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

Fair Elections New York Releases New Video Staring Sam Waterston

Fair Elections New York, a coalition of reform organizations, is blasting a new video across the net, advocating for the adoption of public financing in New York State. The goal is to reach over a million New Yorkers with the message. The video stars actor Sam Waterston, famous for his role in Law and Order and the HBO series The Newsroom. “Today in our broken system, political candidates raise huge contributions from a few wealthy donors. You can bet those fat cat CEOs, millionaire lobbyists and multi-billion dollar corporations have their own interests in mind. Middle-class working Americans’ interests? Not so much,” Waterston states in the video. Waterston encourages citizens to demand clean elections from politicians in Albany. You can view where your Representative and Senator stand on the issue at the Fair Elections New York website.

Democrat and Chronicle Editorial Criticizes Business as Usual in Albany

This Monday, an editorial in the Democrat and Chronicle lamented business as usual in Albany, asserting that campaign finance reform is necessary to restore trust and accountability in government. The article criticized the status quo, which only benefits incumbents and the special interests that fill their campaign coffers. Governor Cuomo and state legislators should pledge to make this the last election with excessive financial advantages for incumbents. “Campaign finance reform should be a top priority for any post-election legislative session.” Although recent court decisions complicate the issue and some remedies inevitably lie at the federal level, state leaders have no excuse for not getting their own house in order. New York’s campaign contribution limits—the highest in the nation—need to be lowered, and the state’s lax disclosure requirements need to be strengthened to restore public trust in our democratic institutions.

Frackers Spend Big on Lobbying Politicians in Albany

As the New York Department of Environmental Conservation studies the ecological consequences of hydraulic fracturing, the American Petroleum Institute has been spending $265,054 on lobbying legislators since January. In the prior two years combined, API spent only $190,000 by comparison. Among its expenses, the API listed $61,000 worth of payments to organizations for “grass-roots advocacy,” including $47,387 to XRM LLC. Greg Sovas, an outspoken supporter of hydrofracking, is the owner of XRM LLC and the former head of the Mineral Resources Division at the Department of Environmental Conservation. Sovas has submitted affidavits in lawsuits regarding “home rule”—whether local governments have the right to ban gas drilling and hydrofracking within their borders. It remains to be seen if Albany’s decisions about gas exploration will be centered on the scientific analysis of fracking and its consequences, rather than all the money pouring in.

Wall Street Gears Up to Oppose Disclosure Rules in New York State

This year New York State enacted ethics regulations requiring for-profit and tax-exempt groups—those that spend more than $50,000 a year and at least 3% of their budgets on lobbying—to publicly identify all sources of funding above $5,000. Although Political Action Committees have to disclose their funding sources, tax-exempt “business leagues” and 501(c)(4) “social welfare” groups do not, according to federal law. The New York Joint Commission on Public Ethics approved the new regulations and is currently awaiting public comments on the rules. Wall Street groups such as the Bankers Association and the Life Insurance Council are opposing the measure, insisting that it will curb their free speech. Reform groups on the other hand are lauding the effort. According to Dick Dadey, executive director of Citizens Union, there “should be no reason to hide from public scrutiny the funders…that affect how our democracy functions."

NATIONAL

State Contribution Limits Reinstated in Montana

Last week, Reform NY reported that U.S. District Judge Charles Lovell of Helena struck down Montana’s low campaign contribution limits on the grounds that they violate free speech rights by restraining effective campaigning. Montana’s campaign finance laws restrict individual and PAC contributions to $630 for gubernatorial candidates, $310 for other statewide offices and $160 for local candidates. The 9^th U.S. Circuit Court of Appeals approved an emergency stay of Lovell’s ruling, stating that it needs to see his full reasoning to review the case. Montana’s campaign donation limits have been reinstated for now.  Nick Nyhart, President and CEO of Public Campaign, welcomed the decision. "The 9th Circuit has stopped unlimited donations for this year's elections in Montana—a good idea now and for the future. Montana voters approved these laws, they want these laws, and the history of corruption in the state proves that unlimited contributions are incompatible with a government of, by, and for the people."

New York Times Op-Ed Debunks Notion of “Independent” Groups

Defenders of the status quo assume that “independent” expenditures by outside groups are indeed independent, and further assert that such spending does not have the capacity to corrupt politicians. In an excellent op-ed in the New York Times, Joe Nocera exposes logical flaws in these arguments in light of reality. After Watergate, Congress “instituted a system for presidential elections that combined small contributions from individuals ($1,000 or less), public financing from the taxpayers and a cap on how much the candidates could spend.” Consequently in the Gerald Ford-Jimmy Carter election of 1976, the two candidates were allowed to spend only $35 million each. Compare that to $181 million—the amount that Obama raised just in the month of September. Of course this figure doesn’t even account for the money being spent by Super PACs and 501(c)(4) organizations on the candidates’ behalf, a phenomenon Nocera characterizes as “campaign money-laundering”—that is “allowing wealthy people to contribute millions toward supposedly ‘independent’ spending on campaign advertising, polling and other expensive campaign goodies.” In reality the assumption that Super PACs and 501(c)(4)s are independent from campaigns, as the Supreme Court has iterated, is far from true. Karl Rove, the former strategist from the Bush Administration, is well aware of the most pressing needs of the Romney campaign, as is Rahm Emanuel with respect to the Obama campaign. After all, Emanuel served as Obama’s first chief of staff. Furthermore, this much money in politics from a small number of wealthy donors has the potential to corrupt. “In Congress we see it every day. A congressman gets on an important committee, begins to raise money from the companies that care about the committee’s issues — and, suddenly, the congressman is writing legislation the company wants… This can’t be good for Democracy.”

Congressional Ethics Committees Protect Legislators

Reviews of Congressional deliberations reveal the dire state of affairs in Congress with respect to ethical violations. First, lawmakers are free to employ information they gather through committee investigations in the stock market and direct federal money to projects that coincide with their financial interests. Second, when Congressmen do break loose ethics rules, they rarely face prosecution. In February, the Washington Post reported that 33 lawmakers directed more than $300 million in earmarks and other provisions to projects within two miles of their own property. Another 16 Congressmen crafted legislation to award tax money to companies, colleges or community programs where their family members worked or served on boards. The Office of Congressional Ethics, an independent and investigative arm of Congress, has probed 32 cases of possible wrongdoing by lawmakers, and subsequently referred them to the House Ethics Committee. However, only two of these cases have led to sanctions. For example, in 2010, the OCE called for an investigation of Representatives John Campbell (R-CA), Joseph Crowley (D-NY) and Tom Price (R-GA), who held fundraisers with Wall Street firms on the eve of their vote on the Wall Street Reform and Consumer Protection Act of 2009. Nevertheless, the House Ethics Committee ruled that there were no ethical violations because the politicians had already staked out positions on the bill.