Campaign Reform Would Curb Albany Corruption

April 24, 2013

The public has been shocked at the recent corruption scandals marring New York politics, and calls for reform have grown louder. Addressing the “show me the money” culture in Albany requires a systemic solution, and that solution must include comprehensive campaign finance reform including public financing, lowering contribution limits, and improved enforcement of election laws. Public financing is crucial because it will release candidates from their dependence on big-money donors and restore public trust in government.

Public Campaign Financing Curbs Corruption

New York City enacted a public financing system in response to a massive corruption crisis in the 1980s. Mayor Ed Koch’s administration was slammed with a series of scandals involving graft, bribery, and extortion. Party bosses packed several city agencies with patronage appointments and created a system in which thousands of parking meter attendants and municipal inspectors took graft. With party bosses’ tight control over their agencies, multiple whistleblowers were ignored. In the decade prior to the passage of public financing in 1988, four of the city’s elected officials, including a borough president, were convicted of corruption charges, one was censured by the City Council and later convicted of tax crimes, and another borough president committed suicide as more and more evidence came to light implicating him in bribery and kickback schemes.

Since the enactment of public campaign financing, New York City has not seen another corruption crisis remotely resembling that of the 1980s. Although there have been individuals who sought personal gain at the expense of the public fisc, they have been caught quickly and faced the consequences. The city’s public funding system has succeeded in making elections more competitive, allowing candidates to campaign more than they fundraise, and making sure candidates play by the rules. In its oversight of the 2009 elections, the New York City Campaign Finance Board penalized several campaigns for improper spending: The agency imposed fines and required campaigns to return more than $400,000 in public funds. The system has also dramatically increased the diversity of donors, greatly increasing the influence and voice of small donors without access to large sums of money.

In neighboring Connecticut, comprehensive campaign finance reform with public financing has been a smashing success since it was implemented in 2008. A recent report shows that Connecticut’s system has decreased the number of uncontested elections and reduced the influence of lobbyists. The number of federal public corruption convictions in Connecticut decreased drastically after the adoption of their public funding system as compared to the years immediately preceding reform. And the four-year stretch since reforms were implemented has had the fewest convictions of any four consecutive years since the Department of Justice started reporting this data.

Furthermore, public financing programs are highly popular where they have been implemented. Connecticut voters are strongly in favor of the program, supporting it at a rate of 79 to 15 percent after hearing how it works. And voters understand the connection to the influence of money and corruption: They were more than three times more likely to agree with the statement, “The state needs the Citizens’ Election Program because, in the past, lobbyists and state contractors received special deals in exchange for political contributions which has even landed some politicians in jail,” than an alternative criticizing the cost of the program. Arizona’s public financing system is similarly popular with its voters, and Maine’s system is even more popular, with 88 percent of Mainers in support.

Opponents are Wrong that New York City’s System has Fostered Corruption

Opponents wrongly claim that public financing won’t help to address the problem of money in politics, even suggesting that public financing will increase corruption. Opponents have seized on a 2011 report by the Center for Competitive Politics (CCP) that argues public financing systems in Arizona, Maine, and New York City are characterized by the “rampant” abuse of public funds and corrupt practices.

The CCP report’s section on New York City lists 24 scandals that are supposed to be evidence that the city system has not deterred corruption. But a closer look reveals severe flaws in CCP’s analysis.

Several cases had nothing to do with public financing, including one state legislator who never participated in the city system. Half of the cases involve no wrongdoing: They either describe activity that is legal and not corrupt or cite investigations that never found a crime or election law violation. Finally, there are a number of examples of candidates attempting to violate the rules of the city’s public funding system. Every campaign in this last category was caught by the city’s effective enforcement agency and either fined or denied public funds. This shows that enforcement works, and it is a necessary part of comprehensive campaign finance reform that includes public funding.

The following list breaks down the 24 alleged scandals described in the CCP report to show how little they tell us about the relationship between corruption and public financing, suggesting that the CCP’s zeal to attack public funding motivated it to trump up these cases.

Cases that have nothing to do with public campaign funding

  • The report lists one member of the State Assembly who never participated in the city’s public funding system, even though the CCP claims its list consists of “New York City ‘Clean Elections’ candidates.”
  • Six cases of abuse of City Council members’ discretionary funds are described.* These have nothing to do with public funding or campaign finance. New York State legislators do not have access to discretionary funds.

Cases with no official finding of wrongdoing

  • Two candidates accepted public funds for elections that the report claims were not competitive. This is not illegal, and it’s not corruption.
  • Eight candidates were allegedly involved in collusion between the Working Families Party and Data & Field Services. Federal prosecutors decided not to file charges against those candidates, and there was no finding of wrongdoing in a civil lawsuit that WFP settled.
  • There are two unfounded allegations that candidates spent public funds improperly. The report cites a news article that presents no evidence that the expenditures in question violated the law.

Cases that were caught by New York City enforcement

  • Two candidates were found by the Campaign Finance Board found to have coordinated with a labor union, resulting in in-kind contributions that exceeded contribution limits. Both candidates paid hefty fines.                                                                                 
  • Four candidates violated campaign finance laws but were caught by the Campaign Finance Board’s routine audits.* The agency either denied the candidates public funds or ordered them to repay all the public funds they had received.

*Former City Councilmember Miguel Martinez engaged in both discretionary funds abuse and campaign finance violations that were caught by routine audits.

In short, three-quarters of the scandals discussed in the CCP report had nothing to do with public financing and the handful that did were all readily caught by the city's enforcement agency.

New York State Needs Comprehensive Reform with Public Financing at its Core

Today, Albany’s corruption problems are threatening to completely destroy public faith in government. In the last 10 years, at least 13 state elected officials have been convicted on charges relating to corruption, and several more have been indicted. The corruption has reached the highest levels of state government: Former Comptroller Alan Hevesi steered $250 million of the state pension fund’s money to a company in exchange for almost $1 million in cash and travel benefits from the company’s founder. Three of the last five Senate Majority Leaders or Co-Leaders have been indicted or convicted on corruption charges: Joseph Bruno is awaiting retrial after his 2009 conviction was overturned due to a change in the law, Pedro Espada pleaded guilty last year and faces a trial on more charges, and Malcolm Smith was charged this month. The damage to public trust is undeniable: A recent poll found that 87 percent of New Yorkers think that corruption is a somewhat serious or very serious problem.

Although no system can stop individuals from behaving badly, public financing combined with strong enforcement, disclosure, and reasonable contribution limits can change the culture of Albany. It will end the mad chase for campaign cash that starts some elected officials down the road to corruption, and it will make candidates dependent on ordinary voters rather than special interests. A system of matching small donations with public funds will encourage New Yorkers to participate in elections and give them a greater sense of ownership of their government. Contrary to the exaggerated claims by ideological opponents like the Center for Competitive Politics, public financing systems have been a crucial element of anti-corruption reform in New York City, Connecticut, and elsewhere.