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 Matthew Ladd and Dan Rockoff.

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

New York Campaign Finance and Ethics News

1. This week saw the publication of several editorials calling on Gov. Cuomo to maintain his commitment to creating a public campaign finance program in New York state, beginning with a Sunday New York Times editorial that cut to the heart of the matter: “There is no mystery about what New York State needs: do it like New York City.” The Times also noted that Cuomo now has “big-time support” for public campaign finance in the form of the NY LEAD coalition, the subject of a front-page story in the Times last week.

2. On Monday, the Newsday editorial board called public campaign finance “New York’s chance to blunt big donors,” noting that the current contribution limit of $60,800 for a state candidate is over 12 times the national median, and citing a recent report by NYPIRG that found that just 127 donors gave one third of the total amount of money raised by state-level candidates and political parties. The editorial praised Gov. Cuomo for supporting public campaign finance but adds, “better still would be action to make it a reality.” Monday’s Times Union reported that Cuomo’s popularity, together with emergence of the NY LEAD coalition, have created what Citizen Action Executive Director Karen Scharff calls a “unique moment in time” for public campaign finance. A Times Union editorial also highlighted one of the major benefits of public campaign finance: not only a reduction in the influence of corporate money, but a “surge in civic engagement,” based on new information released by the Campaign Finance Institute (below).

3. The Campaign Finance Institute released a new report by Prof. Michael Malbin finding that a state-level public matching funds system would “reverse the importance of small and large donors” in state electoral campaigns, and that “importing something like the city’s program is likely to bring greater participation and equality to the state’s campaign finance system.” Prof. Malbin’s report concludes that a small-donor matching funds program is likely to boost the total percentage of small donations ($250 or less) in state races from 6% to 54%, allowing small donors to be “the most important financial constituents instead of the least important.” The full study can be downloaded as a PDF here.

4. As if to confirm the conclusions drawn by the Campaign Finance Institute, the Wall Street Journal noted this week that hedge funds have contributed tens of millions of dollars to state political candidates and parties within the past few years, and that the amounts are steadily growing: from $4.1 million in 2006 to over $7 million in 2010.

5. Advocates for Fair Elections for New York held a well-attended press conference in Albany on Wednesday, urging lawmakers to pass a public campaign finance bill before the end of the legislative session in June. The press conference included statements from NY LEAD, Citizen Action, the Brennan Center, NYPIRG, and Citizens Union, among other organizations and community groups from across the state.

6. An Albany grand jury is deciding whether to indict former Sen. Majority Leader Joe Bruno on new charges of receiving kickbacks while he was in office. Bruno, who was earlier convicted of fraud by a federal district court, saw that conviction overturned on appeal thanks to a Supreme Court ruling that limited the definition of “honest services fraud,” which includes accepting bribes and kickbacks. Bruno spent nearly $2 million in campaign contributions to fund his legal defense during his trial in 2009.

7. In other news concerning disgraced New York state senators, former state Sen. Carl Kruger, facing over a decade in prison for taking over $500,000 in bribes during his tenure in office, appealed to a federal judge for mercy this week in a sentencing memorandum that emphasized his “humble and modest life.” He will be sentenced in Manhattan federal court next week. Meanwhile, testimony in the embezzlement trial of former Sen. Majority Leader Pedro Espada Jr. revealed that Espada took in over a quarter of a million dollars from his Soundview Health Care Network, ostensibly for “unused vacation time,” in order to reimburse Soundview for the “personal expenses” he charged to its corporate American Express card—expenses that included tickets to sporting events and bills from restaurants near Espada’s home in Mamaroneck.

National Campaign Finance News

1. 2012 is shaping up to be the most expensive presidential race in history, with Mitt Romney’s campaign now estimating that it will spend a total of $1 billion in the general presidential election this summer and fall, including $800 million from joint fundraising between the Romney Campaign and the Republican National Committee. The campaign also states that another $200 million will likely be spent by super PACs.

2. The Democratic Party and the Obama campaign raised $53 million in March in preparation for the upcoming general election season. Obama campaign manager Jim Messina pointed out that the average contribution to the campaign in March was small—a little over $50—but the president ahs also held big-ticket joint fundraisers with his victory committees and the Democratic National Committee, events at which wealthy donors can write checks for up to $38,500.

3. The Obama White House has also shown itself friendly to lobbyists; as the Times reports, “the regular appearance of big donors inside the White House underscores how political contributions continue to lubricate many of the interactions between officials and their guests.” Although the Obama administration has publicly declared that it will not accept contributions from registered lobbyists, this does not stop big donors with access to the White House from bringing lobbyists with them on their visits.

4. The Presidential Election Campaign Fund, which allows presidential candidates to opt into using volunteered public funds to finance their campaigns, is steadily shrinking, according to FEC records. Those records show that in 2010 fewer than 7% of Americans chose to make a donation to the fund, far below the funds’ high-water mark of 29% in 1980. President Obama was the first major-party candidate to opt out of public funding for both the primary and general elections in 2008, and both he and Mitt Romney are expected to opt out of the system this year as well, leading some to wonder whether the PECF will last much longer. The New York Times called upon candidates to fix the presidential public financing system – and to stop selling White House access to big campaign donors.

Money and 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 Matthew Ladd.

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

NY Campaign Finance News

1. Gov. Cuomo renewed his support for public campaign financing in New York in his recent State of the State address, calling on the legislature to send him a comprehensive campaign finance reform bill that includes public financing for state and legislative elections. The official text of Gov. Cuomo’s State of the State address can be found here.

2. As Nick Nyhart writes in the Huffington Post, New Yorkers support the public financing of campaigns by wide margin. A new poll conducted by the Siena Research Institute shows overwhelming support for public financing and lower contribution limits: a full 74% of those polled are in favor of public financing of state elections. Siena’s press release highlights campaign finance reform as one of the three proposals in the governor’s address that garnered the most support. The full results can be downloaded here.

3. The Lower Hudson Journal News has joined the latest call for campaign finance reform in New York, mentioning Gov. Cuomo’s backing of public financing of elections in his State of the State, and quoting a election official on the notorious laxity of the state’s campaign finance regime: “Unless you out-and-out stick it in your pocket and walk away, everything’s legal.” The editorial also cites a long litany of former elected officials who have dipped into their campaign accounts—often to pay attorneys hired to handle their legal troubles—for years after they stopped running for public office.

4. The Utica Observer-Dispatch issued a similar editorial on Wednesday, praising Gov. Cuomo for his remarks on public financing in his State of the State, and citing the Campaign Finance Institute on the many incentives that voluntary public financing creates for small donors.

5. NBC New York singled out Gov. Cuomo’s call for public campaign financing as a key point in his address, noting that 24 states already have some form of public financing for elections, that only a fraction of New York’s 19 million residents currently contribute to campaigns, and that campaign finance reform has been a crucial issue since the Pataki era.

6. Likewise, NPR’s New York affiliate reported on a new study by the Campaign Finance Institute, which found that New York is “dead last” in terms of political donations by the public—less than one half of one percent of the state’s population makes campaign contributions for state or legislative elections. Gov. Cuomo’s State of the State address cited the CFI’s research, which is available on the CFI website.

7. Union leaders have rallied around Gov. Cuomo’s promise to back public campaign financing, issuing a joint letter on behalf of the UAW (United Auto Workers), CWA (Communication Workers of America), and SEIU (Service Employees International Union) to express their support. “To have a truly just and equal society, we must have elections that reflect the will of the people, not the privilege of the wealthy few,” the letter states in part. “We need public funding of elections to achieve this goal.”

National Campaign Finance News

8. Citizens United is “the worst campaign finance decision in Supreme Court history,” according to an op-ed by Fred Wertheimer of Democracy 21 in Politico, in large part because it has unleashed an unprecedented wave of special-interest spending through the creation of super PACs. The op-ed emphasizes the need for a small-donor matching funds system that puts ordinary citizens at the forefront of campaign fundraising, among other legislative remedies such as better disclosure laws, a prohibition on candidate-specific super PACs, and the creation of a stronger enforcement agency to replace the failed FEC.

9. Mitt Romney’s repeated endorsement of Florida’s “Full Sail University,” a for-profit college whose curriculum includes an $80,000 program in “video game art,” has raised some eyebrows after revelations that Full Sail’s chief executive, Bill Heavener, is a major donor to Romney’s campaign as well as the super PAC run by Romney’s former aides. The New York Times also recounts how “Winning the Future,” the super PAC that shores up Newt Gingrich’s campaign, recently received a $5 million lifeline from billionaire casino owner and longtime Gingrich supporter Sheldon Adelson.

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.

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

Senator Warren Prods New York to Pass Comprehensive Campaign Finance Reform

Last week, at St. Peter’s Church in New York City, U.S. Senator Elizabeth Warren and New York Attorney General Eric Schneiderman gave rousing speeches touching on campaign finance reform. Senator Warren explained the connection between the country’s broken campaign finance laws and growing income inequality. “We’ve got a government that works all too well for the rich and the powerful, and all too little for everyone else,” Warren said. She insisted that campaign finance reform should be a top priority for New York State. “Your governor has said, ‘Let’s attack money in politics head-on. Let’s go for campaign finance reform,’” Warren stated. “All I can say is go, go, go, GO!” Attorney General Schneiderman praised Governor Andrew Cuomo for including a public financing proposal in the budget. “The fact that the [public campaign finance] coalition was powerful enough to get the language included in the budget was a huge breakthrough,” Schneiderman said. However, he emphasized that constituents must keep the pressure on the governor and the legislature in the coming months in order to get it passed.

Public Financing Can Restore Public’s Trust in Elected Officials

In the Times-Union last Thursday, NY LEAD member and chairwoman of the Greater New York Chamber of Commerce, Cynthia DiBartolo, and executive director of Citizen Action, Karen Scharff, authored an op-ed urging New Yorkers to help make campaign finance reform a reality in the state. Now that Governor Andrew Cuomo has included comprehensive election reform in his executive budget, the only obstacle that remains is the leadership in the Senate. Senate Co-leader Dean Skelos has voiced his opposition to the reform because it would allow candidates to qualify for public matching funds if they meet certain qualifying criteria. However, another prominent Republican, Onondaga county district attorney Bill Fitzpatrick—who is investigating public corruption in the state as the co-chair of the Moreland Commission—thinks public financing would be an excellent use of public money, leading to long-term savings for taxpayers. Despite representing very different organizations, both authors agreed that public financing can help “restore the public’s trust that our elected officials are really listening to New Yorkers.”

Democrat and Chronicle: Cuomo Must Continue Reform’s Momentum

A Democrat and Chronicle editorial on Monday pressed Governor Cuomo to continue the push for campaign finance reform through the remainder of the session. While praising Cuomo for including the proposal in his executive budget, the editorial insisted that the effort requires “far more attention.” Recent polls demonstrate that the vast majority of New Yorkers favor the proposal. A December report by the state’s anti-corruption commission highlighted the problems with the current system: poor oversight, high contribution limits, and extensive loopholes for major donors. It is no surprise that more than half a dozen state lawmakers were engulfed in scandals last legislative session. “Ultimately, if he’s serious on this front, the governor will need to prove it by making additional ethics reforms a priority this year,” the editorial concluded.

Rep. Grimm’s Actions Call Attention to Campaign Finance Scandal

U.S. Representative Michael Grimm’s (R-NY) recent on-camera altercation with a reporter has brought questions regarding his campaign finances to the forefront of public scrutiny. In an interview following President Obama’s State of the Union address, Grimm threatened to throw a reporter off the Capitol balcony for asking questions about a campaign finance scandal. The reporter was referring to the arrest of Grimm’s fundraiser Diana Durand by the FBI for allegedly contributing more than $10,000 to Grimm’s 2010 campaign via straw donors. In an earlier scandal in 2012, the New York Times reported that Grimm asked for campaign donations from undocumented immigrants. Citizens for Responsibility and Ethics in Washington has requested that the Office of Congressional Ethics investigate whether Grimm’s behavior with the reporter violates House Rules. In 2012, CREW singled out Grimm as one of the 13 most corrupt members of Congress.

NATIONAL

Republican Governors Association Raises Record Funds for 2014

The Republican Governors Association (RGA) announced this week that it raised $50 million in 2013 in preparation for the 2014 election cycle. Thirty-six states have gubernatorial races coming up this fall, the most in any one year since 2009 – and last year’s fundraising total was 66 percent higher than 2009’s.  The RGA spent $35 million on television ads and PAC donations in 2012, making it the top outside spender at the state level, and, in 2010, it spent more than the five largest conservative super PACs and 501(c) groups combined. A Mother Jones analysis of the RGA’s election spending strategies shows the RGA using a network of state level PACs to shuffle money through different states, which has the potential to obscure the identity of its donors and circumvent local campaign finance laws.    

Conservative Author, Director Indicted for Alleged Illegal Campaign Contributions

Dinesh D’Souza, an author and documentary director known for his criticisms of President Obama, was indicted last Thursday on charges of making illegal campaign contributions.  The indictment alleges that D’Souza directed $20,000 in campaign contributions to a 2012 Senate candidate, violating the Fair Election Campaign Act’s limitations on an individual’s contribution to any one candidate to $2,500 during the primary and general campaign.  D’Souza allegedly funneled the contributions through “straw donors,” telling associates to make campaign contributions that he later reimbursed. Sen. Ted Cruz (R – Tex.) and others have claimed that the indictment is political retribution for D’Souza’s criticism of Obama.

More Montana Candidates Accused of Campaign Violations in 2010 Elections

The Montana state commissioner of political practices, Jonathan Motl, has ruled that two 2010 legislative candidates, Joel Boniek and Terry Bannon, illegally coordinated attack ads with an outside spending group and took unreported in-kind donations of costs associated with producing and distributing mailings. Motl previously issued findings against three other candidates for campaign violations in 2010, and says that additional candidates will be implicated in forthcoming rulings. All rulings involve illegal contributions from and candidate coordination with a non-profit corporation, Western Tradition Partnership (WTP) and its affiliated direct mail services.  WTP claimed to be an educational group, but a state judge ruled last year that it acted as a political committee and must therefore disclose its donors and spending. A former attorney for the group claims that the group is no longer active, and WTP has not responded to any of Motl’s rulings. According to Motl, “It’s the candidates who are going to bear the primary social debt for these actions. I’m not certain the non-candidate actors are going to be around.”