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 and Katherine Munyan.

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

NEW YORK

Moreland Commission Will Issue Subpoenas to Legislators, Political Parties

The Moreland Commission to Investigate Public Corruption said Tuesday that it will issue subpoenas to lawmakers mandating disclosure of their outside income. New York State legislators are allowed to hold positions outside of public office during part of the year. The commission’s request earlier this year that the information be voluntarily released was rebuffed by lawyers representing state legislators. “In addition to the investigation into the legislature, the Moreland Commission has moved to look across the board at all housekeeping accounts,” commission spokeswoman Michelle Duffy informed the press.  “Housekeeping” accounts may only be used for party-building and administrative costs, and there is no limit on the amount that individuals may donate to them. Reform groups however, argue that housekeeping accounts frequently serve as a conduit to transfer funds to party-favored candidates, circumventing state contribution caps. For example, a Common Cause investigation demonstrated that the Senate Republican Party transferred $211,000 to the state Independence Party last year, which was ultimately spent on attack ads against Democrats. State Attorney General Eric Schneiderman has emphasized the importance of independence for the commission and instructed his staff to help the commission accomplish “whatever the commissioners want. Period.”

Buffalo News: Corruption Commission Should Remain Independent

Following allegations that the Moreland Commission to Investigate Public Corruption was being pressured by Governor Cuomo’s office to forgo certain investigations, the Buffalo News penned an editorial emphasizing the need for the commission to remain independent. The governor’s office has denied the claims of interference, stating that it has regular meetings with the commission but does not exercise inappropriate influence. Meanwhile, as of last week, legislators were still resisting the commission’s request for information regarding outside income. A subpoena drafted by the commission to examine contributions by the Real Estate Board of New York was never sent out, but commissioners have urged REBNY to turn over the information voluntarily or face a subpoena. Campaign finance reports of all state lawmakers, the editorial argues, should be scrutinized by the commission to examine and expound upon potential instances of corruption. The editorial was adamant in driving home this point: “Given the Legislature’s opposition to clean living, an independent investigation is the only way to go.” New recommendations can only be formulated after wrongdoings are examined and publicized.

Gambling Opponents Question Industry Contributions and Ballot Language Changes

Earlier this year, Albany legislators approved constitutional amendment language that would allow casino gambling in New York, sending the issue to the voters in a referendum to be decided this November. Currently New York permits gambling at five Native American-run casinos and electronic gambling at nine racetracks. The constitutional amendment, if it passes, would allow up to four new casinos in the Catskills, Southern Tier and Albany County regions. According to analysis by Common Cause New York, gambling and horse racing interests have spent $59 million on lobbying and political contributions in the state since 2005. And in just May and June of this year, the industry spent more than $1 million on lobbyists. Susan Lerner, executive director at Common Cause New York, said that “Albany is extra skilled in creating opportunities for the gambling industry to throw money at it.” Opponents of the measure have expressed concern about the language on the ballot, which was changed to describe supposed benefits such as “promoting job growth, increasing aid to schools and permitting local governments to lower property taxes.” Concerned citizens have argued that the language was deliberately changed to incline voters to approve the proposed constitutional amendment and question the likelihood of such positive results. A prior effort to legalize gambling in New York was defeated in 1997 by an unexpected coalition between faith leaders and Donald Trump, although that proposal never made it to the referendum stage.

NATIONAL

McCutcheon Decision May Affect State Laws

Last week, the Supreme Court heard arguments in McCutcheon v. FEC on the constitutionality of federal aggregate limits on campaign contributions to federal candidates and parties, which require individuals who have given a certain amount to stop giving altogether for the rest of the election cycle.  States with similar limits on state candidate contributions are watching closely.  Only nine states have aggregate limits on campaign donations. A case challenging Wisconsin’s limits is already pending in the federal courts. Wisconsin law sets an aggregate limit of $10,000 per year on individual donations to state-office candidates, political parties, and PACs.  In U.S. District Court, Wisconsin resident—and Koch brothers associate—Fred Racine, Jr. is fighting to strike down those limits.  Another case is pending challenging campaign finance laws in Hawaii, including donation caps, reporting rules, and a ban on government contractors donating to candidates. The 9th Circuit has already heard arguments in the case, but suggested it may delay ruling until the Supreme Court rules on McCutcheon.

Washington State Sues Food Lobbyists over Campaign Finance Law Violations

On Wednesday, Washington State Attorney General Bob Ferguson filed suit against the Grocery Manufacturers Association (GMA) over state campaign disclosure laws.  According to Ferguson, the GMA, a Washington D.C.-based trade association, illegally collected and spent more than $7 million without disclosing its contributors. The GMA became involved in Washington State to oppose an upcoming ballot initiative, I-522, that would require the labeling of genetically modified food and has become one of the state’s costliest initiative campaigns ever. The attorney general’s office is requesting the court to mandate that GMA immediately comply with disclosure requirements.  The GMA denies that it is in violation of state campaign finance laws.

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

Moreland Update: Hearing Tonight

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 Hearing Tonight

Tonight, the Moreland Commission will hold a hearing at 5:00 p.m. in the Javits Center, 1E Hall Rooms 12-13, focusing on campaign finance reform. The invited speakers are:

• New York State Board of Elections Co-Executive Directors, Robert Brehm & Todd Valentine and Deputy Enforcement Counsel, William McCann
• New York City Campaign Finance Board Executive Director, Amy Loprest
• Connecticut Deputy Secretary of State, James Spallone & Demos President, Miles Rapoport
• NYC Council Members, Brad Lander and Carlos Menchaca

At this hearing the Moreland Commission will investigate current problems with campaign finance enforcement and hear about successful reforms in New York City and Connecticut. Unlike New York State, Connecticut and New York City have strong enforcement agencies created in response to public corruption crises. Both enforcement agencies are strengthened by public campaign financing systems: When disbursement of public funds is conditioned on compliance with campaign finance laws, candidates have a powerful incentive to stay in line.

While the hearing will necessarily emphasize the failure to enforce New York State’s current campaign finance laws, it would be unfortunate if that was the sole focus. In Albany the real scandal is what is perfectly legal. Contribution limits are sky-high and full of loopholes, disclosure requirements are lax, and a pay-to-play culture rewards the biggest campaign contributors while locking ordinary citizens out of the political process. If tonight’s hearing focuses only on high-profile bribery cases or how much money is in the Board of Elections’ budget, the Moreland Commission will have lost a crucial opportunity to examine changes that can profoundly transform Albany.

We are hopeful that commissioners will devote the necessary time and attention to these topics:

• The adequacy of the State Board of Elections’ current report filing schedule (January, July, and a few times during the fall), which limits the contribution information available during the legislative session.
• The adequacy of current State Board of Elections rules governing disclosure of independent expenditures, which is limited to express advocacy.
• The high rate at which candidates from both parties participate in New York and Connecticut’s public funding systems, and the reasons for that success.
• The ways that public campaign financing and effective enforcement support each other, through both powerful financial incentives and meaningful transparency.
• How public funding allows candidates to respond to independent expenditures.

The Moreland Commission will issue its first report in the beginning of December.

Relevant Clips and Links

How to Make the Impossible Possible with, Yes, a Government Commission. Karen Scharff of Citizen Action of New York argues that the Moreland Commission can change what’s possible if it makes the demand for change irresistible by showing just how bad the current situation is.

Moreland’s Next Hearing, Without Good-government Groups. Jessica Alaimo and Jimmy Vielkind give a preview of tonight’s hearing.

Start the Process for Meaningful Campaign Reform. Assemblywoman Didi Barrett calls for comprehensive campaign finance reform to address the insidious dominance of money in the halls of power.

Testimony to the Moreland Commission. Brennan Center Deputy Director Lawrence Norden’s updated testimony discussing tax credits for major political donors that have been repeatedly reauthorized by the legislature without any substantive, public analysis as to whether such tax breaks should be made permanent or eliminated.

Money in New York Politics

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. This week’s links were contributed by Eric Petry and Syed Zaidi.

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

NEW YORK

New York Times Investigation Sheds Light on Moreland Commission’s Operations

According to an extensive investigation by the New York Times, the office of Governor Cuomo allegedly tried to control the operations of the Moreland Commission to Investigate Public Corruption, by steering its investigations away from groups that were politically connected to the governor. For example, when commission investigators sought to review political donations and communications by the Real Estate Board of New York—a trade group whose members include some of Cuomo’s biggest donors—in an effort to connect the dots on a valuable housing tax break, the governor’s secretary reportedly instructed commissioners not to subpoena the organization. Ultimately, the commission declined to do so, gaining information from a voluntary request instead. In addition, although the investigation of independent expenditure groups was part of the commission’s mandate, the governor’s staff allegedly told commissioners not to mention a pro-Cuomo organization, the Committee to Save New York—which spent more than $16 million on lobbying and elections without fully disclosing the source of its contributions—in their final report. Governor Cuomo’s office released a statement contesting the characterization of events by the Times, arguing that since the commission was created by and reported to Cuomo, he could not “interfere” with it. Federal prosecutors are investigating the governor’s decision to shut down with commission. Before it was shuttered, the Moreland Commission recommended public campaign financing and other campaign finance fixes to address Albany’s culture of corruption, but the legislative session ended without meaningful reform.

Feds Probe Campaign Expenses of NY Sen. George Maziarz

A federal investigation, led by U.S. Attorney Preet Bharara, is continuing the Moreland Commission's work to examine campaign expenditures made by 28 state senators, including Republican George Maziarz. According to public filings and bank records subpoenaed by the Moreland Commission, the Maziarz campaign failed to report more than $325,000 in expenditures since 2008, including more than 300 checks made out to "cash" with no indication of who ultimately received the money. In addition, sources close to the investigation say that the Maziarz campaign made significant expenditures directly to staff members and their families. The Senator's chief of staff, Alisa Colatarci, reportedly received $91,378 through 219 payments. Bharara's investigation became public following subpoenas issued to Colatarci and Maziarz's former office manager, Marcus Hall, both of whom resigned last week prior to the subpoenas being issued. Colatarci's attorney, Daniel French, issued a statement emphasizing that she is not a target of this investigation, and that she will continue to cooperate fully with prosecutors. In a statement made last week, Maziarz announced that he would not be seeking reelection this fall.

Democrats Challenge Petition Seeking Spot in Gubernatorial Primary

Represented by prominent election lawyer Martin Connor, two New York Democrats challenged the validity of Zephyr Teachout's petition to secure a place on the Democratic gubernatorial primary this week. The objections filed in court question the petition signatures Teachout collected as well as her status as a New York resident. Under New York election law, Teachout's petition to force a primary against incumbent Governor Andrew Cuomo must include at least 15,000 signatures from registered Democrats, and she must have been a continuous resident of the state for at least the past five years leading up to the election. Although Teachout received more than three times the required number of signatures, Connor and his clients argue that there was high potential for error since signatures were collected at public rallies and street fairs by inexperienced volunteers. Regarding the residency challenge, Connor claims Teachout has maintained elements of her previous Vermont residency, including drivers licenses and an address listed on a 2012 donation to the Obama Campaign. Despite these challenges, Teachout maintains that she has more than the requisite number of signatures and that her residency in New York has been uninterrupted since she accepted a tenure-track position at Fordham University Law School in 2009.

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 and Katherine Munyan.

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

NEW YORK

Gov. Cuomo Reportedly Wielding Influence Over Anti-Corruption Commission

Reports allege that the Moreland Commission to Investigate Public Corruption is being pressured by Governor Cuomo’s office to limit the scope of its investigations. Although the co-chairs of the commission signed off on subpoenas for several real estate developers that contributed heavily to Albany legislators and received large tax breaks this year, the subpoenas were never sent out. The commission also did not send subpoenas to the New York State Democratic Party, although it did subpoena the Senate Republican Campaign Committee and the State Independence Party as part of an ongoing examination of political party “housekeeping accounts.” William J. Fitzpatrick, the commission’s co-chair said the panel plans on subpoenaing the Senate Democratic Campaign Committee instead. Commission spokeswoman Michelle Duffy stated that though the commission receives input from the Governor’s office, the Attorney General’s office and other outside experts, it is the commissioners’ “judgment and discretion that governs the commission and determines its action.” Common Cause New York, in response to the allegations, sent a letter to Governor Cuomo and Attorney General Schneiderman asking their offices to ensure the panel has the independence to carry out important investigatory work. “We urge you to allow the Commission to fulfill its mission as it deems appropriate,” the letter said. “To do anything less would be a disservice to the outstanding men and women you have appointed to the Commission and a shocking waste of the momentum for meaningful change which its appointment created.”

Post-Star Tells Lawmakers to Reveal Outside Income

This week, the Glens Falls Post-Star editorialized in favor of the Moreland Commission to Investigate Public Corruption’s request for disclosure of outside income earned by legislators in Albany. In a rare bipartisan response, lawyers representing lawmakers rejected the request. New York State Assemblymen and Senators serve the public for only part of the year and are allowed to maintain outside employment for the remainder. The anti-corruption commission’s concern arises from the potential for conflicts of interests. Republican Senate Co-leader Dean Skelos and Democratic Assembly Speaker Sheldon Silver made $250,000 and $450,000 respectively last year from their law practices. Twenty other states require the disclosure of outside income, and the New York State Bar Association also supports the measure. In a 2011 report, the bar’s Task Force on Government Ethics stated that the “public has an interest in knowing whether a public official has interests with or ties to particular special interests; and the public has an interest in knowing those financial interests that can affect a public official’s actions.”

Good-Government Groups Urge Commission to Recommend Campaign Finance Reform

On Tuesday a number of good-government groups including the New York Public Interest Research Group, Common Cause New York, the Brennan Center for Justice, Citizens Union and the League of Women Voters of New York State sent a letter to the Moreland Commission. The organizations encouraged the anti-corruption commission to ensure that comprehensive campaign finance reform remains a priority in any ongoing investigations, deliberations and recommendations. The groups urged that real reform must include four key measures: (1) limited public funding to match small private donations, (2) independent and effective enforcement of campaign finance laws, (3) lower contribution limits including stricter caps for lobbyists and contractors doing business with the state, and (4) better disclosure of political expenditures. “Not including a bold prescription for campaign finance reform will almost certainly allow politicians in Albany to continue to ignore the public call for change,” the letter informed the commission.

Common Cause: Gambling Industry Contributed $3.2 Million in Past Two Years

As a November 5th ballot referendum on legalizing casino gambling approaches, Common Cause New York has released a new analysis showcasing influence of the gambling industry in state politics. Racinos, casinos, and Native American tribes with a stake in gaming have all contributed nearly $3.2 million to political campaigns and committees in New York State during the past two years. Legislative leaders, regardless of political party, have been the greatest beneficiaries of the contributions. The top three recipients include the Democratic Assembly Campaign Committee at $414,750, the Senate Republican Campaign Committee at $403,750, and Governor Cuomo at $361, 500. The lawmakers who chair the Racing and Wagering Committees in each chamber have also received large sums in donations for their campaigns: Assemblyman Gary Pretlow (D) raked in $132,000 during 2011 to 2012, and Senator John Bonacic received over $85,000 from gambling interests in 2011.  Common Cause New York executive director Susan Lerner said that “The problem is that the rules of the game are stacked against average voters and the house always wins. We need campaign finance reform now to ensure that politicians are accountable to the people, not the highest pay-out.”

NATIONAL

Supreme Court Considers Contribution Limits in McCutcheon v. FEC

This week, the Supreme Court heard oral arguments in McCutcheon v. FEC, a case challenging aggregate limits on individual campaign contributions. Currently, an individual can give a maximum of $123,200 in total to candidates and parties in a two-year election cycle.   Most of the argument before the Court this Tuesday centered on hammering out the logistics of how campaign financing works, rather than the potential constitutional issues involved.  Justice Kagan, who argued the government’s case in Citizens United as President Obama’s solicitor general, offered up concerns about “special treatment” for large donors.  Justice Breyer suggested returning the case to a lower court to develop the facts. Justice Roberts appeared to seek a middle path, expressing concern about both about the consequences for corruption of lifting the limits and the consequences for First Amendment rights of retaining them.

Second Week of Government Shutdown Strains Constituent Patience

Republican incumbents may face a political backlash over growing public frustration with the government shutdown. Even typically  Republican-leaning big business lobbyist groups, such as the U.S. Chamber of Commerce, are now lobbying congress to come to an agreement on government funding and the debt ceiling “for the sake of the U.S. economy,” in the words of Business Roundtable President John Engler.  Some frustrated trade associations are considering supporting challengers in primary campaigns against the incumbents who have been behind the government shutdown.   In Grand Rapids, Michigan, a conservative stronghold, voters in 2010 elected Justin Amash (R-Mich.) to the House, but, after Amash’s role in the shutdown, many local business leaders are pushing for a more centrist candidate in the next primaries. The Republican Main Street Partnership, a centrist conservative group, has released several statements condemning fellow Republicans, as well as Democrats, for the unwillingness to compromise that has led to the shutdown.

Voter Initiative to Eliminate Dark Money in Montana Gathering Signatures

In Montana, a petition to eliminate “dark money” in state elections is now gathering the signatures necessary to appear on the 2014 ballot. “Dark money” refers to campaign-related spending by groups whose donors are not disclosed. Under current laws, as a general rule, political groups are required to report their donors, but there are ways to avoid disclosure. Non-profits can keep their donors secret if they call themselves “educational groups,” saying they educate about candidates’ positions on issues rather than actually campaigning. If voters approved Montana Initiative 168, the Stop Dark Money Initiative, the law would change to require public reporting of campaign-related spending and donors by all independent groups, and expand the definition of campaign-related communication. Launched by a group of Republican state legislators, the initiative grew out of local concern about the influx of out-of-state money into state elections. To get on the ballot in 2014, supporters will need to collect signatures from 34,000 Montanans, about 5% of qualified voters.

Tobacco Lobbyists Turn Talents to E-Cigarettes

With the Food and Drug Administration (FDA) preparing regulate the e-cigarette industry for the first time, tobacco lobbyists are harnessing decades of experience representing big tobacco to attempt to shape the rules for a new industry.  The FDA says that there is currently not enough research to determine how safe e-cigarettes are and what harmful effects they may have.  In this information vacuum, lobbyists are sweeping in to help guide public policy. E-cigarette company representatives have met with the FDA Tobacco Center dozens of times since September 2012. Lorillard Tobacco, a powerhouse that recently acquired an e-cigarette brand, spent $2.35 million on lobbying last year.  Their lobbying team, with former House speaker Dennis Hastert and several other former congressmen on the payroll, exemplifies the revolving-door between lawmakers and K Street.  Lobbyists are focused on lawmakers on the committees that oversee the FDA, creating the impression the protection of profits may be interfering with the protection of public health in a new industry already earning $2 billion in annual sales.