CITY HALL — Mayor Bill de Blasio on Monday defended soliciting $20,000 for his political nonprofit from real estate developer Don Peebles even as Peebles's firm was bidding on a project to redevelop Long Island College Hospital in Brooklyn.
The U.S. Attorney is investigating de Blasio's role in the sale of LICH and federal authorities have issued subpoenas for emails from de Blasio and his top aides to see if any laws were broken.
DNAinfo New York first reported in May that de Blasio asked Peebles for a donation while the state was weighing bids for the LICH site.
"As I made clear, when we looked at Long Island College Hospital our goal was to insure health care there and only a plan that would actually work at preserving health care that was financially viable was acceptable to us," de Blasio said at an unrelated press conference.
"It had nothing to do with whatever anyone was doing with their First Amendment right to give donations."
De Blasio said the fact that Peebles did not get the project showed that decisions were made in the "public interest" and not because of political donations.
"In the case of Mr. Peebles, he had an aspiration for that site. That proved not to be the effective option and he didn't end up getting that site," de Blasio said.
As DNAinfo first reported, de Blasio personally solicited the $20,000 donation from Peebles when the mayor's UPKNYC nonprofit, which eventually became known as the Campaign for One New York, was raising money to achieve universal pre-K in the city.
Peebles heads the Peebles Corporation, a national real estate development and investment firm, and was estimated last year to have a net worth of $700 million by Forbes.
His firm submitted a bid for LICH in February 2014. The initial request to donate to UPKNYC came on Jan. 21, 2014, according to records provided by Peebles. Another request came on Jan. 30, 2014.
In early February 2014, Peebles told de Blasio fundraiser Russ Offinger that he was too busy finalizing his LICH bid to discuss a donation to UPKNYC and promised to get back to him shortly.
Between March 3 and 5, 2014 Offinger called Peebles again, followed by a phone call from the mayor requesting $25,000, Peebles said.
"It's hard for a business person who has business interests in New York City to tell the mayor no, especially real estate developers," Peebles added.
Peebles ordered his staff to issue a check on March 6, 2014 and they did so, according to a copy of the check viewed by DNAinfo. The check was cashed the next day.
But Fortis Property group, represented by powerful lobbyist and de Blasio donor James Capalino, eventually won the bid after negotiations stalled between Peebles and SUNY.
On June 26, 2014, a letter paid for by the Campaign for One New York, from Gary Reilly of the Carroll Gardens Neighborhood Association, lauded the deal to sell LICH to Fortis.
Peebles thought it was inappropriate for the mayor's nonprofit to send the letter.
"When he called me and asked me to contribute it was to support universal pre-K. I felt that that was essential to have," Peebles said in May. "So when he didn't use the money for that purpose, I wanted it back."
The mayor acknowledged in an email to Peebles that the money would be returned. The Campaign for One New York returned Peebles' $20,000 contribution on July 2, 2014.
Jeanne Zaino, a professor of political science at Iona College, said Peebles' donations creates problems for the mayor.
"The legal end of things will be worked out by the U.S. Attorney but this creates the appearance of impropriety, which is especially problematic for a progressive like the mayor who called on ending favors for the rich and the elite," Zaino said. "It's evidence of him saying one thing and doing another."
De Blasio also lauded the Campaign for One New York's transparency, saying that the group did "disclose every donation that we actually receive and keep."
But Peebles' donation was not disclosed on the voluntary disclosures or expenditures that the nonprofit handed out by request only to members of the media.
Nor was the donation listed on the group's 2014 filings with the New York State Joint Commission on Public Ethics.
The group had registered as a lobbyist in 2014 and was required to submit details about donations and expenditures.
JCOPE officials have declined to say whether Peebles' donation should have been listed as the agency is conducting an investigation on why the group did not register as a lobbyist in the following year.
De Blasio's nonprofit operated outside of city Campaign Finance Board rules, which would have required "any contribution" that is accepted and deposited — as Peebles' $20,000 check was — to be reported.
Good government groups called for nonprofits like de Blasio's to be regulated under Campaign Finance Board rules and the agency recently asked the City Council to pass laws that would regulate political nonprofits.
A representative for Peebles declined comment.
"It is our policy not to comment on pending legal matters," said Peebles' spokeswoman Nicole Goldberg.
SUNY, in a statement, said it "has received a subpoena from the U.S. Attorney for correspondence with Mayor de Blasio and his office" and "will provide the requested documents in accordance with law."