Campaign Finance Board Denies Liu Public Funds Supporters and opponents of the mayoral candidate John C. Liu protested outside of the offices of the New York City Campaign Finance Board on Monday. The Rev. Joseph Parkes, chairman of the campaign finance board, explained the decision to deny matching funds to Mr. Liu. "The evidence suggests that the potential violations are serious and pervasive across the campaign's fund-raising," the board's chairman, the Rev. Joseph Parkes, said in a statement. He added, "The choice to withhold payment in this instance is based on the campaign's inability to demonstrate it is in compliance with the law." The decision deals a serious blow to Mr. Liu, who had already been stuck in fifth place among Democratic candidates in recent public polls. The lack of matching funds places Mr. Liu at a severe financial disadvantage to the other top-tier Democrats, because he will now have significantly less money for purchasing television advertising, which is quite costly in New York. The other leading Democrats all qualified for public funds under New York City's relatively generous campaign finance program, a voluntary system in which candidates who agree to abide by strict spending limits are eligible for public matching funds. Mr. Liu, who has already spent hundreds of thousands of dollars out of his campaign coffers on legal fees, will have to make do with the $1.5 million that he has remaining. The decision, based on what the board said was "evidence of substantial noncompliance" with campaign finance laws, was not a surprise. The campaign finance board has, in the past, denied payments to several candidates with questionable contributions whose campaigns had not been charged with crimes. Moreover, the board provided information to federal prosecutors related to the Liu campaign scheme, in which Mr. Liu's former campaign treasurer, Jia Hou, and a fund-raiser, Xing Wu Pan, relied on so-called straw donors - people whose contributions are reimbursed by others - to raise money. Mr. Liu was not charged in the case, but federal investigators, in their trial testimony, depicted the Liu campaign as condoning, if not orchestrating, questionable fund-raising practices. Ms. Hou and Mr. Pan are scheduled to be sentenced in September, after the Sept. 10 primary. Mr. Liu has been resolutely defiant in proclaiming his innocence and criticizing prosecutors. And his fiercely loyal band of supporters have questioned whether there has been a conspiracy afoot intended to torpedo Mr. Liu's mayoral aspirations. About 150 supporters showed up outside the finance board's offices in Lower Manhattan on Monday morning to protest the board's anticipated decision; some shouted "Give Liu the money!" During the brief hearing, Martin Connor, a lawyer for the Liu campaign, argued that "there's smoke and no fire," as he asked the board to grant matching funds to the campaign. Mr. Connor also said that, in the scrutiny of Mr. Liu's contributors, many of whom are Asian-American, "I see a bit of economic prejudice." Mr. Liu did not attend the rally or the hearing; he planned to address the news media Monday afternoon.