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

Daily News Tells Legislators to Reveal Outside Income to Corruption Commission

The Daily News ran an editorial on Saturday asking Albany lawmakers to come clean about their outside income. The Moreland Commission to Investigate Public Corruption set last Friday as the deadline for state legislators to provide information regarding outside employment that earned them more than $20,000 in 2012. State Assemblymen and Senators serve for only part of the year, and the commission is investigating whether legislators are using their political power for private gain. In a rare bipartisan response, lawyers representing lawmakers have stated that all information that is legally required has been disclosed and that the commission is constitutionally constrained from demanding any more. “So much for openness and accountability,” the editorial reads. Commission spokeswoman Michelle Duffy said that “There are a number of avenues through which the commission can [still] obtain the information being sought, and we will pursue them.”

Moreland Commission Holds Second Public Hearing

The Moreland Commission to Investigate Public Corruption held its second public hearing on Tuesday, this time in Albany. The location was changed at the last minute due to higher than expected attendance: at its peak there were nearly 100 people in the audience. Several good-government groups were present to testify in favor of comprehensive campaign finance reform as an answer to the epidemic of corruption in the state legislature. New York Public Interest Research Group research coordinator Bill Mahoney emphasized that lax enforcement by the state Board of Elections has allowed politicians to spend campaign funds on private expenses including pool covers, cars and legal defense. Brian Paul of Common Cause of New York criticized the infamous LLC loophole – whereby a single corporation can use multiple limited liability companies to give effectively unlimited amounts. They also derided the “soft money” loophole that has allowed just 59 special interest groups to contribute over $47.6 million to political party housekeeping accounts, which in turn are used to benefit party-favored candidates. Brennan Center counsel Ian Vandewalker requested that the commission examine legal corruption in addition to illegal corruption. Almost all of the speakers testifying asked the commission to focus on a comprehensive solution that includes small-donor public financing based on the New York City elections model.

Norden and Vandewalker Discuss Albany’s Tax-Break Protection Racket in Daily News Op-ed

A Daily News op-ed by Brennan Center attorneys Lawrence Norden and Ian Vandewalker describes the way decisions about tax credits seem to be driven by campaign contributions. In testimony before the Moreland Commission to Investigate Public Corruption, the Brennan Center singled out 14 temporary tax credits that were repeatedly scheduled to expire and were reauthorized. Although the Brennan Center takes no position on the utility of the tax breaks, the authors ask why the credits are not made permanent if they benefit the economy. Our money-driven campaign system provides a possible answer. In 1999, the state legislature reduced taxes on gambling wagers from 7.5 percent to 1.6 percent. Although these were set to expire in 2007, since then, they have been reauthorized seven times. Meanwhile, research by Common Cause/NY shows that racetrack and racino interests contributed over $4.7 million to political campaigns in the state between 2005 and 2012, as well as $2.4 million to the Committee to Save New York. As long as our campaign finance laws remain broken, “corruption will remain endemic.”

Super PAC Files Suit against NYS Aggregate Contribution Limits

The New York Progress and Protection PAC, a Republican Super PAC, has filed a suit against the New York State Board of Elections over the right of individuals to donate more than $150,000 to independent political organizations. New York State law bars an individual from contributing more than $150,000 per year to independent political groups. Shaun McCutcheon, a wealthy Republican donor from Alabama, alleges that his free speech rights are being violated because he wants to donate at least $200,000 to the organization. He has also filed a case against the federal aggregate contribution limit for political campaigns, set to be heard by the Supreme Court this October. The new group plans on spending funds to indirectly support Republican mayoral candidate Joe Lhota. Lhota claims he does not know the group in question, but supports the right of big donors to spend as much money as they wish on political contests. During his primary race, Lhota was able to keep his campaign afloat against self-financed grocery chain owner John Catsimatidis through the New York City’s public financing program, which matches small donations with public funds.

NATIONAL

Obama Campaign Bundlers Awarded with Ambassadorships

Twenty bundlers that raised at least $13.8 million for Obama’s election campaigns have received U.S. ambassadorships to countries and international organizations. Bundlers are major fundraisers who collect donations from family, friends and co-workers for political contests. Recent appointees to ambassador posts include prominent finance, consulting and law firm executives, as well as former government officials and political campaign veterans. According to the American Foreign Service Association, which represents career diplomats, President Obama’s rate of appointing non-career ambassadors is similar to previous administrations: about one in three. Historic White House tapes, released in 1997, reveal that President Nixon informed donors during his 1972 reelection campaign that they needed to contribute at least $250,000 – $1.4 million in 2013 dollars – to be considered for an ambassadorship. The AFSA has criticized the practice saying that is hard “to attract, train, retain and deploy a professional cadre…if the majority of key senior diplomatic positions at home and abroad are reserved for political appointees.”

Senate Finally Approves FEC Nominees After Two Months

Two of President Obama’s nominees to the Federal Election Commission have finally been approved by the Senate after their initial nomination on June 21^st. Lee E. Goodman, a Republican attorney at the law firm LeClairRyan, and Ann Miller Ravel, a Democrat and the head of California’s Fair Political Practices Commission, are set to join the commission. The FEC has struggled with ideological divides and gridlock over enforcement for years. The new members will fill two slots that have been vacant because of resignations. Ravel, in her official capacity, fought for the disclosure of donors to a secretive Arizona non-profit that spent $2 million on California ballot initiatives. Goodman served as a lobbyist for America Online and Time Warner, as well as a counsel to the governor of Virginia and assistant attorney general of Virginia.

The Battle over Obamacare Turns to Ad Spending

The ongoing battle in Congress over the implementation of the Affordable Care Act is jeopardizing the nation’s financial stability with the threat of another government shutdown. The Obama administration, aided by Organizing for America and insurance companies, is set to kick off a six-month campaign to encourage uninsured Americans to purchase health insurance. Some Republicans, meanwhile, are also spending big to discourage consumers from enrolling. If enough consumers do not enroll it threatens to derail the signature healthcare law, which aims to lower premium costs through a wider pool of less risk-prone, healthy, young people. Insurance companies are poised to spend nearly $1 billion on marketing to attract new customers. The Republican National Committee has been boosting a campaign to run commercials during popular radio and TV programs. And the Republican-controlled House of Representatives just passed a government funding bill last week that strips funding for key Obamacare provisions. The Senate Conservatives Fund, a political action committee connected to Heritage Foundation President Jim DeMint, has raised more than $1.5 million to pressure Republican Senators to defund Obamacare as well. If the House and Senate cannot agree on a funding bill by September 30^th, it will lead to a government shutdown.