Federal Probe Targeting Bill de Blasio Could Impact Hillary Clinton Campaign

Federal investigation of de Blasio fundraising, NYPD corruption becomes distraction

Mayor Bill de Blasio with Hillary Clinton / AP
April 12, 2016

Ahead of New York’s crucial Democratic primary next week, Hillary Clinton’s top surrogate in the state Mayor Bill de Blasio has become entrenched in a federal corruption probe focused on his political fundraising operation.

De Blasio has emerged as a key figure for Clinton. The two appeared together at a charity event on Sunday, where they made a racist attempt at comedy centered around "colored people time," the stereotype that black people are often late for things. The routine has been described as "painful" and has liberal commentators at Jezebel asking, "Who the hell thought this was a good idea?"—but it’s likely the least of de Blasio’s worries right now.

The New York Times reported Sunday that there has been a "long-running and wide-ranging federal investigation that has come to focus on possible corruption involving de Blasio’s campaign fund-raising." Investigators are not authorized to speak about the active investigation and have talked to the press only on the condition of anonymity, but details of the investigation have started to emerge.

U.S. Attorney Preet Bharara, who last year took down Clinton ally Sheldon Silver for corruption, is reportedly carrying out the investigation in conjunction with the FBI.

At the center of the probe are de Blasio fundraisers Jona Rechnitz and Jeremy Reichberg, who were both members of the planning committee for de Blasio’s 2014 inaugural celebration.

Rechnitz and his wife each gave $4,950, the maximum-allowed contribution in New York City, to de Blasio's mayoral campaign—money that de Blasio now says he will return. De Blasio, however, will not return the $45,000 Rechnitz raised for him through fundraisers or the $50,000 Rechnitz gave to de Blasio's Campaign for One New York.

Reichberg raised an additional $35,000 for Campaign for One New York that will also not be returned.

It was announced last month that the Campaign for One New York would start the process of shutting down operations, but de Blasio says that its role in the federal investigation played no part in that decision.

The investigation did not start as a look into political fundraising. Rechnitz and Reichberg were linked to a small Harlem liquor store that was funneling large sums of money that authorities believed were part of a narcotics ring.

The financial web investigators uncovered turned out to be far more interesting.

The liquor store was owned by the sister of Hamlet Peralta, who owned a Harlem restaurant that was the hub for a $12 million Ponzi scheme that both Rechnitz and Reichberg were invested in. The now-closed restaurant served as a hang-out for corrupt cops, which helps explain why both the men were treated so well by top officials in the NYPD.

Rechnitz and Reichberg allegedly showered NYPD brass with cash, gifts, and lavish trips in exchange for the ability to treat the police force like a personal security detail. As many as 20 cops are being grilled as part of the probe, and four senior officers have already been stripped of their badges, according to the New York Post.

Although Bharara's investigation has already uncovered a Ponzi scheme and a ring of crooked cops, its political implications could have the most lasting impact. The discovery of how real-estate executives like Rechnitz curried favor from city officials has turned the probe into a wider examination of de Blasio's full fundraising operation.

It has already proven to be a distraction from de Blasio's efforts to help Clinton win next week's crucial primary.

The mayor appeared on NBC's Meet the Press on Sunday to discuss Clinton's campaign to stop the resurgent Bernie Sanders, but the media focus was on his response when Chuck Todd asked whether he was confident he complied with campaign finance law.

A Monday interview with Yahoo's Katie Couric that was intended to be on the 2016 presidential election also turned into a discussion of the federal investigation.