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The Empire

New fundraising arrest raises more doubts about Liu's future

The US District Attorney’s office in Manhattan today announced the arrest of another campaign donor who allegedly funneled illegal campaign funds into a 2013 mayoral contender John Liu's coffers. WNYC has confirmed through a Federal law enforcement source that the official in question is Comptroller Liu, who has been plagued by questions over irregular and potentially illegal fundraising activities.

Xing Wu “Oliver” Pan is accused of contributing $16,000--far beyond the legal contribution limit--to Liu’s 2013 campaign through 20 “straw donors.” The donations would have been matched six-to-one by the city’s campaign finance matching system had they not been caught.

“As alleged, Oliver Pan engaged in a deliberate and flagrant attempt to subvert the campaign finance laws and manipulate the City’s matching fund system,” Manhattan U.S. Attorney Preet Bharara said in a statement.

“I am saddened by what I read today. If it is true then the conduct was clearly wrong and my campaign was not told the truth,” Liu said in response to the allegations, via a spokesperson.

With another allegation of financial impropriety coming forth, political insiders are beginning to question not only Liu’s 2013 mayoral aspirations, but his ability to function as the city’s fiscal steward.

“It doesn’t look good for a city comptroller to now have two sets of investigations going on over his campaign fundraising,” said Dick Dadey, the executive director of the good government group Citizens Union. “For a citywide elected official, and an aspiring mayoral candidate, it raises questions that he can’t afford to have asked.”

He continued, “These are questions being asked, they’re not charges being leveled. In the interest of fair play, he should be given time to completely and accurately make sure his records are in order.”

Scott Levenson, a political consultant with the Advance Group, said there are two questions hanging over Liu.

“One, there are the issues of what the comptroller knew and when he knew it,” Levenson said. “And then there’s the issue of—whether fair or unfair—whether a comptroller should be held to a higher standard on financial issues.”

He noted that this was the case among the electorate and in the media, pointing to the outrage over former State Comptroller Alan Hevesi’s involvement in a pension corruption scheme that led to his conviction of felony misconduct. Today’s indictment raises questions about Liu’s role as comptroller for the city, and whether he will be able to perform his duties.

“If it gets worse—if there’s any suggestion that John Liu knew or should have known—that becomes a problem,” Levenson said.

The idea that the issue was no longer about his mayoral prospects, but increasingly about the job he currently holds, were reflected in other conversations.

“That’s not an option,” said one Democratic insider when asked about Liu as a mayoral candidate. “The question is whether or not he’s running for reelection in 2013, and, if there’s more stories like what happened today, whether or not he’s an incumbent in 2013.”

Among Liu supporters, specifically donors, the reaction to the news varied from cautious optimism to ardent faith in the Comptroller’s ultimate innocence. Manhattan Attorney Ravi Batra, whose law firm and family have donated to John Liu, said he was aware of the issues surrounding Liu and hoped the Comptroller would ultimately be vindicated.

“All I can hope is that my friend John has nothing to do with any of this stuff,” he said.

Another supporter, Timothy Chuang, the co-chair of the Downtown Flushing Business Improvement District in Queens, said he was upset to hear about today’s indictment. But he said he did not believe the Comptroller had any knowledge about alleged illegal activities.

“I think John Liu has done a wonderful job. He’s so honest,” Chuang said. “He doesn’t know—100 percent. If he [knew], he would not accept [the donations].”

Others aren’t as sure as Chuang.

One source, familiar with Queens Democratic politics, said there had been rumors of fundraising improprieties that dated back to Liu’s first campaign. A number of others pointed to Chung Seto, the former executive director of the Democratic Party in New York State who now works for the Comptroller. Seto was connected to fundraising problems in the past, as well as campaign scandals, and multiple observers pointed to her as a central figure to watch as the Comptroller’s fundraising problems move forward.

"Before one asks whether John Liu knew or not, and when he knew, one has to ask that same set of questions about the person who's perceived to be where the buck stops in his operation,” said one source. The person the individual was referencing was Chung Seto.

But the biggest fallout over the campaign may be felt in the Asian American community that has such high hopes for Liu, the first Asian-American citywide officeholder in New York.

“The community, viewing this situation, has got to be thinking, how does this impact people’s impression of us as a community,” noted one political consultant who regularly works in Flushing. “Then there’s how they feel about the Comptroller specifically: cautious optimism that perhaps it wasn’t him directly [involved], air of resignation that this is not going to end well.”