09.27.2012The following post is the first of four contributions from our guest bloggers. This post comes from Amy Loprest and Eric Friedman, Executive Director and Director of External Affairs, respectively, of the New York City Campaign Finance Board. A decades-long succession of scandals has cemented Albany’s reputation as home to the most ineffective, ethically-challenged legislature in the nation. For those concerned about the role of money in politics and its effects on governance, it is accepted wisdom that New York State’s campaign finance laws need to be ripped up, thrown out, and rewritten from scratch. If the aim of a well-functioning campaign finance system is to minimize the perception that campaign contributions can sway the decisions of elected officials, New York State falls short. The problems are well-documented. New York’s limits on direct contributions to candidates are the most permissive of any state in the country[*], allowing the wealthiest contributors an outsized role. Limited liability companies (LLCs) are treated as individuals, allowing corporate funds to flow directly to candidates without detailed disclosure of its sources. Voters are in the dark when it comes to independent spending. And the structure of the State Board of Elections makes it difficult for them to investigate and punish many violations of the laws on the books. These suggestions for reform can start to put New York State on the right track. 1. Establish a public matching funds system NYC’s public matching funds system is viewed as a model for common-sense campaign finance reform. Why? New York City matches contributions from City residents up to $175 at a rate of six-to-one. Our small-contribution multiple-matching system provides a powerful incentive for candidates to look beyond wealthy mega-donors and build their campaigns with grass-roots, low-dollar support. To succeed, candidates don’t need billionaires in their corner; all they need is their neighbors. A study by the Campaign Finance Institute found that candidates for New York State office in 2006 raised only seven percent of their total funds in contributions of $250 or less. By contrast, for candidates who participated in New York City’s public matching funds system during the 2009 elections, 38 percent of their contributions came from donors who gave $250 or less. When the public matching funds are added, those small donors were responsible for 63 percent of those candidates’ funding. The incentives established by matching funds do change candidates’ fundraising habits. 2. Set common-sense contribution limits A public financing program will succeed only if it is built on a sound foundation. This starts with lowering New York State’s astronomical contribution limits. A candidate for governor can solicit and receive an individual contribution as large as $60,000. Candidates may accept contributions directly from corporations and LLC’s, and party committees can take contributions larger than $100,000—funds that may be transferred without limit to any candidate. The Supreme Court has allowed limits on individual contributions precisely because of the concern that direct contributions may lead to a quid pro quo. In New York City, contributions to candidates for mayor and other citywide offices are limited to $4,950; candidates for City Council may accept contributions no larger than $2,750. These limits apply to individuals and political committees, including parties. Contributions from corporations, LLC’s, and partnerships are banned. Common-sense reform must start with reasonable limits like these. 3. Close the “housekeeping” loophole Even beyond the State’s barely-there limits on contributions to regular party committees, political parties may accept unlimited contributions from any source for their “housekeeping” accounts—funds earmarked for party-building activities. Although housekeeping committees may not promote specific candidates, the law does allow housekeeping funds to be transferred to another committee that may promote or make contributions to candidates. Any meaningful limits on contributions must apply to housekeeping accounts as well. 4. Require thorough disclosure of independent spending Fueled by the Supreme Court’s decision in Citizens United v. FEC, spending on so-called independent expenditures has exploded in recent years—not just in this year’s Presidential election, but at every level of government. Spending by non-candidate actors may not be limited, the Court said, but it can and should be disclosed to the public so that voters can learn about candidates’ sources of support before they go to the polls. In November 2010, New York City voters approved a Charter amendment that required disclosure of independent expenditures in City elections. To ensure the most complete disclosure for the public, the rules adopted by the CFB require disclosure for express advocacy (i.e. “Vote for Joe”) and electioneering communications (so-called “sham issue ads,” nominally about issues, aired close to an election). As required by the Public Integrity Reform Act of 2011, the NYS Board of Elections has promulgated rules to require the disclosure of independent expenditures in State elections, but has not adopted them in time for the 2012 elections. New York State should create clear, comprehensive rules that require all independent actors to disclose the money they spend in State elections. 5. Enact effective, non-partisan enforcement None of these rules matter if there is no body vested with the resources and authority to enforce them effectively. But the State Board of Elections’ structure impedes its ability to enforce the law. With a partisan Board and staff evenly split between the two major parties, gridlock is guaranteed on all but the most routine enforcement actions. New York City’s system was set up to be non-partisan and independent from politics. Our appointing authorities may not appoint two members from the same party, but there is no requirement they represent the major parties. Our staff is professional and nonpartisan. A non-political, nonpartisan campaign finance enforcement entity would provide the authority and credibility the system needs to make these reforms work. None of these reforms can guarantee corruption will disappear altogether from New York State. Together, however, they can create a system that offers more good people the opportunity to enter public life and succeed on their terms.
[*] Twelve states have no limits on individual contributions: http://www.ncsl.org/Portals/1/documents/legismgt/Limits_to_Candidates_2011 The views, opinions and positions expressed within this guest post are those of the author alone and do not represent those of Genova Burns. This post has been published as provided by the author, without any substantive edits; Genova Burns makes no representations of any kind as to the content of this post.