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Money in Politics This Week

A roundup with the latest news highlighting the corrosive nature of money in New York State politics — and the need for public financing and robust campaign finance reform.

  • Syed Zaidi
August 24, 2012

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 Syed Zaidi.

For more stories on an ongoing basis, follow the Twitter hashtag #moNeYpolitics and #fairelex.

New York Campaign Finance and Ethics News

1. Over the past two months, Reform NY has publicized studies by Gallup and the Freedom Forum that demonstrate broad ranging support for campaign finance reform among Americans. New York State is no exception. A recent Siena Research Institute poll indicates that likely voters in New York State favor public campaign financing and lowering contribution ceilings by a margin of 55 percent to 31 percent. Support for these vital reforms cuts across party lines and other differences: a plurality of Republicans, Democrats, and Independents—individuals from every region, religion, age and income group—are in favor the initiatives.

2. State and local candidates, officeholders and political action committees are required to file a report with the New York State Board of Elections every 6 months detailing their financial transactions. However, an investigation by the New York Public Interest Research Group shows that 622 campaign committees with a total of $12 million in campaign funds failed to report their expenses, while another 1,700 committees with a total of $19 million indicated that they had no transactions. Although the Board has levied fines against the late filers, the penalties ranging from $100 to $1,000 “are not enough to deter candidates who…have no interest in filing on time or, in some cases, ever.” Although the Board has responded, stating that it filed 5,042 lawsuits against candidates for missing reports totaling $1.5 million in fines, the defense falls far short of the rigorous enforcement required. Indeed, according to the NYPIRG report inaction has been the norm. Policy and administrative changes are needed to arm the Board with the authority to conduct thorough investigations and penalize blatant violators.

National Campaign Finance and Ethics News

1. While Super PACs and non-profits have spent more than $90 million in 16 Senate races this year, Senator Scott Brown and challenger Elizabeth Warren have agreed to a groundbreakingpact to keep out third-party ads. In January, Brown and Warren mutually disarmed, deciding that they did not want interest groups running electioneering ads on their behalf. If an outside group runs an advertisement on television, radio or online, the campaign that benefits has to pay a financial “penalty” to the charity of their opponent’s choice. According to the Boston Globe, ads for the race have been relatively less negative and have concerned the candidates’ own agendas and biographies—unsurprising, given that the candidates are forced to put their own names behind the messages. The pledge has also benefited both candidates; Brown has avoided a flood of attack ads from left-leaning groups—which had spent $3 million against him before the agreement—and Warren has been spared from the barrage of negative ads by Crossroads GPS and American Crossroads.

2. The DNC pledged earlier this year to reject all corporate, lobbyist and PAC money for the direct expenses of the convention, limit individual contributions to $100,000, and regularly disclose contributors in an attempt to be the “most open and accessible ever.” The policy originally published on the DNC convention committee’s website stated that donors would be revealed “on an ongoing basis.” Indeed, during the 2008 conventions, both political parties disclosed their donors online and regularly updated the information. Not so this time around. The Washington Post writes that the names of donors will remain secret until the federal deadline of October 15th, long after the public’s attention will have shifted from the convention to Election Day. After an inquiry from The Washington Post, the inaccurate policy statement was removed from the committee’s website. Sheila Krumholz, Executive Director of the Center for Responsible Politics, stated that the refusal to immediately disclose donors runs “counter to the message that this is the people’s convention. You’d think transparency would be something celebrated, not reduced.”

3. Super PACs and non-profits continue to play a pivotal role in the Presidential election. Mitt Romney’s Super PAC Restore Our Future hauled in $7.4 million in July, while Obama’s Priorities USA Action brought in $4.8 million. American Crossroads, the major Super PAC backing Romney and Senate Republicans, raised $7.7 million in July. Mega-donors, those giving $500,000 or more, account for 68 percent of all contributions to Super PACs. Two Pinterest boards by the Public Campaign Action Fund profile the billionaire backers behind Obama and Romney’s Super PACs. Although federal law bars such outside groups from coordinating with the politicians they hope to elect, according to Politico, the firewall is razor thin, enabling many Super PACs to work intimately with candidates and their campaigns.  

4. Now that the FEC has approved campaign donations via text, the Obama campaign has launched a lucrative venture into grass-roots fundraising from small donors. The Obama campaign will allow supporters to send contributions by texting “GIVE” to 62262, which corresponds with the letters O-B-A-M-A. The donations are cappedat $10 per text, $50 per month and $200 in total per candidate. Foreigners, corporations, and people under 18 are prohibited from donating. Third-party aggregators will purchase the contributions and then sell them to the campaign for a fee. It is unclear what percentage of the donations will actually go directly to the campaign. Reform advocates pushed for the FEC ruling earlier this year, arguing that this accessible method of donating could counter the strength of large donors. “With billionaires and super PACs drowning out the voices of hardworking Americans, text message campaign contributions can enhance the role of small donors and, combined with public matching funds, could provide a megaphone for the masses,” stated Nick Nyhart, president and CEO of Public Campaign.

5. The Brennan Center for Justice and Democracy 21 have jointly released a report that seeks to harness the power of small donors in federal elections. The proposal is modeled after the small donor public matching program in New York City. It would match contributions of $250 or less at a 5-to-1 rate with public funds to amplify the power of small donations. Participating candidates would have to abide by lower contribution limits ($1,250 compared to the current level of $2,500) and raise contributions from a certain number of in-state donors in order to qualify. “We want to provide candidates with an alternative way to finance their campaigns without having to sell their souls to influence-seeking funders” stated Fred Wetheimer, president of Democracy 21. Adam Skaggs, senior counsel at the Brennan Center, argued that matching funds could “transform candidates into agents of civic participation.”