NYC NOW - August 1, 2024: Midday News

Episode Date: August 1, 2024

New Jersey native and Wall Street Journal reporter Evan Gershkovich is among three U.S. citizens released on Thursday in the largest U.S.-Russia prisoner swap since the Soviet era. Gershkovich, accused of spying for the U.S., was sentenced to 16 years in prison. Meanwhile, Mayor Eric Adams says his administration has shut down more than 750 unlicensed marijuana shops since May, seizing over $41 million worth of illegal products. Finally, Mayor Adams is under scrutiny from the city’s campaign finance watchdog over fundraising practices in his 2021 mayoral campaign. WNYC’s Michael Hill speaks with reporter Brigid Bergin, who exclusively obtained a draft audit by the city’s Campaign Finance Board.

Welcome to NYC Now. Your source for local news in and around New York City from WMYC. It's Thursday, August 1st. Here's the midday news from Michael Hill. Wall Street Journal reporter Evan Gershkovich is among three U.S. citizens released today in a major prisoner swap involving seven nations as the United States and Russia completed their biggest prisoner swap in post-Soviet history. The trade included American Pol.

Wheelan and another American-Russian journalist in a multinational national deal that sets him two dozen people free. Turkish officials say the exchange took place at an Ankara airport. It followed years of secretive back-channel negotiations, despite relations between Washington and Moscow being at their lowest point since the Cold War after Russia invaded Ukraine two years ago. Gershkovich is a 32-year-old New Jersey native and Princeton High alum. He had been arrested in March of 2023 and accused of spying for the U.S.

He had been sentenced to 16 years in prison after his conviction this summer. The U.S. has always maintained his arrest and the charges were baseless. Mayor Adams says his administration has shut down more than 750 stores selling marijuana without a license since May. That's out of an estimated 3,000 unlicensed shop citywide. Adam says the city has seized more than $41 million worth of illegal products from stores that were rated. We knew that these locations were becoming not only eyesores, but they became really focal points for criminal behavior. Adam says some unlicensed shops have been targeted by

armed robbers. The city ramped up its cannabis enforcement efforts after new laws passed earlier this year. Officers are now allowed to padlock unlicensed stores on the spot without getting a court order. But in a class action lawsuit, the stores say it violates. their due process right. Stay close. There's more after the break. NYC. Mayor Adams is facing scrutiny

from the city's campaign finance watchdog over questions related to the fundraising operation of his 2021 mayoral campaign. WNIC's Bridget Bergen exclusively obtained a copy of a draft audit by the city's campaign finance board. Bridget joins us now with what it says and how people are reacting.

So Bridget, before we dig into the details, when I hear the word audit, I think something is wrong. No one wants the IRS to audit them, for instance. Is there anything out of the ordinary about the Adams campaign being audited? Yeah, I don't want the IRS to audit me either, Michael. But there is nothing wrong, actually, with an audit of a campaign. In fact, the city's campaign finance board audits every campaign for city office, even if the candidate doesn't accept matching funds. But in this case, Mayor Adams did take matching money a lot.

$10 million of it. That's taxpayer money. It comes with obligations. Here's how Charo Torres-Pasili, a professor at Stetson University, College of Law, and a fellow at the Brennan Center, explains it. When candidates sign up to get this public money, one of the things they agree to is that they will abide by the rules. So it is completely fair for the Campaign Finance Board to insist upon it. because it's basically contractual. So again, the audit itself totally ordinary,

but some of the issues the auditors found definitely were not. In fact, the audit itself was 900 pages long. It highlighted 22 separate categories of disclosure problems, and that included some $2.3 million in expenses that need more documentation. That's a whole lot of money. What kinds of documents was the campaign missing? You know, some of it was kind of run of the, mill. They spent millions of dollars on TV ads and they didn't provide all the broadcast details

about when and where they aired. There were payments to some of his closest consultants that were missing contracts. One particularly weird batch of payments went to an auto dealership in Brooklyn. That money appeared to have covered car damage from car crash and parking tickets and tolls. I spoke to another expert, Rachel Harding, she's an attorney who does campaign finance compliance work on a regular basis. And she was kind of flabbergasted by these charges. Gas is one thing, right? Mileage is another thing. But parking tickets and then certainly getting in an accident, it looks like, or fixing a car for an accident-related injury is what it looks like. I have never seen that before. It is no surprise that the CFB is flagging this.

She said she actually was surprised the campaign submitted invoices for all these things. She didn't think they should be paid for by taxpayers. And Michael, these are just some of the things the campaign will need to explain. What about the donors? We've reported in the past about how the Manhattan DA prosecuted people related to a straw donor scheme to Adams campaign. Does any of that show up in this document? So, you know, there are definitely a lot of donor issues flagged here. But this was another particularly weird case.

The law requires donations to be made in the name of the person making the donations. And auditors flagged more than 50 donations that were clearly not. In fact, the people who made the donations wrote little notes in, you know, that the credit card field saying, my friend is donating for me, or this is from my fiancé, or I used my parents' credit card. That's the definition of straw donations. the campaign should not have accepted those donations and should have refunded them, but the audit indicates that the campaign finance board hasn't received records

that the campaign has refunded any of these straw donations. And just as a note, I should say, in the case that the Manhattan DA prosecuted, no one from the campaign was accused of any wrongdoing, but this is a serious issue that the campaign finance board has flagged and will need to be addressed. So what does this now mean for the Adams campaign? Are there any penalties looming? Well, they need to respond to this audit by the end of the month, and there's a lot to respond to. They have to explain that $2.3 million in expenses with documentation, and they may be on the hook for what they can't explain.

At a minimum, they are likely going to need to return about half a million dollars that was left as their bank balance at the end of the last election cycle. but ultimately it's up to the campaign finance board members to decide on penalties. And while it is extremely rare, the board has withheld public matching money from candidates before, but the board's going to be under a lot of pressure. They have to make a call before the end of the year. The first payment of public matching funds for the upcoming election cycle is due in December. And remember, the primary is right around the corner in next June. I'm wondering, Bridget, what kind of.

reaction we're getting and what you're hearing? So a lawyer for the Adams campaign who I spoke to while reporting this story pointed out that, you know, they had a huge number of transactions. They raised a ton of money. And they, that lawyers said this is, some of this is inevitable. It's a result of unintentional, you know, an unintentional margin of error, but that they followed the law and that they're going to respond to the audit as needed. The deadlines at the end of the month. And so that they will get it in. When it is due, this is, I'll, I'll, note with an extension that the campaign finance board gave them, but there have been calls to tighten up the law that governs the campaign finance system. There is council legislation that

would allow the CFB to withhold money from candidates that don't respond to their information requests earlier in the process. And some of Adams' potential primary challengers are taking some shots at him. Former city controller Scott Stringer says he thinks the kind of lack of attention to detail that's evident in this draft audit is similar to what he sees and how Adams runs City Hall. There's no ability to focus attention on the details of campaign public expenditure and the details of government and it's wrong and it should not be accepted. And what I think is happening internally is this government is slowly collapsing. Michael, a spokesman for the mayor, missed that criticism. I'll note that I also reached out to city controller Brad

Lander, who jumped in the race this week and state Senator Zelner-Mirey for their reactions. Both declined to comment. WNYC's Bridget Bergen on the campaign finance boards, preliminary audit here. Thank you, Bridget. Thanks, Michael. Thanks for listening. This is NYC now from WMYC. Catch us every weekday, three times a day. For your top news headlines and occasional deep dives. and subscribe wherever you get your podcasts. More soon.