Six people were indicted in New York City for conspiring in an alleged fraud scheme involving straw donations tied to the 2021 campaign of Mayor Eric Adams.
The scheme consisted of illegally structuring contributions to maximize the amount of additional money gained through a New York City program that provides generous matching funds to mayoral candidate campaigns, Manhattan District Attorney Alvin Bragg said Friday in a statement. The mayor wasn’t accused of any wrongdoing.
The indictment alleges two donors, Dwayne Montgomery and Shamsuddin Riza, who owned companies that were hoping to do business with the city, organized fundraisers for Adams and recruited straw donors to make contributions in their own names. Montgomery and Riza allegedly later reimbursed the donors.
Two others, Shamsuddin Riza and Ronald Peek, allegedly counseled defendants Yahya and Shahid Mushtaq, the owners of a firm called EcoSafety Consultants Inc., on how to orchestrate a straw donor scheme by using their employees’ personal information to name them as donors to Adams’s campaign without their knowledge, Bragg said.
Adams won the Democratic primary in June of 2021, and went on to win the general election in November that year. In the course of the 2021 campaign cycle, he raised more than $19.1 million for his campaign, $10.1 million of which was public matching funds.
‘Never Tolerate’
“There is no indication that the campaign or the mayor is involved in this case or under investigation,” Adams 2021 campaign spokesperson Evan Thies said. “The campaign always held itself to the highest standards and we would never tolerate these actions. The campaign will of course work with the DA’s office, the Campaign Finance Board, and any relevant authorities.”
In the 2021 election, New York City limited individual donations in the mayoral campaign to a maximum of $2,000 and just $400 for those with business before the city. But the city also provided matching funds for residents on donations of up to $250 at a rate of $8 for every $1 donated. So, one $250 donation could yield an additional $2,000 in public funding for a candidate.
The 2021 elections were the first to use that system for matching funds, which was authorized by voters in 2018.
Last year, the New York’s Independent Budget Office reported that the city spent $127.1 million on the election in public matching funds in the 2021 election cycle, roughly four times as much as the average amount disbursed in each of the previous five election cycles.
Montgomery and a business associate kept records of the contributions, along with the likely matching funds, which they “planned to use the contributions as leverage in potential future requests of the Mayor’s Office,” Bragg’s office said in a press release accompanying the indictment.
‘Get 25 Gs’
In a July 2021 phone conversation recounted in the indictment, Montgomery told Riza that “[the Candidate] said he doesn’t want to do anything if he doesn’t get 25 Gs.”
“We allege a deliberate scheme to game the system in a blatant attempt to gain power,” Bragg said in a statement. “The indictment charges the defendants with subverting campaign finance laws by improperly structuring campaign contributions.”
EcoSafety Consultants has received $470,437 in city contracts since 2021 — $337,673 of that came after Adams took office in 2022, according to a review of city contracting records.
--With assistance from Gregory Korte.
(Updates with more details from indictment, comment from Adams campaign official, background on campaign.)