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 Katherine Munyan and Syed Zaidi.

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

NEW YORK

Philanthropic, Civic Groups Send Letter to Cuomo Urging Public Financing of Elections

Major philanthropic organizations and numerous environmental and civic groups sent a letter to Governor Cuomo on Tuesday urging him to support the public financing of state elections. “We are concerned that the views you and many other leaders have articulated will have a very hard time being translated into action unless systematic reform occurs in New York,” they stated. The Moreland Commission to Investigate Public Corruption is set to release a report of its findings and recommendations by December 1. It has been investigating state campaign finance and corruption laws and practices for the past six months. Among the signatories to Tuesday’s letter were the Rockefeller Brothers Fund, the New York Foundation, and the Park Foundation. Environmental groups such as the Natural Resources Defense Council and the Sierra Club also voiced their concerns in the letter.

DiNapoli and Stringer Join Tele-town Hall to Promote Comprehensive Reform

On Tuesday evening, New York State Comptroller Thomas DiNapoli, New York City Comptroller-elect Scott Stringer, and a host of good-government groups held a “telephone town hall” to encourage citizens to demand small donor-financed elections in New York State. Addressing the crowd, DiNapoli said that mega checks to state politicians in Albany are “downing out the voices of everyday New Yorkers and it’s distorting our priorities.” Regarding concerns about the use of public funds for election campaigns, DiNapoli added that with a “$135 billion budget…spending $20 or $30 or even $40 million, that’s really a small investment with a tremendous payback.” Stringer informed the callers that matching small donations with public funds helped him challenge Eliot Spitzer, a self-financed opponent who spent over $10 million in the race. “[I]f it were not for the New York City campaign finance program the fact that we could continue to raise money — $50 or $100 or $200 at a time — knowing that money would be matched six to one giving us a shot at this race we would have been doomed from the start,” he stated. The reform groups urged the Moreland Commission to endorse comprehensive campaign finance reform, including public financing, as a solution to change the pay-to-play culture in Albany.

Lawmakers Reject Corruption Commission’s Request for Disclosure of Outside Income 

Lawyers representing the New York State Assembly and Senate jointly filed papers in Manhattan Supreme Court on Friday challenging the Moreland Commission’s subpoenas seeking information on outside income of legislators. Albany lawmakers work part of the year and are allowed to seek private employment. The commission asserts that disclosure is necessary for the sake of transparency and preventing potential conflicts of interest. The initial request, for legislators earning more than $20,000 in 2012 from private practice, was sent out in August. In response to a rebuke by lawyers representing the Senate Majority Leaders – a coalition of Republicans and four break-away Democrats – the commission subpoenaed the firms employing the lawmakers. New York State Attorney General Eric Schneiderman said he is confident that the commission would prevail in court.

NATIONAL

House Ethics Committee Drops Investigation into Taiwan Trips

After an investigation spanning more than a year, the House Ethics Committee dismissed charges against Rep. Bill Owens (D-NY) and Rep. Peter Ruskim (R-Ill.) last Friday. Both cases involved 2011 trips to Taiwan.  The travel’s legality depended on who organized and paid for the trips. A private university in Taiwan allegedly sponsored both trips, but an initial investigation by the independent House of Congressional Ethics found “substantial reason to believe” that the Taiwanese government paid, which would count as an impermissible gift from a foreign government under Congress’s rules. The Ethics Committee concluded there was insufficient evidence to continue the investigation.  Its report states that Owens “should have known” the trip was improper due to the continued involvement of the lobbying firm Park Strategies, which represented the Taiwanese government for $20,000 a month at the time of the travel. However, the Committee will not pursue charges against Owens since he paid back the cost of the trip.

House Passes Expansion of FEC Disclosure Fines

On Monday, the House of Representatives passed a bill that would expand the Federal Election Commission’s administrative fine program. The administrative fine program started in the 1999-2000 election year, and established a schedule to fine candidates and campaigns for failing to file disclosure reports on time. The schedule determines fines automatically based on the length of the delay, the amount of data missing, and any prior history of violations. The program will end December 31^st of this year without Congressional reauthorization. All nine members of the House Administration Committee sponsored H.R. 3487, introduced last Thursday and passed days later in a voice vote.  The bill extends the FEC’s administrative fine authority through the end of 2018, and expands it to cover more types of organizations, including groups making independent expenditures or electioneering communications. A supporter, Rep. Candice Miller (R-Mich), called the bill’s recommendations “a consistent and transparent process” for assessing filing violation fees.

Mega Donor Sheldon Adelson Turns to Online Gambling Ban

In 2012, billionaire Sheldon Adelson set a new record in political donations, giving $70 million to GOP candidates.  Adelson’s fortune made him a major political player, and he is now harnessing his political clout to protect its source:  the U.S. casino industry.  Adelson claims that internet gambling, recently legalized in several states, will endanger the industry’s business model and draw minors and the socially-vulnerable into gambling. He is currently hiring lobbyists and forming an advocacy group, Coalition to Stop Internet Gambling, to make his case in Washington. Other casinos and lotteries, which see internet gambling as a potential revenue source, are ready to push back with lobbying efforts of their own to legalize regulated internet gambling. With Adelson openly committed to spending “whatever it takes” to stop internet gambling, the fight promises to be an expensive one on both federal and state levels. 

Moreland Update: State Comptroller, Major Philanthropists Call for Public Financing

Yesterday, thousands of people called in to a telephone rally for public campaign financing in New York State. State Comptroller Tom DiNapoli and New York City Comptroller-elect Scott Stringer joined the “tele-town hall” and trumpeted the reform proposal as fiscally sound, echoing comments by Moreland Commission Co-Chair William Fitzpatrick and others. “In the context of a multi-billion dollar budget, spending $40 million [for public campaign finance] is a small investment with a big payback,” DiNapoli said.
 

Meanwhile, more than a dozen major environmental and philanthropic organizations sent a letter to Gov. Andrew Cuomo urging him to pass public campaign financing. “The move could bring far more money to Albany for lobbying and to energize the public over the idea in the 2014 legislative session, which begins Jan. 1,” the Associated Press reports. The groups backing reform include the Rockefeller Brothers Fund, the New York Foundation, the Natural Resources Defense Council, and the Park Foundation. Their letter calls for “systematic reform” in Albany and promises, “We stand ready to support such changes in whatever way we can.”

Latest News

Cuomo Stockpiles Cash
Gov. Andrew Cuomo has raised far more money than any other 2014 gubernatorial candidate in the nation, despite having no obvious challenger. The Wall Street Journal notes that Cuomo has been able to amass a $27.8 million war chest in part because of New York’s weak campaign finance laws, which allow a small class of big donors to finance campaigns.

Disgraced Brooklyn Pol William Boyland, Jr. Used Dad as Bag Man: Prosecutors
Prosecutors have submitted court papers detailing bribery allegations against Assemblyman William Boyland, Jr. Boyland’s father, himself a former assemblyman, allegedly took a check for $3,000 from an FBI agent posing as a real estate developer in exchange for a promise from the younger Boyland to direct government funding to a development project.

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Over the next several weeks, the Brennan Center for Justice at NYU School of Law will send regular updates to this list of Friends of Reform in New York State on efforts to secure comprehensive campaign finance reform centered on public financing of elections. These updates will be sent to good government advocates, allies of the Fair Elections New York campaign, legislative and opinion leaders, scholars and engaged students, reporters, and other advocates for reform. They will also be posted on the Brennan Center’s New York blog at ReformNY.blogspot.com.

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 Katherine Munyan and Syed Zaidi.

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

NEW YORK

Moreland Commission Co-Chairs Support Public Financing

In recent press interviews, two members who head the anti-corruption commission appointed by Governor Cuomo, Democratic Nassau County District Attorney Kathleen Rice and Republican Onondaga County District Attorney William Fitzpatrick, said that they are in favor of public financing of elections as a means to reduce the dominance of big money in state politics. Rice told Newsday that recent hearings and investigations conducted by the commission have made her “more confidant that public financing of campaigns has to be part of any meaningful campaign-finance reform.” Large amounts of private contributions for public service “is a recipe for disaster,” she continued. Fitzpatrick said that he believes public financing for elections could reduce the pay-to-play culture so prevalent in the state legislature. When asked about the costs to taxpayers, he replied that he is a fiscal conservative and believes the “savings would ultimately be astronomical in the long run.” He went on to criticize aspects of New York politics that reformers have long called problematic, including the inappropriate use of “housekeeping” accounts, the LLC contribution loophole, the lack of enforcement by the State Board of Elections, and the undisclosed outside income earned by state lawmakers. The commission’s report of its findings and recommendations is set to come out on December 1. Good-government groups have proposed that the report include comprehensive reform, including harsher penalties for corruption and public matching funds for small donations.

Attorney General Says Moreland Should Recommend Public Financing

Attorney General Eric Schneiderman recently informed The Capital Pressroom on WCNY that he thinks the Moreland Commission should pursue systematic reform of our election system rather than just a few corrupt politicians. Any findings of illegal behavior are to be referred to the appropriate law enforcement agencies, but the commission has really been “empowered and designed to find weaknesses in existing laws and recommend better ways of doing business,” Schneiderman stated. He added that “public financing should be a part of whatever comes out of this.”

Poughkeepsie Journal Editorial: Moreland Commission Must Follow the Campaign Money

This week, a Poughkeepsie Journal editorial encouraged the Moreland Commission to continue its series of investigations into potentially corrupt practices in the state legislature. There is evidence that political party “housekeeping accounts,” which face no contribution limits,  are being used to advance candidate campaigns rather than for administrative and party-building activities – as dictated by law. The editorial calls for “legislation designed to put reasonable limits on campaign contributions and negate the opportunity for people to buy access.”

Business Community Should Get Behind Reform

This week, Cynthia DiBartolo, chairperson of the Greater New York Chamber of Commerce, wrote an op-ed in the Albany Times-Union, asking New York’s business community to come together behind comprehensive reforms of our campaign finance laws. “We cannot continue to foster a system that risks elevating businesses with the best political connections above those with the best business practices.” But New Yorkers now have a historic opportunity to fix the system; by lowering contribution limits and instituting public matching funds for small donations, citizens can ensure that their representatives once again become dependent on them rather than special interests. As the Moreland Commission puts forth recommendations for reform on December 1, the business community should help ensure that these reforms become a reality.

Former Bronx GOP Chairman Pleads Guilty on Corruption Charges

Former Bronx Republican Party Chairman Jay Savino pleaded guilty in U.S. District Court on Tuesday on several corruption charges. Savino was accused of accepting a bribe of $15,000 in exchange for agreeing to assist State Senator Malcolm Smith (D-Hollis) in his run for New York City mayoral elections. He has been charged with three federal counts, including bribery, conspiracy and wire fraud. In sum, the charges could lead to a 30 year prison sentence.

NATIONAL

Biden Hires Former Corporate Lobbyist as Chief of Staff

On Wednesday, Vice President Joe Biden announced that his current senior aide Steve Richetti will replace Bruce Reed as his Chief of Staff next month. Richetti has had a thirty-year career in Washington, moving in and out of Capital Hill staff positions and K Street lobbying firms. After leaving the Clinton administration, Richetti founded his own lobbying firm, Richetti Inc., representing big corporate clients including Fannie Mae, General Motors, AT&T, and pharmaceutical company Eli Lilly.  Richetti deregistered from lobbying with Congress in 2008 after Obama won the presidential election.  He remains president of Richetti ,Inc., but his brother, Jeffrey Richetti, is registered to do the actual lobbying. According to a statement from Biden’s office, Steve Richetti ‘s continued role with the firm involves advising clients on “public policy, communications strategy, and grass-roots efforts.”

FEC Debates Bitcoin Contributions to Candidates

On Thursday, the Federal Election Commission debated a proposal to allow candidates and committees to accept bitcoins as an in-kind contribution, similar to computer equipment or stock shares. A ruling on the issue was requested by the Conservative Action Fund, a Super PAC funded largely by Shaun McCutcheon, whose challenge to federal contribution limits is being considered by the Supreme Court in McCutcheon vs. FEC.  Bitcoins allow people to make online payments without going through a bank or other third party. The payments are public, but only bitcoin addresses identify the parties, and the currency has been associated with black market drug purchases – although this has not deterred investors.  FEC commissioners indicated that contributions must include the contributor’s name and address, but debated how to classify bitcoins.  Since they are not a national currency, bitcoins are unlikely to be classified as money. Bitcoins also pose another challenge to the enforcement of contribution limits – since their value varies with supply and demand, a bitcoin contribution’s worth could change drastically between when it is given and it is converted into dollars.

States Consider Campaign Finance Law Changes

Now that Election Day has come and gone, state legislators are debating changes in campaign finance rules for the next election cycle. In Michigan, a new Senate bill would double limits on individual contributions to candidates and political committees. The bill would also require candidate committees to file new finance statements in off-election years.  New Hampshire is also considering increasing how much donors can give to candidates.  Massachusetts legislators, alarmed by the flood of secret money from outside groups into Boston’s mayoral race, are introducing legislation that would require independent groups to disclose their donors within a week of spending more than $250 on a campaign and list their five biggest donors on television ads.

Moreland Update: Co-Chairs Support Public Financing

Momentum for a statewide public financing system continues to grow: Kathleen Rice, co-chair of the Moreland Commission and Nassau County District Attorney, says she’s now in favor of public financing, as a result of what she’s learned since the Commission convened in June. The commission’s work has “made me more confident that public financing of campaigns has to be part of any meaningful campaign-finance reform,” she said. Rice has seen the danger of large donations in our political system. She said, “Infusing huge amounts of private money for public service is a recipe for disaster.” A public funding system that multiplies small donations would allow candidates to depend on the support of average New Yorkers, rather than on big donations from moneyed interests.

Rice’s endorsement comes on the heels of those of her fellow Moreland Co-Chair William Fitzpatrick and Attorney General Eric Schneiderman, as highlighted in an Associated Press report yesterday. The AP piece notes that public financing supporters see it as an effective anti-corruption measure. Public financing makes elections more competitive, which keeps elected officials accountable to their constituents, and therefore less likely to assume the “untouchable” mentality that seems to precede most corruption scandals.

The Brennan Center’s advocacy for comprehensive campaign finance reform was also featured in Albany’s Legislative Gazette. The article says that public financing as a centerpiece of a broad reform package will improve enforcement of campaign finance laws, because candidates who violate the rules would not be eligible for public funds.

Latest News

Calls for Public Campaign Finance System Include a Moreland Commission Co-Chairman
Karen Dewitt reports on Moreland Co-Chair Fitzpatrick’s support for public campaign financing. Fitzpatrick’s change of heart was motivated in part by fiscal concerns. He described the potential of public financing to save the state money by reducing the ability of special interests to secure sweetheart deals from Albany. Citizen Action of New York Director Karen Scharff hopes the panel comes to the same conclusion, saying, “the Moreland Commission will be a failure unless they really do recommend systemic reform.”

Savino Pleads Guilty in Corruption Scandal
Jay Savino, the former Bronx Republican Party Chairman, pleaded guilty Tuesday to federal charges relating to the corruption scandal surrounding State Senator Malcolm Smith. Smith’s legal troubles are just one example of the state legislature’s corruption crisis. In less than five years, four legislative leaders have been convicted or charged with corruption, and the scandals have touched Democrats and Republicans, from upstate and down.

Editorial: Ethics Panel Must Follow the Money
The Poughkeepsie Journal calls on the Moreland Commission to probe the corrupting influence of campaign contributions in Albany. The Journal writes that the recent corruption crisis stems from the legislature: “More than 30 lawmakers have run into some kind of legal or ethical trouble over the past 12 years, and many of these cases involved the exchange of money.” The huge political donations that New York law allows raise suspicions that donors are buying access. The influence of money on Albany must be addressed by meaningful reform.

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Over the next several weeks, the Brennan Center for Justice at NYU School of Law will send regular updates to this list of Friends of Reform in New York State on efforts to secure comprehensive campaign finance reform centered on public financing of elections. These updates will be sent to good government advocates, allies of the Fair Elections New York campaign, legislative and opinion leaders, scholars and engaged students, reporters, and other advocates for reform. They will also be posted on the Brennan Center’s New York blog at ReformNY.blogspot.com.

Moreland Update: A Growing Chorus Calling for Public Campaign Financing

Cynthia DiBartolo, chairperson of the Greater New York Chamber of Commerce, made the case today in an Albany Times Union op-ed for why New York’s business community supports comprehensive campaign finance reform that includes public financing. She argues that only systemic reform can fix Albany’s corrupting system. The businesses she represents at the Chamber worry they can’t compete with firms that give massive campaign contributions: “We cannot continue to foster a system,” DiBartolo writes, “that risks elevating businesses with the best political connections above those with the best business practices.”

Broad reform is desperately needed to bring down sky-high contribution limits, close loopholes, provide for effective enforcement of campaign finance laws, and, most importantly, enact a small donor matching system for contributions. Polling shows strong business support for public financing, which has worked in New York City for years. The Moreland Commission has collected more than enough evidence of the power of public financing to curb corruption. DiBartolo calls on the business community to demand changes that will make elections transparent, fair, and competitive. “In New York there is a real possibility for meaningful reform in the near future,” she writes. “The best solution is statewide campaign finance reform that includes a system of matching small contributions with public funds.”

DiBartolo’s call for public campaign financing boosts the Brennan Center’s argument that comprehensive campaign finance reform with a small donor public matching system will broadly benefit New York voters and businesses by addressing all types of corruption, making elections more competitive, improving enforcement of the rules, and re-engaging a cynical voting public. The Moreland Commission’s recommendations should reflect this reality.

Latest News

Schneiderman: Moreland Commission Should Spur Public Financing
Attorney General Eric Schneiderman said today he believes the Moreland Commission’s recommended reforms should include public campaign financing. Schneiderman spoke of the importance of the commission’s recommendations for reform on WCNY’s Capitol Pressroom. “I think public financing should be a part of whatever comes out of this,” he said.

Fitzpatrick Says He’s on Board with Public Financing for Campaigns
Moreland Commission co-chair and Onondaga County District Attorney William Fitzpatrick now supports public campaign financing. In a radio interview over the weekend, Fitzpatrick said, “based on what I’ve learned over the last couple of months, I’m now a proponent of public financing.” He explained that public financing would address the pay-to-play culture of Albany, at a negligible cost. In fact, he said, “The savings ultimately would be astronomical in the long run.” Given the strong evidence presented to the Moreland Commission, the Brennan Center is confident that Fitzpatrick can build support among the Commission’s other members for this crucial reform.

New Battleground Poll: Money-in-Politics One Issue That Transcends Partisan Divide
A new poll of battleground districts across the nation found that voters from both parties are fed up with the influence of big money in politics and strongly support comprehensive campaign finance reforms. There is robust support for a system in which small donations are matched by public funding, and swing voters are some of the strongest supporters. Pollsters found almost no negative response to reform proposals, even those that require significant public contributions to political campaigns.

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Over the next several weeks, the Brennan Center for Justice at NYU School of Law will send regular updates to this list of Friends of Reform in New York State on efforts to secure comprehensive campaign finance reform centered on public financing of elections. These updates will be sent to good government advocates, allies of the Fair Elections New York campaign, legislative and opinion leaders, scholars and engaged students, reporters, and other advocates for reform. They will also be posted on the Brennan Center’s New York blog at ReformNY.blogspot.com