The Brennan Center regularly compiles 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.
NEW YORK
Former Charity Leader Facing Inquiry into Political Donations
The former head of the Metropolitan Council on Jewish Poverty, William
E. Rapfogel, is under
investigation by an anticorruption task force formed by the state’s
attorney general and comptroller. Rapfogel has been accused of overpaying the
Met Council’s insurance company, Century Coverage, and asking the insurer to
contribute to certain political candidates. On Monday, he was removed from his
position at the charity after an investigation by outside counsel. Rapfogel has
long been a power player in the Jewish community and both city and state
politics, and his wife has served as chief of staff to Assembly Speaker Sheldon
Silver for many years. Rapfogel’s lawyer said that neither his wife nor Speaker
Silver were aware of his actions. As the investigations unfold, New York City
has suspended
all funding to the Met Council, and several mayoral candidates have returned
contributions from Century Coverage.
Democrat and Chronicle Calls on Moreland Commission to Investigate
Fracking Contributions
The Rochester-based Democrat
and Chronicle editorialized in favor of comprehensive campaign finance
reform this month, saying “The longer state lawmakers wait to act on meaningful
campaign finance reform, the more examples advocates can point to for why it is
so badly needed.” The editorial decried the Empire State’s loose campaign
finance laws and “casual” enforcement. Common Cause/New York and Fair Elections
New York released reports
indicating that backers of hydrofracking have funneled $14 million to
Western and Southern Tier New York lawmakers, in an attempt to tilt decisions
regarding the controversial practice. The editorial urged the Moreland
Commission to Investigate Public Corruption to look thoroughly into the matter.
NATIONAL
House Financial Services Committee Members Reaping Big Donations from
Financial Industry
Some freshmen in the U.S. House of Representatives are
seeing a flood of donations due to their position on the Financial Services
Committee. The panel is sometimes called “the cash committee” because of its
members’ ability to attract big contributions; for example, PACs have
donated more than $10 million to Financial Services Committee members, more
than any other committee. Seven freshmen Democrats on the committee have raised
more PAC money from the financial industry than minority committee chair
Representative Maxine Waters (D-CA). One lobbyist made the financial industry’s
intention clear: “It is almost like investing in a first-round draft pick for
the N.B.A. or N.F.L. There is potential there. So we make an investment, and we
are hopeful that investment produces a return.” These freshman also joined
with Republicans earlier this year, over the objection of Representative
Waters and the Obama administration, to roll back some of the strictest
provisions of Dodd-Frank financial reform. Freshman Representative Andy Barr
(R-KY), who has received $150,000 from the financial industry in only six
months, has also been a vocal critic of financial regulations. Last month, he introduced legislation
to eliminate a new federal rule intended to prevent banks from issuing
mortgages to customers who could not afford to repay the debt – a measure that
was backed by bank lobbyists that had visited his office. Former Representative
Brad Miller (D-NC) explains, “It’s only natural that it has got to be on your
mind that a vote one way or other is going to affect the ability to raise
money.”
Thirty-One Percent of Former Governors Now Work As Lobbyists or
Consultants
A review of post-government employment for 32 former governors by USA
Today, shows that 31 percent of them now work for trade associations,
consulting businesses or lobbying firms. The revolving door between Congress
and K Street has been widely discussed in the press: two-thirds of former
Congressmen from the 112th Congress now work for lobbying firms or industries
that lobby the federal government. Now “Governors are seeing that it’s
lucrative to trade in on their public service” as well, according to Danielle
Brian, executive director of the Project on Government Oversight. Earlier this
year, former Pennsylvania Democratic governor Ed Rendell wrote an op-ed
urging New York state officials to allow hydraulic fracturing. He also
worked as a paid consultant for a private equity firm with investments in the
gas industry, a fact he failed to disclose at the time of publication. Former
Mississippi governor Haley Barbour, a Republican, now runs a lobbying shop in
D.C. that hosts multinational clients including Chevron, Toyota and Motorola.
Former Kansas governor Mark Parkinson, a Democrat, is now president and CEO of
American Health Care Association, which spent $2 million on lobbying Congress
on legislation related to assisted-living facilities and nursing homes.
Former Rep. Kennedy: Elections Need Transparency
Former Congressman Joseph P. Kennedy II (D-MA) urges the IRS, in a Boston
Globe op-ed, to bring transparency for citizens to the election process. In
accordance with the current interpretation of the law, groups organized under
section 501(c)(4) of the tax code are allowed to spend up to 49 percent of
their funds on politics. Although legitimate 501(c)(4)s spend over $40 billion
annually on social welfare projects, the law allows political groups to collect
and spend exorbitant sums on narrow political goals without having to disclose
their donors, as they would if they were organized as political committees. In the 2012 election cycle, politically
active 501(c)(4)s spent nearly $300 million. Yet many of these same groups
checked “no” on their tax forms when asked if they plan to engage in campaign
activity. “No one should be able to spend tax-free dollars — or be able to
deduct donations as a business expense — to elect candidates” Kennedy argues.
Unfortunately, the IRS has been relying on key word searches such as “tea
party” and “occupy” to examine 501(c)(4)s that may be using tax-free money for
political activities. What is ultimately needed, Kennedy argues, is federal
legislation to close the loophole, but he suggests the IRS improve transparency
by requiring political contributions of $250 by 501(c)(4)s to be publicly
reported, and codifying regulations for what constitutes political speech.
NYC Public Advocate: 28 States Already Possess Power to Mandate
Disclosure
Federal laws and regulations are one avenue for enhancing transparency
in our elections. Enacting strong disclosure regimes in states is another. In a
new report, “Building a
Frontline Defense to Stop Secret Political Spending,” New York City Public
Advocate Bill de Blasio outlines that 28 states already have the ability to
tighten rules around independent expenditures. These states can use legal
or regulatory authority vested in the Attorney General or the Secretary of
State to help unmask major donors to 501(c)(4) groups – organizations that seek
to sway local and state elections without disclosing who bankrolls their
efforts. This summer, New York Attorney General Eric Schneiderman led the way
when he crafted
new regulations requiring groups that spent more than $10,000 on New York
elections to file itemized lists of expenditures above $50 and donors that gave
over $1,000. This type of rule has the potential to bring massive amounts of
political spending into the sunlight. IRS applications for non-profit 501(c)(4)
status more than doubled during the presidential election – from 1,735 in 2010
to 3,357 in 2012, and spending shot up from $92.2 million to $256.3 million.
Fundraising Now Increasingly Important in Congress
With growing
partisanship and excessive demands for fundraising, many former Congressmen
are glad they are no longer on Capitol Hill. Representative Rodney Alexander
(R-LA) announced this week that he would retire after serving 10 years in the U.S.
House, citing frustrations with continual gridlock on important issues. “Rather
than producing tangible solutions to better this nation, partisan posturing has
created a legislative standstill.” Former Representative Brad Miller (D-NC) also
expressed dissatisfaction with Congress, noting the consistent demand for
raising money. Following the Citizens United decision, independent expenditures
have flooded elections, and members must raise more and more money to keep
their jobs. Recent live tweets
about a freshman Congressmen’s attempt to raise money are illustrative of the
broader problem. Miller reflected, “It’s hard to imagine that that's really
what democracy should really be about. It means that members of Congress have
to spend their time in a little room with a phone, calling up lobbyists and
asking them to contribute from their PACs, then rushing to the floor to vote on
a lot of issues that very few members have had time to think about and
certainly not to shape in any important way.” Sunlight Foundation’s Party Time app
reveals that there were 12 political fundraising events this week, and 55 this
month, despite the August Congressional recess.
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