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Feds launch probe into Liu financing

City Comptroller John Liu says he will cooperate with federal investigations into his campaign fund-raising.
TimesLedger Newspapers

Federal investigators are looking into City Comptroller John Liu’s current campaign war chest following a series of published reports that questioned the legality of some of his donations.

The former Flushing city councilman is being investigated about the $1.5 million he has in his coffers for a yet-undeclared but widely expected run for mayor in 2013, according to The New York Times.

“We are going to completely cooperate with the investigation, and I am fully confident that my campaign fund-raising efforts have been proper at all times,” Liu told the TimesLedger Newspapers in a brief phone call Tuesday.

The Times said both the U.S. attorney’s office in Manhattan and the FBI were probing Liu’s campaign finances. Both agencies declined to comment on an ongoing investigation.

The probe into the comptroller’s election funds became public a little more than a month after the Times first reported inconsistencies in an Oct. 11 front page story.

Reporters had approached some of the donors listed as giving to Liu’s campaign, but found that about two dozen either had no knowledge of giving money to the mayoral hopeful or said that someone else gave money for them. Some of the donors could not be located at all by Times reporters.

In addition, The Times said some of the donation cards coming from a company were filled out in the same handwriting, indicating that they were filled out by a single person in the organization instead of by each individual donor.

The law does not require an individual to fill out his or her own card, according to Eric Friedman of the city Campaign Finance Board, but more generally requires the candidate not to misrepresent where the money came from.

After the initial report, Liu said he would look into his own finances.

On Oct. 28, Liu announced he would hire former State Attorney General Robert Abrams to conduct an audit into his finances.

He then told The Times that in accordance with finance law he would release the name of bundlers, which are people who collect smaller monetary donations from a group of donors and package them together in a larger donation to the campaign.

For example, a bundler might take small cash donations from a room full of senior citizens and then submit them to the campaign as a lump sum.

But the comptroller backpedaled earlier this month and said he would not release the names of the bundlers until the start of next year.

Friedman said that as far as the board is concerned, there would be no reason why a candidate would delay disclosing the names.

Liu also called off the audit by Abrams, telling news organizations that he does not want it to interfere with the federal probe.

The Times also reported that the feds had previously investigated Liu’s 2009 campaign amid allegations that foreign money was pouring into the comptroller race, but charges were never filed and Liu said he had no knowledge of the investigation.

Reach reporter Joe Anuta by e-mail at januta@cnglocal.com or by phone at 718-260-4566.

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