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. New York State’s campaign finance rules allow lawmakers wide latitude to use campaign funds for covering legal fees, restaurant tabs, season tickets to professional sporting events, or in the infamous case of former Senate Majority Leader Joseph Bruno, a $1,300 pool clean-up. Unfortunately the State Board of Elections only exacerbates the problem with lax enforcement of the law. The New York Public Interest Research Group examined the board’s rulings over the past five years and found that “they never take action on anything.” New York needs an overhaul of its campaign finance system, and an independent and robust enforcement body to oversee it.

2. New York City’s exemplary small-donor matching fund system should serve as a model for reform in New York State. But, while matching funds are an important feature of the City’s system, any reform being considered in Albany that hopes to replicate the City’s success should include lower contribution limits and an overhaul of administration and enforcement, writes Bill Mahoney of the New York Public Interest Research Group. Among other reforms, New York State’s sky-high contribution limits need to be lowered across the board for both participating and non-participating candidates, and loopholes that allow Limited Liability Companies to be treated as “individuals” and corporate affiliates to be treated as separate entities subject to their own limits must be eliminated. Comprehensive reform should also incorporate lower limits on party fundraising and deal with “housekeeping committee” accounts. Finally, Mahoney writes, administration and enforcement of a new campaign finance regime should not remain in the hands of the State Board of Elections, which has been mired in partisanship and has proven itself to be an ineffective enforcement body. Several individuals that donated above the legal threshold annually faced no consequences from the Board. In addition, the Board failed to draft rules for the disclosure of independent expenditures by Super PACs, which it was supposed to finish by January of 2012. The citizens of New York State deserve better.

3. In New York City executives that are engaged in business with the city government have discovered roundabout methods to avoid strict campaign contribution limits. Bundlers, the intermediaries that deliver donations from multiple donors to a candidate, can skirt campaign finance rules which restrict city contractors and lobbyists to just $ 400 in contributions per candidate. Jay Kriegel of Related Companies is an active bundler and a registered lobbyist. In March of this year, Kriegel contributed $ 400 to each of Christine Quinn, Bill de Blasio, Bill Thompson, and Scott Stringer’s campaigns for mayor. Although as a lobbyist Kriegel isn’t eligible to receive matching funds for his own contributions, the contributions he bundles are matchable. Data from the New York City Campaign Finance Board shows that between October 2007 and July 2012 Kriegel bundled a combined total of $100,000 for the same four candidates. Nearly half of his funds went to Quinn who, as City Council Speaker, voted to allow Related Companies to proceed with the western phase of its 12 million-square-foot Hudson Yards complex in Quinn’s district. The New York World analyzed the financial disclosures of six prospective mayoral candidates—Quinn, Stringer, de Blasio, Thompson, John Liu, and Anthony Weiner—and found that 60 bundlers, who were engaged in business with the city, bundled almost $1 million for the prospective 2013 mayoral candidates. If these candidates choose to opt into the city’s public financing program, the contributions from bundlers will be matched 6-to-1 for the first $175 of each donation. Advocacy organizations such as Citizens Union and New York Public Interest Research Group have recommended that contributions bundled by lobbyists should not be eligible for matching funds.

National Campaign Finance and Ethics News

1. More shocking still than the flow of Super PAC money into presidential and legislative contests is the potential for their involvement in races for state courts. In North Carolina, State Supreme Court Associate Justice Paul Newby, a Republican, is up for re-election this November. Sam Ervin, a Democrat, is expected to challenge Justice Newby for the position. Supporters of Ervin, such as the North Carolina Judicial Coalition, will run issue ads to buttress Ervin’s campaign. Such issue ads and campaign spending create the appearance of bias and can even undermine judicial impartiality and independence. To ensure that judicial candidates “don’t have to dial for dollars from the very lawyers and parties who may appear before them in court” neighboring West Virginia has instituted a public financing program for judicial elections. Recognizing the importance of judicial independence, the Brennan Center for Justice has filed a lawsuit in the Supreme Court of Appeals of West Virginia, on behalf of Allen H. Loughry II, a Republican candidate for the West Virginia Supreme Court. Loughry is the only one of four candidates competing for two Supreme Court seats who opted to participate in West Virginia’s public financing program. The law states that Loughry is entitled to receive additional funds if any non-participating candidate surpasses a certain spending threshold, but the State Election Commission has failed to release the additional funding.

2. Although small donors have been increasing their presence in the Presidential race, Politico illustrates that 14 percent of donors—wealthy contributors—still account for 82 percent of the total funds raised by campaign committees. Susan Daole, a librarian in Lexington, Kentucky, gave $ 100 to President Obama to counter the flood of million-dollar checks supporting Mitt Romney. Unfortunately it would take 100,000 Susan Daole’s giving $ 100 each just to match the $ 10 million donation from casino mogul Sheldon Adelson. In an election purportedly being driven by the economic concerns of the middle class, the top 0.07 percent of American donors are more valuable to the candidates than the bottom 86 percent.  

3. Political party conventions typically provide lobbyists with ample opportunity to access lawmakers and influence politicians. This year however a combination of factors is leading many lobbyists to stay in D.C. First, fewer members of Congress are attending the conventions. Democratic Congressional Campaign Committee Chairman Steve Israel has advised fellow Democrats in competitive districts to skip the convention and focus on reelection efforts. The DNC has also pledged to reject all corporate, lobbyist and PAC money for the direct expenses of the convention. Individual donations have been limited to $ 100,000. A few financial firms and automakers are even cutting lobbying costs.  Meanwhile lobbyists for wealthier corporations fear that political trackers fielded by opposition groups may gather footage of them scheming with politicians. “It’s becoming more and more dangerous to have your name out there,” a Republican consultant said. “It’s better to be under the radar.”

4. Elizabeth Warren explains in a Politico op-ed that lenient campaign finance laws skew the political system in favor of big businesses. Small business owners cannot afford the armies of lobbyists in D.C. that large corporations can. “The game is rigged to work for profitable oil companies, who made $137 billion in profits last year — and still collected billions of dollars’ worth of government subsidies. The game is rigged to work for big multinational corporations, which get tax breaks to ship U.S. jobs overseas and park investments abroad. The game is rigged to work for hedge fund managers and billionaires, who pay lower tax rates than their secretaries.” But for the tens of millions of working families and small businesses left to pay the price, it’s not a game.