At the last Meeting of the NY Public Campaign Finance Board, Commissioner Peter Kosinski asked what the Board was doing to stop fraudulent matching fund claims.  He referenced the latest story about indicted straw donors in the City program. 

CAMPAIGN FINANCE FRAUDSTERS GET CAUGHT

In every election cycle campaigns and contributors are caught engaging in straw donor schemes to obtain public matching funds.  And every election cycle the investigations and prosecutions of the people involved in these schemes make the news.  And yet every time, somebody, somewhere comes up with a plan to beat the system and get more public money. The problem is it’s not only wrong, it’s not only a campaign finance violation, it’s a felony.  It’s defrauding the government.

In case you missed it, the latest indictment Commissioner Kosinski referenced involves donors to Mayor Adams’ 2021 mayoral campaign (Mayor Adams is not implicated in the scheme).  This criminal conspiracy worked like they usually work.  They collected checks from people with the promise that they would be reimbursed by a deep-pocketed supporter of the candidate.  Then, they would submit the contribution from the fake donor for matching funds and make $2,000 courtesy of City taxpayers. But Kosinski could have referenced any number of similar indictments over the years.  My google search of “straw donors” and “campaign finance board” yielded 1,820 results. 

AVOID FUDRAISING FRAUD PITFALLS

The lesson here is that people try this all the time, and they fail all the time.  And the consequences are ruinous for the people involved.  The answer to Commissioner Kosinski’s question about catching fraud was that the State Public Finance Board was conferring with other jurisdictions about their fraud detection methods and implementing their own.  They did not want to speak about it in an open public session so as not to divulge the methods.  But they have software, and their auditors are trained to identify patterns of contributions that could potentially be fraudulent. And they have follow up methods to prove (or disprove) it. 

Someone close to the candidate should review contributions for patterns that raise a red flag.  For example, if the campaign suddenly receives numerous $250 contributions from unknown people in a short time frame, ask some questions. 

If the fraudulent activity happens outside of the purview of the campaign’s activities and personnel, no one in the campaign will be held criminally responsible.  But it can have severe financial implications for the campaign, such as a loss of all or some public funds.  And it’s hardly a feather in the candidate’s cap when stories like this hit the papers, as they inevitably do.  So, it’s always better that you take some fairly simple, straightforward precautions before matching fund claims are submitted.