(Laura Cavanaugh)
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The feds are investigating city Comptroller John Liu for allegedly shady campaign-financing practices, sources told The Post last night.
Liu, a mayoral hopeful, is already under scrutiny by the city Campaign Finance Board — which doles out matching taxpayer funds to eligible political candidates — for thousands of dollars in donations his campaign has received.
But now, “there is a federal investigation into campaign financing connected to … Liu,” one source told The Post.
At issue is whether Liu’s campaign illegally skirted campaign-finance rules to maximize the public funding it could receive.
Under the rules, for every individual donation of $175 or less a candidate receives, the board gives another six times the amount.
The system is designed to encourage small donations to lessen influence-peddling.
But the set-up also is ripe for abuse, since some rogue candidates have been known to use ghost donors to spread out their donated dough to qualify for the maximum matching funds.
Liu received $1.35 million in matching funds for his 2009 comptroller race.
People working for one of his opponents at the time quietly told reporters that his campaign filings raised suspicions because they showed people of modest income making large donations.
The charges were never pursued because the suspect donations all came from people with Asian names and staffers in the rival camp feared they’d be labeled as racists for picking on one ethnic group.
That’s precisely what happened in 2007 when Chung Seto, a Liu campaign aide who was then working in Hillary Clinton’s US Senate race, rebuffed similar charges of implausibly large donations from seemingly low-paid contributors to Clinton.
The Los Angeles Times questioned how “dishwashers” “waiters” and “street hawkers” living in what it described as a “grimy Chinatown tenement” could afford to write hefty campaign checks to Clinton.
“I just want to know why there are no stories about Jewish waiters and Latino dishwashers,” Seto said at the time.
The federal investigation is likely to make Liu’s anticipated 2013 campaign for mayor more difficult, since it could dry up new donations and is sure to put all his donors under intense scrutiny.
But one veteran political operative said it was too early to count Liu out.
“They still have to find something,” said the operative.
The feds have been investigating Brooklyn Democratic leader Vito Lopez for years without coming up with any evidence of wrongdoing.
Similar suspicions were raised concerning Liu’s 2013 fundraising, when allegations surfaced that some small companies that contributed to his campaign listed a higher number of employee-donors than their total number of workers.
On Nov. 13, Liu announced he’s asked that he asked former state Attorney General Robert Abrams to conduct an independent probe of his current campaign committee to see if it used “straw donors,’’ people who never gave their own money.
“I look forward to a thorough and prompt review,’’ said Liu, who promised a report in two months.
Laundering money through straw donors can be prosecuted as a crime.
Liu was also involved in another recent campaign controversy, losing his challenge to the biggest campaign-poster fine ever handed out in the city.
An Oct. 20 ruling upheld the more than half million dollars in fines for hanging posters on public property and utility poles.
Liu’s rep last night said the comptroller is confident his campaign did nothing wrong.