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

Indictments Not an Issue for New York Politicians Seeking Re-Election

Four New York politicians were re-elected on Tuesday despite facing federal indictments.

• Congressman Michael Grimm won re-election to his Staten Island-based House seat despite facing a 20-count federal indictment for various offenses.
• State Senator Tom Libous was re-elected with 60 percent of the vote in the 52^nd Senate district. Libous still faces a trial on charges of lying to federal investigators, but he is attempting to have the charges thrown out on technical grounds.
• State Senator John Sampson of Brooklyn was charged this summer with embezzling hundreds of thousands of dollars, but still won his primary and general elections by very comfortable margins.
• State Senator William Scarborough ran uncontested on Tuesday. He was charged and arrested this summer for improper use of campaign funds.

Post-Moreland Reforms Unsuccessful

The New York World in partnership with Capital New York published an assessment of the reforms that Governor Cuomo secured in exchange for shuttering the Moreland Commission earlier this year. These reforms included a pilot program to test public financing, new disclosure rules, and a new office of enforcement at the State Board of Elections. Overall, the article claims, these reforms have been a bust. New York Comptroller, Democrat Tom DeNapoli, opted out of the pilot public financing system, citing the program’s structural flaws. His opponent, Republican Bob Antonacci, did participate in the program, but was unable to raise the requisite $200,000 in matchable contributions to qualify for the public funds. Increased disclosure for outside spending, while necessary, was not a profound reform because New York’s unusually high contribution limits allow big spenders to make direct campaign contributions instead. Finally, the independent enforcement office at the Board of Elections took little action this election cycle and proved to be less independent than planned.

Poll: Small Businesses Support Public Financing

A recent national poll conducted by Small Business Majority shows that 85 percent of small business owners support public financing of elections. The results also show that small employers feel that their voices are drowned out by large corporations, giving big business an unfair advantage in the political process. The poll reflects survey responses from 900 small business owners, with 48 identifying as Republican or independent-leaning Republican, 32 percent as Democrat or independent-leaning Democrat, and 11 percent as independent. 

IDC Senators Want to Remain with Republicans

State Senator Jeff Klein, leader of the Independent Democratic Conference, announced last week that the he wants the IDC to remain aligned with the Republican majority, despite promises earlier this summer to form a coalition with the other Democrats in the chamber. The deal struck this summer helped to appease the Working Families Party and major labor unions, allowing Klein and the rest of the IDC senators to avoid difficult primary challenges from the left. But while the IDC Senators won reelection, other Democratic candidates were less successful, leading to Republicans taking 32 seats and maintaining control of the state Senate. The Senate GOP leader, Dean Skelos, would not confirm whether he would welcome a new coalition with the IDC.

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

City Board of Elections Creates Another Poorly Designed Ballot

The New York City Board of Elections has come under scrutiny in recent years for designing confusing ballots that led to tens of thousands of votes being thrown out as invalid. It appears that 2014 could be no different. One of the recurring issues with the Board’s ballots has been that candidates for the same races are split onto multiple lines. Splitting contests, which this year’s ballot does, can cause voters to accidentally choose more than one candidate when completing their ballot. Another troubling design feature of this year’s ballot is that it favors the major parties, while discriminating against the minor parties. Voters who support the Democrats or Republicans will find the ballot very straightforward, because Democratic and Republican candidates are aligned separately from the minor party candidates. Minor party voters, on the other hand, will have to search through the confusing cluster of other candidates to find their choice. The Brennan Center for Justice, a consistent advocate for ballot improvement, sent a letter to the New York City Board of Elections this week detailing how the design flaws harm minor political parties, and urging the Board to take action to address these issues.

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 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

Small Donations Fueled ‘Wide-Open’ Elections Last Year
A report by the New York City Campaign Finance Board shows that the city’s 2013 elections were “the most wide-open” since the city’s small-donor matching system was put in place 25 years ago. The report, “By the People: The New York City Campaign Finance Program in the 2013 Elections,” shows, among other things, that: the number of candidates participating in the public-funding system in 2013 remained high; more than two-thirds of all New York City contributors gave $175 or less; and more than 90 percent of the total raised came from individual contributors, rather than from PACs or unions. While the level of outside expenditures in 2013 was also high, the CFB says that its disclosure requirements – which were recently tightened further – reduced the influence of dark money in the city elections. The CFB report demonstrates the benefits of a public matching system for small donors, supporting the view that the New York City system could be a valid model for the rest of the nation.

Roundup of Public Corruption Cases

• State Senator Thomas Libous and his attorney appeared before a U.S. District Court judge on Wednesday to discuss which motions the defense is planning to file. Libous was indicted on July 1; he’s charged with lying to federal investigators regarding allegations that he had improperly helped his son obtain a position with a politically connected law firm in Westchester County. 

• Diana Durand, the ex-girlfriend of Staten Island Congressman Michael Grimm, pled guilty to making illegal contributions to Grimm’s campaign. Her lawyer insisted she is not cooperating with the federal investigation into the congressman, whose trial on fraud and tax charges is scheduled for December. 

• U.S. Attorney Preet Bharara has been going after the pensions of politicians convicted of corruption-related offenses. He obtained forfeiture orders against former New York City Councilman Miguel Martinez and Assembly Member Eric Stevenson and is seeking to have the money paid out of pension benefits.

State Board of Elections Enforcement Unit Starts Work

The enforcement unit created by legislation passed through the budget is now open for business. The unit was part of a package of reforms that Governor Cuomo pushed in exchange for shutting down the anti-corruption Moreland Commission. The new unit is headed by former Cuomo aide Risa Sugarman and will be housed in the Board of Elections but physically walled off from the rest of the agency. Reformers agree that improved campaign finance enforcement is necessary at the state level, but many had called for more sweeping changes including public financing of elections.

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

The Real Moreland Takeaway
SUNY New Paltz dean and state government expert Gerald Benjamin and former New York City corporation counsel Fritz Schwarz wrote an op-ed in the Daily News this week to emphasize the need for public financing at the state level. The attention surrounding Governor Cuomo’s handling of the Moreland Commission is “an easy distraction,” they write, that “takes our attention off of where it should really be focused…the commission’s crucial recommendations for campaign finance.” When adopted, they argue, these reforms will curb the corrosive power of big money in Albany and strengthen the influence of average voters. Schwarz and Benjamin also wrote a letter, which is joined by more than 20 other prominent New Yorkers, urging candidates for the New York State legislature to make public financing a top priority next year. 

New City Law Requires More Disclosure for Campaign Spending
The New York City Council unanimously approved a new campaign spending disclosure law this week. Under the new law, any independent expenditure group that spends in excess of $5,000 will be required to list their top three donors on any literature or advertisements they distribute to voters. They would also have to provide additional disclosure information that would be available publicly on the New York Campaign Finance Board’s website. Councilman Brad Lander, the bill’s primary sponsor, has repeatedly called out groups that do not disclosure their donors and argues that this law will “enable voters to see who’s behind the ads they’re getting.” After the bill passed easily through the City Council, a spokesperson for Mayor de Blasio said he will not hesitate to sign it into law.

Appellate Court Denies Cuomo’s Teachout Challenge
In a unanimous vote, a New York state appellate court rejected the residency challenge against Zephyr Teachout’s campaign, affirming the lower court’s decision. The appellate court ruled that the burden fell on the challengers to provide “clear and convincing evidence” that Teachout does not to meet the residency requirements – a burden that they failed to meet. Following the decision, Teachout renewed her calls for a debate against Governor Cuomo, saying “we have very different visions for where we want to take the state…Democratic voters deserve a choice.” Time Warner Cable News has already agreed to host a debate between Cuomo and Teachout. When questioned whether he would agree to participate, however, the Governor said that he will “leave that to the campaigns to work out.” 

N.Y. poll: Government Corruption a Problem
Another poll was released this week showing that 83 percent New Yorkers view corruption as a serious problem in the state government. Although Cuomo is still the heavy favorite to win reelection this fall, 48 percent of New York voters now see him as part of the problem compared to 41 percent who see him as part of the solution. The latest poll by Quinnipiac University is the third such survey conducted since news of Governor Cuomo’s handling of the Moreland Commission emerged earlier this summer. The results indicate that New Yorkers have become increasingly aware of the Moreland Commission, and nearly half of the respondents in the new poll said that they were in favor of the ongoing federal prosecutions as a way to finish what the commission started. 

New Yorker’s Deep Dive into Campaign Finance and Corruption
This week, the New Yorker published an examination of the corrupting influence of money in politics. While the piece provides an interesting historical perspective of money in politics nationally, it focuses particular attention on the Empire State, which it calls “corruption’s proving ground.” The piece also highlights the anti-corruption research and advocacy conducted by Democratic gubernatorial candidate Zephyr Teachout, calling her campaign less of a campaign for office and more of a campaign for reform.

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 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

Senate Coalition Disintegrates

As the legislative session came to a close last week, comprehensive campaign finance reform remained stalled. Opposition to reform was led by Republicans in the state Senate. This week, the breakaway Democrats who had formed a coalition with Republicans to control the Senate announced plans to abandon the arrangement. The leader of the Independent Democratic Conference, Sen. Jeffrey Klein, said the IDC would form a coalition with Democrats next year. The change is expected to have implications for public campaign financing and other reforms left on the table at the end of this year’s session. Governor Cuomo has renewed his pledge to “work to elect people who support” the progressive agenda this election season. Whether the planned Democrat-IDC coalition has a majority in the chamber next year will depend on the outcome of the November elections.

Governor Cuomo Has Raised Millions through the LLC Loophole

In the three and a half years since his election in 2010, Governor Andrew Cuomo has collected more than $6.2 million in campaign funds—more any other New York politician—through a loophole that he previously pledged to close. Under state regulations, limited liability companies are considered individuals and permitted to contribute up to $150,000 per year to candidates and political parties. However, since there is no limit on the number of LLCs a corporation or an individual may create, it effectively allows unlimited campaign contributions. In its preliminary report released last December, the Moreland Commission to Investigate Public Corruption recommended closing the loophole due to “the appearance of a relationship between large donations and legislation that specifically benefits large donors.”

Outside Money Plays Big Role in New York Congressional Primaries

Federal Election Commission filings compiled by the Sunlight Foundation demonstrate that outside groups were actively spending money in New York’s Congressional primary races. In the 21^st Congressional District in upstate New York, outside groups came to the rescue of former Bush administration aide Elise Stefanik, in her primary battle against investment fund manager Matt Doheny. American Crossroads, the Karl Rove-linked super PAC, spent almost $800,000 on the race criticizing Doheny as irresponsible and a “perennial loser.” Another group, New York 2014, was formed just last month and, despite its nondescript name, all of its $370,000 in expenditures were in support of Stefanik. New York 2014 is funded by five rich out-of-district contributors, all with key roles at financial firms. The biggest donor to New York 2014 is Kenneth Griffin, founder and CEO of hedge fund Citadel LLC, who also recently made the largest single contribution in the history of the state of Illinois. Stefanik emerged as the victor in this week’s primary, and will go on to face Democrat Aaron Woolf in November. Outside groups were also active in the 1^st Congressional district Republican primary race between Lee Zeldin and George Demos, where independent expenditures hit $1.8 million. Such groups are likely to be a factor in the upcoming general election races as well.

Green Party Candidate to Challenge Cuomo, Astorino

Howie Hawkins, the Green Party’s gubernatorial nominee, will compete against Gov. Cuomo and Republican nominee Rob Astorino in the general election. Fordham law professor Zephyr Teachout, meanwhile, is collecting signatures to run against Cuomo in the Democratic primary. She has criticized the governor over his failure to pass campaign finance reform to address public corruption. An April Siena poll showed that a left-leaning challenger to Cuomo from the Working Families Party would garner 24 percent of the vote and cut Cuomo’s lead by 19 percent. Although the WFP has already endorsed Cuomo, Hawkins said that he is the “ticket that 24 % is looking for.” The most recent Siena poll however illustrated that Hawkins would capture only 4 percent of the vote in a race with Cuomo and Astorino. Nonetheless, Hawkins remains optimistic: “People have gone through some different things and they’ve basically seen they’ve got to be independent and speak for themselves, instead of attach themselves to the latest liberal Democratic hope,” he stated.

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

Good Government Groups Ask Gov. Cuomo for Reform

Thirty good-government, trade and faith-based organizations penned a letter to Governor Andrew Cuomo on Wednesday, urging him to include public financing of state campaigns in his annual executive budget proposal. “New Yorkers have waited long enough for action on curbing corruption and reducing the undue influence and role of campaign money in state government,” the letter stated. Governor Cuomo can add campaign finance reform in his executive budget proposal set to go out next Tuesday. This would force the state legislature to negotiate on anti-corruption measures. According to the groups, the “state budget process allows the best opportunity for making campaign reform a reality in 2014.” The Brennan Center, Common Cause NY, the New York Public Interest Research Group, the State Council of Churches, the Long Island Progressive Coalition, and the Greater New York Chamber of Commerce were just some of the signatories to the letter.

Common Cause: Pro-Fracking Interests Spent Millions on Politics

A new Common Cause/NY report released Monday highlights the role that money plays in the policy debate over allowing hydraulic fracturing in New York. Since 2007 and up until July of last year, pro-fracking businesses, trade organizations, and unions spent $15.4 million on campaign contributions to state lawmakers, who are set to determine the fate of the practice in New York. By comparison, anti-fracking environmental organizations, unions and advocacy groups spent merely $1.9 million on campaign contributions during that period. In addition to campaign contributions, both sides spent huge sums on lobbying lawmakers, according to state records. Pro-fracking interests have focused contributions on the parties in power. The Senate Republicans and the four-member Independent Democratic Conference—who jointly control the chamber—received $3.1 million and $194,000 respectively, whereas Senate Democrats garnered only $785,000 from pro-fracking groups. In the Democratically controlled Assembly, the Democrats obtained $1.3 million and Republicans acquired just $643,000. Susan Lerner, Executive Director of Common Cause/NY, noted that “Hydraulic fracturing has been one of the most polarizing issues in recent history, with no shortage of political money invested by pro-fracking interests to achieve a favorable outcome… New York State needs comprehensive campaign finance and lobbying reform to assure New Yorkers that public policy is based on their interest, not the special interests.”

Norden: Public Financing Is More Effective than a Constitutional Amendment

Last week, Sam Fedele, coordinator of Move to Amend-Rochester, authored an op-ed in the Democrat & Chronicle criticizing the Moreland Commission’s recommendations to fix the perilous state of corruption in Albany. Fedele argued that in the face of the Supreme Court’s decision in Citizens United v. FEC, the only remedy is a constitutional amendment that allows all money spent on politics, including independent expenditures, to be restricted. Lawrence Norden, Deputy Director of the Brennan Center’s Democracy Program, responded with an op-ed of his own. He reasoned that although passing a constitutional amendment is a worthy endeavor, it could take years, if not decades. On the other hand, comprehensive campaign finance reform, including public financing, can be enacted this year. The proposal came shy of passing the State Senate by just one vote last year. Furthermore, Fedele conflates state lawmakers from New York City with city lawmakers from New York City: “18 of the 19 corrupt Senators and Assembly members cited by the commission represented districts from within that very same New York City matching system,” he claims. However as Norden points out, those 18 lawmakers ran for state office under the state’s campaign finance system, not for city office under the city’s public financing system. In fact, corruption in New York City has decreased since public financing was instituted in 1989. In 2012-2013, individuals were responsible for 93 percent of all contributions in city elections, compared to only 31 percent of all contributions in state legislative elections—the remainder of the contributions were made by special interest groups.

NATIONAL

Trade Organization Files Suit over Washington’s Campaign Finance Laws

The Grocery Manufacturers Association (GMA), a Washington D.C.-based trade organization, has filed a civil-rights lawsuit alleging that Washington State’s campaign finance laws violate the federal and state constitutions.  Washington Attorney General Bob Ferguson sued the GMA in October for concealing its donors to a $10.6 million fund opposing a state ballot initiative that would have mandated labeling genetically modified foods.  The GMA agreed to identify its donors, but is still fighting financial penalties for violating state disclosure laws.  The GMA argues that Washington’s requirements that it report donations as a political committee put a burden on it “not justified by any substantial government interest.” The GMA also claims the Washington law unconstitutionally discriminates against out-of-state citizens, since it bars political committees from transferring money to another political committee unless at least ten of its donations came from Washington donors – meant to make it more difficult to shuffle funds to conceal donors.

FEC Staff Concluded Crossroads GPS Likely Violated Campaign Finance Laws in 2010

A recently-released Federal Election Commission (FEC) report reveals that the FEC’s legal department concluded in 2012 that Crossroads GPS probably violated campaign finance laws with its spending in the 2010 midterm elections. A non-profit “social welfare” group founded by Karl Rove, Crossroads GPS is a conservative spending powerhouse that raised over $200 million in 2012. Categorization as a “social welfare” non-profit requires that an organization spend less than 50 percent of its budget on campaign-related activity.  FEC staff determined that Crossroads GPS surpassed this limit in 2010. If the Commissioners had agreed, Crossroads would have been required to register as a political committee.  That would mean revealing some of the deepest pockets in conservative politics – one donation alone in 2012 was for $22.5 million. The FEC report recommended further investigation of Crossroads GPS. However, because the ideologically-split Commission deadlocked with a 3-3 tie on consideration of the report in December, no action will be taken.

Feds Investigate Christie’s Potential Use of Relief Funds for Campaigning

The Inspector General of the U.S. Department of Housing and Urban Development (HUD) is investigating New Jersey Governor Chris Christie’s use of relief funds allocated by the federal government after Superstorm Sandy. The federal government financed a $25 million ad campaign encouraging tourists to return to the Jersey Shore.  The HUD investigation is focused on a television advertisement series dubbed “Stronger than the Storm,” which featured Christie and his family and aired in April as Christie was beginning his reelection campaign.  The winning bid for the advertisements cost $2 million more than the losing proposal, which did not feature the Christies. Rep. Frank Pallone, Jr. (D-NJ) requested the investigation in August, alleging that Christie abused the funds for campaign purposes. The HUD audit will last several months and culminate in an official report.

Conservatives Criticize Choice of Obama Donor to Lead IRS Investigation

House Oversight Committee Chairman Darrell Issa (R-Calif.) and Rep. Jim Jordan (R-Ohio) are requesting that the Department of Justice (DOJ) remove DOJ trial attorney Barbara Bosserman from the investigation into the Internal Revenue Service (IRS). The DOJ is investigating allegations that the IRS targeted conservative groups for unwarranted scrutiny of their tax-exempt status, and Bosserman has been tapped to lead the investigation. According to federal campaign finance records, Bosserman has donated a combined $6,750 to the Democratic National Committee and Obama’s election campaigns between 2004 and 2012. Representatives Issa and Jordan, as well as several of the conservative groups suing the IRS, have criticized her appointment as political because of these donations. DOJ spokeswomen Dena Iverson has responded strongly to their criticisms, characterizing their recommendations as a violation of equal protection law since “it is contrary to department policy and a prohibited personnel practice under federal law to consider the political affiliation of career employees or other non-merit factors in making personnel decisions.”

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

Philanthropic, Civic Groups Send Letter to Cuomo Urging Public Financing of Elections

Major philanthropic organizations and numerous environmental and civic groups sent a letter to Governor Cuomo on Tuesday urging him to support the public financing of state elections. “We are concerned that the views you and many other leaders have articulated will have a very hard time being translated into action unless systematic reform occurs in New York,” they stated. The Moreland Commission to Investigate Public Corruption is set to release a report of its findings and recommendations by December 1. It has been investigating state campaign finance and corruption laws and practices for the past six months. Among the signatories to Tuesday’s letter were the Rockefeller Brothers Fund, the New York Foundation, and the Park Foundation. Environmental groups such as the Natural Resources Defense Council and the Sierra Club also voiced their concerns in the letter.

DiNapoli and Stringer Join Tele-town Hall to Promote Comprehensive Reform

On Tuesday evening, New York State Comptroller Thomas DiNapoli, New York City Comptroller-elect Scott Stringer, and a host of good-government groups held a “telephone town hall” to encourage citizens to demand small donor-financed elections in New York State. Addressing the crowd, DiNapoli said that mega checks to state politicians in Albany are “downing out the voices of everyday New Yorkers and it’s distorting our priorities.” Regarding concerns about the use of public funds for election campaigns, DiNapoli added that with a “$135 billion budget…spending $20 or $30 or even $40 million, that’s really a small investment with a tremendous payback.” Stringer informed the callers that matching small donations with public funds helped him challenge Eliot Spitzer, a self-financed opponent who spent over $10 million in the race. “[I]f it were not for the New York City campaign finance program the fact that we could continue to raise money — $50 or $100 or $200 at a time — knowing that money would be matched six to one giving us a shot at this race we would have been doomed from the start,” he stated. The reform groups urged the Moreland Commission to endorse comprehensive campaign finance reform, including public financing, as a solution to change the pay-to-play culture in Albany.

Lawmakers Reject Corruption Commission’s Request for Disclosure of Outside Income 

Lawyers representing the New York State Assembly and Senate jointly filed papers in Manhattan Supreme Court on Friday challenging the Moreland Commission’s subpoenas seeking information on outside income of legislators. Albany lawmakers work part of the year and are allowed to seek private employment. The commission asserts that disclosure is necessary for the sake of transparency and preventing potential conflicts of interest. The initial request, for legislators earning more than $20,000 in 2012 from private practice, was sent out in August. In response to a rebuke by lawyers representing the Senate Majority Leaders – a coalition of Republicans and four break-away Democrats – the commission subpoenaed the firms employing the lawmakers. New York State Attorney General Eric Schneiderman said he is confident that the commission would prevail in court.

NATIONAL

House Ethics Committee Drops Investigation into Taiwan Trips

After an investigation spanning more than a year, the House Ethics Committee dismissed charges against Rep. Bill Owens (D-NY) and Rep. Peter Ruskim (R-Ill.) last Friday. Both cases involved 2011 trips to Taiwan.  The travel’s legality depended on who organized and paid for the trips. A private university in Taiwan allegedly sponsored both trips, but an initial investigation by the independent House of Congressional Ethics found “substantial reason to believe” that the Taiwanese government paid, which would count as an impermissible gift from a foreign government under Congress’s rules. The Ethics Committee concluded there was insufficient evidence to continue the investigation.  Its report states that Owens “should have known” the trip was improper due to the continued involvement of the lobbying firm Park Strategies, which represented the Taiwanese government for $20,000 a month at the time of the travel. However, the Committee will not pursue charges against Owens since he paid back the cost of the trip.

House Passes Expansion of FEC Disclosure Fines

On Monday, the House of Representatives passed a bill that would expand the Federal Election Commission’s administrative fine program. The administrative fine program started in the 1999-2000 election year, and established a schedule to fine candidates and campaigns for failing to file disclosure reports on time. The schedule determines fines automatically based on the length of the delay, the amount of data missing, and any prior history of violations. The program will end December 31^st of this year without Congressional reauthorization. All nine members of the House Administration Committee sponsored H.R. 3487, introduced last Thursday and passed days later in a voice vote.  The bill extends the FEC’s administrative fine authority through the end of 2018, and expands it to cover more types of organizations, including groups making independent expenditures or electioneering communications. A supporter, Rep. Candice Miller (R-Mich), called the bill’s recommendations “a consistent and transparent process” for assessing filing violation fees.

Mega Donor Sheldon Adelson Turns to Online Gambling Ban

In 2012, billionaire Sheldon Adelson set a new record in political donations, giving $70 million to GOP candidates.  Adelson’s fortune made him a major political player, and he is now harnessing his political clout to protect its source:  the U.S. casino industry.  Adelson claims that internet gambling, recently legalized in several states, will endanger the industry’s business model and draw minors and the socially-vulnerable into gambling. He is currently hiring lobbyists and forming an advocacy group, Coalition to Stop Internet Gambling, to make his case in Washington. Other casinos and lotteries, which see internet gambling as a potential revenue source, are ready to push back with lobbying efforts of their own to legalize regulated internet gambling. With Adelson openly committed to spending “whatever it takes” to stop internet gambling, the fight promises to be an expensive one on both federal and state levels. 

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

Moreland Commission Co-Chairs Support Public Financing

In recent press interviews, two members who head the anti-corruption commission appointed by Governor Cuomo, Democratic Nassau County District Attorney Kathleen Rice and Republican Onondaga County District Attorney William Fitzpatrick, said that they are in favor of public financing of elections as a means to reduce the dominance of big money in state politics. Rice told Newsday that recent hearings and investigations conducted by the commission have made her “more confidant that public financing of campaigns has to be part of any meaningful campaign-finance reform.” Large amounts of private contributions for public service “is a recipe for disaster,” she continued. Fitzpatrick said that he believes public financing for elections could reduce the pay-to-play culture so prevalent in the state legislature. When asked about the costs to taxpayers, he replied that he is a fiscal conservative and believes the “savings would ultimately be astronomical in the long run.” He went on to criticize aspects of New York politics that reformers have long called problematic, including the inappropriate use of “housekeeping” accounts, the LLC contribution loophole, the lack of enforcement by the State Board of Elections, and the undisclosed outside income earned by state lawmakers. The commission’s report of its findings and recommendations is set to come out on December 1. Good-government groups have proposed that the report include comprehensive reform, including harsher penalties for corruption and public matching funds for small donations.

Attorney General Says Moreland Should Recommend Public Financing

Attorney General Eric Schneiderman recently informed The Capital Pressroom on WCNY that he thinks the Moreland Commission should pursue systematic reform of our election system rather than just a few corrupt politicians. Any findings of illegal behavior are to be referred to the appropriate law enforcement agencies, but the commission has really been “empowered and designed to find weaknesses in existing laws and recommend better ways of doing business,” Schneiderman stated. He added that “public financing should be a part of whatever comes out of this.”

Poughkeepsie Journal Editorial: Moreland Commission Must Follow the Campaign Money

This week, a Poughkeepsie Journal editorial encouraged the Moreland Commission to continue its series of investigations into potentially corrupt practices in the state legislature. There is evidence that political party “housekeeping accounts,” which face no contribution limits,  are being used to advance candidate campaigns rather than for administrative and party-building activities – as dictated by law. The editorial calls for “legislation designed to put reasonable limits on campaign contributions and negate the opportunity for people to buy access.”

Business Community Should Get Behind Reform

This week, Cynthia DiBartolo, chairperson of the Greater New York Chamber of Commerce, wrote an op-ed in the Albany Times-Union, asking New York’s business community to come together behind comprehensive reforms of our campaign finance laws. “We cannot continue to foster a system that risks elevating businesses with the best political connections above those with the best business practices.” But New Yorkers now have a historic opportunity to fix the system; by lowering contribution limits and instituting public matching funds for small donations, citizens can ensure that their representatives once again become dependent on them rather than special interests. As the Moreland Commission puts forth recommendations for reform on December 1, the business community should help ensure that these reforms become a reality.

Former Bronx GOP Chairman Pleads Guilty on Corruption Charges

Former Bronx Republican Party Chairman Jay Savino pleaded guilty in U.S. District Court on Tuesday on several corruption charges. Savino was accused of accepting a bribe of $15,000 in exchange for agreeing to assist State Senator Malcolm Smith (D-Hollis) in his run for New York City mayoral elections. He has been charged with three federal counts, including bribery, conspiracy and wire fraud. In sum, the charges could lead to a 30 year prison sentence.

NATIONAL

Biden Hires Former Corporate Lobbyist as Chief of Staff

On Wednesday, Vice President Joe Biden announced that his current senior aide Steve Richetti will replace Bruce Reed as his Chief of Staff next month. Richetti has had a thirty-year career in Washington, moving in and out of Capital Hill staff positions and K Street lobbying firms. After leaving the Clinton administration, Richetti founded his own lobbying firm, Richetti Inc., representing big corporate clients including Fannie Mae, General Motors, AT&T, and pharmaceutical company Eli Lilly.  Richetti deregistered from lobbying with Congress in 2008 after Obama won the presidential election.  He remains president of Richetti ,Inc., but his brother, Jeffrey Richetti, is registered to do the actual lobbying. According to a statement from Biden’s office, Steve Richetti ‘s continued role with the firm involves advising clients on “public policy, communications strategy, and grass-roots efforts.”

FEC Debates Bitcoin Contributions to Candidates

On Thursday, the Federal Election Commission debated a proposal to allow candidates and committees to accept bitcoins as an in-kind contribution, similar to computer equipment or stock shares. A ruling on the issue was requested by the Conservative Action Fund, a Super PAC funded largely by Shaun McCutcheon, whose challenge to federal contribution limits is being considered by the Supreme Court in McCutcheon vs. FEC.  Bitcoins allow people to make online payments without going through a bank or other third party. The payments are public, but only bitcoin addresses identify the parties, and the currency has been associated with black market drug purchases – although this has not deterred investors.  FEC commissioners indicated that contributions must include the contributor’s name and address, but debated how to classify bitcoins.  Since they are not a national currency, bitcoins are unlikely to be classified as money. Bitcoins also pose another challenge to the enforcement of contribution limits – since their value varies with supply and demand, a bitcoin contribution’s worth could change drastically between when it is given and it is converted into dollars.

States Consider Campaign Finance Law Changes

Now that Election Day has come and gone, state legislators are debating changes in campaign finance rules for the next election cycle. In Michigan, a new Senate bill would double limits on individual contributions to candidates and political committees. The bill would also require candidate committees to file new finance statements in off-election years.  New Hampshire is also considering increasing how much donors can give to candidates.  Massachusetts legislators, alarmed by the flood of secret money from outside groups into Boston’s mayoral race, are introducing legislation that would require independent groups to disclose their donors within a week of spending more than $250 on a campaign and list their five biggest donors on television ads.