February 21, 2012
By: Laurence D. Laufer
What do Reform Advocates Think Should Happen to Pre-Reform Contributions?
The drumbeat for campaign finance reform in New York State continues. A new group, New York Leadership for Accountable Government (NY-LEAD), has formed to advocate. The New York Times cries out once more for lower contribution limits and public financing for all state offices, much like the NYC multiple matching funds system. Governor Cuomo is urged to present a bill that carries forward the commitment he made in his State of the State address. But there’s millions of dollars of 800 pound gorillas in this room: what happens to the money raised under the old rules? The answer to this question just might be the key that unlocks legislators’ willingness to adopt contribution limit and public financing reforms. No one – NO ONE – wants to disgorge funds already raised. Without grandfathering of old (non-reformed) money, it may be hard to assemble a majority for adoption. Are reform advocates ready to accept grandfathering as the price for obtaining reform? More particularly, will the New York Times and other reform advocates treat legislators who vote “yes” as heroes or as hypocrites, if they continue to spend previously accumulated funds in one (or more) “reformed” election(s)? Isn’t it reasonable for a legislator to want an answer to this question before voting yes? It’s important to remember that a public financing reform creates two classes of candidates: participants and non-participants. Unless old money is grandfathered into a public financing system, it creates a disincentive to participation. In other words, if old money can only be used by non-participants, fewer candidates will participate. Is there a reform-friendly case for allowing unrestricted use of pre-reform contributions? Allowing old money in reduces the initial public funding costs and encourages more incumbent participation. While reform may have an incumbent-protective effect if the burdens of new fundraising (under reduced limits) falls disproportionately on non-incumbents, this may be countered, in part, by public funding that, initially at least, will primarily benefit non-incumbents – those with less access to old money and thus more need for public funds. An incumbent advantage may also be offset by voluntary spending limits that cap the total amount of funds – old and new – that a participating candidate may spend in the election, provided the spending limits are sufficiently high to allow the non-incumbent to conduct an effective campaign. So, actually, it requires real courage on the part of a legislator with a warchest to vote to support this kind of reform – the courage to make new resources available to potential opponents and to set overall spending limits that may boost their opponent’s competitive potential. Again, will reform advocates continue to praise that courage if the legislator campaigns with old money? Finally, New York City’s campaign finance reform is generally cited by reformers as a model, but which version of the New York City law provides the most relevant model for pre-reform contributions? The current law has been in effect – and evolving – for nearly a quarter century. Once participation levels had risen and the availability of non-reformed dollars had diminished, various restrictions were added that curbed (but did not eliminate) the availability of surplus funds from prior elections – again, an advantage enjoyed primarily by officeholders. The original 1988 New York City law tried to grapple with “pre-effective date” dollars (i.e., non-reformed money) head-on. That law took effect in the third-year of a four-year cycle. It essentially created a spending cap on old funds, by requiring participants to attribute accumulated warchests to prior contributions and to then retroactively apply contribution limits as a cap on future use. The various implementing rules (which also tried to take into account pre-effective date spending) were received as well as might be expected by people long removed from algebra class and became a disincentive to participation. The concept was a brave and ambitious reform; in other words, it was an overreach that failed. Reformers assuredly accept the reality that the perfect can be the enemy of the good. The question they face now is rather a matter of degree: just how “imperfect” may a reform be and still be considered good? And just how broad and lasting will be the credit given to legislators for its passage?