Campaign Reform Would Curb Albany Corruption

By Ian Vandewalker

The public has been shocked at the recent corruption scandals marring New York politics, and calls for reform have grown louder. Addressing the “show me the money” culture in Albany requires a systemic solution, and that solution must include comprehensive campaign finance reform including public financing, lowering contribution limits, and improved enforcement of election laws. Public financing is crucial because it will release candidates from their dependence on big-money donors and restore public trust in government.

Public Campaign Financing Curbs Corruption

New York City enacted a public financing system in response to a massive corruption crisis in the 1980s. Mayor Ed Koch’s administration was slammed with a series of scandals involving graft, bribery, and extortion. Party bosses packed several city agencies with patronage appointments and created a system in which thousands of parking meter attendants and municipal inspectors took graft. With party bosses’ tight control over their agencies, multiple whistleblowers were ignored. In the decade prior to the passage of public financing in 1988, four of the city’s elected officials, including a borough president, were convicted of corruption charges, one was censured by the City Council and later convicted of tax crimes, and another borough president committed suicide as more and more evidence came to light implicating him in bribery and kickback schemes.

Since the enactment of public campaign financing, New York City has not seen another corruption crisis remotely resembling that of the 1980s. Although there have been individuals who sought personal gain at the expense of the public fisc, they have been caught quickly and faced the consequences. The city’s public funding system has succeeded in making elections more competitive, allowing candidates to campaign more than they fundraise, and making sure candidates play by the rules. In its oversight of the 2009 elections, the New York City Campaign Finance Board penalized several campaigns for improper spending: The agency imposed fines and required campaigns to return more than $400,000 in public funds. The system has also dramatically increased the diversity of donors, greatly increasing the influence and voice of small donors without access to large sums of money.

In neighboring Connecticut, comprehensive campaign finance reform with public financing has been a smashing success since it was implemented in 2008. A recent report shows that Connecticut’s system has decreased the number of uncontested elections and reduced the influence of lobbyists. The number of federal public corruption convictions in Connecticut decreased drastically after the adoption of their public funding system as compared to the years immediately preceding reform. And the four-year stretch since reforms were implemented has had the fewest convictions of any four consecutive years since the Department of Justice started reporting this data.

Furthermore, public financing programs are highly popular where they have been implemented. Connecticut voters are strongly in favor of the program, supporting it at a rate of 79 to 15 percent after hearing how it works. And voters understand the connection to the influence of money and corruption: They were more than three times more likely to agree with the statement, “The state needs the Citizens’ Election Program because, in the past, lobbyists and state contractors received special deals in exchange for political contributions which has even landed some politicians in jail,” than an alternative criticizing the cost of the program. Arizona’s public financing system is similarly popular with its voters, and Maine’s system is even more popular, with 88 percent of Mainers in support.

Opponents are Wrong that New York City’s System has Fostered Corruption

Opponents wrongly claim that public financing won’t help to address the problem of money in politics, even suggesting that public financing will increase corruption. Opponents have seized on a 2011 report by the Center for Competitive Politics (CCP) that argues public financing systems in Arizona, Maine, and New York City are characterized by the “rampant” abuse of public funds and corrupt practices.

The CCP report’s section on New York City lists 24 scandals that are supposed to be evidence that the city system has not deterred corruption. But a closer look reveals severe flaws in CCP’s analysis.

Several cases had nothing to do with public financing, including one state legislator who never participated in the city system. Half of the cases involve no wrongdoing: They either describe activity that is legal and not corrupt or cite investigations that never found a crime or election law violation. Finally, there are a number of examples of candidates attempting to violate the rules of the city’s public funding system. Every campaign in this last category was caught by the city’s effective enforcement agency and either fined or denied public funds. This shows that enforcement works, and it is a necessary part of comprehensive campaign finance reform that includes public funding.

The following list breaks down the 24 alleged scandals described in the CCP report to show how little they tell us about the relationship between corruption and public financing, suggesting that the CCP’s zeal to attack public funding motivated it to trump up these cases.

Cases that have nothing to do with public campaign funding

• The report lists one member of the State Assembly who never participated in the city’s public funding system, even though the CCP claims its list consists of “New York City ‘Clean Elections’ candidates.”

• Six cases of abuse of City Council members’ discretionary funds are described.* These have nothing to do with public funding or campaign finance. New York State legislators do not have access to discretionary funds.

Cases with no official finding of wrongdoing

• Two candidates accepted public funds for elections that the report claims were not competitive. This is not illegal, and it’s not corruption.

• Eight candidates were allegedly involved in collusion between the Working Families Party and Data & Field Services. Federal prosecutors decided not to file charges against those candidates, and there was no finding of wrongdoing in a civil lawsuit that WFP settled.

• There are two unfounded allegations that candidates spent public funds improperly. The report cites a news article that presents no evidence that the expenditures in question violated the law.

Cases that were caught by New York City enforcement

• Two candidates were found by the Campaign Finance Board found to have coordinated with a labor union, resulting in in-kind contributions that exceeded contribution limits. Both candidates paid hefty fines.                                                                                 

• Four candidates violated campaign finance laws but were caught by the Campaign Finance Board’s routine audits.* The agency either denied the candidates public funds or ordered them to repay all the public funds they had received.

*Former City Councilmember Miguel Martinez engaged in both discretionary funds abuse and campaign finance violations that were caught by routine audits.

In short, three-quarters of the scandals discussed in the CCP report had nothing to do with public financing and the handful that did were all readily caught by the city's enforcement agency.

New York State Needs Comprehensive Reform with Public Financing at its Core

Today, Albany’s corruption problems are threatening to completely destroy public faith in government. In the last 10 years, at least 13 state elected officials have been convicted on charges relating to corruption, and several more have been indicted. The corruption has reached the highest levels of state government: Former Comptroller Alan Hevesi steered $250 million of the state pension fund’s money to a company in exchange for almost $1 million in cash and travel benefits from the company’s founder. Three of the last five Senate Majority Leaders or Co-Leaders have been indicted or convicted on corruption charges: Joseph Bruno is awaiting retrial after his 2009 conviction was overturned due to a change in the law, Pedro Espada pleaded guilty last year and faces a trial on more charges, and Malcolm Smith was charged this month. The damage to public trust is undeniable: A recent poll found that 87 percent of New Yorkers think that corruption is a somewhat serious or very serious problem.

Although no system can stop individuals from behaving badly, public financing combined with strong enforcement, disclosure, and reasonable contribution limits can change the culture of Albany. It will end the mad chase for campaign cash that starts some elected officials down the road to corruption, and it will make candidates dependent on ordinary voters rather than special interests. A system of matching small donations with public funds will encourage New Yorkers to participate in elections and give them a greater sense of ownership of their government. Contrary to the exaggerated claims by ideological opponents like the Center for Competitive Politics, public financing systems have been a crucial element of anti-corruption reform in New York City, Connecticut, and elsewhere.

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

Syracuse Post-Standard Editorializes In Favor of Small Donor Matching Funds for First Time

On Tuesday, the Syracuse Post-Standard editorialized in favor of small donor matching funds for the first time. According to the editorial, when paired with spending limits and other electoral reforms, public financing of campaigns can help address the culture of corruption in Albany. “Public campaign financing will not cure all that ails the body politic. It cannot detect a larcenous heart. But it seems a relatively cheap and sensible step toward restoring confidence that state government – the Legislature, in particular – acts in the public’s interest.” Although opponents have expressed concern about the costs, the Post-Standard points to the $420 million in incentives that the film and television industries received in this year’s state budget. And film and television are only one special interest group out of many that are present in Albany. The editorial notes, “If we value our democracy, we should be willing to invest in it.” Engaging more small donors and making legislators more dependent on their constituents, rather than a few wealthy special interests, offers an added layer of defense against corruption.

Campaign Finance Reform Proposals by Assembly Democrats and Senate Independent Democratic Conference

New York State Assembly Speaker Sheldon Silver has unveiled a new campaign finance reform proposal. The bill, A4980B, includes a small donor matching component, where every contribution up to $250 by state residents is matched with public funds at a 6-to-1 ratio. “We cannot allow elected public service to become the exclusive domain of the wealthy and the well connected,” Speaker Silver stated. Stronger enforcement of the law and penalties for violations will be enforced by a new body, the Fair Elections Board, to be situated within the state Board of Elections. Organizations making independent political expenditures over $1,000 would have to disclose the name of the person or group behind the spending, and report all major contributors (those that donated over $1,000) to the Board of Elections. The Senate Independent Democratic Conference, headed by Senator Jeffrey Klein, criticized the proposal for failing to eliminate political party housekeeping accounts, and transfers between party committees and individual candidates. "Unless these measures are part of a more comprehensive plan to eliminate party slush funds and slash six figure contributions, we'll be right back to where we started.  Our members look forward to discussing these proposals alongside the more comprehensive plan outlined by the Independent Democratic Conference last week," IDC Spokesman Eric Soufer stated.

The Cost of Public Financing is about $2 per New Yorker per Year

Recently, the New York State Senate Republican Conference, which is opposed to publicly funded elections, finally explained how it arrived at its inflated estimate of the cost of public financing. The method was immediately assailed by campaign finance expert Prof. Michael Malbin, who called it “little more than back of the envelope arithmetic based on incredible assumptions.” The Campaign Finance Institute has used peer-reviewed methods to conclude that the cost of public campaign funding under current proposals would be between $26 and $41 million per year. Senate Republicans’ estimate is many times higher. The Republicans’ calculation unrealistically assumes that there would be two candidates in every general election and each would earn the maximum amount of public funds. For primary elections, the GOP analysis assumes that a quarter of senators would participate in a primary, with one candidate per race receiving the maximum amount of public funds. It is important to note that under Speaker Sheldon Silver’s bill, (1) receiving public funds depends on the candidate’s ability to raise money from numerous small donors, so only donations up to $250 are matched with taxpayer dollars and that (2) candidates are limited to a maximum amount of public funds ($400,000 for Senate candidates and $200,000 for Assembly candidates in the general election race). The Senate Republicans’ assumption, that two candidates in every general election would receive the maximum amount of public funds, does not jibe with the experience of New York City, where a multiple matching funds system is already in place. Between 2001 and 2009, only 51 percent of candidates running in New York City elections received the maximum amount of public matching funds. According to the Campaign Finance Institute, under the least expensive scenario, the cost would be $1.34 per New York resident per year, while it would be $2.08 per New York resident per year for the most expensive scenario—a small price to pay for cleaner elections.

Campaign Finance Reform Can Help Crack Down on Corruption

A 2011 report by the Center for Competitive Politics has been seized upon by opponents of Fair Elections to argue that the public financing system in New York City is characterized by consistent abuse of public funds and corruption. But the facts just don’t support that characterization. Since New York City adopted public financing in 1988 it has not faced a corruption scandal on the same scale as the 1980s. The CCP report outlines 24 scandals related to New York City elections in an attempt to argue that public funding does not deter corruption. Brennan Center counsel Ian Vandewalker’s detailed investigation of the report reveals that several cases have no relationship to public financing, including one involving a state legislator who never participated in city elections. Half the cases involve allegations or investigations that yielded no criminal or election law violation. Furthermore, several others listed describe instances where candidates attempted to violate the rules of New York City’s public financing system, but were caught by the city’s enforcement agency and fined or denied public funds. Enforcement is a necessary component of any effective campaign finance reform proposal. Along with vigilant enforcement of the law, disclosure of contributions, and lower contribution limits, public financing of elections can “end the mad chase for campaign cash that starts some elected officials down the road to corruption and … make candidates dependent on ordinary voters rather than special interests.”

Bad Legal Arguments Can’t Stop Reform

With the introduction of Fair Elections legislation in both chambers, and strong popular support for the effort among voters, opponents are attempting to raise legal barriers to the reform. Specifically, some are alleging that  the New York State Constitution forbids the use of public funds for election campaigns. The Constitution says that “the money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking.” As Larry Norden, deputy director at the Brennan Center, illustrates, elections are, in any sense of the word, competitions for public office. In a 2011 case, Bordeleau v. State of New York, the New York Court of Appeals evaluated the section of the Constitution at issue and ruled that the “burden” of challenging any public financing statute on these grounds is “exceedingly strong.” This is because “enactments of the Legislature” enjoy the presumption of constitutionality, especially when Legislative expenditures are “designed in the public interest.” Furthermore, 46 other statutes that have a similar prohibition on the use of public funds for private undertakings, including Arizona, Connecticut, and Maine, are home to thriving public election financing programs.

New Demos Report Lauds Benefits of Public Financing in Connecticut

Demos has released a new report titled Fresh Start: The Impact of Public Campaign Financing in Connecticut. The study is co-authored by J. Mijin Cha, senior policy analyst at Demos, and Miles Rapoport, Demos president and a former Secretary of State for Connecticut. It chronicles significant changes in the Connecticut Legislature following the state-wide adoption of a public financing system. Public financing of elections has increased the number of small donors because Legislators receive incentives for raising small contributions from a minimum number of in-district donors. The influence of lobbyists has perceptively declined. As one former Legislator recalled, “Before public financing, during the session … there were ‘shakedowns’ where lobbyists and corporate sponsors had events and you as a legislator had to go. That’s no longer a part of the reality.” In addition, elections are more competitive, as new potential candidates are no longer deterred by the large war chests of incumbents. The 2008 election had the lowest number of uncontested seats since 1998, indicating that more candidates were running. Public financing has also proven to be immensely popular with voters, with 79 percent in favor of the clean elections program. Furthermore, voters understand that loose campaign finance laws and mega-donations breed corruption. They were three times more likely to agree with the statement,  “The state needs the Citizens’ Election Program because, in the past, lobbyists and state contractors received special deals in exchange for political contributions which has even landed some politicians in jail,” than an alternative criticizing the cost of the program.

Governor Cuomo Announces New Proposals to Anti-Corruption Agenda

Governor Andrew Cuomo has announced new proposals to his anti-corruption agenda, following the arrest of New York State Senator Malcolm Smith (D-Hollis). The Governor wants to revoke Wilson-Pakula, which governs the process by which candidates can run on a party’s ballot even if they are not members of that party. State Senator Malcolm Smith, a Democrat, is charged with trying to bribe Republican County Chairs in New York City to convince them to allow Smith to run on the GOP ballot for mayor. The Governor is arguing that Wilson-Pakula creates ethical conflicts, as candidates try to bribe or make large donations to political parties to gain ballot access. “You‘ve heard the expression ‘pay to play’,” Cuomo said. “This is pay to run.” The Assembly Democrats are not backing the repeal of Wilson-Pakula. “I don’t think we should preclude people from running on more than one [political party] line,” Speaker Sheldon Silver stated.

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

NY Assembly Passes One-House Budget with Public Financing Reforms

On Tuesday in Albany, Assembly Speaker Sheldon Silver spoke to a large group of Fair Elections supporters gathered for a rally. Silver assured the activists that public financing and comprehensive campaign finance reform would be in the one-house budget to be released by the Assembly the following day. “You all have until April 1st to convince the Senate to do the right thing and pass campaign finance reform,” he added. On Wednesday, the Assembly approved its one-house budget plan with the aforementioned reforms included. Specifically, the Assembly budget proposed a fund to match donations up to $250 from constituents at a 6-to-1 ratio; similar to Governor Cuomo’s budget, which was introduced last month. Under the Assembly proposal, a 10 percent surcharge on penalties for securities fraud and a $5 check-off on tax return forms would fund the system. On the Senate side, the Independent Democratic Conference and the Republicans are still negotiating the details of the chamber’s one-house budget. A Senate resolution released Thursday said that the Senate budget would modify Governor Cuomo’s public financing program, but did not specify how.

Fmr. NJ Governor Whitman: NY Can Serve as Shining Example of Reform

In a recent interview, the first female governor of New Jersey, Christine Todd Whitman, explained why she supports Fair Elections reform in New York. Whitman stated that public financing presents a grand opportunity for New York to showcase itself as a leader in reform. Although she was not an early supporter of public financing, she soon realized that it would allow “those who don’t have access to great wads of money the opportunity to compete.” In addition, she said, public financing could help control the extraordinary costs of running an election campaign—as it did when she was running for governor in New Jersey. When asked why there is so much opposition to public financing among Republicans (her political party), she replied that the “Koch brothers aren’t the only people who give a lot of money. There’s a MoveOn.org and there are the unions, so it should play to [the Republicans’] advantage too to see some of this [reform] and get some of their nontraditional candidates more attention.” 

McCutcheon Presents Opportunity for New York to Address Money in Politics

This year, the U.S. Supreme Court is set to decide McCutcheon v. Federal Election Commission. Katrina vanden Heuvel wrote in the Washington Post that although the decision is difficult to predict at this stage, one possibility is that the Roberts Court could invalidate aggregate contribution limits—restrictions on the total amount that one individual can donate to all political campaigns within an election cycle. Regardless of the outcome, the decision presents an excellent opportunity for New York State to address the torrent of unlimited spending on elections by special interests. Governor Cuomo has proposed a series of reforms including matching small donations with public funds, in order to give constituents the same clout that mega-bundlers and PACs have in Albany. The measure would also reduce sky-high contribution limits and beef up enforcement of campaign laws. In addition, the system also presents distinct advantages for women. “All five states that have public financing rank in the top 12 for the proportion of women legislators, with two in the top five.”

Sign-Up for McCutcheon Rapid Response

McCutcheon v. Federal Election Commission has been termed the next Citizens United. Aggregate contribution limits are vital to preventing the circumvention of candidate contribution limits. The U.S. Supreme Court could issue its ruling in McCutcheon any day. Join the McCutcheon Rapid Response team to be ready for an event on the day of a ruling.

Norden: Public Financing Can Make Elected Officials Dependent on Their Constituents Rather than Special Interests

In a Buffalo News op-ed last week, Lawrence Norden, the deputy director of the Brennan Center’s Democracy Program, stated that comprehensive campaign finance reform, with a public funding option, is the most practical remedy to the influx of big money in state politics. Although some reformers have pinned their hopes exclusively on a constitutional amendment to reverse Citizens United, such a feat would entail a long and arduous process including the cooperation of 37 states and two-thirds of Congress. Alternatively, public financing can mitigate many of the problems—such as the disproportionate influence of special interests and mega-donors—of the current system, and has a real shot of passing this year. It has already garnered the support of a majority of assembly members, senators and the governor. The objective of any reform, Norden explained, should be to make politicians dependent on their constituents rather than those writing the biggest checks. “The experiences of Connecticut and New York City,” he noted, “show that comprehensive campaign finance reform, with public financing at its core, can be a valuable step toward cleaning up our state government.”

Cuomo Releases Ad to Push Public Financing of Elections

Governor Cuomo’s campaign has released a set of ads regarding his budget priorities as negotiations over the topics continue. Among these, is an ad that asks state residents to call their representatives in Albany to urge them to support the governor’s comprehensive reform package, which includes public financing of elections.