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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
July 21, 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. Last week, Governor Cuomo reestablished campaign finance reform as a priority for the next legislative session. A Newsday editorial calls on Governor Cuomo to stay the course. Meanwhile, reform advocates Sundeep Iyer and Michael J. Malbin write in a Journal News editorial that adopting a matching funds system statewide modeled on  New York City’s example can help lead to greater equality and diversity of political participation.   New York City’s public matching funds allow candidates to receive a 6-to-1 match for the first $ 175 a city resident contributes, turning a $ 100 contribution into $ 700 for the candidate. Iyer and Malbin’s research shows that the incentives public matching funds give to candidates to reach out to their own constituents—rather than focus exclusively on wealthy donors—are working. Nearly 90 percent of NYC census block groups were home to small donors who contributed to City Council candidates, while only 30 percent of NYC census block groups were home to small donors who gave to state Assembly candidates. In addition, small donors in NYC’s predominantly minority neighborhoods were far more likely to donate to City elections, where a public match was available, than to State elections. For instance, 24 times more small donors from Bedford-Stuyvesant, a poor and predominantly African-American neighborhood,  contributed to City Council races than to State Assembly ones.

2. Congressional Representative Michael Grimm was recently cleared of accusations that he illegally accepted cash contributions from non-US citizens by the independent watchdog, the Office of Congressional Ethics. However the FBI is still investigating whether he embezzled millions of dollars worth of donations from New York Rabbi, Yoshiyahu Yosef Pinto, and his congregation.

National Campaign Finance News

1. Massive campaign contributions flow unabated. The Washington Post reports that Goldman Sachs has contributed $ 1.4 million to Romney and another $ 2.2 million to his Super PAC, Restore Our Future. Bain Capital has donated $ 5 million to the candidate, his party and his Super PAC. Meanwhile, Restore Our Future has hauled in $ 10 million from its largest single contributor, casino magnate Sheldon Adelson. Adelson’s admission back in 2001 that he could derail a Republican bill, which opposed China’s Olympics bid due to human rights violations, is a prime example of the corrosive impact that money has on the political decisions of our leaders. Now cigar store owners have banded together to prevent the FDA from regulating “premium” cigars. Their Hybrid Super PAC – a traditional PAC that doles out money to candidates and a Super PAC that makes unlimited independent expenditures – has already raised $ 247, 159 this election cycle

2. So far in 2012 there is a disclosure gap, the difference between spending by 501(c) organizations ($ 127 million) and the amount that has been reported to the Federal Elections Commission ($ 12 million), of an astonishing $ 115 million. That is millions of dollars unaccounted for that have flowed into political ads and electioneering efforts by unidentifiable individuals with unknown motives. Unless these massive sums are disclosed and limitations established, it may usher in a Gilded Age on steroids, warns Russ Feingold in the Boston Review.

3. While the Chamber of Commerce and the National Federation of Independent Business fight campaign finance restrictions, small business owner, David Borris, asserts in an article in The Hill that transparency is an entrepreneurial value. Secret donations give big corporate interests an unfair advantage over their small business counterparts. “I don’t have a line item in my budget for ‘independent expenditure’ political ads” Borris recounts.  Whereas secret political spending and large campaign donations generate a system of pay-to-play politics, fair competition stresses that success should come from hard work, creativity and quality service.

4. According to a survey conducted by the First Amendment Center, 63 percent of Americans believe that “corporations or unions should not be able to spend as much as they want supporting political candidates.” Unlike the Supreme Court, ordinary citizens reject the notion that the constitutional right to free speech translates into unlimited campaign expenditures. Furthermore, research by Drew Weston, professor of Psychology at Emory University, demonstrates that campaign finance reform messages strike a positive tone with nearly 61 percent of Americans from across the political spectrum.

5. The Democrats introduced the DISCLOSE Act in the Senate this past week. The DISCLOSE Act would require non-profit “social welfare” organizations that spend more than $ 10,000 on electioneering communications per year to publicly document all donors that contributed more than $ 10,000. Super PACs are currently allowed to wait for long periods of time before disclosing their donors, and 501 (c) organizations do not have to divulge this information at all. This common-sense transparency measure was unanimously blocked by Senate Republicans on Monday and Tuesday; yet, ironically, the same Republicans that filibustered the DISCLOSE Act, were big proponents of disclosure when they were behind in the fundraising game. A Huffington Post editorial debunks baseless attacks against the Act, including the assertion by long-time campaign finance reform champion, John McCain, that it was a partisan proposal that carved out exclusions for left-leaning organizations. Even former Republican Senators Warren Rudman and Chuck Hagel have urged their Republican colleagues to pass the DISLOSE Act, arguing that citizens deserve to know who is behind the anonymous attempt to control the outcome of elections. As the Albany Times-Union states, without disclosure “we’re left with a twisted system that requires the disclosure of the names of ordinary citizens who write, say, a $200 check to the candidate of their choice, but shields the identity of someone who gives millions to a trade group or nonprofit that in turn saturates the airwaves with ads to attack or bolster a candidate.” 

6. This week, Mitt Romney accused the White House of practicing crony capitalism. Romney is contending that President Obama rewarded donors to his campaign with lucrative subsidies and contracts amounting to hundreds of millions of dollars. The influence of large donors in gaining ambassadorships, contracts and other favors has been endemic across recent presidencies – a real cause for concern and a product of our current pay-to-play campaign finance system. At the same time, Romney is not in the best position to criticize. While Obama has released the identities of all of his top fundraisers, or “bundlers,” Romney has refused to name his own. A quick look at the list of bundlers who are registered lobbyists, which Romney is legally mandated to disclose, reveals ties to banks and military contractors. As Adam Smith, Communications Director at Public Campaign Action Fund, eloquently writes “Mitt Romney is raking in big bucks from lobbyists whose main goal is to secure government contracts and get deals for their clients. He should be careful about throwing stones from his big glass house.” 

7. According to the New York Times, in an effort to fight fire with fire, Jonathan Soros has launched an anti-Super PAC Super PAC. The team at the new Super PAC, Friends of Democracy, seeks to run ads that will target House members and candidates who have strong records against campaign finance reform. Additionally, the Super PAC hopes to assist Congressmen that are supportive of transparency, lobbying reform, an independent Federal Elections Commission with greater authority, and better delineation between “independent” groups and organizations that directly support candidates.