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NYC Comptroller Liu Shrugs Off Legal Cloud Before Mayoral Bid

Photographer: Seth Wenig/AP Photo

New York City Comptroller John Liu. Close

New York City Comptroller John Liu.

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Photographer: Seth Wenig/AP Photo

New York City Comptroller John Liu.

New York City Comptroller John Liu stood in a Chinatown banquet hall last week surrounded by hundreds of guests who paid $100 each to celebrate his 46th birthday. There were platters of noodles, balloons and enough American flag-themed cake to feed the entire room.

Liu, who has made no secret of his plans to enter the Democratic primary for mayor, drew cheers when he promised to “make an announcement soon.” To more applause he said, “I’m ready to win this campaign.”

He didn’t mention the trial next month of two of his top fundraisers on federal election-fraud charges. They have pleaded innocent, and Liu denies wrongdoing. That hasn’t stopped speculation -- even from Liu himself -- about the consequences should the trial end with allegations implicating him. In quieter moments, he shares his anxiety.

“I don’t think anybody would like a Sword of Damocles hanging over their head,” he said in an interview last month. “That doesn’t mean you quit or switch tracks when it has nothing to do with what you’ve done.”

Liu assumed office as comptroller in 2010 after serving two terms on the City Council. As comptroller, he’s New York’s chief financial officer, responsible for reviewing contracts, overseeing public-worker pension funds and auditing agencies.

He was 5 years old when his parents arrived in the U.S. from Taiwan and settled in Flushing, Queens, where more Chinese live than in Manhattan’s Chinatown. Emulating one of America’s political family dynasties, his father named him and his two brothers after John, Robert and Edward Kennedy.

First Asian

Liu became the first Asian elected citywide in the most populous U.S. metropolis. He accomplished the feat through the traditional Democratic coalition of minorities and labor unions, with help from Harlem-based campaign consultant Bill Lynch, architect of David Dinkins’ historic 1989 election as New York’s first black mayor.

“No one thought Liu had a chance in hell of winning that race,” Lynch said in an interview.

Liu’s path to victory starts with voters of Asian descent, who could make up more than 10 percent of the total Democratic primary vote, Lynch said.

“He’s always been there on issues that affect Hispanic and African-American voters, and he best articulates the views of New York’s progressive voters,” Lynch said.

Busy Saturday

His Saturday, Nov. 30 itinerary already showed a campaign- style schedule: a fundraiser to support a park in Queens; a Chinatown street fair; lunch with senior citizens; a community group’s meeting with state legislators; an NAACP dinner dance, a Christmas tree lighting with Italian-Americans in the Bronx; a party sponsored by Indonesian Christians and a dinner celebrating the anniversary of the Queens Taiwanese community.

“My understanding of government and politics is from junior high school,” said Liu, a former insurance actuary. “Very basic: equal opportunity, fair treatment. I’ve always been a math and science guy.”

On Dec. 20, Liu tried out his campaign themes inside a packed auditorium at Manhattan’s John Jay College, where he presented what he called his State of the City address. It featured performances by a violinist, an interpretive dance group and a choir from a Queens elementary school where Liu was valedictorian.

He proposed raising the hourly minimum wage to $11.50 from $7.25; free tuition at City University of New York for high school students graduating in the top 10 percent; an end to subsidies for large corporations; tax cuts for small businesses and tax increases for the richest 1 percent.

Saving Money

He called for a ban on semi-automatic assault weapons and for the end of stop-and-frisk practices by police affecting hundreds of thousands of mostly minority youths.

In the interview, Liu touted his role in stopping cost- overruns, including payments to Science Applications International Corp. (SAI) on CityTime, a project to overhaul New York’s payroll system, which ended in March with the company paying the city $466 million as part of a settlement with federal prosecutors who accused the company of failing to investigate accusations of fraud and overbilling.

“I’ve saved a ton of money,” Liu said when asked to name his main accomplishment.

Liu’s self-described achievements include enlisting Mayor Michael Bloomberg’s support to take advantage of historically low interest rates and borrow $1 billion to create jobs financing construction and repair of infrastructure and schools.

Bloomberg Counterpoint

The comptroller has also been a counterpoint to Bloomberg. Last month he assembled a group of people in wheelchairs as he rejected Bloomberg’s choice of a Nissan Motor Co. cab as the city’s official taxi on grounds that it didn’t allow access by disabled passengers, even though Bloomberg has legal authority to overrule him. The mayor, who is founder and majority owner of Bloomberg News parent Bloomberg LP, is barred by law from seeking a fourth term.

“He built a massive business empire and I admire the guy for that,” Liu said. “But I think a city has to be run differently than ‘it’s my way or the highway.’”

Marc LaVorgna, a spokesman for the mayor, declined to comment on Liu’s remarks.

In November, Liu proposed a “Green Apple Bond” program to finance and accelerate what is now a 12-year plan to replace school lighting containing cancer-causing PCBs. The more- efficient, less-expensive fixtures would pay the debt service, he said. The mayor hasn’t embraced that idea.

Union Praise

“He’s done an outstanding job,” said Michael Mulgrew, president of the 200,000-member United Federation of Teachers, who hasn’t endorsed a mayoral candidate. “He proposes ideas to solve real problems.”

Liu boasts that he’s managed the city’s five pension funds and their $126 billion in assets more transparently, broadcasting portions of investment meetings on the Internet. Investment decisions are rarely disclosed.

He has used pension fund stock holdings to press corporations to disclose political contributions and diversify the racial and gender composition of their workforces.

The five funds produced a combined 1.37 percent return for the fiscal year ending June 30, 2012, according to the city’s Comprehensive Annual Report. The median public pension with more than $5 billion returned 1.15 percent, according to Wilshire Associates. City pensions returned 23.2 percent the previous fiscal year, compared with 22.2 percent for the median fund.

Polling Fourth

Liu placed fourth in a Nov. 21 Quinnipiac University poll, receiving 5 percent of Democratic voters. City Council Speaker Christine Quinn led with 32 percent; former City Comptroller William Thompson had 10 percent; Public Advocate Bill de Blasio, 9 percent; and 4 percent backed Manhattan Borough President Scott Stringer, who decided against a mayoral run in favor of seeking Liu’s current job. Forty percent remained undecided.

The primary, scheduled for Sept. 10, requires the winner to get more than 40 percent of the vote or face a run-off against the candidate with the second-most votes.

The election’s unpredictability is compounded by the unknown outcome of next month’s trials involving two of Liu’s fundraisers, said Hank Sheinkopf, a Democratic political consultant.

“John Liu can win this thing,” Sheinkopf said in a Dec. 13 interview. “He will portray himself as the outer-borough candidate who stood up to the Manhattan power elites and gave voice to the disenfranchised.”

Fraud Allegations

Federal prosecutors accuse Xing Wu “Oliver” Pan, 48, a Liu fundraiser, and Jia “Jenny” Hou, his 26-year-old campaign treasurer, of soliciting thousands of dollars from secret contributors, then dividing the money into smaller amounts credited to phony or straw donors to obtain matching public campaign funds.

Pan’s case is built on a $16,000 donation passed to him from an undercover FBI agent, according to court papers. Hou’s case stems from telephone text messages with a former boyfriend suggesting, then canceling, a request for a donation, the government said. The federal complaints contain no evidence implicating Liu.

“There were months of wiretaps, and all one hears is John Liu spending considerable time trying to raise money legally,” said Paul Shechtman, Liu’s attorney.

Late yesterday, Liu’s campaign reported that he raised $522,000 from 2,052 contributions in the six months through Jan. 11, giving him $2 million cash on hand. Under the city’s campaign-finance program, Liu is eligible to apply for $3 million in public matching funds, campaign officials said.

The pending trial didn’t stop Liu from celebrating his birthday with music, laughs and cheers. Although the candidate warned his supporters to expect “lots of insinuations, lots of allegations” in coming months, Liu’s takeaway from the event included more than $100,000 from 843 attendees.

“A year ago they said I was done, finished, kaput, because how could I raise any funds?” Liu said three weeks before the party. “The reality is I expect to be fully funded.”

To contact the reporter on this story: Henry Goldman in New York City Hall at hgoldman@bloomberg.net.

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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