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.

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

NEW YORK

Despite Federal Indictments, State Senators Win Primaries

Three New York Senators – Thomas Libous, John Sampson, and Malcolm Smith – entered the primary election on Tuesday facing federal criminal charges. Despite these legal troubles, both Libous and Sampson managed to win their races by safe margins – 28 points and 25 points respectively. Smith, on the other hand, lost by more than 50 percentage points in a landslide. While it remains to be seen whether Libous and Sampson will win in the general election this November, the primary this week showed that the presence of pending criminal charges can be is not necessarily a death knell for New York legislators seeking reelection. Gubernatorial hopeful Zephyr Teachout made Albany corruption a primary campaign issue and garnered 34 percent of the vote, the highest of any primary challenge to a sitting governor since primaries were instituted in 1970.

Consultants Avoid Regulation as Lobbyists

New York politics is starting to see the emergence of a new group of political actors: non-lobbyist strategic consultants. These consultants function like lobbyists in terms of access and ties to politicians, but they are able to avoid registering as official lobbyists. Their unofficial status allows them to avoid disclosure requirements, as long as they do not “attempt to influence politicians.” While this practice technically falls within the law, it raises suspicions because of the inherent influence strategic consultants can possess. Jennifer Cunningham, for example, worked closely with Attorney General Eric Schneiderman and Governor Andrew Cuomo throughout her political career, helping to get them both elected in 2010. After they were elected, Ms. Cunningham deregistered as a lobbyist to “avoid even the appearance of a conflict” of interest and resigned her job at a top lobbying firm. In the role as a strategic consultant, which she has kept since 2010, however, Cunningham has continued to represent clients before the state government, working closely with Schneiderman on a consistent basis. So close, in fact, that the Attorney General’s office initially refused an open records request to provide communications between Schneiderman and Cunningham, claiming that the conversations fell under an exception for “intra-agency records” between state employees.

JCOPE Holds First-Ever Hearings

For the first time in its 20-month history, the Joint Commission on Public Ethics held a hearing to discuss specific allegations of lobbying law violations. While JCOPE has engaged in enforcement actions previously, none had ever proceeded far enough to reach a hearing. The hearing officer, former federal Judge George Pratt, recommended that the three entities found in violation of disclosure requirements – Blackboard, Inc., Community Redemption Center, and YL Management, L.L.C. – each receive fines between $4,000 and $10,000. 

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 Syed Zaidi.

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

NEW YORK

Good Government Groups to Cuomo and Legislative Leaders: Pass Reform Before Budget Deadline

Several good-government groups, including the New York Public Interest Research Group, Common Cause, Citizen Action, the League of Women Voters, and the Brennan Center, gathered in Albany on Tuesday to encourage state leaders to enact comprehensive campaign finance reform. Governor Cuomo has proposed numerous reforms in his budget: a system of matching small donations with public funds, lower corporate contributions limits, and $5.3 million for the state Board of Elections to enforce campaign finance and election laws. The governor, as well as Democratic Assembly Speaker Sheldon Silver and Independent Democratic Conference Senate Co-leader Jeff Klein, have all come out in favor of public financing for election campaigns. With public financing in the budget this year, the reform groups called on the elected officials to make sure it remains in the final budget agreement between the governor and legislature.

Teachout on MSNBC: Fair Elections in New York Serves as National Model

On Tuesday, Zephyr Teachout, associate professor at the Fordham University School of Law, appeared on All In With Chris Hayes on MSNBC to discuss the problem of money in American politics. Nicholas Confessore of the New York Times joined Hayes and Teachout, to explain the intricate network of undisclosed wealthy donors seeking to influence American elections. When asked how we can solve the problem of money in politics, Teachout said, “We should respond like the great Republican Teddy Roosevelt with two different political responses. One is public funding of campaigns. And two is breaking up this consolidated power.” When informed about Tom Steyer—a retired billionaire investor who plans to spend $100 million during the 2014 elections to pressure lawmakers to act on climate change—Teachout said that his money would be better spent on addressing the root causes of our government’s failure to address climate change. She gave the example of the effort to pass public financing in New York State as one solution to target the systemic problem of money in politics.

JCOPE Rejects Applications from Groups Seeking Disclosure Exemptions

The New York Joint Commission on Public Ethics rejected applications from four groups on Tuesday seeking exemptions from state disclosure rules. The commission mandates reports from lobbying organizations, but can withhold the records of contributors to the lobbying groups if the donors might suffer “harm, threats, harassment or reprisals” from public knowledge of their support to the specific entities. Applications from left-leaning organizations such as the Family Planning Advocates (FPA), the Women’s Equality Coalition (WEC), the New York Civil Liberties Union (NYCLU) as well as the right-leaning New Yorkers for Constitutional Freedoms (NYCF) were rejected by the commission. In the summer of last year, NARAL, a pro-choice organization was granted exemption from disclosure. Two of the groups, the NYCLU and NYCF said they would consider every available option to protect their donors’ identities.

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         

Lobbying Groups Seek Exemption from Donor Disclosure Rules

The New York State Joint Commission on Public Ethics recently granted an exemption to Naral Pro-Choice New York from regulations requiring tax-exempt organizations that participate in political activities to disclose their major donors. The law allows exemptions for groups whose donors might face “harm, threats, harassment or reprisals.” Naral Pro-Choice points to past threats as evidence of the danger that disclosure would create: disturbing handwritten letters and Facebook posts by a man who was later convicted of participating what he thought was a plot to bomb an abortion clinic. Many groups from across the political spectrum are now seeking the same exemption, arguing that publicly disclosing their donors could endanger them. New York’s broad definition of lobbying includes spending on advertisements for or against legislation. Groups that devote a substantial amount of their resources to lobbying have to disclose all donors that contribute more than $5,000. According to Kelly Williams, corporate general counsel at the Brennan Center, exemption from disclosure should only be granted in instances of credible threats or harassment, not for fear of economic harm, such as boycotts. The New York Times concurs, stating in a Wednesday editorial that “Otherwise, big-money partisan lobbying via hidden backers will only proliferate as the public heads deeper into the dark, and the ethics law itself will begin to unravel, thread by thread.”

Super PACs Active in New York City Elections

Super PACs, independent political action committees with no restrictions on campaign spending, are shelling out cash for flyers, robocalls and TV ads in New York City elections. Forward NY is one of six Super PACs active in the city. It recently sent thousands of emails attacking the former governor Elliot Spitzer for his attempted comeback into politics. Jobs for New York, a group backed by the Real Estate Board of New York, has spent $314,000 on City Council races. Three former aids to Rudy Giuliani are also forming a Super PAC to support Republican mayoral candidate Joe Lhota. Government watchdog groups have criticized the independent expenditures because they undermine the city’s public financing system, which imposes contribution and spending caps on candidates. “Skewing by big donors is a serious matter,” according to Eric Lane, the dean of Hofstra University Law School, who helped write the city’s campaign finance law. The only check on Super PACs in the city is a state election law barring an individual from making more than $150,000 in annual contributions to all state and local campaigns combined.

City Comptroller Candidates Discuss Campaign Finance

The candidates for New York City Comptroller traded shots at each other over how their campaigns are financed in a debate last week. The debate was the first in a series administered by the New York City Campaign Finance Board (CFB). Manhattan Borough President Scott Stringer is participating in the CFB matching funds program, which provides him with a $6-to-$1 match for every donation he raises up to $175. Consequently Stringer also has to abide by strict contribution limits and a spending cap of $6 million. Spitzer joined the race after the CFB deadline and is self-financing his campaign. Stringer accused Spitzer of “trying to destroy one of the best campaign finance systems in the country” at the debate. Spitzer fired back saying that Stringer had benefited from independent expenditures from a coalition of women’s advocates, business and labor leaders.

NATIONAL

Rep. Van Hollen Files Suit Against IRS

Representative Chris Van Hollen (D-MD) has filed suit in Federal District Court to overturn an Internal Revenue Service ruling on tax-exempt “social welfare” organizations that engage in overtly political activities. Three government watchdog groups, Democracy 21, Public Citizen and the Campaign Legal Center, are joining the suit. The tax statute confers 501(c)(4) tax-exempt status only to groups that “exclusively” engage in non-political social welfare work. For decades, however, the IRS has only required 501(c)(4)s to make social welfare their “primary” purpose, allowing significant political activity. “The point here is that the law is clear,” Representative Van Hollen said. “What do you want us to do — put an exclamation point after exclusively?” As opposed to traditional PACs and Super PACs which fall under Section 527 of the IRS Code, the concern arises over the ability of the 501(c)(4)s to spend on politics without disclosing their major donors. Following the Supreme Court’s Citizen United decision, $256 million was pumped into political ads in the 2012 presidential election cycle, three times more than the amount spent in 2008.

In August Recess, Congressmen Globe-trot on Privately Financed Trips

While many Americans are concerned about making ends meet this summer amid oncoming sequestration cuts, Congressmen are using the summer recess to travel around the globe on privately financed tours, some paid for by lobbyists. Congress clamped down on such travel in 2007 when a scandal involving lobbyist Jack Abramoff and free trips was exposed. Abramoff was later sentenced to prison on corruption charges, which also engulfed former Representative Bob Ney (R-OH) and some Congressional aides. But the trips haven’t stopped; expeditions to Turkey and Israel, paid by private groups and foreign government have been especially popular. Four House Republicans and a Democrat who are members of the “Friends of Scotland Congressional Caucus” are headed to Scotland this month, on the Scottish government’s tab. Bill Allison, editorial director of the Sunlight Foundation, is concerned that the trips may make lawmakers feel indebted to the sponsors, especially when they include free food, hotels, tours and transportation. There have been 1,363 trips at a cost of $3.2 million to hosts so far this year.

Race for Governor in Virginia Invites Super PACs

The race for governor in Virginia is heating up as the candidates attract massive contributions. In the month of July, DGA Action, a Super PAC of the Democratic Governors Association, contributed $1.2 million to Terry McAuliffe, a Democratic candidate for governor, one of the largest single political donations for the office in recent history. Virginia has no limits on contributions for candidates to state offices.  McAuliffe’s Republican opponent, Virginia Attorney General Kenneth T. Cuccinelli II has received several large donations including $5.6 million from the Republican Governors Association. And the race has turned extremely partisan and bitter with each candidate accusing the other of ethical lapses. McAuliffe has attacked Cuccinelli in a television ad criticizing $18,000 in gifts Cuccinelli received from a prominent GOP donor, Star Scientific CEO Jonnie R. Williams, Sr. Cuccinelli has penned an op-ed accusing GreenTech Automotive, an electric car company founded by McAuliffe, of dubious practices to attract foreign investors.

Small Business Leaders Ask SEC to Adopt Disclosure Rule

Aimee McQuilkin, a leader in the Montana Small Business Alliance, and Freddy Castiblanco, a leader of Small Business United New York, have authored an op-ed in The Hill arguing for the Securities and Exchange Commission to establish a rule regarding disclosure of political spending by corporations. Currently public companies that spend money on politics are not obligated to report such spending to investors or the government. Several small business trade groups have signed onto a letter urging the SEC to adopt the proposed disclosure rule, in an effort to generate greater transparency. “Under current rules, money from the general treasury of a public company can be disbursed to fund political activities without the owners (the shareholders) having any way to know about it.” Hardworking small business owners understand that success in the marketplace should be determined by innovation and healthy competition, not pay-to-play politics or secret back-room politicking.

Brennan Center Expresses Approval of the Substantial Baisis Investigation Report

By Kelly Williams

The Brennan Center for Justice expresses its approval of today’s release by New York State Legislative Ethics Commission (LEC) of the Substantial Basis Investigation Report that was unanimously approved by the Joint Commission on Public Ethics (JCOPE) in February.  We note that release of the report is the clear obligation of the LEC as provided by reforms included in the 2011 Public Integrity Reform Act (PIRA).  Today’s release of the Substantial Basis Investigation Report by LEC demonstrates that this part of the new ethics oversight process established under PIRA can work – now it is up to the LEC to decide what the proper course of action will be.  We congratulate the JCOPE Commissioners and their staff on today’s important development and hope the remainder of this process will be handled fairly and expeditiously.

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

Utica Observer-Dispatch Editorial on Matching Small Donations

The Utica Observer-Dispatch editorialized in favor of campaign finance reform on Sunday. Governor Cuomo and Senator Cecilia Tkaczyk have both championed the call for reform. Assembly Speaker Sheldon Silver stands behind the initiative as well. “It’s an issue that politicians love to talk about, and it’s time they put that money where their mouth is and reform campaign financing once and for all.” The current system allows incumbents to raise large sums of campaign cash in a myriad of ways, including from lobbyists looking for political favors. Campaign war chests can be multiplied through investments in bonds and mutual funds. This discourages rising challengers. Matching small donations with public funds, and reducing the size of big donations for candidates willing to participate in such a system offers an alternative to campaigns dominated by wealthy special interests. Opponents afraid of the cost to taxpayers would do well to know that the relatively miniscule monetary expense is “well worth the trade off to drive out special interests whose big bucks influence decisions that ultimately cost the public in many ways.”

Former U.S. Representative Mike Arcuri: Congress Too Reliant on Big Contributions

On Thursday, former U.S. Representative Mike Arcuri (D-NY) made the case for public campaign financing by matching small donations to The Syracuse Post-Standard. Representative Arcuri explained the negative ramifications that big campaign contributions have on public policy. “There’s something inherently difficult about voting on a bill that you know the stakeholders … have threatened to support your opponent if you don’t,” Arcuri stated. The former Congressman said that based on his tenure, this was a common predicament on nearly every issue. “I had to think about how will this affect my contributor, really, I should not have been considering that.” Matching small donations by adopting a comprehensive fair elections system can reverse this scenario, so that Representatives are dependent upon their constituents rather than a few wealthy individuals, corporations, and PACs.

Former U.S. Representative Tom Perillo: It’s Time for Campaign Finance Reform

In an Albany Times-Union op-ed, Tom Perriello, former Congressional Representative from Virginia, makes a strong case for campaign finance reform in New York State. Perriello argues that despite the flood of money in the 2012 election, New Yorkers can still reclaim their government. By matching small donations with public funds and reducing New York’s sky high contribution limits, ordinary New Yorkers can regain control over their representatives in Albany. New York City, which has operated under this clean elections system for 20 years, has certainly reaped the benefits. “City Council candidates now hustle to gather contributions from scores of small donors,” and new donors “are more economically, racially and geographically diverse.” Although some are concerned about the tax costs of implementing public financing, ordinary taxpayers would be the big winners because it would drastically diminish government giveaways to wealthy interests. “Closing just a few tax loopholes currently protected by the influence of major donors could more than cover the cost of citizen-funded elections.”

New York Lobbying Reports Reveal the Biggest Spenders of 2012

Disclosure records from the New York State Joint Commission on Public Ethics reveal the biggest lobbying spenders in the state. New York enacted the nation’s first system of disclosure of funding sources for entities spending more than $50,000 per year on lobbying expenditures after the passage of the Public Integrity Act of 2011. According to the Democrat and Chronicle, there was a seven percent drop in lobbying, from $220 million in 2011 to $205 million last year. The biggest spender was the Committee to Save New York, a business group that supports Governor Cuomo’s fiscal agenda. The group spent $4.2 million in 2012. Exxon Mobil Corporation was the second largest spender of the year, dolling out $2.1 million in 2012. Major League Soccer, which is seeking to open a new stadium in Queens, came in third, also nearing $2.1 million in lobbying expenditures. According to Kelly Williams, corporate general counsel at the Brennan Center, the new regulations ensure that voters can “tell who is trying to influence the legislative process,” especially when entities with vague and unrecognizable names tacitly conduct expensive lobbying campaigns.

Organizing for Action Joins Fair Elections for New York Campaign

Organizing for Action, a team of grassroots volunteers formed from President Obama’s campaign organization, has decided to join the movement for campaign finance reform in New York State. At a conference call for members, OFA executive director Jon Carson stated that the group will help build momentum for the fair elections effort in the final three months of the state legislative session. New York State Attorney General Eric Schneiderman, also on the call, informed participants that public financing of elections is “essential in a post-Citizens United world.” The campaign finance push is OFA's first foray into state politics and away from Obama's presidential agenda. The Fair Elections for New York coalition, a diverse array of reform, good-government, and business organizations is already active on the issue, organizing house parties and rallies, gathering signatures for petitions, and lobbying legislators in Albany. OFA’s lead New York organizer Kate Stevens, said OFA volunteers will be doing grassroots organizing as well, including house parties, educational forums, and reaching out to friends and neighbors.

NATIONAL

Washington Post op-ed: Small Donor Democracy Can Replace Status Quo

In a Washington Post, op-ed E.J. Doinne Jr. describes the current battle over gun control as an advertising contest between proponents of regulations such as Mayor Michael Bloomberg and opponents such as the NRA. Unfortunately politics has been reduced to a “contest between liberal rich people and conservative rich people” in America. The post-Citizens United world is infused with nonstop fundraising, political spending and permanent campaigning. As political strategists dismiss campaign contribution limits and Organizing for Action plans to accept large donations, Doinne suggests an alternative. It would be far better for the Obama administration to concentrate “primarily on building off the pioneering work his campaigns did in rallying small donors.” Unfortunately, too many politicians are growing comfortable with the status quo of big money campaigns. Two Congressional Representatives that refuse to are David Price (D-NC) and Chris Van Hollen (D-MD). They are sponsoring the Empowering Citizens Act, which would match contributions under $250 with public funds at a 5 to 1 ratio. Other members of Congress would do well to add their names as co-sponsors and publicly voice their support.

Do You Ever Wonder What Your Former Congressman Is Doing?

USA Today reports that 16 lawmakers that left Congress recently have now jumped on board with lobbying groups. The analysis looks at lawmakers who retired, resigned or lost their seats in the last Congress and the new Congress. Although rules forbid former Representatives and Senators from directly lobbying Congress for one and two years respectively, there are no restrictions on providing advice and consulting services to organizations seeking to shape federal legislation. Former lawmakers are allowed to lobby the executive branch and state and local governments without any moratorium. Former Congresswoman Jo Ann Emerson (R-MO) who resigned from Congress in January, is now the President and CEO of the National Rural Electric Cooperative Association. Scott Brown, the former Massachusetts Senator who was defeated in November, will be joining the lobbying firm Nixon Peabody. Scott received extensive contributions from the financial services, real estate and insurance industry during his Congressional race. The firm’s D.C. clients include Goldman Sachs and Sallie Mae.

Public Financing Bill Clears Hawaii Senate Committee

On Thursday, the Hawaii Senate Ways and Means Committee recommended the passage of House Bill 1481, which passed the state House earlier this month. Currently, Hawaii has a partial public funding program, but only one legislative candidate participated in 2012. The new legislative proposal aims to strengthen the program. Under the new system, candidates who collect a certain number of signatures and qualifying contributions from registered voters to show broad-based community support would be eligible to receive a public grant to fund their campaigns. An interview with the lead sponsor of the bill, Hawaii State Representative Della Au Belatti (D), is available at the Public Campaign website. “It would … really free political candidates and elected officials from having to chase after money, which we so often have to do,” she stated.

West Virginia House of Delegates Passes Resolution to Encourage Congress to Overturn Citizens United

The West Virginia House of Delegates is asking Congress to enact a constitutional amendment overturning the Citizens United Supreme Court decision. House Resolution 9, which passed 60-39 on Thursday, asks Congress to draft a constitutional amendment that will allow for corporations to be regulated in terms of how much money they can donate and spend on politics. Proposed amendments need to either (a) receive backing from three-fifths of the members of the U.S. House and Senate or (b) attain support for a constitutional convention called for by two-thirds of all state legislatures, before they can be considered for ratification by the states (three-quarters of the state legislatures are required to approve) and added to the Constitution. House Resolution 9 is advisory in nature and does not call for a constitutional convention. Referring to corporations, Delegate John Ellem (R-Wood) stated, “Since a corporation is a tool for commerce, I strongly believe being a tool we created, we have the power, we as the legislative body, and the Supreme Court has chimed in on it, but we have the right to impose restrictions."