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Campaign Finance Reform
By ReformNY – 02/10/12
Crossposted on ReformNY.
Every Friday, the Brennan Center will be compiling 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 Matthew Ladd and Dan Rockoff.
For more stories on an ongoing basis, follow the Twitter hashtag #moNeYpolitics
NY Campaign Finance
1. A new report issued by NYPIRG identifies a “core group” of 127 donors who each gave $50,000 or more to state candidates and party committees in 2011, for a grand total of $16.8 million. Of the 127 deep-pocketed donors, the largest — a New York City property development group — contributed nearly $700,000 in total, and several organizations made single contributions in excess of $100,000. The report highlights New York’s chronically lax laws governing “housekeeping” and soft money accounts, which allows individual donors to skirt the $150,000 ceiling on individual giving. The full report can be seen here.
2. A coalition of more than 100 organizations, including policy institutes, community groups, and labor and religious organizations, delivered a letter to Gov. Cuomo expressing their strong support for public financing in New York state elections, and calling on the governor to “press hard for the creation of a robust public financing program” during the upcoming year.
3. The Wall Street Journal finds that Gov. Cuomo has built strong relationships with public interest groups committed to campaign finance, ethics, and disclosure reform, citing his hiring of Jeremy Creelan, a former deputy director at the Brennan Center, as special counsel for public integrity and ethics issues. The liaison was instrumental in the governor’s overhaul of state ethics laws last year, and reformers hope it will continue to bear fruit in upcoming legislative campaigns.
4. State Senator Liz Krueger is publicly calling for an end to political spending by “ghost campaigns,” which allow Albany’s lawmakers to spend campaign funds long after they’ve retired from office — and, in at least one case, after they’ve passed away. The article highlights continued spending by the campaign committees of former Rep. Eric Massa, who resigned in 2010, as well as the re-election committee of former State Sen. Ron Stafford, who passed away in 2005. “Politicians shouldn’t be able to keep hundreds of thousands of dollars of campaign money hoarded years after their own careers end,” Sen. Krueger said. “It’s an invitation to corruption.”
5. US Congressman Joe Crowley (D–NY) was singled out this week as a top Democratic beneficiary of a private equity PAC with a history of spending on behalf of Republicans. The PAC, formed in 2007 by some of the country’s biggest private equity firms, has drawn unwelcome media attention since it emerged that Bain Capital, where Mitt Romney made his fortune, was one of its founding members.
6. Pay-to-play politics is alive and well in New York, as the Daily News reports that freshman US Congressman Michael Grimm (R–NY), seven months after sponsoring a bill to permit a natural gas pipeline under Jacob Riis Park in Queens, has received contributions from the pipeline’s developers. Two weeks ago, the New York Times also reported that Rep. Grimm was drawing scrutiny for allegedly soliciting campaign donations above the legal limit, and for enlisting the help of a fundraiser now under federal investigation for embezzlement.
Campaign Finance News Nationwide
1. On Tuesday, President Obama signaled that he would not oppose spending on his campaign’s behalf by Priorities USA Action, the super PAC that backs his re-election bid. Aides to the President confirmed that he planned to allow cabinet members, senior advisors and top campaign staff to speak at fundraising events led by Priorities USA. The decision was condemned by many as an about-face by an administration that has criticized the use of super PACs — but has also prompted at least one writer to observe that the decision presents a unique opportunity for Obama to make campaign finance reform a centerpiece of his election campaign.
2. Media mogul and philanthropist Leo Hindery, Jr., argues for a strong link between campaign finance reform and renewed corporate responsibility, proposing that national reform efforts should include not only stronger disclosure rules for corporate contributions and lobbyists, but also voluntary efforts by business leaders not to use corporate funds to influence elections. Such an approach, Hindery writes, would help to reclaim corporate responsibility as a duty extending to “employees, shareholders, customers, communities and the nation.
3. A new poll released Wednesday by Greenberg Quinlan Rosner finds strong support — by a 2-to-1 margin — for the Fair Elections Now Act, which would allow federal candidates who agree to contribution limits to receive public matching funds for donations from residents of their home states. The poll also finds that voters would be more likely to re-elect representatives who voted in favor of a campaign finance reform package that included the Fair Elections Now Act.
4. Politico reports that two PACs have used shell corporations to circumvent existing laws on fundraising and spending, making campaign committees into “black boxes” for anonymous contributions. According to the report, the Alliance for New America, which raised money for John Edwards in 2008 and now plays a supporting role in his trial, created an LLC through which it funneled much of its spending, while Restore Our Future, the super PAC supporting Mitt Romney, accepted donations through shell corporations, allowing the names of donors to remain hidden.
5. Two recent reports highlight the corrosive potential of so-called “c4s” (after their 501(c)4 tax code designation), the “social welfare” arms of super PACs, to raise and spend money without disclosing their donors to the FEC. Based on their IRS filings, such groups have begun to play a bigger role in direct independent spending than supporters of campaign finance reform had expected, and their ability to filter money from contributors to their associated super PACs means that some super PAC spending is virtually untraceable. A report recently issued by Demos and the US PIRG Education Fund found that out of 10 super PACs active in the 2012 elections, 6 had received money from untraceable sources.
Tags: Democracy, Campaign Finance Reform, NY Reform
By Adam Skaggs – 02/07/12
The mock outrage at President Obama’s campaign for blessing contributions to the Super PAC supporting him, Priorities USA, is a distraction from the real questions about today’s campaign finance environment — how to stop the abuses, and who will provide the leadership needed to achieve meaningful change.
The president’s apparent about-face — from condemning “the corrosive influence of money in politics” in the State of the Union to his campaign’s announcement that it will “do what [it] can, consistent with the law, to support Priorities USA” — provided plenty of fodder for critics. But it’s not surprising. In 2008, Obama reversed course, too — he first planned to participate in the presidential public financing program, but later eschewed it when it became clear he could raise more money outside the system.
The reality in 2012 is that no candidate with a serious chance of winning can afford, in the words of Obama for America campaign manager Jim Messina, to “unilaterally disarm.” The campaign fundraising arms race this election cycle, like it or not, involves Super PACs. They’ve already dumped $40 million of slash-and-burn attack ads into the Republican presidential primaries. Karl Rove’s Super PAC alone, working with a related non-profit group, raised $51 million last year.
However disappointing it was to campaign reform advocates, the only surprise about the Obama campaign’s decision to play by the same rules is that it waited this long to make the announcement. Any campaign that doesn’t take advantage of the rules that permit super spending by Super PACs doesn’t stand a chance.
The Supreme Court’s disastrous decision in Citizens United v. FEC helped enable the Super PAC takeover of elections (as did other court decisions), but the Supreme Court isn’t entirely to blame. Under the Court’s decisions, the only groups that can raise and spend unlimited sums are groups that are completely independent of the campaigns. The candidate-specific Super PACs are anything but.
Why do these groups, which look like shadow arms of the campaigns to any common-sense viewer, operate under rules designed for groups that are wholly independent of campaigns? In large part, the answer has to do with the Federal Election Commission.
In 2010, the FEC issued an advisory opinion that green-lighted Super PACs: as long as a group tells the FEC it’s not affiliated with any campaign and won’t make direct contributions to candidates, it can raise and spend without limit. Later, in spite of laws providing that groups like Super PACs can’t coordinate with candidates and still claim to be independent, the FEC said that Super PACs could legally do a whole lot that looks like coordination. Only at the FEC can a group run ads that are “fully coordinated” with a candidate and still say it is “wholly independent” of his campaign.
The FEC was created under the Federal Election Campaign Act, enacted 40 years ago today, and the last four decades have shown that the agency isn’t up to the task of enforcing the nation’s campaign finance laws. The Alice-in-Wonderland approach it has taken to the Super PACs dominating this year’s election is just its latest failure.
Congress should replace the FEC with an agency that will actually carry out its mission. (While it’s at it, Congress could fix the Super PAC problem by passing laws that give real meaning to words like “independence” and “coordination.”) The abuses that will inevitably emerge from this year’s orgy of Super PAC spending should be sufficient to galvanize support from both sides of the aisle to pass meaningful campaign reform.
But even if partisan gridlock in Congress continues to stymie legislative reform, the president can take a significant step toward addressing the current state of dysfunction at the FEC. Five of the six commissioners who “lead” the agency are serving with expired terms, and the president has the power to appoint competent replacements committed to enforcing the nation’s campaign laws.
A coalition of reform groups under the leadership of Citizens for Responsibility and Ethics in Washington (CREW) has been calling on President Obama to do just that — since 2009. So far, the president has ignored the calls to appoint new leaders to the FEC.
There is no excuse for further delay. If President Obama is genuinely concerned about the “corrosive” impact of big money in our elections, he should demonstrate it with action, not rhetoric.
Tags: Democracy, Campaign Finance Reform, Other Reforms
By ReformNY – 02/03/12
Crossposted at ReformNY.
Every Friday, the Brennan Center will be compiling 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 Dan Rockoff.
For more stories on an ongoing basis, follow the Twitter hashtag #moNeYpolitics
NY Campaign Finance:
1. Today, over 100 organizations that support Fair Elections for New York wrote Governor Cuomo detailing the need for publicly financed campaigns, lower contribution limits, and better enforcement. The civil rights, business, faith, grassroots community, good government, environmental, and labor organizations who signed the letter, thanked the Governor for his strong support and expressed their enthusiasm to work with him and members of the Legislature to pass publicly financed elections and other campaign finance reforms during this legislative session.
2. Despite the annual $150,000 contribution limit by individuals to candidates in New York, luxury-apartment mogul Leonard Litwin gave almost $700,000 to candidates in 2011. A study by the New York Public Interest Research Group revealed that Litwin was the biggest individual donor in the state. Litwin was able to dodge the state’s campaign finance laws by utilizing the limited liability company (LLC) loophole, which allows companies to contribute multiple times through affiliated LLC’s, even when the LLC is completely controlled by a corporation or individual who has already reached the maximum contribution limit.
3. Governor Cuomo spoke with reporters about the need for public financing and campaign finance reform after participating in a fundraising event for the Democratic Governors Association. “One of the things we have to work on is getting money out of politics,” Cuomo said. In response to a reporter’s question about the meeting, Cuomo replied, “Your issue of, ‘You are in a room where people contribute money’ — that is the current state of politics and that is (the case for) every elected official in every fundraising forum.”
4. Manuel Ortega, law chairman of the Staten Island Democratic Party, filed a complaint with the FEC against Republican Representative Michael Grimm. The complaint alleges excessive and illegal cash contributions. A key fundraiser of Grimm’s is now being investigated for embezzling millions of dollars from a rabbi’s congregation. According to the New York Times story that Ortega used as the basis for his FEC complaint, unnamed followers allege that Grimm sought donations over the legal limit, and that he sought those donations in cash and from undocumented aliens.
5. The Democrat and Chronicle calls for Governor Cuomo to follow through on his election promises for public financing and campaign finance reform. The newspaper notes that “the governor continues to say the right things” and urges him to “prod the Legislature to deliver.”
Other News Nationwide:
1. In his State of the Union address, President Obama spoke about the “corrosive influence of money in politics.” He called for “a bill that bans insider trading by Members of Congress,” places limits on incumbents’ ability to own stocks in industries they impact, and restricts the ability of bundlers to lobby Congress.
2. The New York Times editorializes that under the federal lobbying law, “Newt Gingrich can legitimately claim that he is not a lobbyist.” The paper stated that Gingrich had “made a great deal of money in Washington peddling his influence, while carefully staying about half-an-inch short of the legal definition of lobbyist.” The paper calls for a better law limiting lobbyist activity and promoting disclosure. Part of the problem is that many Members of Congress use the revolving door—more than 400 former members have become lobbyists or consultants in the last decade.
3. In Massachusetts, Senator Scott Brown and likely Democratic opponent Elizabeth Warren agreed on a plan to stop outside groups from running negative ads. The agreement “requires each side to donate to a charity of the other’s choosing” when benefiting from a third-party ad, and also requires each side to write to outside groups and television station managers requesting a cease-fire. Brown, who is up for re-election to a full term, said that third-party ads “spend millions of dollars from anonymous donors portraying their opposition unfairly and misleading voters.” The question now is whether the agreement is enforceable.
4, In Montana, the State Supreme Court upheld by a 5-2 vote a law banning corporations from making political expenditures. A New York Times editorial praised the Montana Supreme Court, stating that “in Citizens United, the conservative majority turned itself into a copper kings’ court.” The majority rejected Justice Kennedy’s “misguided reasoning” that money does not “give rise to corruption or the appearance of corruption.” The court’s dissenters, however, argued that the Supreme Court’s Citizens United decision dictates the opposite result, and warned that the Supreme Court would not allow Montana to ignore precedent.
Tags: Democracy, Campaign Finance Reform, Public Financing, NY Reform
By Jonathan Backer – 01/30/12
Throughout the 2012 election, candidates have piously condemned Super PACs for lowering the level of political discourse. These same candidates have simultaneously derived enormous gain when these purportedly independent groups used unlimited contributions to tar and feather their opponents. Recently, in South Carolina, Gingrich criticized Romney’s Super PAC for airing inaccurate ads, but the former Massachusetts governor washed his hands of the ads, saying, “I’m not allowed to communicate with a super PAC in any way, shape or form. My goodness, if we coordinate in any way whatsoever, we go to the big house.”
Two politicians, however, have now mustered more than rhetoric to rein in the Super PACs. Last week, U.S. Senate candidate Elizabeth Warren and Senator Scott Brown called for Super PACs and other outside groups to stop running ads in their election. To provide a disincentive for Super PACs to ignore their request, Brown and Warren each vowed to donate 50 percent of the cost of all such ads to charity. Most groups have reluctantly agreed to abide by the request.
Both candidates demonstrated genuine concern for the role of Super PACs in the political system. Brown criticized Super PACs for “trying to buy elections and do[ing] things inappropriately.” Warren praised the agreement as an attempt to move “beyond talk to real action to stop advertising from third-party groups.” Both candidates should be commended for taking concrete steps to change the tone and restore accountability to their electoral contest.
The goodwill of candidates, however, should not be the only barrier to unrestrained and secretive corporate spending in politics. Government needs to restore common-sense rules so that the public can hold outside groups accountable in the post-Citizens United era. Reportedly, Reps. Chris Van Hollen (D-MD) and Robert Brady (D-PA) will soon introduce legislation that would require outside groups to disclose the underlying sources of their funding. Such legislation would be an important first step to ensuring that outside groups are held accountable in future elections.
James Madison defended the role of a robust federal government in our political system by saying, “If men were angels, no government would be necessary.” If all candidates were as attuned to the perils of unlimited and opaque political spending by corporations as Brown and Warren are, perhaps we would not need campaign finance regulation. But there are too many candidates who are willing to rhetorically distance themselves from outside groups while doing nothing to rein in their worst practices. It’s time for government to play a proactive role in protecting our democracy again.
Tags: Democracy, Campaign Finance Reform, Other Reforms
By John Travis – 01/25/12
Crossposted at ReformNY.
In a joint op-ed in today’s Times-Union, former New York State Congressmen Sherwood Boehlert and Scott Murphy voiced their support for Governor Cuomo’s plan to enact a system of public financing of elections, an issue he gave prominence in his State of the State address.
Speaking from their experiences as former members of Congress representing both major political parties, Boehlert and Murphy acknowledge the “corrosive role that private money plays in political campaigns and the legislative process,” both in Washington and Albany. The increased cost of running for office in New York means that candidates have to spend more and more time courting special interests to raise money for their campaigns. This has only contributed to Albany’s culture of dependence on big money.
The solution for our state: adopt a system of voluntary public financing of elections with matching funds like we have in New York City. If small donor contributions are matched on a 4-to-1 ratio, politicians would be able to spend less time raising money from lobbyists and special interests, and more time focusing on serving the interests of their constituents.
A recent Siena poll indicates that public financing of elections has broad support among both Republicans and Democrats in New York. Boehlert and Murphy have now added to the growing — and bipartisan — chorus of calls for meaningful campaign finance reform in Albany.
Tags: Democracy, Campaign Finance Reform, Public Financing, NY Reform
By Jonathan Backer – 01/06/12
Recently, the Montana Supreme Court upheld the state’s ban on corporate independent expenditures. This is a direct rebuke of the U.S. Supreme Court’s decision in Citizens United v. FEC, which struck down a federal ban on corporate independent expenditures, largely based on the assumption that such spending inherently cannot corrupt elected officials.
The majority opinion in Citizens United, authored by Justice Kennedy, concluded that “independent expenditures do not lead to, or create the appearance of, quid pro quo corruption” and that “there is only scant evidence that independent expenditures even ingratiate.” But, thanks to a procedural quirk, the case shot up to the Supreme Court before anyone in the case could engage in any real fact-finding. So, Kennedy’s conclusion was little more than an untested hypothesis, not supported by any hard evidence.
When presented with evidence of corruption in a similar case, Justice Kennedy came to a totally different conclusion. Caperton v. Massey dealt with a West Virginia Supreme Court justice who failed to recuse himself from a case involving a CEO who spent nearly $3 million on independent expenditures in support of the justice’s election. Because the independent expenditures constituted the vast majority of spending in the judicial election, Justice Kennedy concluded that the justice should have recused himself because “no man is allowed to be a judge in his own cause, [and] similar fears of bias can arise when…a man chooses the judge in his own cause.”
Though Kennedy never said that the independent expenditures in Caperton had a potentially corrupting influence, “bias” and “corruption” are cut from the same cloth. Quite simply, a serious fact-based analysis of the role of independent expenditures in the West Virginia Supreme Court election led Kennedy to correctly conclude that large independent expenditures have just as much capacity to influence policymakers as a direct contribution — if not more.
Perhaps taking its cue from Caperton, the Montana Supreme Court engaged in a similarly thorough fact-based analysis of independent expenditures and reached a similar conclusion. Upholding the law, Justice McGrath argued that citizens adopted the law in a populist revolt against the “naked corporate manipulation” of the state — at that time, one mining company controlled “90% of the press in the state and a majority of the legislature.” Justice McGrath concluded that corporate money clearly corrupted Montana’s government before the adoption of the law and would do so again if permitted. McGrath and the other justices on the Montana Supreme Court (even those who dissented) tried to use fact-based analysis in order to expose the lack of factual basis for the Supreme Court’s conclusion in Citizens United that independent expenditures inherently cannot corrupt.
The recently concluded saga of the Republican Iowa caucuses provides more evidence than ever before of how strained the court’s rationale was in Citizens United. Candidate super PACs spent two-thirds of the $12.5 million worth of ads in Iowa under the legal illusion of non-coordination with the candidates. The plurality of those ads — 45 percent of all ads run in Iowa — came at the expense of Newt Gingrich, who once cheered Citizens United as a “great victory for free speech.” Of course, where you stand depends on where you sit — Gingrich now complains of Super PACs, the progeny of Citizens United, "[T]hey have no responsibilities, they have no connection to any pattern of reasonable politics, and it’s a model I hope we can get beyond..."*
Gingrich’s about-face on campaign finance reform is cynical, but it represents a recognition by many that a Supreme Court ruling rooted in ideology rather than reality creates the potential for countless unintended consequences; consequences far more dire for our republic than a stymied Gingrich presidential campaign. The Montana Supreme Court decision — which the plaintiffs will appeal to the Supreme Court — is an opportunity for the Court to face facts and recognize the corrupting influence of corporate independent expenditures, just as it did in Caperton. Will it seize the day and save American elections? Stay tuned.
*This post previously attributed a quote to Newt Gingrich saying that “[c]ampaign finance law has made a mockery of our political campaign season.” The quote should have been attributed to Mitt Romney.
Tags: Democracy, Campaign Finance Reform, Other Reforms
By John Travis – 01/05/12
Crossposted at ReformNY.
During his State of the State address, Governor Andrew Cuomo reaffirmed his commitment to clean up Albany, telling legislators he would send them a campaign finance reform bill that would include voluntary public financing of elections. The system would be modeled on New York City’s successful matching funds system which has increased the competitiveness of elections, diversity among candidates, and the participation of small donors.
In his written message, the governor called for additional campaign finance reforms, including lowering the state’s sky-high contribution limits, enacting pay-to-play rules, and improving the enforcement of campaign finance laws by creating a new enforcement unit at the Board of Elections. Given the recent corruption scandals involving elected officials and those seeking to do business with the state, this is a positive reform for New Yorkers that would reduce the dependence on money from special interests and help restore trust in state government.
The Brennan Center’s Michael Waldman appeared on NY1 and Capital Tonight to discuss the governor’s speech. "This exciting and vital proposal would make New York a national example of how to revitalize our democracy," Waldman said. "Meaningful campaign reform would curb corruption and boost accountability. It is the single most important next step to transform Albany. We welcome the Governor’s leadership on this issue and are looking forward to helping him make these reforms a reality."
Tags: Democracy, Campaign Finance Reform, Public Financing, NY Reform
By ReformNY – 12/09/11
Crossposted at ReformNY.
Every Friday, the Brennan Center will be compiling 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 Matthew Ladd.
For more stories on an ongoing basis, follow the Twitter hashtag #moNeYpolitics
NY Campaign Finance
1. Joan Mandle’s Sunday Op-Ed in the Syracuse Post-Standard issued a clarion call for voluntary public financing of elections in New York state. Drawing on recent visits to New York college campuses, Mandle observed that frustration with the political system is a direct result of the massive influx of corporate money in legislative campaigns, and encouraged Gov. Cuomo to return to his earlier outspoken support for a voluntary public financing system. “We believe in democracy,” Mandle wrote. “It’s time for our elected officials to prove that they do, too.”
2. The Times-Union also called for Gov. Cuomo to move forward with his campaign promise to prioritize public financing, pointing out that independent expenditure loopholes allowed a coalition of labor unions to pour $400,000 into the coffers of a challenger for Erie County executive during the final six weeks of the race. A state public funding remedy would guarantee that even “a candidate being overwhelmed by special-interest money... would be assured of funds by way of a constituency without a clear agenda.”
3. Trustees at Manhattan’s Intrepid Sea, Air and Space Museum encouraged other board members to contribute to Gov. Cuomo’s re-election campaign by attending a birthday fundraiser at the Intrepid, raising questions about when directors of a nonprofit organization may engage in political activity without risking their tax-exempt status. Although the email was sent from a trustee’s museum email address, a museum spokesman characterized the email as a “personal appeal,” implying that the sender — a co-chair of the Intrepid’s charitable foundation — did not send it in his capacity as trustee.
NY Corruption and Politics
4. William Boyland’s bribery scandal continues to make headlines, as his chief of staff, Ry-Ann Hermon, was charged this week with taking bribes from the same federal officers who recorded Boyland’s bribery solicitations. The arrest comes on the heels of Boyland’s latest charges, which include evidence that he took a $3,800 bribe from a federal agent at a Brooklyn fundraiser while claiming travel and lodging expenses as if he were in Albany on state business. The ongoing scandal has moved Republican State Sen. Steve McLaughlin to call for Boyland’s resignation.
5. Four associates of Queens State Sen. Shirley Huntley, including one of her aides, have been charged with misappropriating $30,000 in public funds that was earmarked for Parent Workshop, a nonprofit ostensibly created to help parents navigate the New York City school system. The indictments are the latest — and most high-profile — results of this year’s joint effort between attorney general Eric Schneiderman and city comptroller Thomas DiNapoli to target public corruption. Subpoenas, including one for Huntley’s daughter, were issued in March, but the state did not file charges until this week.
Campaign Finance and Politics Nationwide
6. The world’s largest ethanol producer is also a major contributor to New Gingrich’s presidential campaign, according to a study released by the Center for Responsive Politics. Individual donors from the corporation include CEO Jeff Broin, who also chairs Growth Energy, an ethanol lobbying organization that hired Gingrich as a consultant two years ago.
Tags: Democracy, Campaign Finance Reform, NY Reform
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