(William Farrington)
(
)
Comptroller John Liu has turned to his top political adviser, Chung Seto, for more than just campaign advice — he has actually let her run much of his office, even though she is not a city employee, The Post has learned.
Seto, who orchestrated Liu’s political ascent, has been dealing with everything from redecorating to communications with the White House — and has even referred financial advisers to the city’s pension czar, according to e-mails between Seto and Comptroller’s Office staffers obtained by The Post through a freedom- of-information request.
Correspondence between Seto — a former chief of the state Democratic Party — and the Comptroller’s Office shows that there was no division between Liu’s political operation and the office of the city’s fiscal watchdog.
The e-mails show there were no details too small for Seto, such as including a recycling symbol on business cards, getting an extra key for a secretary, deciding where individual staffers would work and what Liu would say in an economic speech.
And the documents show Seto had use of staff and space at the comptroller’s downtown offices, where she held sway like a chief of staff or operations director.
“Nothing important happens without Chung’s approval,” one insider said, echoing the e-mails. “She is basically co-comptroller.”
Most of the e-mails were sent during 2010, Liu’s first year in office. The correspondence continues into August 2011.
On April 21, 2010, Seto e-mailed two of Liu’s top deputies, telling them whom to contact so the comptroller could attend President Obama’s speech on financial-industry reform at Cooper Union.
She also sent referrals directly to Larry Schloss, the deputy comptroller who oversees the five municipal pension funds managed by the comptroller.
On June 26, 2010, Seto forwarded to Schloss an e-mail from a Long Island finance firm, Dix Hills Partners, with the note “FYI . . . thanks.”
And on July 13, 2010, she did the same thing with e-mail traffic related to a Manhattan firm, CastleOak Securities, directing readers to “please see communications below.”
Sources told The Post that Seto had been instructed not to communicate directly with pension officials to avoid the perception that she was influencing investment decisions. Her spokesman said, “No one knows anything about” that directive.
Susan Lerner, executive director of the government watchdog Common Cause New York, said the law has “an absolute requirement” for office-holders to separate their political activities from official business.
“There has to be a bright line, particularly in offices where there is a lot of public money being spent,” she said.
Seto referred questions to George Arzt, who has been handling press inquiries for both Seto and Liu since the comptroller’s campaign finances became the subject of a wide-ranging criminal investigation last year.
Arzt insisted that Seto’s role at the Comptroller’s Office was completely appropriate. From Jan. 1 through March 31, 2010, Arzt said, Seto was running the comptroller’s transition into office.
Arzt added that Seto was “a volunteer adviser to the Comptroller’s Office” for the next year, and he claimed that she had been given a written opinion from the city Conflicts of Interest Board clearing that work.
But Arzt said he could not provide a copy of that letter yesterday, and the Conflicts of Interest Board, without commenting on the case, said any documentation that may have been issued would have to come from Seto.
As for the e-mails, Arzt said Seto’s messages to the pension division, with references to investment firms, were innocuous.
“People approach Chung,” Arzt said. “She forwards the e-mails as an FYI . . . She doesn’t advocate for anyone, and that’s it.”
Meanwhile, Liu tapped loyalist Shiang Liu, no relation, as his new campaign treasurer yesterday. He replaces Jenny Hou, the ex-treasurer, whom the feds have charged with illegal fund-raising.
Additional reporting by Sally Goldenberg and Carl Campanile