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.

CAMPAIGN FINANCE REFORM AND ETHICS NEWS

NEW YORK

Gambling Industry Donates Millions to New York Politicians

As Governor Andrew Cuomo and the New York State Legislature discuss the process of amending the State Constitution to allow up to seven new full-scale, privately owned casinos in New York, the gambling industry is funneling millions of dollars into lobbying efforts and campaign war chests. Indian tribes, racetrack casinos and other gambling interests have spent nearly $50 million since 2005—over $40 million on lobbying and roughly $7.1 million on campaign contributions—according to a new report by Common Cause. Nearly $4 million of this has gone to New York Senate and Assembly races. “Gambling interests are betting big and spending millions in advance of a potential billion-dollar pay out. New York’s sky-high contribution limits, LLC loophole, and unlimited contributions to soft money accounts means the deck is stacked against the average voter” Susan Lerner, executive director at Common Cause, stated. “We need campaign finance reform to assure the public that the state’s future won’t be decided in a high stakes game where the dealer always wins,” she added.

Congressmen Warn Schneiderman Not to Investigate Outside Groups

Earlier this year, New York State Attorney General pledged that he would investigate non-profit “social welfare” organizations that have been channeling millions of dollars into political campaigns for potentially violating their tax-exempt status, which dictates that they cannot have political campaigning as their primary purpose.  Representative Dave Camp (R-MI) and Senator Orrin Hatch (R-UT) released a letter warning Schneiderman that his attempt to obtain tax information from 501(c)(4) groups could violate federal privacy laws. “We emphasize strongly that willful unauthorized disclosure of returns or return information is a federal crime subject to fines and/or imprisonment,” the letter alleged. The Attorney General’s Office defended its request for the tax records, arguing that New York has the right to examine fraud and state tax evasion, and further asserting that the Attorney General is aware of the proper procedures for proceeding with the inquiry.

2011 Ethics Legislation Riddled With Loopholes and Complications

An op-ed in the New York Times from early September attributed ethical mishaps in Albany to the part-time nature of the legislative position. “Because these ‘citizen lawmakers’ work only a few days a week, they also are permitted to have lucrative day jobs — including anything from broad consulting or legal work to key roles at companies or organizations that may benefit directly from the legislative activity in Albany.” The author credits Governor Cuomo for signing important reform legislation back in June that requires legislators to disclose their outside income and creates an independent monitor to help investigate breaches. However as Kelly Williams, corporate general counsel at the Brennan Center, explains in a letter to the editor the ethics law does not go far enough. “Lawmakers must disclose only their new clients, or new business with existing clients after July 2012 — and only those clients for whom the lawmaker personally and directly performed state business, like negotiating a contract with a state agency in an amount greater than $50,000 or obtaining a grant greater than $25,000 through legislative initiative.” These complicated procedures and loopholes necessitate that more must be done to ensure ethical behavior on the part of our lawmakers. 

NATIONAL

AP-NCC Poll Shows Robust Support for Campaign Finance Reform

Over the course of this year national surveys by Gallup and the FreedomForum have illustrated that Americans support campaign finance reform by broad margins. Now, a recent poll by the Associated Press and the National Constitution Center has yielded similar results. More than 80 percent of Americans back limits on the amount of money that can be donated to groups vying to influence the outcome of elections. Furthermore 71 percent of Americans still retain a robust view of free speech, responding that people have the right to say as the please, even if their positions are deeply offensive to others. In contrast to the Supreme Court decision in Citizens United, Americans regard free speech as distinct from unlimited campaign contributions.

Romney and Obama Should Open Their Fundraisers to the Public

Leaked videos from an exclusive fundraiser for Mitt Romney, at the home of private equity firm executive Marc Leder, have gone viral. The videos demonstrate the special access and influence that moneyed special interests enjoy over the Presidential candidates. The dramatically blunt recordings illustrate the dichotomous nature of the race; an image of the candidates on the campaign trail with tediously prepared remarks to woo voters, and another in the company of elites that paid outlandish sums for direct answers from the real candidate. Of course such secrecy and duplicity is not limited to the Romney campaign—the Obama campaign’s strict entrance protocols at fundraisers this year are a response to the “guns or religion” comment that surfaced online in the 2008 race. A Washington-Post op-ed is calling on both candidates to open their fundraisers to the media so that the American public can also hear from the real candidate. “Let the media hang out. You’ll be better protected and the public will be better informed. If donors are offended and decide to stay away, the republic will just have to live with less money in its political system.”

Appeals Court Overturns District Court Ruling on “Social Welfare” Organizations

This summer, the D.C. District Court ruled that non-profits spending money on “electioneering communications” had to disclose their donors. Electioneering communications, also referred to as express advocacy, is one of two means at the disposal of outside groups, whereby they can run ads that mention a candidate without calling for his election or defeat. By contrast “independent expenditures” are ads that explicitly take a position on the candidate’s election. This week the D.C Circuit Court of Appeals overturned the District Court’s ruling. Back in 2007 the Federal Election Commission stated that non-profits engaged in electioneering communications only had to reveal donors that contributed to the direct financing of political ads. The District Court in Van Hollen v. FEC held that the FEC’s interpretation of McCain-Feingold was incorrect and that the law mandated the disclosure of all donors to non-profits engaged in "electioneering communications." However the case has now been sent back to both the District Court and the FEC, where the commissioners must either come up with a new regulation or decide to defend the old one in District Court. Furthermore, the Appeals Court has stated that the district court must find an FEC regulation to be "arbitrary and capricious" in order to overturn it.

Representative Sarbanes Holds Roundtable on Grassroots Democracy Act

Representative John Sarbanes (D-MD) is introducing the Grassroots Democracy Act (H.R. 6426) today in an effort to combat the influence of concentrated money on the political process. The Congressman hosted a roundtable discussion on his proposal yesterday with several reform organizations. “Super PACs and other shadowy groups have become a dominant force in political campaigns and most Americans do not believe Congress can operate independently of these special interests,” Representative Sarbanes stated. “It’s time to create a new paradigm that empowers grassroots donors and makes candidates dependent upon the people for support.” The legislation would match contributions of $100 or less by a 5-to-1 ratio, and create a $50 tax credit for campaign donations as well as a People’s Fund to fight back against outside Super PACs and non-profits. Candidates that forgo all contributions above $100 would receive a 10-to-1 match with public dollars. The bill has 31 co-sponsors at this stage. Adam Skaggs, senior counsel at the Brennan Center, commended Representative Sarbanes “for developing the Grassroots Democracy Act and for his continuing leadership in addressing the corrupting role of money in politics.”