Donors to Mayor Adams’ campaign invest in Evolv Technologies, a gun detection company
Two deep-pocketed donors who spent a combined $1 million to support Eric Adams’ mayoral run work at companies that hold sizable investments in Evolv Technologies, the manufacturer of a gun detection system Adams began touting earlier this year.
Kenneth Griffin, CEO of the Citadel investment firm, gave $750,000 to the pro-Adams Strong Leadership NYC political action committee (PAC) during his mayoral run last year, city Campaign Finance Board records show. Robert Granieri, the founder of Jane Street Financial Services, contributed $250,000 to the same group.
Records show that both firms hold sizable investments in Evolv Technologies, a company the Adams administration tapped to temporarily supply a gun detector at City Hall and which launched a pilot program in February at Jacobi Medical Center in the Bronx.
It does not appear any disclosure requirements have been violated.
Adams has sung the praises of such technology for months, framing it as a potential tool in the city’s arsenal against gun violence. He also preemptively pushed back against potential critics of the technology recently.
“Imagine me saying, ‘No, we’re not going to invest in technology that can identify guns because someone is an investor in that technology’ — that just doesn’t make any sense,” Adams said on NY1 two weeks ago. “You know, good technology that saves lives, I have an obligation and a responsibility to bring it forward.”
When asked by the Daily News as to how the city came to temporarily install one of Evolv’s gun detectors at City Hall, Adams said he found it on the internet.
“I told my staff at the time to go take a look at it,” he said.
Adams’ deputy mayor for public safety, Phil Banks, has been tasked with researching gun detection technology for the city. Before joining the administration, Banks served as the NYPD’s chief of department, but he retired from that job amid a corruption probe.
A spokesman for the mayor, Fabien Levy, said that “before he even took office … the mayor directed his team to explore technology that could look to detect guns without causing a bottleneck at different locations.”
Levy said Adams doesn’t recognize Griffin or Granieri’s names and would have to check if he’s ever met with them. He added that Strong Leadership NYC operated independently of Adams and that before the pilot program at Jacobi, Evolv’s technology was present in other hospitals in the city as well.
“The team contacted a number of companies, including Evolv, which had ongoing pilots and is being utilized at a number of locations across the city, including at ballparks, museums, hospitals, and at other venues,” Levy said. “Mayor Adams has never invested in or profited from this company.”
Financial records for Evolv show that both Citadel and Jane Street hold significant investments in the company. According to Fintel, a company that tracks major investors, Citadel held more than 100,000 Evolv shares as of May 16. Jane Street held more than 76,000 shares of the company as of May 17, according to the site.
John Kaehny, head of the government watchdog Reinvent Albany, said that the mayor should lay out the situation with Evolv to the city’s Conflicts of Interest Board, given the potential optics of impropriety.
“If the Adams administration doesn’t go to COIB, which exists for this purpose, then they deserve to be questioned by the press about it,” said Kaehny.
Betsy Gotbaum, executive director of Citizens Union, said there should be laws on the books detailing “what can and cannot be done” when it comes to donors to PACs and how they may attempt to exert influence once a candidate is in office.
“People who give a lot of money to a PAC will have expectations,” she said.
Citadel spokesman Zia Ahmed told The News that no one at that firm or its affiliate Citadel Securities has discussed Evolv with the mayor, anyone on his team, or anyone connected to the pro-Adams Strong Leadership NYC. He also noted that 89,900 of the shares held by Citadel Securities are call options, meaning that they’re shares held by the company for other investors.
“Citadel Securities is the largest equity market maker in the U.S., and over the course of time holds a position in virtually every publicly traded company to help individuals buy or sell stock in companies they want to invest in to achieve their financial goals,” he added.
Meanwhile, Evolv is represented by Moonshot Strategies, a firm specializing in public relations, political consulting and lobbying. According to records kept by the city clerk’s office, Moonshot signed on Evolv as a lobbying client in mid-April, although no lobbying activity has been reported. The firm’s CEO, Jason Ortiz, also recently helmed Blue Suit Strategies, listed in city campaign records as a vendor for Strong Leadership NYC, the pro-Adams entity Griffin and Granieri gave to.
Last May, during the mayoral primary that Adams ultimately went on to win, Politico reported that Ortiz was working with Jenny Sedlis, the manager of Strong Leadership.
“We learned about Evolv the same way every other New Yorker did — when the mayor started publicly praising the technology to reduce gun violence,” said Moonshot spokeswoman Jennifer Fermino.
An Evolv spokesman declined to say whether anyone from the company discussed its technology with Adams, anyone from Citadel, or Jane Street.
“Last year, we kept 11 million New Yorkers safe at some of this city’s most high-profile locations,” the company said in a written statement. “We’re proud to see Mayor Adams considering our technology to support the city’s public safety goals, and we’re glad he is laser-focused on keeping New Yorkers safe.”
Citadel’s investments in Evolv aren’t the only financial positions it holds that may interest Adams.
Griffin, the company’s CEO, also appears to be making a hedge regarding firearms.
According to WBEZ Chicago, the billionaire’s hedge fund, Citadel, and its affiliate Citadel Securities “increased the value of their gun and ammunition manufacturing holdings by 62% during the first quarter of this year compared to the final three months of 2021.” Citing Securities and Exchange Commission records, the outlet reported Citadel’s investments in guns and ammo were worth more than $139 million, up from $86 million three months earlier.
When asked about Citadel’s investments in relation to Griffin’s support of his mayoral run, Levy said the mayor has made numerous efforts to address gun violence and hopes all businesses will divest, instead of invest in firearm companies.
The revelation that two key political supporters of Adams are also investors in a company the mayor has promoted comes on the heels of a New York Times story that outlined how the mayor’s chief of staff, Frank Carone was an investor in the company that manufactures Bolawrap, a technology intended to thwart fleeing criminals.
According to the story, Carone held significant investments in the company during Adams’ time as Brooklyn borough president when the then-BP held a demonstration involving Bolawrap. Carone and Adams told the Times that the mayor didn’t know about the investment until April.
Still, the story also noted that after Adams’ Bolawrap demonstration, Carone scooped up 55,000 more shares in the company.
As of May 20, Evolv, which is listed on the Nasdaq exchange, was trading for $2.40 a share — down from about $10 a share a year ago.
But in early May, the company reported revenue raised in the first quarter of 2022 of $8.7 million, more than double the $4 million it brought in for the first quarter of 2021.
While seemingly promising, the technology offered by Evolv isn’t without its critics.
Donald Maye, the director of operations of IPVM, a trade publication specializing in analyzing surveillance technology, said its gun detection device tends to register false positives.
Such flaws could make using it in places like subways — an idea that Adams has floated — a huge logistical challenge, Maye said.
According to Maye, Evolv’s gun detectors register false positives at a rate of 5% to 10% in settings like sports stadiums. If applied to the subway, he predicted that rate would likely increase and require cops to perform “secondary screenings,” which could, in turn, lead to thorny civil liberties questions.
Adams seemed to acknowledge those issues last week.
“We want to make sure that we check all the boxes,” he said. “Is it foolproof? Does it pass constitutional muster? And how easy it is to move around.”