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Liu Hired Consulting Firm Ahead of Treasurer’s Arrest

Monday, July 30, 2012

Comptroller John Liu (Jessie Wright-Mendoza for WNYC)

Two weeks before his campaign treasurer was arrested for fraud, city comptroller John Liu’s campaign hired a consulting firm that specializes in finding electronic data, according to campaign finance filings released earlier this month

Liu’s campaign hired Texas-based Scarab Consulting, shortly before treasurer Jenny Hou was arrested and charged with fraud. She pled not guilty.

A member of the Liu campaign said the hiring of Scarab had nothing to do with the arrest of Hou. “You’d be wrong that it’s connected to her, in anyway,” a source said.

The Liu campaign declined to comment on whether Scarab’s contract was related to the investigation into alleged fundraising improprieties.

A member of the campaign said Scarab was hired because Liu’s campaign was “in a different situation than other campaigns.” 

The firm, according to its website, “provides results-driven litigation consulting, information governance, and e-discovery services…to proactively prepare for litigation involving electronically stored information.”

Its website says Scarab clients are usually law firms and corporations.  City records show Scarab has a multi-million dollar contract with the City of New York’s law department.

But a search of the city’s campaign finance database doesn’t reveal any other campaign using Scarab as a consultant as far back as 1989.

The first payment to Scarab, on February 14, was for $2,725.42. The following payment, made on March 19, was for $5,127.47. In all, the Liu campaign has paid Scarab more than $11,500, with the last payment on May 30 for $244.97.

A representative in Scarab’s New York City office wouldn’t comment.

Liu has said he believes his former treasurer.

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