Outside Money Floods Mayor’s Race, Raising Ethics Concerns

New York City’s pivotal mayor’s race has unleashed an army of super PACs the likes of which the city has never seen.

Raymond J. McGuire, the former Citigroup executive, has one. So, too, does Shaun Donovan, President Barack Obama’s former housing secretary, and Scott Stringer, New York City’s comptroller. Andrew Yang, the former presidential candidate, has one and soon may get another.

The proliferation of super PACs supporting individual candidates in the race — a familiar theme in presidential races, but unheard of in a New York City mayoral contest — points to the gravity of this year’s election in the midst of a pandemic.

But it also raises the question of whether the super PACs are simply a way to get around campaign finance limits and may lead to scrutiny of possible coordination between the outside funds and political campaigns, a practice that would violate campaign finance rules.

The issue came into sharp focus on Thursday, when New York City’s Campaign Finance Board withheld the release of public matching funds to Mr. Donovan’s campaign. The board said it wanted to ensure there had been no coordination between the campaign and the super PAC supporting him, which is largely funded by his father.

In a statement he read during the Thursday meeting, board chairman Frederick Schaffer said the board required further information from the Donovan campaign and New Start N.Y.C., the super PAC created to support Mr. Donovan’s campaign.

The board first reached out to New Start N.Y.C. for more information on March 25, following a New York Times article on the super PAC, according to its treasurer, Brittany Wise. The super PAC responded the very next day.

Michael Donovan, Mr. Donovan’s father, said there has been absolutely no coordination between him and his son. They talk “about the grandchildren” and other personal matters, he said.

“I’m very dis-involved, and my son is very very careful that we don’t talk about anything involving the PAC,” said Mr. Donovan, an ad tech executive, when reached by phone.

Ms. Wise said there had been no coordination with the campaign. Jeremy Edwards, a spokesman for Mr. Donovan, said, “We follow the law.”

The questions surrounding Mr. Donovan illustrate the continued repercussions of the Supreme Court’s 2010 Citizens United decision, which allowed unlimited outside spending in elections.

Coordination between super PACs and political campaigns is notoriously hard to prove. And the penalties, when there are any, are often slaps on the wrist.

The stakes are particularly high in New York City, which is deploying its new, more generous matching funds program — designed to reward candidates who raise small-dollar donations from New York City residents — for the first time in a mayor’s race. On Thursday, the board doled out another $10 million to six qualifying candidates in the race, including Mr. Stringer and Mr. Yang.

The board gave out $2.3 million to Kathryn Garcia, the former sanitation commissioner; $2.2 million to Dianne Morales, a former nonprofit head; $900,000 to Maya Wiley, the MSNBC analyst and former counsel to Mayor Bill de Blasio; and $300,000 to the Brooklyn borough president, Eric Adams — candidates who so far have no apparent super PAC support.

Critics argue that the rise of super PACs threatens the efficacy of the new system by allowing candidates to effectively have it both ways. Mr. Donovan, Mr. Stringer and Mr. Yang are participating in the matching funds program. Mr. McGuire is not.

“Right now, independent expenditures are a monster that’s getting bigger and bigger, and the good guys have not figured out a way to slay it yet,” said John Kaehny, executive director of Reinvent Albany, a good-government group. “It’s like patching one part of your roof and the water finds another way in.”

There were no super PACs explicitly supporting individual candidates in the 2013 mayoral primary, officials said.

This mayoral election is different. Mr. McGuire’s super PAC has raised more than $4 million dollars from donors like Kenneth Langone, the billionaire co-founder of Home Depot; the art world philanthropist Agnes Gund; and the real estate developer Aby J. Rosen.

Mr. Donovan’s has raised more than $2 million, nearly all of it from his father. The super PAC for Mr. Stringer, a collaboration between Food and Water Action and New York Communities for Change, a social justice group, was just formed on Monday. It aims to raise a modest $50,000 to $100,000, using those resources to mobilize a pre-existing volunteer network, according to its treasurer, Sam Bernhardt.

Mr. Yang’s super PAC, Future Forward NYC, has only raised $35,000 so far, according to state records, though its founder, the entrepreneur and investor David Rose, said he aims to raise more than $7 million.

Mr. Rose suggested that the existing spending limit for campaigns that participate in the matching funds system — $7.3 million — was not enough to win a New York City mayor’s race.

“New York City is the single biggest market around, and to try to do a big campaign on quote-un-quote that kind of money is challenging in this media market,” he said in an interview. “My goal is to see if we can double that.”

Lis Smith, a former adviser to the presidential campaign of Pete Buttigieg, said she was also in the process of organizing a super PAC supporting Mr. Yang’s candidacy, aiming to counteract the bombardment of negative advertising that the presumptive front-runner is expected to face in the coming weeks.

The goal is to raise $6 million, Ms. Smith said, so that Mr. Yang’s message was not “drowned out by millions of dollars in negativity.”

The PAC, reported by Politico, is partnering with veteran ad makers and political operatives who have worked on behalf of Mr. Obama and Senators Chuck Schumer and Kirsten Gillibrand.

“Every day Andrew’s opponents wake up, get out of bed, attack Andrew, and then go to sleep,” Ms. Smith said. “We need to make sure their negativity doesn’t drown out Andrew’s message.”

Kimberly Peeler-Allen, the treasurer of New York for Ray, the super PAC supporting Mr. McGuire’s candidacy, said the spending allows Mr. McGuire to compete. The PAC has spent more than $2 million on ads to introduce the candidate to the general public.

Ms. Peeler-Allen acknowledged that super PACs are problematic. But she and Ms. Smith also argued that it makes no sense to unilaterally disengage in a race with so much at stake.

“Until there is significant campaign finance reform in this country, we have to use the tools that we have to create the change that we want to have,” Ms. Peeler-Allen said.

Mayor de Blasio, who has himself engaged in creative fund-raising efforts that have drawn legal scrutiny, agreed.

“We need a reset in this whole country on campaign finance,” he said on Thursday. “We need a constitutional amendment to overcome the Citizens United decision by the Supreme Court, and we need to reset the whole equation to get money out of politics across the board.”