(Adds comments from mayor, background on other cases)
By Joseph Ax
NEW YORK, March 16 Federal and state prosecutors
said on Thursday they would not bring criminal charges against
New York City Mayor Bill de Blasio or his aides in two
simultaneous year-long investigations into his fundraising
But the mayor's conduct was criticized by prosecutors, with
Manhattan District Attorney Cyrus Vance saying de Blasio's
fundraising for other Democratic candidates in 2014 appeared to
violate the "intent and spirit" of state campaign finance laws.
The decisions are a victory for de Blasio, who was dogged by
questions about the probes as he prepared to run for re-election
It is unusual for prosecutors to announce the conclusion of
criminal inquiries. In a statement, Acting U.S. Attorney Joon
Kim in Manhattan said it was done "in order not to unduly
influence the upcoming campaign and mayoral election."
At a news conference, de Blasio said the statements
confirmed he and his administration had acted lawfully. He
dismissed questions pointing out that prosecutors criticized his
actions despite deciding not to pursue a case.
"I do not agree with some of the characterizations," he
said. "What matters is the fact that this was extensively
investigated for a year, and no charges have been brought."
U.S. prosecutors had probed whether the de Blasio
administration gave favors to donors who contributed either to
his campaign or to a nonprofit organization set up to promote
his political agenda.
In a statement, Kim said his office had investigated
"several circumstances" in which the mayor or his associates
contacted or directed agencies on behalf of donors.
The decision not to prosecute, Kim said, was made based on
several factors, including "the particular difficulty in proving
criminal intent in corruption schemes where there is no evidence
of personal profit."
Vance's office separately examined whether de Blasio steered
campaign contributions to county committees in order to sidestep
New York state campaign finance limits.
In a 10-page letter to the state Board of Elections, whose
own inquiry led to his investigation, Vance detailed how de
Blasio and his allies sought to help Democrats win a majority in
the state Senate in 2014.
Wealthy donors were encouraged to give to county committees
rather than individual candidates because the limits are much
higher for the committees.
The money then flowed from the committees to individual
candidates, often within days. While each individual transaction
appeared lawful, the overall effect was to evade campaign
finance law by creating an "end run" around contribution limits,
But Vance said the transfers were approved by an election
law attorney working with the coordinated campaign. Under the
law, an individual who acts on the advice of an attorney is
typically shielded from prosecution.
The conclusion not to bring charges "is not an endorsement
of the conduct at issue," wrote Vance.
Though City Hall was spared, the investigations have
previously uncovered multiple unrelated schemes, including some
involving high-ranking police officials.
The federal probe was initially centered on two businessmen,
Jona Rechnitz and Jeremy Reichberg, who helped raise money for
de Blasio in 2013 and 2014.
Reichberg and several police officials were charged in June
with a bribery scheme involving prostitutes and luxury trips.
Rechnitz had already pleaded guilty in secret and cooperated
His assistance also helped prosecutors build a case against
the once-powerful head of the city's correction officers union,
Norman Seabrook, who was charged alongside a hedge fund
financier with secretly investing union pension funds in
exchange for kickbacks.
In yet another fraud linked to the probe, U.S. prosecutors
charged two police officers and a Brooklyn man, Alex
Lichtenstein, in a bribery scheme involving gun licenses. He was
sentenced to more than 2-1/2 years in prison on Thursday after
Another peripheral figure, restaurateur Hamlet Peralta, was
charged last year with running a $12 million Ponzi scheme in a
case that grew out of the probe.
Several high-ranking police officials have been disciplined
as a result of the investigation into Rechnitz and Reichberg.
(Additional reporting by Laila Kearney, Jonathan Stempel,
Jonathan Allen and Karen Freifeld in New York; Editing by Bill
Trott, Jeffrey Benkoe and Grant McCool)