Among other allegations in the federal indictment unsealed last week, Mayor Eric Adams is accused of defrauding the city’s public campaign finance system.

The so-called matching funds program is meant to reduce the influence of big money in politics, but it’s been at the center of numerous fraud cases through the years.

Under the current system, small donations to candidates for city office are matched 8-to-1, meaning a $250 donation nets a candidate $2,000 in city taxpayer money.

But according to last week’s federal indictment, Adams defrauded the system during his 2021 campaign, which “reaped over $10 million in Matching Funds based on false certifications that the campaign complied with the law.”

Adams’ attorney, Alex Spiro, noted this week that the $10 million figure is the total amount of matching funds the campaign received. He says the allegedly illegal donations totaled just $18,000.

“Eighteen thousand,” he said. “Not $10 million fraud. Eighteen thousand.”

State Sen. John Liu can empathize. His 2013 campaign for mayor was derailed by a campaign finance fraud case.

The $10 million figure is “just really an exaggeration,” Liu said, “and potentially a huge mischaracterization.”

Liu’s campaign fundraiser and a top bundler were convicted on federal charges and were sentenced to prison time, and Liu was denied more than $3.5 million in matching funds.

Fraud cases involving matching funds are nothing new. Longtime Queens City Councilman Sheldon Leffler was convicted of fraud in 2003 after a donor divvied up a large donation into 40 smaller ones in order to qualify for $40,000 in matching funds.

And in 1998, longtime transit police union head Ron Reale was convicted for engaging in a similar scheme during his 1993 run for public advocate, having effectively stolen $164,000 in matching funds.

Though Liu has called on the mayor to resign, he says the campaign finance fraud is the weakest part of the government's case against Adams.

“I guarantee you,” he said, “no serious person running for mayor or any citywide office is going to be able to personally go through every single record, conduct an investigation of all the donors and then truly sign that statement that says everything is absolutely true.”

Dan Weiner of the Brennan Center at NYU Law says while the allegations against Adams are serious, there is no causal connection to matching funds. He notes the city’s Campaign Finance Board has a rigorous enforcement apparatus.

“It’s been a very successful system,” Weiner said. “In the big scheme of things, too, the matching funds program has at least corresponded to a time period — it’s been around since the 1980s — when New York City’s level of corruption has compared very favorably to the state and to many other jurisdictions.”

As for penalties, Leffler was ordered to return almost $300,000 in matching funds. Adams could potentially have to return all $10 million his mayoral campaign received.