Money in Politics This Week

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.

For more stories on an ongoing basis, follow the Twitter hashtag #moNeYpolitics and #fairelex.

NEW YORK

Op-ed by Susan Lerner Asks NYC Council to Support Disclosure

An op-ed by Susan Lerner, the executive director of Common Cause/NY, appeared in the Daily News this Wednesday asking the New York City Council to bring greater transparency to the city elections process. New York City voters this year are facing a plethora of advertisements and mailings from outside special interests hoping to swing the upcoming elections in their favor. Following the U.S. Supreme Court’s Citizen United decision, corporations and unions are free to spend unlimited amounts of funds garnered from mega donations to boost their preferred candidates. For example, Jobs for New York, a group representing real estate interests, has spent $167,341 in support of Sara Gonzalez’s run for the 38th City Council district – an amount two times greater than what Gonzalez has spent herself. Jobs for New York has received more than $6 million from 116 limited-liability corporations – which were in turn used to funnel money from just 22 backers. Common Cause/NY is urging the City Council to pass legislation introduced by City Councilman Brad Lander which would require city campaign ads paid for by independent expenditures to list the top five contributors on the ad itself. “Independent expenditures unfairly color the campaign process by dominating the conversation with the point of view of a particular interest… First and foremost, voters need to know who is sponsoring the advertising they receive,” Lerner said.

Hedge Fund Donations to NYC Elections Pale in Comparison to State Contributions

Hedge funds have donated $500,000 to New York City races thus far. A significant portion, $170,336 has gone to City Council Speaker Christine Quinn’s mayoral campaign. The next closest recipient, Republican candidate Joseph Lhota, has received $47,625 from hedge funds. The $500,000 figure is small in comprasion New York State elections, where hedge funds – donating upwards of $7 million in the 2010 election cycle – are now the second-largest contributors after the real estate industry. The difference is largely due to New York City’s contribution limits, which are far lower than the state’s. James S. Chanos, founder of Kynikos Associates, who has not made any contributions in 2013 New York City races, explains that “limits are a big aspect to it, and I think people would give more if the limits were higher. At the federal and state level, we are constantly being called [about donations].” No one calls for contributions at the city level, he added.

Thompson’s Campaign Strategist Alleges Campaign Finance Misconduct by Rival de Blasio

New York City mayoral candidate Bill Thompson’s campaign strategist, Jonathan Prince, has filed a complaint with the city Campaign Finance Board seeking an investigation into fundraising events held for Democratic rival Bill de Blasio. De Blasio held fundraisers at the Villa Pacri restaurant in the Meatpacking district last year. The restaurant charged the de Blasio campaign $4,349.53 for drinks and appetizers for 75 people at the two events last year. The per-person per-hour rate amounts to $22.50, but a different group of the same size was charged $58.33 per-person per-hour just two days later. The complaint alleges that the difference between the “fair market value and the $22.50-per-person cost” is an in-kind campaign contribution. The campaign finance law iterates that candidates must pay fair market prices for campaign goods and services. De Blasio’s campaign dismisses the charge, saying that the price difference was due to differences in what the groups were served.

NATIONAL

Ben and Jerry’s Co-Founder: Education Costs Linked to Flood of Money in Politics

As the new school year approaches, President Obama has been traveling around the nation to discuss ways to address the high cost of education. Ben Cohen, co-founder of Ben and Jerry’s Ice Cream, and Edward Erikson, senior associate at MacWilliams Sanders Communications, write in a CNN op-ed that if the President is serious about tackling the issue of affordable education and student debt, then “we need to strike at the root of the problem – the influence of money in politics.” Cohen and Erikson write that Sallie Mae benefits from cheap loans from the government and have an interest in protecting the status quo regarding student debt. Sallie Mae has donated over $1.26 million to federal candidates and parties in the last four election cycles, and bankrolled $1.93 million into lobbying Congress in 2013. During that time period, Congress drafted and the President signed a student loan bill tying interest rates to financial markets. Although in the short term the bill prevents interest rates from doubling, now students are vulnerable to adjustable interest rates that could top 8.5 percent. Meanwhile Sallie Mae borrows at subsidized interest rates below %0.5 percent from the Federal Home Loan banks. In 2012, Sallie Mae earned $2.5 billion in interest payments from student loans. Cohen and Erikson call on citizens to stamp currency with messages to get the word out about reform and support referendums calling on Congress to redefine the Constitutional line between money and free speech.

Watchdog Groups Urge FCC to Expand Spending Disclosure

A broad coalition of transparency groups, dubbed the Public Interest Public Airwaves Coalition, have submitted comments to the Federal Communications Commission (FCC), regarding the agency’s rules mandating broadcasters to post political files online. In April, 2012, the FCC started requiring broadcasters in the top 50 U.S. markets, affiliated with the four major national networks, to post files online containing information on political advertisements; specifically the group’s purchasing ads, prices paid and the times aired. The FCC has proposed expanding the ruling to all stations by July, 2014. This could have a big impact on transparency in next year's elections. Of the 10 races that will determine control of the Senate in 2014, more than half will take place in states that have no online ad disclosure under the current FCC order. Groups have called for improvements to the system including uniform data and reporting standards, adoption of machine-readable data, and a more user-friendly database that can assist with reducing reporting errors, monitoring compliance, and analyzing data. The Sunlight Foundation’s Political Ad Sleuth provides a searchable database of the FCC files, a project that would be strengthened by an improved disclosure regime.

New Investigation Reveals Donors behind Voter ID in North Carolina

A new investigation by the Institute for Southern Studies has revealed several connections between Republican mega-donor Art Pope and the push for restrictive voting legislation in North Carolina. North Carolina House Bill 589 (now State Law 2013-381) raised significant outcry from civil rights advocates when it was signed by Republican Governor Pat McCrory this month. The bill mandates photographic identification, cuts the early voting period from 17 days to 10, ends same-day voter registration and eliminates rules encouraging youth to sign up to vote. The prime sponsors of the bill, including N.C. Representatives Harry Warren and Tom Murry, have received generous support from Art Pope and organizations that garner significant funds from the donor. In 2010, Warren narrowly defeated a five-term Democratic incumbent by fewer than 200 votes. His campaign benefited from over $109,000 in independent spending from Real Jobs N.C., a 527 committee co-founded by Pope. Murry also got significant funds, including $12,000 in campaign contributions from the Pope family, as well as over $92,000 in favorable independent spending from outside groups, such as Real Jobs N.C. and Civitas Action. Governor McCrory received $20,000 in contributions from Pope and his family, and benefited from independent expenditures from Pope-funded groups including $380,000 by Real Jobs N.C. and $130,000 by Americans for Prosperity.

Rise of “Obamacare Lobbyists” on K Street

The Affordable Care Act has boosted the demand for lobbyists and consultants who helped shape the law, as new regulations are being fine-tuned and implemented. More than 30 former Obama administration officials, lawmakers and Congressional staffers who worked on the healthcare law have become lobbyists since 2010. They’ve found clients like Delta Air Lines, UPS, BP America and Coca-Cola, as well as healthcare companies including GlaxoSmithKline, UnitedHealth Group and the Blue Cross Blue Shield Association. Watchdog groups have criticized the rise of “Obamacare lobbyists” as another example of the revolving door that turns public service into private enrichment. Craig Holman of Public Citizen says, “It raises questions about the [bill’s] integrity.” The firm Avenue Solutions has recently hired Yvette Fontenot, a former staffer for both a Senate committee that wrote Obamacare’s tax provisions and the Health and Human Services Office of Health Reform, one of the bill’s implementers. Since April, the firm has picked up the Health Care Service Corporation as a client and is on pace to earn $1.8 million in the first half of 2013. Healthcare lobbying will remain a bright field of work as the reform law’s requirements continue to roll out over the coming decade.