For D.C. pols, a cautionary tale from N.Y.
By Colbert I. King,
Citizens concerned about what might be in store for the District in the months ahead should direct their attention to the federal criminal complaint filed on Feb. 28 by Manhattan U.S. Attorney Preet Bharara.
The complaint accused Jia “Jenny” Hou, campaign treasurer for New York City Comptroller John Liu, of “participating in a scheme that used ‘straw donors’ to funnel to the campaign large, illegal contributions that were well above the limit authorized by the New York City Campaign Finance Board.”
Hou, who was arrested Feb. 28, was also charged with obstructing the government’s investigation of suspected fraud in connection with the campaign’s fundraising efforts.
According to the complaint, Hou tried to cover up the fraud by instructing volunteers “not to accept consecutively numbered money orders,” because that might alert authorities to the fact that the money was coming from the same contributor.
Hou is alleged to have worked closely with campaign bundlers who collected large sums from multiple donors at events where straw donors were reimbursed and, the complaint said, failed to disclose their involvement in the campaign as required by law.
Liu told reporters that he was stunned to hear of Hou’s arrest and said, “I believe my campaign has acted properly at all times.” Through her lawyer, Hou also denied wrongdoing.
Hou is the second person tied to the comptroller’s campaign to face federal charges. Another fundraiser was indicted last month on two counts of fraud stemming from a plan to direct $16,000 to the campaign.
Bharara said in a joint news release with Janice K. Fedarcyk, assistant director in charge of the FBI’s New York office: “Campaign finance laws are not optional. They ensure that all candidates operate on a level playing field and that everyone plays by the rules. . . . Hou concealed the use of straw donors, subverted the city’s electoral system, and obstructed justice.”
Noting that Hou is accused of using straw donors to skirt limits on individual contributions, Fedarcyk said, “The intent of those rules is in part to limit the influence of wealthy contributors on political campaigns. In a very real sense, Hou is accused of undermining the democratic process.”
Now, back to the District.
For many months The Post, Washington City Paper, WAMU, DC Watch’s Dorothy Brizill and others have reported on D.C. campaign fundraising activities that resemble the schemes that prompted the federal investigation in New York.
We, too, have campaign finance laws. But the political playing field in the District is not level, and not everyone plays by the rules. Moneyed interests cavalierly work around D.C. regulations to the benefit of politicians who know laws are being skirted. Together, they make a mockery of the democratic process.
Unfortunately, they are assisted by lax enforcement.
D.C. law states: “No person shall make a contribution in the name of another person, and no person shall knowingly accept a contribution made by one person in the name of another person.” The penalty is $2,000 per violation.
This week I asked the D.C. Office of Campaign Finance if it had conducted any investigations into this kind of violation. Two days later, spokesman Wesley Williams said, via e-mail: “The past investigations conducted by the office did not present allegations involving contributions made through conduits.”
D.C. code also says: “No person may make contributions in any one election … [that] when totaled with all contributions made by that person in that election to candidates and political committees, exceed the total sum of $8,500.”
Well, OCF, what about this?
“D.C. Mayor Vincent C. Gray’s campaign accepted cash contributions above the city’s legal limit and in some cases recorded donations from people who say they didn’t contribute to his mayoral bid, according to a Washington Post review of District records and interviews.”
“One city political fundraiser, who requested to remain anonymous to maintain a relationship with [Jeffrey E.] Thompson, called him a ‘kingmaker,’ capable of delivering as much as $100,000 to a citywide candidate. Washington City Paper recently calculated that $730,000 in local political donations in the past decade could be traced to Thompson and his companies.” That’s from The Post’s Mike DeBonis.
Gray told The Post, “If there were mistakes that were made and they were willful, obviously people should be held accountable. . . You had to trust people to run what they were responsible for.”
I, on the other hand, would like to trust that the U.S. Attorney for the District of Columbia, like his counterpart in Manhattan, will start draining the political cesspool that is engulfing our city.
More on this debate from PostOpinions: The Post’s view: A D.C. ethics bill with teeth Colbert I. King: Ethics woes in the D.C. government Colbert I. King: More money and politics in D.C.