New York City Mayor Eric Adams is scheduled to appear in court on Wednesday on federal criminal charges, but it’s a civil authority that will determine whether his re-election campaign stands a chance.
The city’s Campaign Finance Board could leave Adams on the hook for millions of dollars — or it could choose to grant him millions of dollars more.
Candidates seeking taxpayer-funded matching dollars for their 2025 campaigns must submit fundraising statements to the board by Oct. 11. It’s the last filing deadline before the board decides who gets the cycle’s first round of public matching funds in December. If Adams qualifies, his campaign could collect almost $4 million in taxpayer dollars.
The mayor, who is charged with a five-count federal indictment that accuses him of accepting illegal campaign contributions in exchange for tony travel perks and official government acts, has pleaded not guilty. The charges he faces come with a maximum sentence of 45 years in prison. Separately, they could deliver seismic blows to his 2025 campaign.
If the Campaign Finance Board determines that Adams’ campaign broke the rules of the matching funds program, it could dole out a range of penalties, beginning with fines and rising to the ultimate sanction — disqualification from future participation in the program and repayment of all public funds. Because of the city’s generous $8-to-$1 match, the campaign would be required to give back more than it raised in the first place.
In what’s called a “breach of certification,” the board could order the campaign to repay all of the more than $10 million in taxpayer matching funds it received for the 2021 election. This would also allow the board to block Adams from receiving matching funds for his 2025 re-election effort, putting his campaign on life support as he faces a growing field of challengers.
This scenario, the most severe penalty the board can impose, would be “unprecedented,” according to Rachael Harding, a campaign finance attorney and chair of the New York City Bar Association’s election law committee.
So is the first federal indictment of a sitting New York City mayor in modern history.
This potential punishment is spelled out in writing for every candidate who wants to receive matching funds. In order to qualify, candidates must read and sign a 15-page certification document that stipulates the rules of the program and possible penalties for violating them.
The Adams campaign submitted its certification on Oct. 29, 2020, according to emails received by Gothamist in a records request.
The board’s rules detail at least six ways a campaign could breach its certification. They include submitting documentation that the campaign knows or should know is fraudulent; misrepresenting information to the board; and misusing campaign funds.
In the indictment against Adams, U.S. Attorney Damian Williams alleges Adams “falsely certified compliance with applicable campaign finance regulations despite Adams’s repeated acceptance of straw donations, relying on the concealed nature of these illegal contributions to falsely portray his campaigns as law-abiding.”
In a statement from Campaign Finance Board Chair Frederick Schaffer last Thursday, the board acknowledged the seriousness of the charges Adams faces and its own obligation to “review all relevant information, including but not limited to the indictment, in order to uphold our city’s campaign finance rules and protect taxpayer dollars.”
Out of the thousands of candidates who have participated in the matching funds program, the board has found approximately 26 in breach of certification in almost a quarter of a century, according to data from the agency.
Of those candidates, 19 were required to pay a range of fines for breaking the program’s rules. Only seven were required to pay fines and return all public matching funds.
Up to now, Sheldon Leffler, a former city councilmember and Queens borough presidential candidate in 2001, held the highest record for the amount of public matching funds a candidate has been ordered to repay — $296,084 plus $91,850 in penalties. Leffler narrowly escaped a prison sentence in a state case related to his campaign finance fraud.
Because of recent changes to the city’s campaign finance program that increased the match rate, Adams is set to blow past that record.
Adams’ 2025 campaign has already raised $4.3 million, more than $500,000 of which the campaign has submitted as matching claims. If the Campaign Finance Board were to determine those claims are valid, that could turn into another nearly $4 million in taxpayer-funded matching dollars for his campaign, maxing out the public funds available for the primary election.
An attorney for Adams’ campaign has not yet responded to a request for comment.
“There is a possibility they will require him to refund [matching funds],” said Harding, the campaign finance attorney. She cited the board’s draft audit of Adams’ 2021 campaign, which included an unusually high number of unexplained donation refunds and was first reported by Gothamist.
The document also identified $2.3 million in undocumented expenses, including missing payroll records, undisclosed subcontractors and even what appeared to be expenses related to an auto accident and repair. Altogether, the board flagged 22 separate categories of reporting discrepancies, including anonymous contributions, unreported in-kind contributions and prohibited corporate contributions.
Harding said that if the board finds the Adams campaign knew — or should have known — it was taking prohibited contributions, it could be forced to return those donations and any matching funds associated with them. If the board determines the campaign breached its certification, the campaign could have to refund all $10 million in public funds.
That determination is not expected before Dec. 16, the first public funds payment date.
The maximum penalty for most campaign violations — which the campaign would have to pay on top of any refunds — is a $10,000 fine. But those assessments can increase if the campaign violated the spending limit or failed to respond to the draft audit of its campaign.
The Adams campaign has not responded to the draft audit it received from the Campaign Finance Board in June. But the board granted the campaign an extension to respond, after the campaign said it was too busy responding to inquiries from the federal investigation. The new deadline is Nov. 29.
In a letter sent on Thursday — the same day the indictment against Adams was unsealed — Councilmember Lincoln Restler urged the board to force the campaign to repay any illegal donations and refund matching funds associated with them. He also said the board should withhold any future public matching funds from the Adams campaign.
“If we allow someone who’s cheated the system to continue to get millions of dollars from that same system, the future of the CFB is at stake,” Restler told Gothamist. He said people will be watching “how they handle this case and how they bring real accountability to a flawed [Adams] campaign that defrauded New Yorkers.”
Restler, who chairs the Council’s committee on government operations and state and federal legislation, stopped short of calling for the board to give the campaign the most severe penalty. But he cited the campaign’s repeated failure to respond to the board’s requests for information — and how it allegedly participated in straw-donor schemes to take money from foreign nationals and corporations — as examples of how the campaign undermined confidence in the city’s campaign finance system.
“This campaign, Mayor Adams, should not receive another penny in matching funds,” Restler said.
