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Money in Politics This Week: Government Shutdown Doesn’t Shutdown Lobbying and Fundraising

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
  • Katherine Munyan
October 4, 2013

Crossposted at ReformNY

The Brennan Center regularly compiles 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 and Katherine Munyan.

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


Moreland Commission Issues Subpoenas to Political Parties

According to an anonymous source, the Moreland Commission to Investigate Public Corruption has issued subpoenas to the state Senate Republican Campaign Committee and the Independence Party. Although real estate developers were subpoenaed earlier this year, and the commission asked Albany lawmakers to disclose their outside income in August, this marks the first time that the commission has probed political parties. At issue are political party “housekeeping accounts,” which can accept unlimited contributions and are intended for party-building activities. Nonetheless, money from these accounts is frequently transferred to party-favored candidates. In March, the Daily News reported that the Republican Senate Campaign Committee transferred hundreds of thousands of dollars to the Independence Party, which in turn purchased ads in competitive races.  No subpoenas have yet been issued for records of the Democratic Senate Campaign Committee. Commission co-chair William Fitzpatrick said some subpoenas did not go out or were changed, but has denied any “nefarious intent.” The commission has refused to comment on the ongoing investigation.

Conspirators Involved in Funneling Campaign Donations Charged by Attorney General Schneiderman

The New York State Attorney General’s office has filed charges including grand larceny, conspiracy, money laundering and tax fraud against William Rapfogel. Rapfogel is alleged to have used padded payments to Long Island-based insurance company Century Coverage to facilitate campaign donations to city, state and federal legislators. As the CEO of the Metropolitan Council on Jewish Poverty, Rapfogel overcharged the non-profit for insurance coverage and along with two other co-conspirators pocketed the difference between the inflated and actual prices. They collected $5 million from the scheme over 20 years. Some of the stolen funds were then used to make political contributions to various lawmakers. Since 2011, Assembly members have received nearly $15,000 from Century Coverage or its employees, while contributions to campaigns in New York City amounted to $150,000.  New York State lawmakers that received the contributions said they may donate the funds.

Independent Spenders Avoid Disclosure in Buffalo Mayoral Primary Race

Independent spending committees have been active throughout local elections in New York this year. Rochester Rising, a committee formed by lobbyist Robert Scott Gaddy, spent large sums in the past few months to boost City Council President Lovely Warren’s mayoral campaign in the Democratic primary. Although the contribution limits for the mayoral race stand at $3,335 per individual, organizations can spent unlimited funds as long as they do not coordinate directly with a candidate’s campaign. Rochester Rising was created on August 26th with a deposit of $60. Then $40,000 was placed in the group’s treasury on September 3rd, after the cutoff date for a pre-primary disclosure deadline. The full report was available only after Warren had already won the contest. Susan Lerner, executive director of Common Cause/New York said that this “seems to be a deliberate attempt to avoid even the relatively mild disclosure rules that apply here, which is why the response ought to be much more stringent requirements for disclosure.”

Paul Wolf: Localities Should Reform Campaign Finance Laws

In a guest essay in Buffalo-area newspaper Art Voice, Paul Wolf, founder of the Center for Reinventing Government, explains the problems with New York State campaign finance laws and encourages local political bodies to act to ensure greater transparency and cleaner elections. New York State has one of the highest campaign contribution limits in the U.S. for statewide offices – $60,800. The contribution limit for federal campaigns stands at $5,200. Consequently state politicians rely heavily on large donations. With such a high ceiling on contributions, average New Yorkers, who don’t have thousands to spare for political races, are locked out of the electoral and policy process. Wolf encourages the Buffalo Common Council and the Erie County Legislature to consider reforming campaign finance at the local level. In particular he suggests New York City’s system – where limited public funds are awarded for candidates who raise small donations – as a model. “Instead of focusing on personalities and political wars, we need to focus on adopting policies and legislation to change the influence of money not only at the state level, but the local level as well.”


Government Shutdown Shutters the FEC

Deemed non-essential, 335 of the Federal Elections Committee’s 339 employees are out of work until the federal government shutdown ends. Only the four commissioners are allowed to work, leaving the FEC’s work essentially suspended. According to the FEC website, “the FEC will be unable to provide any services during the government shutdown.” With a quarterly filing deadline and a monthly filing deadline looming in the next few weeks, a continued shutdown will prevent the FEC from enforcing its deadlines—or even guaranteeing that the electronic filing system remains running.   Meanwhile, the public will have to wait for access to the campaign income and expenditure disclosures that the law requires.  The upcoming deadlines affect all committees that file quarterly, such as the 2014 candidates’ campaign committees, and all monthly filers, including a number of PACs.  According to FEC Chairman Ellen Weintraub, the shutdown has already infringed on the public’s right to information about the election.

Government Shutdown Doesn’t Stop Lobbying, Fundraising

Meanwhile, the government shutdown has in no way shut down business for lobbyists or the campaign fundraising efforts of members of Congress.   Lobbyists report being as busy as ever during the shutdown; with schedules full of meetings with clients and on the Hill, their biggest problem is getting into congressional offices through the long lines caused by the shutdown’s security staffing cuts.   While many lawmakers have canceled fundraising events this week, others remain committed to passing the hat for donations, no matter their surroundings.   Both Republican and Democratic candidates are using references to Sen. Ted Cruz’s (R-Tex.)  21-hour speech and the shutdown itself—albeit framed with different battle cries — to galvanize their supporters to contribute. For those potential  contributors for whom words are not enough, a few more creative fundraising events were slated for this week to encourage them to dig deep into their pockets, like Arkansas Senator John Boozman’s ARK PAC Second Annual Trout Fishing Weekend beginning this Friday.

The NRA Money behind Senate Opposition to the U.N. Arms Trade Treaty

Approved overwhelmingly by the United Nations General Assembly this past April, the U.N. Arms Trade Treaty (ATT) aims to reduce the global trade in conventional weapons, keeping weapons out of the hands of those who will use them to break humanitarian law, commit genocide, aid terrorism, or kill women and children.  The ATT will require sellers to consider how purchasers will use the weapons and make that information public, although enforcement measures have not been determined.  As the treaty’s preamble clearly states, the treaty would only affect gun exports, not domestic gun policies.  Despite this, John Kerry’s signing of the treaty last week sparked strong criticism from some senators, who argue it would violate the Second Amendment—even as they rake in contributions from the NRA.  Senator James Inhofe (R-OK), who wrote Kerry that the treaty was “dead in the water” in the Senate, counts the NRA as one of his consistent top donors, having received a total of $53,500 for his campaigns. Sen. Jerry Moran (R-KS), who called the ATT a threat to American gun owners, also received money from the NRA for his last campaign, as did  Senator Bob Corker (R-TN), who sent a letter to Obama warning against implementing the treaty. 

Former Nevada Lobbyist Sentenced to Two Years in Prison

On Monday, a federal judge sentenced former Nevada power broker Harvey Whittemore to two years in prison and a fine of $100,000 for making illegal campaign contributions.  A former multimillionaire, Harvey Whittemore was a lobbyist for alcohol, tobacco, and gambling interests and decades-old friend of Senate Majority leader Harry Reid.  This past May, a jury found Whittemore guilty of two counts of making illegal campaign contributions to Reid in 2007 and one count of causing the Reid campaign to make a false filing with the FEC.  Trying to get around federal limits on individual campaign contributions, Whittemore used family members and employees as “straw donors” to funnel money to the Reid campaign by providing them money that they in turn used to write checks to the 2007 Reid re-election campaign. The checks totaled over $130,000—and were all submitted to the Reid campaign on the same day.  In sentencing, Judge Larry Hicks described the fraud as “an incredibly criminal, intentional act” that “goes to the very heart of the electoral process.”