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Yesterday the Campaign Finance Board denied $3.5 million in matching funds for John Liu's mayoral campaign, citing evidence of pervasive violations of campaign finance laws. It is largest penalty in the history of the program. Liu's lawyer called it a "death penalty." The campaign has already spent hundreds of thousands on legal fees and only has $1.5 million left. Liu argued that the irregularities were due to the make up of his donors, who are "overwhelmingly immigrant and first-time donors to any campaign." But a probe by the firm Thacher Associates found straw donors and other problems with the campaign's fundraising.

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