Friday, July 27, 2012

Money in Politics This Week

Every Friday, the Brennan Center will be compiling the latest news concerning the corrosive nature of money in New York State politics—and the ongoing need for public financing and robust campaign finance reform. We’ll also be linking to dispatches from around the country highlighting the national scope of this crisis. This week’s links were contributed by Syed Zaidi.

For more stories on an ongoing basis, follow the Twitter hashtag #moNeYpolitics and #fairelex.

New York Campaign Finance and Ethics News 

1. Even with the legislature out of session, lobbyists and politicians are swinging clubs together at golf fundraisers. The Albany Times-Union reports that the Republican Assembly Campaign Committee recently held its annual fundraiser at the Wiltwyck Golf Club. The Democratic Assembly Campaign Committee and the Senate Republican Campaign Committee each have similar fundraisers planned over the next month. “The golf events aren't about golf. Like any political fundraiser, it's a chance to spend easy time with lawmakers and their closest aides, building relationships that will make more serious talk in the Capitol hallways go easier.” Sean Coffey, writing in The Buffalo News, notes that this shocking degree of camaraderie is due to the lax campaign finance laws in New York state. The simple truth is that in such an environment “voters can’t compete. Less than one-half of 1 percent of voters donate to political campaigns, making New York dead last among the states in citizen participation (and 48th in voter turnout).” That is why—as the Brennan Center and Sean Coffey have argued–New York State needs a public financing system modeled on New York City’s. This would encourage participation by everyday New Yorkers in the political process and reduce overreliance on donations from a few wealthy individuals and corporations.

2. This summer, politicians in Albany are busy amassing funds for their war chest. In the Senate the GOP campaigns have acquired a total of $ 20. 3 million while the Democrats have pulled together $ 3. 8 million. Many lawmakers have also begun bolstering their campaign accounts through investments. Democratic Assembly Speaker Sheldon Silver has earned $ 41, 571 in dividends and interest by investing a portion of his $ 2. 8 million campaign funds. Republican Senate Majority Leader Dean Skelos has invested $ 717, 319 out of his $ 2.1 million war chest.  An examination of Silver’s campaign finance records displays that his investments include companies with state contracts, lobbying relationships with legislators, and regulatory interests. The list also contains several firms that contributed handsomely to Silver’s campaign such as Verizon, JP Morgan Chase and GE. Skelos’s investments reveal bonds in local government, school district, hospital, library and public works projects. Although the investments are legal–they are operated by separate mutual funds–they nonetheless raise questions about conflicts of interests. Elected officials are required to disclose the purchase of investments, but they do not need to provide details about interest and dividends gains or losses.  

National Campaign Finance and Ethics News

1. If the public is curious about why elected officials rarely address their concerns, part of the answer surely lies with the influence of special interests in D.C. and state capitals alike. Following the tragic Colorado movie theatre shooting, Representative Carolyn McCarthy (D-N.Y.) criticized her colleagues for blindly doing the bidding of the National Rifle Association and failing to take any measures toward greater gun control. This is not surprising given that the NRA has spent nearly $ 25.6 million in campaign contributions and $ 24 million in lobbying expenditures to influence lawmakers according to a Sunlight Foundation Report. Meanwhile two popular weapons manufacturers, Smith & Wesson and Remington Arms, have spent $ 2.2 million and $ 1.4 million respectively in lobbying efforts. 

2. The recent LIBOR scandal has shed light on an egregious form of misconduct. American and British financial institutions were colluding to artificially manipulate the LIBOR rate, a benchmark utilized to determine interest rates on trillions of dollars worth of consumer loans, mortgages, credit cards, and state and municipal bonds. With this latest development, the pressing need for financial regulation is quite evident; however Wall Street is again attempting to gut existing consumer protection provisions in the Dodd-Frank law. The financial industry has been active on Capitol Hill, contributing immense sums to Republicans seeking to water down or repeal financial regulations. From 2011 to the first quarter of 2012 the finance, insurance and real estate sector spent $ 600 million lobbying Congress and federal agencies with a team of 1, 984 lobbyists.  Similarly, the Chamber of Commerce has allocated $ 55 million to lobbying efforts during the first half of 2012. Outside spending by financial interests has increased 20-fold from $ 3.2 million in 2008 to $ 60 million in 2012.

3. Unbridled corporate campaign spending and billionaires with a desire to influence national policy have dominated the narrative this election season. In a satiric piece, The Onion implies that the presidential election may be decided by a few swing corporations. Sadly, with the advent of unlimited campaign contributions to Super PACs and inadequate disclosure, the satire strikes a nerve that is all too real. According to the Washington Post, Conservative Super PACs and 501(c)(4) “social welfare” organizations have spent $ 94 million on TV ads, while their liberal counterparts have spent approximately $ 19 million. In combination with Romney campaign, the aggregate air time purchases by the panoply of Republican outside groups amounts to $ 179 million. For their part, Obama and the aligned union of Super PACs and non-profits have spent $ 128 million on general election ads to date. An interactive map by the Washington Post illustrates the vast sums spent by all the various campaign committees, PACs and non-profits.

4. According to the Center for Public Integrity, over 100 companies have collectively donated more than $ 14. 2 million to Restore Our Future, the pro-Romney Super PAC, accounting for 15 percent of the $ 82 million raised by the group thus far. Nearly two-dozen companies have given $ 9. 4 million to American Crossroads, the GOP Super PAC, constituting 23 percent of its $ 40 million fund. Democratic Super PACs have struggled to keep pace, relying largely on unions and wealthy individuals. Non-profits are on track on outspend Super PACs, an advantage for the donors and strategists since 501(c)’s do not have to disclose the identities of contributors.

5. Despite the overwhelming influence of corporations and large donors in this election, small donors do have some role to play. The Obama campaign has raised 39 percent of its contributions from small donors, those donating less than $ 200 to the campaign in the aggregate. Meanwhile Romany remains dependent on large donors, with small donors only composing 15 percent of his war chest, although the proportion is steadily rising.

6. In a positive development, the House Fair Elections Now Act (H.R. 1404) has received a hearing by the Senate Judiciary Committee. The measure proposes a voluntary public matching system for congressional elections. The bipartisan panel of elected officials at the hearing suggested numerous proposals to combat the corrosive impact of money in politics. Advocates praised disclosure, public financing and a Constitutional amendment to reverse the Citizens United ruling as key elements of future reform initiatives. Former Louisiana Governor, Buddy Roemer, stressed that under the current system politicians had to run on two fronts: a voting election for the general public and a money election to garner contributions from wealthy donors. 

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