A defiant John Liu said he was disappointed but not deterred after the city's Campaign Finance Board denied his campaign for mayor more than $3.5 million in public matching funds Monday.
"The strength of this campaign has never been the in the money, the strength of this campaign has always been in the people," Liu said in front of Manhattan Municipal Building.
Liu, who is also City Comptroller, was denied the funds after two former staffers were found guilty in May of attempting to funnel money to the campaign through an illegal fund-raising scheme.
"The evidence suggests that the potential violations are serious and pervasive across the campaign's fundraising," Board Chair Joseph Parkes said after the unanimous vote.
In federal court, prosecutors said former Liu campaign treasurer Jenny Hou and fundraiser Olivia Pan relied on "straw donors" to raise money and obtain matching funds from the city. Straw donors are those contributors whose money is reimbursed by others.
At trial, 35 such contributors were identified, but a consultant's report commissioned by the Board and released Monday suggests the campaign had additional straw donors and and other "potential violations of campaign finance law."
The Board said their decision relied on testimony during the federal trial but that it was "answering a different question than the jury was asked to consider."
Liu said he disputed the Board's characterization of his campaign.
"The campaign against my campaign has been about suggestions and innuendoes," Liu said.
His campaign lawyer, Martin Connor, said the Board's report doesn't show a "pattern."
In testimony ahead of the board's vote, Connor said denying the funds was a "death penalty." He accused critics of effectively profiling lower-income contributors who made donations in cash.
Connor also said Liu had not done anything wrong himself.
"It's no secret that there were problems in the Liu campaign in 2011," Connor told the Board, adding, "Sometimes where there's smoke, there's smoke and no fire."
But the Board was not moved.
"The candidate is ultimately responsible for the campaign's compliance with the law," Parkes said.
Candidates participating in the city's campaign finance system can receive $6 in taxpayer funds for each $175 donated by individual residents, with a maximum $1,050 for each contributor.
As of a mid-July campaign donation filing, Liu has raised $1.5 million.
While Liu said the campaign would appeal the Board's decision, the earliest date of appeal is just days before the Sept. 10 primary.
Outside the Board meeting, protesters rallied both for and against the decision. At the Municipal Building Monday afternoon, supporters alluded that Liu was unfairly targeted.
"This is a political hit," said Norman Seabrook, president of the correction's officer union.
Seabrook and other supporters noted two of the Board members were appointed by Mayor Michael Bloomberg and City Council Speaker Christine Quinn, who is also running for mayor.
"Isn't my money good enough to be matched?" Seabrook asked.
Holding two-by-two-foot sign saying the Board is "rigged by the rich," Cecily McMillan said the decision was "despicable."
"It's discrimination. They're clearly targeting unions," said McMillan, 24, a member of the Organization of Staff Analysts and a resident of Bedford-Stuyvesant.
Liu was confident the decision wouldn't hurt his chances.
"For the last couple of years I have taken body blow after body blow after body blow," he said. "But there's not going to be a knock-down here."
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