to de Blasio, whose office, sources say, contacted the city's leasing agency twice during a fight over arrears. He cooperated in the de Blasio investigation.

After months under siege from subpoenas and negative press, de Blasio aides at City Hall were noticeably more buoyant following Thursday's announcements, shaking hands and smiling in the Rotunda shortly after the news broke.

De Blasio, who had refused to answer specific questions about his fundraising since news of the interlocking probes first broke, disputed both prosecutors' critical descriptions of his behavior in a brief session with reporters after discussing the effects of Trump's budget.

"I believe they have an assessment," he said of Vance's criticisms. "I don't share that assessment. . . . We comported in a legal, appropriate, ethical manner."

When a reporter read de Blasio Kim's statement about contacting agencies on behalf of donors, the mayor responded: "I disagree with your characterization." But de Blasio said he would not rule out passing donors' "concerns" on to city agencies in the future.

He also responded for the first time to questions about intervening with the city's leasing agency on behalf of Singh.

"No one interfered in any way," said de Blasio, who told reporters his comments Thursday would be the final time he discussed the investigations.

Paul Massey, a Republican real estate executive who is so far de Blasio's leading announced opponent in the mayoral race, said the decision by prosecutors did not eliminate the "stench of corruption." Massey also complained about the legal costs of defending the de Blasio administration.

"New York taxpayers have already been forced to pay $11.6 million to defend the Administration on criminal charges, while critical programs that help children, seniors, veterans and our most vulnerable are facing sharp cuts," Massey said in a statement.

The mayor's Democratic ally, City Council Speaker Melissa Mark-Viverito, said the criticisms from prosecutors didn't matter.

"He's vindicated," she said. "There have been no charges issued and the case has been dropped, so, you know, we move forward."

And de Blasio press secretary Eric Phillips, in a statement, said: "We have been confident . . . the actions of the Mayor and our administration have always been within the law. The United States Attorney and the Manhattan District Attorney have now put to rest any suggestion otherwise."

The mayor, in his morning interview on radio station WNYC, said he had been "upfront" all along and cooperated with investigators throughout the course of the year.

"My focus now is to get back to business," de Blasio said.

(c)2017 Newsday