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 AND ETHICS NEWS

NEW YORK

Publicly Financed Elections are Good Business
In an op-ed published Sunday in the Albany Times-Union, co-founder and CEO of the American Sustainable Business Council, David Levine, explains why business owners are so enthusiastic about campaign finance reform. A poll commissioned by the ASBC indicates that business leaders are dissatisfied with the current role that money plays in American politics. Other surveys, such as this one by the Committee on Economic Development demonstrate support for reform is also strong in the business community; 72 percent are in favor of creating a public financing system that would match low-dollar contributions and give average citizens more incentives to contribute to campaigns. Secretive donations to political campaigns and organizations perpetuate perceptions of corruption, eroding the public’s trust in government institutions as is necessary for a functioning market and a participatory democracy. “Underneath the headlines, many business owners still believe that success should come from hard work, safe and quality products, and good customer service—not spending on elections.”

Lobbying Disclosure Reports Available on JCOPE Website
The New York State Joint Commission on Public Ethics has recently implemented the nation’s first system of disclosure of funding sources for specified entities spending in excess of $50,000 per year on lobbying expenditures. The disclosure is a requirement of the Public Integrity Act of 2011, which seeks to end the practice of black box lobbying, whereby expensive lobbying gifts are provided to legislators by unrecognizable and hidden groups. The public will now be better served with information about who is funding the state’s large lobbying campaigns.

In Passing Campaign Finance Reform, Senator Klein Holds the Key
Senator Jeffrey Klein has been in the news quite often lately over the Independent Democratic Conference’s decision to create a ruling coalition with the Republicans in the New York State Senate. It turns out Klein’s coalition could be instrumental in determining the fate of campaign finance reform in the state. Governor Andrew Cuomo has already committed himself to reform; he proposed that the state adopt a system similar to that of New York City, where small donations are matched with public funds. Although Senator Klein has stated he supports campaign finance reform, he has not yet weighed in on any specific proposals.

NATIONAL

Senator Menendez’s Ethics Scandal Illustrates Need for Campaign Finance Reform
The developing scandal involving Senator Robert Menendez (D-NJ) and Dr. Salomon Melgen, an eye surgeon in Florida, provides a clear illustration of how mega-dollar campaign contributions can create an appearance of corruption. Dr. Melgen is under federal investigation for overbilling Medicare nearly $8.9 million over the past decade. Federal auditors have noted an abnormally high volume of eye injections, surgeries and laser treatments performed at his West Palm Beach clinic. Back in 2009, Senator Menendez contacted federal officials about Melgen’s audit, complaining that it was unfair to penalize the doctor because the billing rules were ambiguous. Menendez also intervened on Malgen’s behalf in the eye doctor’s efforts to close a deal to provide port security in the Dominican Republic. Dr. Melgen also happens to be a major contributor to Senator Menendez, having donated tens of thousands of dollars to his campaigns over the years and over $700,000 to Majority PAC, a Super PAC that spent $582,500 on behalf of Mendendez. Now, Menendez is facing a Senate ethics inquiry regarding two free trips he took in 2010 on Melgen’s private plane to the doctor’s seaside mansion in the Dominican Republic. Menendez acknowledged this month that he had not properly disclosed the trips and wrote a personal check for $58,500 to reimburse Melgen.

Super PACs and 501(c)’s Compete Over Secretary of Defense Nomination
The flood of outside spending on elections has spilled over into the nomination process for positions in the Obama Administration. Several groups are levying funds to gather public opposition to Senator Chuck Hagel’s nomination for Secretary of Defense. According to the Sunlight Foundation’s Political Ad Sleuth, outside groups have already spent at least $212,000 on television advertisements to torpedo Senator Hagel’s chances. Use Your Mandate, a new organization which presents itself as a liberal gay rights group but purchases its television time through a prominent Republican firm, is attacking Hagel as “anti-Gay,” “anti-woman” and “anti-Israel” in ad slots during popular Sunday morning political talk shows. The American Future Fund, a dark money group, has spent $14,000 on an ad to air on Fox News Sunday that attacks Hagel's personal financial assets. Meanwhile Hagel’s supporters such as the Bipartisan Group have placed ads, valued at $35,000, in Mike Allen's Playbook, a popular email newsletter put out by Politico. In the post-Citizens United world, the nomination process has evolved into a drawn out political campaign fueled by interest group spending.

Obama Considering Major Donor for Secretary of Commerce

President Obama is considering nominating Penny Pritzker, a successful businesswoman from Chicago, for Secretary of Commerce. Pritzker, part of the Hyatt Hotel dynasty, has experience running a real estate company and serving on the boards of Hyatt, the credit-reporting company TransUnion, and the Wm. Wrigley Jr. Company. She has also been a prominent donor to the Obama campaign and Senate Democrats. Pritzker chaired Obama’s national fundraising operation during his 2008 campaign, helping him raise nearly $750 million. In 2012, she bundled over $500,000 for the campaign. Since 1990, she has contributed to no fewer than 73 Senate candidates, including a grand total of $32,800 to the 13 members of the Senate Committee on Commerce, Science and Transportation. Although Pritzker may well be qualified for the position, the practice of awarding mega-donors with plush ambassadorships and, in rare instances, cabinet positions casts presidential nominations in unseemly light.

Campaign Funds of Former Politicians Used as “Slush Funds”

A review of campaign finance reports by USA TODAY shows that former House members that lost races are using their leftover campaign funds to pay for everything from luxury cars to obscure foundations that bear their names. Federal laws allow former lawmakers to keep their campaign accounts active indefinitely and dole out funds to candidates, political parties and charities. The money also can be used to pay any lingering campaign expenses – such as gifts for volunteers and salaries for any remaining staffers. Florida Republican Allen West had a stockpile of $900,000 in his war chest after his unsuccessful bid for Congress. He donated $250,000 each to the Allen West Foundation and the American Legacy Guardians. The organizations share a post office box in Boca Raton, Florida. As to their mission or purpose, West has stated that will be forthcoming. Former Congressman Edlophus Towns from New York retired in April of 2012 but continued to make $602 monthly payments to Infniti Financial Services for a leased vehicle. The campaign also bought a $2,300 computer from an Apple store in Manhattan on November 28^th.  Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, stressed that politicians should be required to close their campaign accounts after a fixed time period "because they give the appearance of being treated as slush funds."