THE CITY OF NEW YORK DEPARTMENT OF To: File Date: October 22. 2018 From: Carolyn Tomsu Re: .3 16-03782 CLOSING MEMORANDUM The following is a summary only of the information pertaining to this investigation and does not contain each and every fact learned during the course of the investigation. ORIGIN AND OF ALLEGATION: On A )ril 13. 2016. the New York City De )artment ot' lnvestigatirm received. concerning Mayor Bill dc Blasio and the Campaign for One New York (CONY). a not-t?or-prolit organization tbrmerly associated with the _indicated that may have received donations from various entities and individuals with business before the City. some of which were given ?at or around the time" the donor was seeking a particular contract or approval. ?also noted that appeared to have made payments to consulting tirms that "work for Mayor de Blasio in other capacities and are paid by his election campaign l?und." focused primarily on two areas 1 The \?layor?s l?undraising ell?orts on behalt?ot?CONY: whether Mayor de Blasio or any employee ot?the Of?ce of the Mayor solicited contributions ?from any individual who had. or whose organization had. a matter pending or about to be pending before any executive branch ot?the City." in violation (?harter 2604(1))(2). COIB Advisory Opinion 2003- 4. and (?018 Advisory Opinion 2008-6: and 1 D01 Commissioner Mark Peters was recused front the investigation ol?tltis matter. Page 1 of 15 INVESTIGATION investigation included. among other steps: (1) conducting downs of witness interviews. including of: donors; attoincv-s and lobbxists who participated 1n tundraising for consultants who 11 cic compensated by ONY. either diieetl loiiner membe1sol Bogud ol \l'dHH Bill de Rlasio; 4.. (3) issuing subpoenas to and ie\iewing 1ecoids tiom CONY and maioi consultants to CONY including (SKDK). Cjieenbetg Quinlan Rosnei Resea1eh( Message and Media (AKPD). BerlinRosen. and Hilltop Public Solutions (Ililltop): and (3) pertorming research to identify donors who had or were likely to have a matter pending or about to be pending before one or more executive branch of?ces or agencies ofthe City. RESULTS INVESTIGATION: registered as a not-tor-protit corporation in New York State on December 12. 2013. The organization began receiving donations in .lanuar} 2014. and raised a total ofapproximately $4 million during its existence. was disbanded around .Vlareh 2010. Though it was originally established to suppoit \?la'vor de Blasio?s l'nivcrsal Pic-Kindergarten (LTPK) campaign. it later supported a broad array of Mayor dc Blasio?s policy objectives. paying for numerous 4 Specifically. at at \lcssagc and \?1ed1az?ol?BerlinRoscn: at Hilltop Public Solutions: ?at llilltop l?ublic Solutions: consultants who advised City Hall on political strategy. communications. and messaging related to a wide variety ofissues facing the Mayor. A. Operations 1. Legislative and Political Objectives According to CONY fundraising materials. CONY began with a single focus: to develop a grassroots campaign to build support for Mayor de Blasio?s plan for free. full?day UPK in New York City. During the PK campaign. operated and received donations under the name After the success of the UPK campaign in March 2014. CONY's mission became a more generalized effort to support Mayor de Blasio's overall agenda. 'l?he next major campaign CON supported was the ?'l?he Progressive Agenda to Combat Income Equality" (TPA). In 2015. CONY provided financial support to Mayor de Blasio?s affordable housing agenda. though work on the housing agenda slowed by the summer of 2015. In addition to these larger campaigns. COXY supported a wide variety of Mayor de Blasio's policy objecth'es. (TONY paid several consultants for strategy and communications advice on topics and issues that he encountered as Mayor. including education issues. homelessness. and the preservation of Long Island College Hospital. 2. Roles of? and Mayor de Blasio of BerlinRosen described - of Hilltop Public Solutions as the of (TONY. and indicated that -was involved in making all of significant decisions. -told DOI that-selected the consultants retained by negotiated most consulting agreements on behalf of and was responsible for approving expenditures. -statcd that .selected CONY's consultants because they had existing relationships with the Mayor. serVed as sole em lovee from January 201-1 until approximately April 2016. official title was i and _that-had no other role or responsibilities beyond raising funds for the organization. CONY also paid several consultants who essentially functioned as part-time CONY employees. Mayor dc Blasio does not appear to have participated in the day-to-day management of CONY. but he in?uenced the organization?s strategy and benefitted from relationships with several consultants who advised him on a range of matters. .Vlayor dc Blasio was also involved in raising funds on behalf. and-told that they did not know or could not remember whether Mayor de Blasio was directly involved in creating (TONY. Mayor de Blasio did not recall who initially had the idea to create CONY. and stated that he had agreed to creation only if (?018 a roved it. stated that selected the consultants to be paid by ONY. but did not specifically discuss them with the Mayor. Mayor de Blasio confirmed that he had no direct role Page 3 of 15 in choosing employees or consultants. but it was assumed that would be controlled by the same "group of professionals" with whom he had worked for years. they assumed that further communicated with the Mayor as appropriate. Mayor dc Blasio told [)Ol that he did not need to approve specific expenditures. He explained that he receiyed periodic updates on and was generally satisfied that it was moying in the right direction. l?or the most part. through its consultants worked on and addressed issues as they arose in l\'layor dc Blasio's zulministration. expressed that it wits-understanding that-role as 11(0le consultant was intertwined with the \?layor?s goyerninU ofthe ('ity. Thus. .work for included any request-reeciycd from (?in llall. -attended weekly meetings with the Mayor where they ss?l political issues in the City. and otherwise had ongoing. consistent communication with?and other consultants. -told D01 that. by the summer of 3015. many ?onsultants began to question and considered shuttering operations. recalled that Mayor dc Blasio initially opposed ("Ole?s closure. but later agreed to its dissolution.h B. Issue Fundraising I. Background In two adyisory opinions from 2003 and 2008. (?018 articulated rules for elected officials who are fundraising on behalf of a not-fbr-profit organization that support the officials mission. In brief. COIB stated that elected officials may use (?ity time and resources to participate in such fundraising. provided that: the solicitations contain an express statement that a decision whether or not to giye will not result in official fayor or disfayor. and (2) the official does not solicit any person or firm with a matter pending or about to be pending before the official where it is within his legal authority or duties to make. affect. or direct the outcome ofthe matter. Sec COIB Advisory Opinion No. 2003-4; (-018 Advisory Opinion No. 2008-6. On February various news outlets reported that (.?ausc had submitted letters to goyermnent agencies requesting an inyestigation into COVY's dissolution was first reported on \?larch l7. 20H). l?agc 4 of 15 ?The Mayoi stated that he was generally aw me that (OIB rules goV erned his ?fund1aising aetiVities. but he was not speci?cally aware ofthe restriction against soliciting individuals with a matter pending or about to be pending before an executiye branch agency. nor was he specifically aware of the requirement to inform potential donors that their decision to give or not giV'e would not result in official faV?or or disfaV'or. 2. The Establishment of a Vetting Process for Potential (TONY Donors At some point. established a system through which the organization screened potential donors for. among other things. business with the City. DOI uncoV ered no evidence that such a system was implemented until April 4. 201-1.? when a memorandum entitled ?Protocol for [insuring Compliance with Conflicts of Interest Laws" was both stated that there was no issued.? fonnal V'etting system until they wrote the April 4 memorandum. The April 4 memo outlines steps to comply with the prohibition against fundraising from indiViduals with matters "pending or about to be pending" before the (?ity It is silent as to the requirement that the 1\=1ayor must inform potential donors that their decision to or not giV'e will not affect their business with the City. ?l?he memo adVises that the May or ?may solicit funds" from an indiV'iLlual ho has (?in business already has the City permit. grant or contract)." but he may not solicit funds from any indiyidual or entity that has "matters pending or about to be pending before any city agency." lt further states that the Mayor may "encourage excitement and support for with indiV'iLluals who haV'e pending matters." lold D()l that "support" might include lobbying or placing a phone call to another elected official like the goV'ernor The memo established liVe Vetting steps to be taken' ?piioi to am 1equests loi o1al solicitations -stated that .liscussed the memo with the Mayor. who was generally informed of the V'etting process described therein. but could not recall if he was giV'en a copy ofthe memo. ?statcd that they discussed the memo By the date ofthis memo. had already raised approximately SI .37 million. The 111cmoranduin VV as issued from ?Counsel to Mayor Bill dc Blasio" and addressed to "l Staff and ('hiefofStaffto May or Bill Lle Blasio.? Page 5 of 5 3. How the Vetting System \Vorked Witnesses generally con?rmed that the process worked as described in the April 4 memo.?' However. how the system was overseen remained unclear. as did whether the vetting research was conducted thoroughly and consistently: - along with?? and? appear to have conducted the bulk ofthe work associated with vetting. stated that they ?rst identi?ed potential donors by reviewing previous donors. as well as other campaign donation records. Mayor de Blasio or (?in Hall staffers also appear to have occasionally recommended potential donors. [1 appears that and possibly- conducted some measure ofinitial research on potential donors. stated that. searched for pub]icly-available information that would re?ect adversely on the donor. -stated that -assistcd .with this wow denied any direct involvement in this vetting research. Instead. that regularly stated that-did submitted lists of potential donors to Hilltop elieved that Hilltop searched the Doing not know what. if any. vetting steps llillto took. but Business Database. '3 stated each potential donor with one ofthree categories: those the Mayor could not contact: those from whom the Mayor could ask for ?nancial support. but not a specific dollar amount; and those from whom the Mayor could ask for a speci?c monetary donation. -dcnied hax ing any role in CON Y's vetting process.? stated that .submitted lists of potential donors to-and and that informed .whieh potential donors Mayor de Blasio could contact directly and which he could not. - stated that-received lists of potential donors from on a weekly basis. and that they performed additional research on certain )otential donors. however. stated that -receivcd these lists directly from and did not recall regularly performing any vetting research. There does not appear to have been any particular individual who exercised supervision over the vetting process. Although the Mayor indicated that-and "owned" the told DOI that had no signi?cant involvement after drafting the April 4 memo. 'tatcd tha was responsible for ensurin compliance with the vetting system. procedures established therein. lso stated that ?hecked with-to ensure that ided one quali?cation.ltated that. at sortie point after the April 4 was issued. Mayor de Blasio stopped soliciting inonctar} donations for limiting his requests only to "support" for the organi/alion. ll 1- l'he Doing Business Database is maintained by the Ma} or?s Of?ce of Contract Services (MOCS) for the purpose of campaign ?nance compliance. According to information from a MUCS representative. it does not appear that an organi/ation's appearance or absence in the database necessarily con?rms that it does or does not have a speci?c "matter tending or about to be pending? with the City. istated that-played only a limited role with CORY starting in August ZOIS. reviewing donors in conjunction with the organization?s semi-annual public release ofits donor list. Page 6 of IS potential donors were being vetted. even though -denied any significant role in the vetting process. did not know who was responsible for overseeing the vetting process. 4. De Blasio?s Solicitation of Potential CONY Donors - and-all told DOI that Mayor dc Blasio called the vetted potential donors at regularly scheduled ?call times." According to- between June 2015 and the fall of 2015. Mayor de Blasio called approximately six to ten potential donors per week-recalled that call times were not held every week. and were not held ifthe Mayor's schedule was too busy. At "call times." Mayor de Blasio walked around the block as he called potential donors on his cell phone. Before each call. de Blasio was instructed whether he could solicit the potential donor for a speci?c monetary donation or for support. -statcd that Mayor de Blasio reported back with the results ofthe calls. and-was responsible for following 7 with individuals interested in donating to CONY. Mayor de Blasio con?rmed these details. In follow-up calls. requested specific donation amounts from those potential donors from whom Mayor de Blasio requested more general support. The Mayor explained that. generally when asking for support. he described the cause for which he was fundraising. explained that he had an effort underway to achieve these goals. and expressed that he hoped for the individual?s support. He told interested individuals that someone would follow up with them. When the potential donor was familiar witl he stated that would be the one following up. Mayor dc Blasio stated that he did not recall telling any potential donors that their decision to give or not give would not impact their current or future City business. lso told that .was not instructed to deliver any such disclaimer to potential donors. -told they did not believe Mayor de Blasio needed to personally deliver this disclaimer when soliciting potential donors. interviewed four executives of real estate development ?rms in New York City who were contacted by Mayor de Blasio concerning CONY. In three ofthese cases. the ?rm likely had some sort of business or potential business pending before an executive branch of?ce or agency at the time ofthe solicitation. a. donated to CONY on March 2015. In an interview with stated that had ongoing interactions around March 2015. with several City agencies?the New York City School Construction Authority (SCA). New York City Department of Housing Preservation and Development (HPD). and the New York City Housing Development Corporation (HDC)?eoneeming a development in Page 7 of 15 ?agreed to develop affordable housing at the site with 1n- and the dc Blasio administration had reached 2015. an agreement eonceming affordable also approved on the condition that March 2015. ?and were negotiating the agreement and a draft agreement had been sent to? -cxplaincd that with whom-had a previous business relationship. invited-to meet .V'Iavor de Blasio in February or March 2015. -stated that net the Mayor and -at -s office for approximately twenty minutes. During the meeting. Fmentioncd raising money for Mayor dc Blasio?s policies. -could not recall whether vas asked to donate during this meeting or whether itself was mentioned during this meeting. uently received a telephone call from - who provided details about donating to CONY. stated that at no point was it explicitly communicated that a donation to CORY would have no impact on any current or future City business. .Vlayor de Blasio told D01 that he recalled speaking with- but remembered no details ofthe communication. donated S- to on March- 2015. told D01 that the firm had been seekinu a 7011111? change for a project in?for years. _submitted concerning this proposal to the Department of City Planning DCP) in _2013. it submitted in - 2010. 111-2017. - submitted DOI identified at least one other aroiect that?had underway with the ("ity around the time ofthe donation a mixed-use development that received HPD funding. According to Department of Finance records. the property was transferred by deed by me cry or Ne- rerk re?rn 2014. Hl?l) and HDC finalized loans for the project. and the )roieet's regulaton agreement was signed. i1-2014. In total. HPD granted to the project. to DCP. that-office received a call from the Office. asking if- would like to speak with the \-?1ayor. Shortly thereafter. on or around February 15. 2015. - received a call from Mayor dc Blasio. '1 hey talked generally about City politics for most ofthe ten-minute call. Near the end of the conversation. Mayor dc Blasio mentioned and informed -that-w'ould receive a follow-up call from- -could not recall whether Mayor dc Blasio explicitly askec onation to during this call. or whether was the first to solicit a donation. "stimated that-received -s call a few days to a alter speaking with Mayor de Blasio. stated that. at no point during - conversations with Mayor de Blasio or -was it explicitly communicated that a donation to CONY would have no impact on any current or future City business. Page 8 of 15 i\-1ayor de Blasio stated that he did not recall speaking with - ?donated S-to CORY on February. 2014 and 5-0 COXY on April I 2015. identified potential business before the City contemporaneous with the 201-1 dona ion. According to information obtained from the Landmarks Preseryation Commission (LPC). submitted an application to the on- 2013. A hearing on the ion was held on 3014. and approyal was granted at a public meeting held on 201-1. Additionally. submitted a bid to? hat was pending at the time of the February 201-1 donation. told that at a 2013 fundraiser. and knew him to be affiliated with Mayor dc Blasio. Durin the call. asked-to donate to a fund to support Lil?K. Wu? did not provide any disclaimer that a donation would haVe no impact on cun?ent or future city business. identified one?)roject continuing at the time ofthe 2015 donation. On 2015. the of Buildings DOB) issued a sto) work order on the project submitted its building lans for the review On . 21115. the DOB approyed modified stated that the contacted -by phone in approximately March *ould donate to the Mayor's aflordable housing campaign. Although ?ould not recall the exact language Mayor dc Blasio used. told DOI that. was confident that Mayor dc Blasio asked for a donation. further stated that Mayor dc Blasio did not provide any disclaimer that a donation would ha\'e no impact on - current or future (?ity business. could not recall whether l\4ayor dc Blasio brought up during their call or whether mentioned it in a follow-up call. Mayor de Blasio told DOI that he recalled speaking with- but remembered no details ofthe communication. (1- donated S- to on submitted a bid concerning in early 20 1-1. plans for the arch 3-014. On March 201-1. to Although thi-was an issue of interest to the lVlayor. did not connect it to any matter pending before an executi\ branch City agency. D01 identified another matter that was potentially pending at the time ofthe solicitation. 1n ?acquired a landmarked building Page 0 of 15 According to the LPC. it has receiVed tor the building since March I 20H. Thi?u as issued on 2014. told that received a )hone call from in 3014 to discuss contributing to CONY. told that would consider donating and. within minutes- a call from Mayor de Blasio. who asked -tor a 525.000 donation to stated that at no point in their discussion did lV'layor dc Blasio provide any sort ot? disclaimer that a decision to give or not give would not result in ollieial ?oor or disfavor. '4 The Mayor told that he recalled speaking with - hut remembered no details of the communication. (I. Issue Page 10 of 15 Page 1 I 01?15 P, )fl 5 CONCLUSION AN I) RECON ENDATIONS: There?n'e. this matter will be closed as: Page 14 of 15 I Substantiatet'l with respect to the ?rst question. whether the Mayor solieited contributions ?from an} individual who had. or organization had. a matter pending or about to be pending before any executixe branch ol'the City." (3) Submitted by (1 1?0 In Atto nev Approved by: Andrew Sein Senior lnspeetor General