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

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

Reform Advocates Meet With Moreland Commission Co-Chair Fitzpatrick

Representatives from three good-government groups met with Onondaga County District Attorney William Fitzpatrick at the end of August. Fitzpatrick is one of three co-chairs of the Commission to Investigate Public Corruption, a body appointed by Governor Cuomo to examine political corruption in the legislature. Representatives from Citizen Action of New York, the Brennan Center for Justice and Democracy Matters were present at the meeting. Karen Scharff, executive director of Citizen Action, noted that the commission is “very willing to do investigations.” Already it has subpoenaed five major political donors – real estate developers in New York City – who received tax abatements from the state legislature. The advocates stated that Fitzpatrick was attentive to their comprehensive campaign finance reform proposal, which includes lower contribution limits, pay-to-play restrictions, public financing and better enforcement of existing laws. 

Public Financing Keeps Focus on Small Donors in NYC Elections

Wall Street is noticeably absent from the campaign chests of New York City mayoral candidates. Three candidates in the Democratic primary ran on a platform of reducing income inequality and imposing higher taxes on the rich, and yet the city’s financial elite have been relatively inactive. New Republic senior editor Alec MacGillis explains that the city’s public financing system helps ensure that money does not speak louder than the voices of voters. Candidates that can garner small donations from enough city residents are provided with six dollars for every one dollar raised up to $175. Individual donations are capped at $4,950 for mayoral candidates. The system has encouraged mayoral candidates to spend time raising small donations from constituents rather than a few mega-donors. A 2012 study by the Brennan Center and the Campaign Finance Institute showed that 89 percent of census block groups in the city had at least one person who donated up to $175 to a City Council candidate, whereas only 30 percent of census block groups had a donor for the New York State Assembly races – where public financing is absent.  

Independent Spenders Active in NYC Races

Although the New York City public financing system has done much to reduce the influence of special interests on electoral campaigns, independent groups can still spend unlimited funds as a result of the U.S. Supreme Court’s decision in Citizens United v. FEC. In the first citywide election since the Supreme Court’s 2010 verdict, special interest groups are flexing their muscle through independent expenditures. Approximately $12.7 million has been spent by these groups on all races, with Jobs for New York, a real estate developers’ group, topping the charts with $4.8 million for and against City Council candidates. In the Democratic primary, Bill Thompson received the most favorable spending on his behalf; $2.9 million by a teachers’ union organization and a firefighters’ group, among others. On the Republican side, independent spenders preferred Joe Lhota. New Yorkers for Proven Leadership, co-founded by former Mayor Rudy Giuliani aides, spent $120,001 in support of Lhota.

NATIONAL

The Donors and Lobbyists Behind the President’s Syria Resolution

In August, President Obama sought Congressional approval to engage in limited military action in Syria. On Wednesday of last week, a resolution authorizing the strike cleared the Senate Foreign Relations Committee by a 10 to seven vote. Analysis by MapLight illustrates that Senators who voted for the resolution received, on average, 83 percent more in campaign contributions from defense companies and defense-related interests, compared to Senators that voted “no.” Senators authorizing military force received on average $72,850 from the defense industry, whereas those rejecting the resolution received $39,770. Senator John McCain (R-AZ) who has been leading the effort to convince fellow Congressman on the issue received the greatest amount: $176,300. The American Israeli Public Affairs Committee (AIPAC) has also been active, dispatching 250 members and activists to D.C. to lobby undecided lawmakers. AIPAC and Israeli Prime Minister Benjamin Netanyahu are both supportive of the strikes, seeking to send a bold message to the Syrian regime’s key ally, Iran, and punish Bashar Al-Assad for the alleged use of chemical weapons. After Russia presented a diplomatic opening, Obama has asked Congress to postpone the vote on his resolution.

Independent Group Spent $3.5 Million on Recall Elections in Colorado

Recall elections held last week in Colorado that were seen as a referendum on gun control provided a battlefield for outside spenders as the issue gathered national attention. Four Colorado state Senators were challenged in the recall election for voting to expand background checks on private gun sales and limit ammunition magazine capacity in the aftermath of the tragedies in Newtown and Aurora. Two Democratic state Senators, John Morse and Angela Giron, lost their seats. An estimated $3.5 million was spent by both sides, much of it from out of the state, and it’s likely much more spending went unreported. New York City Mayor Michael Bloomberg donated $350,000 to Taxpayers for Responsible Democracy, a new Denver-based organization opposed to the recalls. Americans for Responsible Solutions, the group founded by former U.S. Representative and gun violence victim Gabrielle Giffords, spent $400,000 on TV ads in support of the Senators. The National Association for Gun Rights, spent $100,000 on this anti-Morse ad. The Virginia-based National Rifle Association, which put forth $400,000 for the recall efforts, accused Mayor Bloomberg of “coming in and trying to buy elections.”  

Disclosure Proposals Introduced in Several State Legislatures

A new analysis by the Sunlight Foundation shows that legislators in nearly half of all states have introduced legislation to expand disclosure and transparency in state politics following the Citizens United decision. Thirty-nine of the 66 bills introduced in 2012 and 2013 on campaign finance include proposals for greater disclosure, whereas 25 remain neutral on the issue, and two would actually damage transparency. Measures in D.C., Delaware, Florida, Hawaii, Minnesota and Rhode Island, if passed, would improve disclosure around “dark money.” For instance, in Delaware, HB 300, which was introduced back in April and just passed last week, requires the prompt reporting of third-party spending on campaign ads. Unfortunately some states, such as Connecticut, Maryland, Florida, Arizona, Wyoming, and Minnesota have responded to heavy independent expenditures by dismantling or increasing contribution limits for candidates, political action committees, or political parties. For example, Arizona Governor Jan Brewer signed HB 2593 into law last April. The law raised the legal contribution limit, as well as the total amount one individual may donate to PACs. Reformers fear that the law threatens the survival of the state’s public financing system.

Kentucky Senate Race Drawing Outside Groups, Big Donors

The Senate race in Kentucky is drawing national attention and consequently attracting big checks from major donors as well as expenditures from outside groups. Senate Minority Leader Mitch McConnell (R-KY) is up for up for reelection, contending with a tea party-backed primary challenger, Matt Bevin, as well as Democratic front-runner Kentucky Secretary of State Alison Grimes, for the general election. The Senate Conservative Fund has launched $340,000 worth of TV ads criticizing McConnell’s unwillingness to defund the Affordable Care Act. A 501(c)(4) called Kentuckians for Strong Leadership, founded by Caleb Crosby – the treasurer  of Karl Rove’s American Crossroads Super PAC – has raised $1.4 million. Most of the money is from 17 out-of-state donors, including $50,000 from Donald Trump and $100,000 from a Super PAC run by conservative pundit Dick Morris. KSL has released ads painting Grimes as a “rubber stamp” for the President’s agenda. On the liberal side, the Senate Majority PAC, which has raised $3 million, including $1.6 million from labor unions, will be assisting Grimes. Jeffrey Katzenberg, who bundled more than $500,000 to reelect Obama, is slated to hold a fundraiser for Grimes in Los Angeles. He has already maxed out on personal contributions to her campaign. McConnell, seeing the field of challengers, is also actively raising money, gathering $13.7 million so far. He has already spent $4 million. Grimes’s contributions and expenditures will be revealed on September 30th.

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.

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

Jerome Kohlberg Explains Why Business Leaders are Standing Behind Campaign Finance Reform

In a Crain’s New York Business op-ed, New York LEAD member Jerome Kohlberg explains why the business community supports campaign finance reform. New York was recently reminded how rampant corruption is in the state after the arrest of two state lawmakers in separate bribery scandals. Business leaders understand that honest and open government is necessary for a prosperous business climate to thrive. Public policy decisions and electoral outcomes should not be decided by who gave the biggest check. Dysfunction, backroom deals, and influence peddling are far too often the norm in Albany. This is why 72 percent of business leaders support creating a system that matches small donations with public funds, along with other comprehensive reforms that can empower average citizens to participate in state government. In New York City, these reforms have already allowed a more diverse range of candidates to run competitive campaigns and involved more constituents in the electoral process. It is time for New York State to follow through.

Rochester Democrat and Chronicle Editorial Asks Cuomo to Propose Reform Legislation or Endorse Assembly Speaker Silver’s Bill

In a Monday editorial, the Rochester Democrat and Chronicle encouraged Governor Andrew Cuomo to propose new laws that ensure greater accountability from our elected officials. The governor has endorsed campaign contribution limits and matching campaign donations less than $250 with state funds as key reforms for the future of New York. These measures can go far to help regenerate public confidence in our state institutions. Cuomo should propose his own legislation or endorse Assembly Speaker Sheldon Silver’s bill for campaign finance reform. Campaign finance reform and early voting can help reduce the influence of well-heeled special interests and increase grassroots participation.

Daily News Editorial: Enforcement of Law is Key Component of Reducing Corruption

In late April, Governor Andrew Cuomo called for a new watchdog to enforce New York’s campaign finance laws. The indictments of former State Senator Malcolm Smith and Assemblyman Eric Stevenson for bribery led the Governor to propose new ideas to combat corruption including harsher punishments for corruption, giving prosecutors greater investigative powers and cracking down on campaign finance violations. The Daily News editorialized in favor of enforcement this week. The Fair Elections campaign has consistently called for enforcement as one of four key reforms, along with public financing, lower contribution limits, and disclosure. Currently, the State Board of Elections has no staff committed to conducting investigations. With such lax enforcement, former Bronx State Senator Pedro Espada got away with failing to disclose his finances for 15 years. Politicians and donors routinely violate contribution limits and disclosure rules without any consequences. The Daily News advised Governor Cuomo and the Legislature to create an enforcement agency that is (a) independent of the State Board of Elections, (b) has investigative authority, (c) is equipped with subpoena power, (d) can prosecute offenders in civil and criminal courts and (e) receives adequate funds and staff.

Richard Davis: Matching Small Donations Can Change Albany’s Culture of Corruption
Richard J. Davis, a former Watergate prosecutor and a member of the New York City Campaign Finance Board and New York LEAD, wrote an op-ed in Long Island Newsday advocating for the adoption of public financing in New York State. Although Governor Andrew Cuomo has unveiled legislation that will give prosecutors greater authority to punish corrupt politicians, without systematic changes to our campaign finance laws, Albany still remains the Wild West of money in politics. As a former prosecutor, Davis sees a connection between porous campaign finance laws and corruption. At a time when we should be enfranchising citizens so they can hold elected officials accountable, repeat scandals are tuning voters out of the political process. In the New York City small-donor matching-funds system, candidates can rely on their constituents for campaign expenses rather than a few wealthy special interests. By contrast, at the state level, sky-high contribution limits and a myriad of loopholes allow State legislators to fundraise outside of their home districts from lobbyists and special interests. A report last year showed that only three out of 575 donors to former State Senator Pedro Espada Jr.’s campaign – who faced federal and state corruption investigations – were residents of his district. 

Public Financing Bill Introduced by NY Senate Independent Democratic Conference

The New York Senate Independent Democratic Conference introduced a campaign finance reform bill this week with Senate Co-Leader Jeffrey Klein as the chief sponsor. The bill includes public matching funds for small donations, restrictions on fund transfers between candidate campaign committees and political party committees, dramatically lower limits on contributions to campaigns and parties, ceilings on contributions by those doing business with the state, and greater disclosure of outside spending. The bill, S04897, would utilize unique sources of financing for the public matching component including transfers from the abandoned property fund to a campaign finance fund, an optional tax return check-off and a surcharge on securities fines that Speaker Silver’s bill also includes.

Hearings on Senate IDC Reform Bill

Hearings on the Independent Democratic Conference’s bill for campaign finance reform were held on Wednesday in New York City. A series of additional hearings are scheduled over the next month across the state. Before the hearing, the Fair Elections for New York coalition held a press conference with supporters to encourage Legislators to bring a bill to the floor for a vote. David Donnelly, Executive Director of the Public Campaign Action Fund, stated that “New Yorkers know that reforming the pay-to-play system in a way that lifts up the voices of everyday people is the best answer to the corruption scandals of the past months and years.” Susan Lerner, Executive Director of Common Cause New York, also present at the conference said that “One too many corruption scandals have finally tipped the scales of decency, and the voters are crying out for campaign finance reform built around a system of public matching funds.” Representatives from more than 10 groups testified at the hearing that followed. Ian Vandewalker, counsel at the Brennan Center, informed the lawmakers about the benefits of public funding systems as evinced by clean elections in states such as Arizona, Maine and Connecticut, as well as New York City. “At bottom, opponents of comprehensive reform are defenders of the status quo, champions of a system that works for lobbyists and special interests, but not every day New Yorkers,” Vandewalker stated.

NATIONAL

Senators Introduce Follow the Money Act to Disclose Political Spending

Senators Ron Wyden (D-OR) and Lisa Murkowski (R-AK) have introduced S 791, the Follow the Money Act, aimed at disclosing political spending. The bill would require groups spending $10,000 or more on election-related activities to disclose all contributions above $1,000. As Jonathan Backer, research associate at the Brennan Center, explains in The Hill, the 2012 election demonstrated the dire need for such a law: following Citizens United, spending by outside groups increased by more than 255 percent between 2008 and 2012. Fifty-nine percent of the $1 billion spent on television and radio advertisements by independent groups during the 2012 election cycle remains undisclosed, meaning we still have no idea who the donors behind all of those negative ads were. The Follow the Money Act has elements similar to the DISCLOSE Act proposed earlier this year, with a few exceptions. Under the new legislation, the floor for the disclosure of individual donations has been raised from $200 to $1,000. In addition, the FEC is required to set up a real-time reporting system for all independent groups and candidates, so that voters are informed about political donations and expenditures on a daily basis rather than every three months.

Lack of Transparency in Campaign Finance Laws Threatens National Security

Potentially serious consequences of our nation’s free-for-all campaign finance system are exemplified in K Street’s relationship with a Chinese telecommunications firm closely tied to the People’s Liberation Army. The Shenzhen-based Huawei Technologies has spent $1.2 million to build an in-house lobbying shop stocked with former members of Congress, and Congressional and White House staff, in an effort to gain prominence among tech and intelligence circles in the capital. Federal records illustrate that Huawei paid another $1 million to APCO Worldwide, a powerhouse Washington-headquartered public relations and lobbying giant. The excessive political spending comes after the U.S. House Intelligence Committee charged that Huawei was implicated in corporate espionage activities, including the insertion of malicious hardware and software into U.S. telecommunications networks that are critical to the American defense system. “Huawei, in particular, provided evasive, nonresponsive, or incomplete answers to questions at the heart of the security issues posed,” the committee said in its unclassified report on the issue. Charles Fried, a Harvard law professor and former U.S. Solicitor General said “I think it stinks… Everybody is entitled to a lawyer. I didn't know that everybody is entitled to a lobbyist.”

Special Election in South Carolina Attracts Mega-Donors

The May 7 special election for South Carolina’s 1st District for Congress is drawing in several big money donors. Former South Carolina Governor Mark Stanford is the Republican candidate, with $284,000 in his campaign account. The Democratic nominee Elizabeth Colbert Busch has $254,000 on hand. Stanford’s disappearance from office during his governorship and Busch’s quasi-celebrity status due to her brother, Stephen Colbert, have attracted national attention, not only from late night comedians but also wealthy donors and PACs. The National Republican Congressional Committee has disowned Sanford’s candidacy after accusations that he trespassed on his ex-wife, Jenny Sanford’s property. Subsequently, the Democratic Congressional Campaign Committee has picked up steam and invested $458,000 in the election via independent expenditures, while House Majority PAC, a Super PAC that supports Congressional Democrats, has spent $90,000 already on television advertising and direct mail. Despite his trouble with the RNCC, Stanford is still receiving donations from prominent out-of-district contributors including $2,600 from Patrick Byrne, CEO of Overstock.com, $5,200 from Howard Rich, a major backer of the conservative 501(c)(4) Club for Growth and $5,200 from Richard Chilton, a Connecticut investor. Busch’s benefactors include Hollywood activist Peg Yorkin, who gave $1,000, the Teamsters PAC, which donated $2,500 and the American Federation of State, County and Municipal Employees PAC, which provided $5,000.