The city's Campaign Finance Board has denied current City Comptroller and mayoral candidate John Liu public matching funds, following a recommendation by the board's staff last week.
The program gives $6 in taxpayer money for every dollar in small donations.
Since much of Liu's donations have been small, he would have benefited greatly from matching funds.
The board has the power to deny funds if a candidate or a campaign staff member violates the rules.
In a statement, the campaign finance chair said there is "reason to believe that violations of the Act and Board rules have been committed by his campaign."
He went on to say, "The evidence suggests that the potential violations are serious and pervasive across the campaign's fundraising."
In May, Liu's Campaign Treasurer Jenny Hou and fundraiser Oliver Pan were convicted of fraud for operating a straw-donor scheme.
Liu has not faced criminal charges.
