de Blasio will consider options to override or negotiate COIB guidance of legal defense fund donation caps


Hours after the New York City Conflicts of Interest Board issued an Advisory Opinion, stating that donations made to a legal defense fund set up by a public servant would generally be capped at $50 each, Mayor Bill de Blasio (D-New York City), who had publicly promised to set up such a structure to pay for his white collar criminal defense legal fees, announced that he would consider proposing special legislation to override the Conflict of Interest Board's determination. In making its findings, the Conflicts of Interest Board announced that donations to a public servant's legal defense fund would be presumed to be offered to public servants "only because of his or her City position." Given that presumption of motivation, the Conflict of Interest Board invoked the very low threshold of the Valuable Gift Rule that is sourced to Section 2604(b)(5) of the City Charter. The Advisory Opinion made an exception to allow unlimited donations from family members or close friends of a public servant, if such donors had no business before the City of New York.

Although the Advisory Opinion did not specifically identify Mayor de Blasio or his anticipated legal defense fund, the Conflict of Interest Board's determination temporarily upended Mayor de Blasio's plans to set up a privately-funded legal defense fund to pay for legal fees he reportedly personally owes to the law firm of Kramer Levin Naftalis & Frankel LLP. Those legal fees, the sum of which has not been disclosed, were incurred by Mayor de Blasio as he faced a wide-ranging, compound Federal and Municipal investigation into his campaign finance activities. Mayor de Blasio chose to privately pay for his legal fees instead of allowing the City of New York to indemnify his legal costs or to arrange for his campaign committee to pick up the legal fees. According to several media reports, Municipal employees are expected to incur over $10 million in legal fees, which will be paid by taxpayers, as a result of the Federal and Municipal investigation of Mayor de Blasio's campaign finance activities. By paying his legal fees privately, Mayor de Blasio will be able to shield details about those legal fees, including their sum, from public disclosure. The parallel investigations came to an end on 16 March when Acting U.S. Attorney Joon Kim and District Attorney Cyrus Vance, Jr. (D-Manhattan) separately announced that their respective investigations were being closed without the filing of criminal charges.

Second recent check on Mayor de Blasio by an exiting regulatory official

The City Hall press office, in keeping with its custom, did not answer a request for an interview for this report. In a press conference on Wednesday, Mayor de Blasio said he would consider proposing legislation or entering into negotiations with the Conflicts of Interest Board to refine the Advisory Opinion, according to a report filed by the journalist Madina Toure for The New York Observer.

Before Mayor de Blasio announced plans to challenge the Conflicts of Interest Board's Advisory Opinion, advocates for Government reform and accountability had briefly celebrated the ethics determination that would generally impose very strict limits on donations to legal defense funds. Public officials, who have faced corruption or ethics investigations, have generally arranged for campaign committees or taxpayers to pay for their legal fees. Some reform advocates have been hoping that the anti-corruption work of former U.S. Attorneys Preet Bharara and Robert Capers would inspire officials at other Government bodies to exert greater independence from political pressures that seek to curtail a robust check on the corruptive influence of money in politics.

After the Conflicts of Interest Board issued its Advisory Opinion, Wayne Hawley, the Conflicts of Interest Board's general counsel and deputy executive director, announced his retirement from the Municipal ethics panel. Mr. Hawley's announced retirement from the Conflicts of Interest Board follows the resignation of Rose Gill Hearn, the former chair of the New York City Campaign Finance Board, the Municipal campaign finance regulatory authority. Ms. Gill Hearn's resignation, which she claimed was prompted by a desire to focus more of her attention on her private sector career, likewise followed bold action by the Government body over which she administered. Before her retirement in December 2016, Ms. Gill Hearn oversaw the assessment of fines on 14 campaign committees, including on the 2013 campaign committees of Mayor de Blasio and New York City Councilmember Julissa Ferreras-Copeland (D-Corona), for violations of Municipal campaign finance regulations. As seen with the ouster of former Acting U.S. Attorney General Sally Yates, who challenged the legality of President Donald Trump's first Muslim travel ban, before she was fired by President Trump, advocates for Government reform have questioned whether significant public officials can take a stand for reform from within Government without costing the officials their incumbency.

Reference Document

Recommended Reading