Candidates Who Take Public Funds Rarely Pay Back Taxpayers

City Councilman Erik Dilan is the only New York City candidate who has returned all of the extra public matching funds he received in the 2009 election cycle.

Dilan, a three-term representative from one of Brooklyn’s toughest neighborhoods, says he didn’t need the $20,794 sent to him by the Campaign Finance Board.
“The need for public dollars to be used or spent in our campaign was unnecessary,” Dilan said. 

Out of 140 candidates who accepted taxpayer dollars to boost their 2009 bid for office, Dilan was the only one to refund the entire balance to taxpayers.  Only 11 candidates returned any money at all.  Out of $27.3 million in public matching funds, candidates have paid back just over $51,000.

Despite the low refund rate, lots of candidates had surplus cash in their campaign accounts after election night.  A review of expenditure records shows both winners and losers chose to spend money on all sorts of goods and services - rather than refund taxpayers.

Council Member Inez Dickens spent $7,292 to pay fines associated with her campaign posters.  So far, she has paid no public matching funds back.

After Bill de Blasio won the public advocate election, he used surplus campaign funds to pay for nine parking tickets and a $1,083 trip to Puerto Rico.  So far, he has not paid back any of the $2.2 million dollars in matching funds he received in 2009.

John Liu, who won the race for comptroller, spent more than $20,000 on three volunteer and victory dinners.

According to Campaign Finance Board rules, candidates are only allowed to use public matching funds for one, small post-election volunteer party.  Liu’s campaign told NBC New York the parties were financed with private donations.

“The dinners were not paid for with public funds,” said Chung Seto, who served as Liu’s campaign chairperson.

Because CFB rules don’t require campaigns to keep two sets of books -- one for public funds and one for private donations -- it’s hard to say which expenditures might be disallowed. 

Dick Dadey, executive director of the non-profit good government watchdog Citizen’s Union, says post-election expenditures should be treated with more skepticism than bills paid before voters cast their ballots.

“If you have extra money, that extra money should only be spent on expenses that you incurred before the election,” Dadey said.

“You shouldn’t be spending money for travel expenses to a conference in Puerto Rico or to send out flowers to constituents on their birthdays or anniversaries or to throw yourself a fundraiser for another run at office.”

Bill Thompson did throw himself a fundraiser with leftover campaign cash.  Nearly a month after he lost the mayoral race to Michael Bloomberg, Thompson spent $5,219 to feed political donors at Francesco & Giovanni’s Pine restaurant in the Bronx.

Thompson has not paid back any of the more than $3 million in public funds his campaign received from taxpayers.  A campaign representative declined to comment because the CFB has not completed its audit of Thompson’s expenditures.

The CFB has tried to claw-back public matching funds in the past, but a recent court ruling has stymied the effort. 

In February, a three-judge appellate division panel found the city can only force a candidate to pay back taxpayers if there is money left in his or her campaign account.  The ruling was a decision in favor of former Manhattan Borough President C. Virginia Fields, who unsuccessfully ran for mayor in 2005.  The CFB alleged Fields improperly spent $61,000 on improper post-election expenses.

“What the decision basically says is that we cannot collect money back from a campaign unless that money is actually physically in a campaign’s bank account,” said Amy Loprest, executive director of the Campaign Finance Board. 

Inez Dickens, Bill de Blasio, Bill Thompson, and John Liu all declined to be interviewed on the subject of post-election campaign expenditures.

A spokesman for the CFB expected campaign audits for the 2009 election cycle should be complete within the next six months.  In the meantime, CFB staff members are lobbying the City Council to strengthen the law so improper expenditures can be clawed back.

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