The Flushing community is stunned by the news that City Comptroller John Liu, who rose through the political ranks in the bustling Queens neighborhood, has been ensnared in a federal investigation into his campaign finances.
Last week a fund-raiser for the mayoral hopeful was arrested on federal wire fraud charges for allegedly funneling $16,000 to Liu’s campaign, the U.S. attorney in Manhattan said.
Xing Wu “Oliver” Pan, 46, of New Jersey, is charged with helping an undercover FBI agent posing as a businessman contribute the $16,000 to Liu’s 2013 campaign account by using straw donors to circumvent campaign finance laws, U.S. Attorney Preet Bharara said.
Liu has not been charged and there is no indication at this point that he was aware of Pan’s role in his campaign.
The arrest is just the latest in a series of events that have raised doubts about the accuracy of Liu’s books: The New York Times report that found about two dozen of Liu’s listed donors said they did not give money to his campaign and Liu’s announcement that he would look into his own finances following the report.
In addition, the Environmental Control Board slapped the comptroller with a nearly $500,000 fine for putting up illegal campaign posters.
“It’s very sad what’s happening. It’s like a bomb dropped in the community,” said Ethel Chen, a Democratic district leader who once ran for state Assembly and is well-known in Flushing political circles. “It’s really shocking.”
Chen said Liu has so much support that she believed it was unlikely that he was involved in campaign illegalities.
Peter Tu, head of the Flushing Chinese Businesses Association, has known Liu for decades and said that he will reserve judgment until the investigation is complete.
“I still think he is the best person to be mayor of New York,” Tu said. “But if he is not innocent, then I cannot support him. The law is the law.”
Tu added that if Liu comes away from the investigation unscathed, all the publicity could give him a boost for the 2013 mayoral elections.
Tu, a Taiwanese native and an established Flushing businessman, said men like Pan who attempt to funnel illegal money to political campaigns are hardly uncommon, but he could not speculate on whether Liu was aware of the wrongdoing.
“I don’t know what is true and what is not true,” he said.
But members of rival political circles claimed they had known about straw donors like Pan since 2009, and pointed to the investigation, the poster violations and The New York Times news report as indicative of a conscious flaunting of the law.
A person familiar with Liu and with a knowledge of campaign finance said it was unlikely Pan’s suspected antics could pass unnoticed by someone on his staff.
“There’s no way somebody didn’t know it was sketchy,” the source said.
The criminal complaint charged Pan with attempted wire fraud and conspiracy to commit wire fraud. The comptroller was not mentioned by name in the report, although he has made it clear publicly that he is cooperating with the investigation.
An undercover FBI agent posing as a businessman filled out a $16,000 campaign contribution card to Liu’s account that was received by Pan, according to the complaint.
The maximum contribution under campaign finance law is $4,950, and Pan allegedly sought out 20 “straw donors,” or individuals who were to make the contributions on the FBI agent’s behalf and be reimbursed for the contributions, and had the straw donors make $800 donations each, the complaint said.