August 25, 2009

By: Laurence D. Laufer

Thompson v. Bloomberg

Last week, we submitted a complaint on behalf of our client, New Yorkers for Bill Thompson, the authorized committee of mayoral candidate, Bill Thompson. The complaint alleges that Mr. Thompson’s opponent, incumbent Mayor Michael Bloomberg, violated the New York City Campaign Finance Act by failing to disclose over $3.35 million in political contributions he made during the 2009 election cycle. Here is some background on the legal issues involved.

New York City law requires “every expenditure made by the candidate and [his or her] committee” to be reported to the City’s Campaign Finance Board (CFB). This disclosure requirement was extended to candidates not participating in the NYC matching funds program by a 2004 law adopted over Mayor Bloomberg’s veto. (Mr. Bloomberg has self-financed all his political campaigns and has not participated in the matching funds program.) That 2004 law was intended to ensure that all City campaigns make comprehensive and comparable public disclosure, which would then be reviewed for completeness and accuracy by CFB auditors.

Many campaigns make contributions to political parties and other candidates, since these can help build support for their election efforts. According to the CFB, the making of a political contribution is reportable as a campaign expenditure, which is also subject to expenditure limitations if made by a participating candidate.

What is distinctive about Mayor Bloomberg’s 2009 re-election campaign is that it has reported making no political contributions. (To date, the Bloomberg campaign has reported over $36 million in campaign expenditures.) Instead, Mr. Bloomberg has separately spent another $3.35 million from his own funds, mostly as contributions to Republican and Independence party committees – political parties which have nominated him for re-election. Thus, Mr. Bloomberg is self-financing both his political contributions and his campaign committee, but only acknowledging the latter as an aid in his re-election effort.

The fact that Mr. Bloomberg’s political contributions are reported to Boards of Elections by the recipients will not likely win him credit at the CFB. Similarly, the fact that the CFB has not questioned some other candidates about occasional small political contributions from personal funds does not likely stem from an unusual unwritten exemption, but is more likely reflective of a wise tolerance for de minimis transactions that do not undermine campaign finance law fundamentals. This is especially true for candidates whose campaign committees reported making political contributions during the same time period.

Indeed, the CFB will likely be concerned not to set a precedent that opens large loopholes. For example, one option the law allows for self-financed candidates is “limited participation.” (Mr. Bloomberg declined to exercise this option.) Limited participation permits a self-financed candidate to agree to abide by the same spending limits that apply to his or her participating opponents without accepting any private contributions or public funds for the campaign. The CFB will not likely countenance a result that permits future limited participants to “abide” by spending limits, while simultaneously using personal funds to make millions in political contributions that aid their election efforts “off the books.”

Perhaps the most significant issue in the Bloomberg case is not the large sum of political contributions, but rather the contrast between the zero reported by the campaign committee and that $3.35 million. The reporting of zero in political contributions appears to be apiece with his campaign’s favored narrative of a mayor standing above partisan politics and influence peddling. Shielding his political contributions from public disclosure is thus a statement that those contributions play no part in his re-election effort.

At its heart, however, “pay-to-play” is a transaction between a buyer and seller. The mayor has touted his credentials in curbing this phenomenon by signing a 2007 law that limited and brought greater public scrutiny to political contributions from those deemed to be “doing business” with the City. In the mayor’s race, these limits are set as low as $400 per contributor. Given his stated concern that others may be seeking to exercise undue influence with political contributions of as low as $400, isn’t it fair to question what the mayor thinks he is buying with $3.35 million in political contributions and why he represents that it has no relationship to his re-election effort?

Tag: New York City