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

Big Donors Sign Letter Asking Gov. Cuomo and Legislature to Reform Campaign Finance

Nearly 140 major political donors, including more than 50 fund-raisers for President Obama, have signed a letter to support the public financing of campaigns in New York. In the wake of a series of corruption scandals that have tarnished Albany, the signatories are calling for immediate action by Governor Andrew Cuomo and the New York State Legislature. The donors support the popular New York City small donor matching system as a solution to many of the problems that ail state politics. In New York City, contributions up to $175 are matched with public funds by a factor of six. The signatories include hedge fund manager S. Donald Sussman, venture capitalist Alan Patricof, movie director Rob Reiner and Espirit clothing company founder Susie Buell, among others. All told, the donors have raised or contributed at least $50 million for federal candidates and parties in recent years. The irony of the situation was not lost on anyone. As Ellen Chesler, senior fellow at the Roosevelt Institute explained, “We know how the system works from the inside, and we know it needs change.”

Comptroller DiNapoli Addresses Business and Civic Leaders in Buffalo

Last week, New York State Comptroller Thomas DiNapoli was in Buffalo to speak to a group of business, civic and philanthropic leaders about the need for reforming our state’s campaign finance laws. The event – co-sponsored  by the Brennan Center for Justice, NY LEAD, American for Campaign Reform, SUNY Buffalo Law School, Common Cause and Housh Law Offices – also featured Brittany L. Stalsburg, an analyst at Lake Research Partners. In December of 2012, Lake Research released an extensive poll illustrating broad support, at 79 percent, for a comprehensive overhaul of the state’s campaign finance system. Also speaking was Larry Norden, deputy director of the Democracy Program at the Brennan Center. Norden emphasized that matching small donations with public funds in New York City has made candidacies independent of political machines and unbeholden to special interest donors possible. Only 7 percent of the contributions to New York City candidates for the 2013 election came from special interests compared to 69 percent of contributions to New York State Legislative candidates in the 2012 election. Comptroller DiNapoli said, “The bottom line is we need more good and honest people who want to make themselves available to serve in public office. The reality is the way our system is currently set up, the reliance on private donation—and big donations—is a deterrent to people getting involved.”

Siena Poll: 57 Percent of New Yorkers Favor Public Financing

A new research poll by Siena shows that New York residents across the state express strong support for the public financing of elections.  Approximately 57 percent of survey respondents indicated that they support creating a system that would limit the size of political contributions to state candidates and match small donations to public funds.  This is the twelfth poll conducted since 2010 that demonstrates strong voter demand for the idea. Support cuts across ideological lines and geographic regions, with 64 percent of liberal, 57 percent of moderate, and 52 percent of conservative voters, as well as 60 percent of New York City dwellers and 55 percent of both Upstate and suburban residents standing behind reform.

Former U.S. Senator Bill Bradley to NY Legislature: Reform will Reverse Mistrust Among Voters

On Wednesday, former U.S. Senator from New Jersey and NY LEAD member Bill Bradley wrote an op-ed in the Daily News urging the New York Legislature to adopt reforms that will improve our democracy. The current mistrust and cynicism among voters can be reversed by adopting public financing of elections with a small donor match.  These ideas will put voters in the driver’s seat of democracy as candidates are able to rely on a broad base of small donations from their constituents rather than large donors and special interests. “Three states — Connecticut, Arizona and Maine — offer candidates for public office the opportunity to compete in roughly the same way” Bradley stated. “The result, more often than not, is that qualified people from all walks of life are able to serve, and the relationship between money and politics is greatly reduced.  All voters have the opportunity to be in control of their government, not just the connected few.”

NYPIRG Report: Over 100,000 Campaign Law Violations in Last Cycle

A report by the New York Public Interest Research Group found that there were 103,805 violations of New York State’s campaign finance laws between January 2011 and January 2013. The New York Board of Elections sent violators warning letters but did little to follow-up. Over 2,300 campaign committees filed late disclosure reports, 224 political clubs failed to register with the state, and 346 corporations donated more than the state’s annual limit of $5,000 without any fines or legal repercussions. Currently, the Board of Elections is severely under-staffed with no investigators and only four auditors. By contrast, in New York City, where profound reforms were implemented in 1989, the Campaign Finance Board imposed 128 penalties on 31 candidates that accepted contributions above the legal limit. Governor Cuomo issued a statement immediately following the release of the report: “The buildup of over 100,000 campaign finance violations over the last two years is unacceptable and a clear sign that the current self-policing system at the Board of Elections does not work.”

Brennan Center Responds to Senator Skelos’s False Claims

Last week, Senate Republican Conference leader Dean Skelos published an op-ed in the Albany Times-Union arguing against public financing of state elections. This week, Ian Vandewalker, counsel at the Brennan Center, responded to Skelos in a letter to the paper. Skelos asserted that “real world job creators” are opposed to reform. In reality however, 72 percent of New York business leaders support campaign finance reform, including matching small donations with public funds. They understand that clean elections will allow their business to compete freely in the marketplace rather than on the political stage. Skelos and the Senate Republicans have also quoted exaggerated, unsubstantiated and contradictory numbers pertaining to the cost of publicly funding elections, ranging anywhere from $143 to $286 million per year. A reasoned estimate by the nonpartisan Campaign Finance Institute sets the figure at $26 to $41 million per year. Lastly Skelos argues that public financing has “been a recipe for corruption.” This could not be further from the truth. Since the passage of reform, New York City has not seen corruption scandals like those of the pre-reform era. In neighboring Connecticut, federal corruption convictions reached a record low four years following the adoption of public financing.

NATIONAL

Corporations Earn Big Returns on Investment from Lobbying

Commentary in the New York Times by Thomas Edsall explores the relationship between lobbying, campaign contributions and “returns on investment” for several major American corporations. According to an investigation by the Sunlight Foundation, nearly 200 corporations that spent heavily on lobbying paid lower federal tax rates in subsequent years. Seven out of the eight companies that invested the most in lobbying between 2007 and 2009 saw their tax rates lowered, and six of the eight saw rate declines of at least seven percentage points. Compare that to the median tax rate decline among all 200 companies, which was 0.6 percentage points. For example, General Electric spent $73.17 million in lobbying between 2007 to 2009. Its tax rate declined by 7.6 percent or $1.08 billion in that same time period. According to United Republic, a campaign finance reform advocacy organization, the prescription drug industry spent $116 million lobbying for legislation to prevent Medicare from bargaining down drug prices. The industry was successful in the endeavor allowing them to make an additional $90 billion annually – an astonishing 77,500 percent return on investment. These quantitative studies demonstrate that our open campaign finance system allows politicians to pick winners and losers in the marketplace, and empowers narrow special interests above the concerns of consumers.

Advocates in NC Defend Successful Judicial Public Financing Program

In North Carolina, advocates for public financing of judicial races are ramping up efforts to defend the program. Republican leaders in the North Carolina Senate and Governor Pat McCrory are both opposed to the program. Public financing offers candidates for the North Carolina Supreme Court and Court of Appeals state funds for campaigning. The goal is to reduce reliance on private donations, some which come from parties that frequently appear before state courts. Last year, all eight statewide judicial candidates accepted public funds, which come from voluntary tax check-offs and annual fees on attorneys. Several prominent North Carolinians have voiced support for the program, including former Governors Jim Holshouser and Jim Martin, both Republicans, and Democrat Jim Hunt. Even visitors from nearby West Virginia, which recently adopted a similar program, have advocated for North Carolina to retain their successful system. Former West Virginia Supreme Court Justice John F. McCuskey and Delegate John B. McCuskey from the state legislature were both in North Carolina this week to support public financing. John F. McCuskey said that they started the program in West Virginia because: “The perception of judges being bought, rather than acting impartially created a great distrust among the populous. Everyone agreed, Democrat and Republican, that something needed to be done.”