By Julie Shapiro
City Councilmember Alan Gerson lost his last opportunity to receive public matching funds Friday, four days before voters will decide whether to give him another four years in office.
The Campaign Finance Board’s decision not to give Gerson the matching funds puts him well behind three of his four opponents, who have now each received the maximum $88,550 under the program.
Gerson, on the other hand, has taken out over $50,000 in loans to support his campaign. If he does not repay the loans by the Democratic primary on Sept. 15, he could face penalties of almost $20,000.
The Campaign Finance Board declined to disclose the reason for withholding Gerson’s matching funds. The board previously denied Gerson’s requests for public money earlier this summer and Gerson appealed, but the board denied his appeal Friday.
Gerson referred questions to his spokesperson George Arzt, who said “a whole host of really technical matters” prevented Gerson from receiving the money Friday.
“It’s not going to hurt our strategy,” Arzt said. “We have enough resources to win this race Tuesday…. We’ve been preparing corrective action as we speak.”
Arzt said he expects Gerson to receive full matching funds before primary day, though the Campaign Finance Board does not have any more scheduled fund disbursements.
City Council candidates had four opportunities to receive matching funds this summer. At first, Gerson did not qualify because he was having trouble getting on the ballot after filing paperwork incorrectly. Then, Pete Gleason, one of Gerson’s opponents, filed a complaint with the Campaign Finance Board seeking to prevent Gerson from getting public funds.
Arzt said the Gleason complaint was not affecting Gerson’s public funds, meaning that the problem has shifted back to one of paperwork. The Campaign Finance Board filings are notoriously complicated, but as an eight-year incumbent, Gerson has completed the paperwork correctly before and it is unclear why he is having such difficulty this time. Gerson said last week that he has been distracted by his difficulty in getting on the ballot and Gleason’s subsequent challenges.
To make up for not receiving matching funds, Gerson loaned himself $7,500 on Aug. 1. In addition, he took out a loan of $45,000 from JPMorgan Chase on Dec. 31 of last year. Gerson has to pay back both loans with either matching funds or legally raised campaign contributions by next Tuesday. If he does not, then the loans will count as campaign contributions, and they would far exceed the limit that any single donor can give a campaign.
The Campaign Finance Board has not determined what the penalty would be for such an exceedence, but based on past guidelines, Gerson would likely owe a fine of about $18,000, in addition to having to repay his bank loan.
Even with the $52,500 Gerson has received in loans, his campaign is still about $2,600 in debt, which he also has to repay. Including the loans, Gerson had raised nearly $133,000 as of Sept. 4 and had spent $135,500. For Gerson to execute his strategy in the last few days of the campaign, presumably he’d either have to borrow more, exposing himself to higher potential fines, or raise more money from contributors.
Gleason and two other Gerson opponents, Margaret Chin and PJ Kim, have all received the maximum public matching funds as of Friday and have thousands of dollars left to spend. Arthur Gregory, Gerson’s final opponent, did not qualify for matching funds.
Julie@DowntownExpress.com
