Mayor Adams' campaign potentially masked donations from another construction company

A 2019 fundraising event for Eric Adams hosted by a Brooklyn-based construction company was not disclosed to campaign finance officials despite requirements under city law, according to city records and interviews.

Early in his 2021 mayoral campaign, Adams took in at least $71,000 from Rybak Development employees and vendors at the urging of Rybak’s owner, Sergey Rybak, records and interviews show. New York City's strict campaign finance laws require people who deliver donations from others — or “bundle” donations — to fill out an intermediary statement. But the Campaign Finance Board, which administers the city’s campaign finance system, has no record of such a declaration from Rybak.

The board’s rules also require candidates to maintain records for all fundraising events, including the date, location, organizers, expenses and contributions received. Adams did not disclose the 2019 event to the board, and the only details it could produce when asked by Gothamist were a date and an address.

The disclosure rules are meant to create transparency about which campaign donations are eligible for the city’s generous, taxpayer-funded 8-to-1 match on smaller donations.

Attendees of the Rybak Development event say Sergey Rybak insisted they donate and bring people to the fundraiser. At the same time, the construction company was applying for a zoning change that required the endorsement of Adams, who was then the Brooklyn borough president.

Adams' campaign declined to explain the lack of records of the fundraiser and has said it disagrees generally with the disclosure requirements around bundlers.

“We cannot comment on the details of a federal investigation and an ongoing audit — but we are confident all rules and laws were followed,” campaign lawyer Vito Pitta said in a statement.

Several people in Adams’ campaign are currently embroiled in multiple fundraising investigations, but so far neither the mayor nor his campaign has been accused of any wrongdoing. Last month, the FBI searched the home of Adams' top campaign fundraiser in relation to foreign money funneled into his campaign through KSK, a construction company with strong Turkish ties. Separately, in July, Manhattan District Attorney Alvin Bragg indicted six people for using straw donors to illegally generate donations to Adams’ campaign.

The Rybak fundraiser is at least the second instance of Adams' mayoral campaign not properly reporting donations from a construction company. Previously, Gothamist reported Adams’ campaign did not properly report KSK’s donations from a 2021 fundraiser.

When first asked about the KSK fundraiser, Adams’ 2021 campaign spokesperson Evan Thies said election watchdogs did not flag the event as one requiring disclosure, despite questions raised by the Campaign Finance Board. The campaign later revised its statement to say there was a mistake in filling out the required fundraising paperwork.

‘If he says I need to pay … I will pay’

According to interviews with multiple attendees of the 2019 fundraiser, Rybak’s founder and owner urged his vendors and employees to attend and donate to Adams.

“We're in real estate and one of our developer clients insisted that we be there,” said Andrew Appell, a real estate broker who works with Rybak. Appell donated $1,000 to Adams in 2018 and then $500 at the November 2019 event.

“I don't really like to engage in political donations personally, it's not really my style, but that's what was recommended at the time,” Appell said.

Another broker, David Fernandez, also donated the suggested $1,000, both in 2018 and at the 2019 fundraiser. He said Rybak wanted to be sure the venue for the fundraiser, the restaurant Chateau De Capitaine on Coney Island Avenue in Brooklyn, was full.

“Whoever he works with was there,” he said, referring to Rybak. “Some employees were there, other realtors he works with were there, everyone he’s associated with.”

Fernandez estimates 40 to 50 people attended the family-style dinner. Still, many of Rybak’s vendors contributed to the campaign without attending, according to city records.

“If he says I need to pay something to support, I will pay,” said electrician and Rybak Development subcontractor Boris Kavaldin, referring to the developer. Records show Kavaldin donated $2,000 to the Adams campaign. “Doesn't matter, $10,000, $5,000 — well, not more than $10,000, I cannot afford that.”

Rybak denied acting improperly or compelling his vendors and employees to donate to Adams.

“Everybody's allowed to contribute at their own goodwill, provided they do it appropriately,” Rybak said. “If they believe in the candidate, they should certainly contribute.”

‘I don’t know anything about anything’

Even though the Adams campaign failed to disclose the fundraiser to the Campaign Finance Board as required, it does have a record of an event at Chateau De Capitaine on Nov. 5, 2019, according to the campaign.

That event raised $8,000 in direct donations and $14,000 in potential public matching funds. But records and interviews show that Rybak started raising money for Adams a year earlier.

In total, Rybak bundled $28,500 in direct donations from his firm’s employees and vendors — resulting in $42,800 potential public matching funds, for a total of $71,300.

Because taxpayers pay 8-to-1 in matching funds, the city has rules requiring bundlers to complete an intermediary statement form. The Campaign Finance Board has no record of this disclosure for the 2019 event.

Rybak refused to comment when asked about the fundraiser's existence and whether he filled out the proper intermediary paperwork.

“I don’t know anything about anything,” he said. “I don’t contribute personally.”

City records show Rybak has given $15,350 in donations to six local political candidates since 2017. When asked about previous donations, he said he wasn’t sure.

“Maybe, I don't know,” he said. “I have no comment. My comment is ‘I have no comment.’”

The Rybak fundraiser operated according to a similar playbook as the 2021 KSK event for Adams’ campaign.

At the latter event, the campaign appears to have avoided the disclosure requirement by telling the Campaign Finance Board the event was a “house party” held at a private home, according to city records obtained through an open records request. Yet, the event took place at KSK's offices, according to multiple interviews.

When Gothamist first reported on the missing disclosures for the KSK office party, the campaign said it sponsored the event and had filed receipts with the board. But the receipts required to demonstrate that sponsorship are not on file with the board. Later, the campaign changed its explanation to say it made a mistake in the filing and conflated two different fundraisers.

“This is troubling, this is problematic,” said Sarah Steiner, an election lawyer who specializes in city election law. “The public has a right to know who is getting that money and who's behind them getting that money.”

“If you see one mouse, you have one mouse, but you see two mice, you've got mice,” she said. “If this is a pattern of donors to the campaign and the campaign, this is problematic.”

If you see one mouse, you have one mouse, but you see two mice, you've got mice. If this is a pattern ... this is problematic.

Sarah Steiner, election lawyer

Adams’ endorsement of Rybak’s rezoning

At the time of the 2018 and 2019 donations, Rybak Development was building a 20-story apartment complex known as Sea Breeze Tower and applying for a zoning change that would allow it to add ground-floor retail space and a “physical cultural establishment” — in reality a gym — on the second floor. Under the existing zoning rules at the time, Rybak would have only been allowed to develop a residential building without commercial space on the property.

But the plan was not particularly controversial. The proposal sailed through the local community board in a unanimous vote before Adams recommended approval of the project with modest conditions — adding a rain garden, setting aside parking for ride-hail companies and giving nonprofits rent discounts — in his advisory role as borough president in January 2020.

Just one person opposed the measure at a public hearing Adams held on the project, according to a summary his office submitted to the city’s planning commission. And Adams said he thought the retail space would “enliven the streetscape” as part of his written recommendation.

Rybak denied any knowledge of the rezoning application.

“I've never asked to help anyone for any rezoning applications,” he said. “It does not ring any bells, because we don't own any parking lots, or we have not applied for any rezoning for any parking lots.”

Rybak has remained an active developer in South Brooklyn for much of the past decade, building projects including a sleek seven-story condo building in Sheepshead Bay and a 499-unit apartment complex in Coney Island set to open in 2025.

David Brand, Jaclyn Jeffrey-Wilensky and Brigid Bergin contributed reporting.