Under the Board's rules, public matching funds may not be paid if there is reason to believe that violations of the Act and Board rules have been committed.
The Board did not approve a public matching funds payment to John Liu’s campaign for mayor during today's meeting, because there is reason to believe that violations of the Act and Board rules have been committed by his campaign.
The evidence suggests that the potential violations are serious and pervasive across the campaign’s fundraising.
Several key personnel involved in fundraising while potential violations have occurred have maintained positions of significant responsibility within the campaign throughout the 2013 election cycle. The campaign has placed in a major role at least one person who admitted to a plan to violate campaign finance law.
The Board's conclusion is based on evidence revealed during the prosecution of the campaign's treasurer by the U.S. Attorney's Office, and through the Board’s own thorough investigation. In the final analysis, the Board is answering a different question than the jury was asked to consider.
The Board has received evidence of substantial non-compliance with the Act and Board rules – in particular, the solicitation, receipt, and reporting of “straw donations.” Straw donations represent an attempt to obtain public matching funds inappropriately, they obscure the true source of the funds, and they call into question a campaign’s compliance with the Act's contribution limits and prohibitions.
The candidate is ultimately responsible for the campaign's compliance with the law. The choice to withhold payment does not require a finding that the candidate has personally engaged in misconduct, however. Under the Act and Board rules, the actions of a campaign’s treasurer or other agents are legally indistinguishable from the campaign.
In order for the Board to approve a public funds payment to any campaign, the campaign must maintain accurate records that are sufficient to demonstrate compliance with the Act and Board rules.
Absent a complete and accurate set of records that demonstrates compliance, the Board may deny payment of public matching funds. Under the circumstances noted above, the Board is unable to rely on the campaign’s recordkeeping.
The Campaign Finance Program is a public investment in our democratic process, and the Board takes its responsibility to protect the public’s investment very seriously. To qualify for matching funds, participating campaigns must both collect small contributions from their supporters and demonstrate compliance with the law.
The choice to withhold payment in this instance is based on the campaign's inability to demonstrate it is in compliance with the law.