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Money in Politics This Week: Why Business Leaders Support Campaign Finance Reform

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
May 3, 2013

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.



Jerome Kohlberg Explains Why Business Leaders are Standing Behind Campaign Finance Reform
In a Crain’s New York Business op-ed, New York LEAD member Jerome Kohlberg explains why the business community supports campaign finance reform. New York was recently reminded how rampant corruption is in the state after the arrest of two state lawmakers in separate bribery scandals. Business leaders understand that honest and open government is necessary for a prosperous business climate to thrive. Public policy decisions and electoral outcomes should not be decided by who gave the biggest check. Dysfunction, backroom deals, and influence peddling are far too often the norm in Albany. This is why 72 percent of business leaders support creating a system that matches small donations with public funds, along with other comprehensive reforms that can empower average citizens to participate in state government. In New York City, these reforms have already allowed a more diverse range of candidates to run competitive campaigns and involved more constituents in the electoral process. It is time for New York State to follow through.

Rochester Democrat and Chronicle Editorial Asks Cuomo to Propose Reform Legislation or Endorse Assembly Speaker Silver’s Bill
In a Monday editorial, the Rochester Democrat and Chronicle encouraged Governor Andrew Cuomo to propose new laws that ensure greater accountability from our elected officials. The governor has endorsed campaign contribution limits and matching campaign donations less than $250 with state funds as key reforms for the future of New York. These measures can go far to help regenerate public confidence in our state institutions. Cuomo should propose his own legislation or endorse Assembly Speaker Sheldon Silver’s bill for campaign finance reform. Campaign finance reform and early voting can help reduce the influence of well-heeled special interests and increase grassroots participation.

Daily News Editorial: Enforcement of Law is Key Component of Reducing Corruption
In late April, Governor Andrew Cuomo called for a new watchdog to enforce New York’s campaign finance laws. The indictments of former State Senator Malcolm Smith and Assemblyman Eric Stevenson for bribery led the Governor to propose new ideas to combat corruption including harsher punishments for corruption, giving prosecutors greater investigative powers and cracking down on campaign finance violations. The Daily News editorialized in favor of enforcement this week. The Fair Elections campaign has consistently called for enforcement as one of four key reforms, along with public financing, lower contribution limits, and disclosure. Currently, the State Board of Elections has no staff committed to conducting investigations. With such lax enforcement, former Bronx State Senator Pedro Espada got away with failing to disclose his finances for 15 years. Politicians and donors routinely violate contribution limits and disclosure rules without any consequences. The Daily News advised Governor Cuomo and the Legislature to create an enforcement agency that is (a) independent of the State Board of Elections, (b) has investigative authority, (c) is equipped with subpoena power, (d) can prosecute offenders in civil and criminal courts and (e) receives adequate funds and staff.

Richard Davis: Matching Small Donations Can Change Albany’s Culture of Corruption
Richard J. Davis, a former Watergate prosecutor and a member of the New York City Campaign Finance Board and New York LEAD, wrote an op-ed in Long Island Newsday advocating for the adoption of public financing in New York State. Although Governor Andrew Cuomo has unveiled legislation that will give prosecutors greater authority to punish corrupt politicians, without systematic changes to our campaign finance laws, Albany still remains the Wild West of money in politics. As a former prosecutor, Davis sees a connection between porous campaign finance laws and corruption. At a time when we should be enfranchising citizens so they can hold elected officials accountable, repeat scandals are tuning voters out of the political process. In the New York City small-donor matching-funds system, candidates can rely on their constituents for campaign expenses rather than a few wealthy special interests. By contrast, at the state level, sky-high contribution limits and a myriad of loopholes allow State legislators to fundraise outside of their home districts from lobbyists and special interests. A report last year showed that only three out of 575 donors to former State Senator Pedro Espada Jr.’s campaign – who faced federal and state corruption investigations – were residents of his district.

Public Financing Bill Introduced by NY Senate Independent Democratic Conference
The New York Senate Independent Democratic Conference introduced a campaign finance reform bill this week with Senate Co-Leader Jeffrey Klein as the chief sponsor. The bill includes public matching funds for small donations, restrictions on fund transfers between candidate campaign committees and political party committees, dramatically lower limits on contributions to campaigns and parties, ceilings on contributions by those doing business with the state, and greater disclosure of outside spending. The bill, S04897, would utilize unique sources of financing for the public matching component including transfers from the abandoned property fund to a campaign finance fund, an optional tax return check-off and a surcharge on securities fines that Speaker Silver’s bill also includes.

Hearings on Senate IDC Reform Bill
Hearings on the Independent Democratic Conference’s bill for campaign finance reform were held on Wednesday in New York City. A series of additional hearings are scheduled over the next month across the state. Before the hearing, the Fair Elections for New York coalition held a press conference with supporters to encourage Legislators to bring a bill to the floor for a vote. David Donnelly, Executive Director of the Public Campaign Action Fund, stated that “New Yorkers know that reforming the pay-to-play system in a way that lifts up the voices of everyday people is the best answer to the corruption scandals of the past months and years.” Susan Lerner, Executive Director of Common Cause New York, also present at the conference said that “One too many corruption scandals have finally tipped the scales of decency, and the voters are crying out for campaign finance reform built around a system of public matching funds.” Representatives from more than 10 groups testified at the hearing that followed. Ian Vandewalker, counsel at the Brennan Center, informed the lawmakers about the benefits of public funding systems as evinced by clean elections in states such as Arizona, Maine and Connecticut, as well as New York City. “At bottom, opponents of comprehensive reform are defenders of the status quo, champions of a system that works for lobbyists and special interests, but not every day New Yorkers,” Vandewalker stated.


Senators Introduce Follow the Money Act to Disclose Political Spending
Senators Ron Wyden (D-OR) and Lisa Murkowski (R-AK) have introduced S 791, the Follow the Money Act, aimed at disclosing political spending. The bill would require groups spending $10,000 or more on election-related activities to disclose all contributions above $1,000. As Jonathan Backer, research associate at the Brennan Center, explains in The Hill, the 2012 election demonstrated the dire need for such a law: following Citizens United, spending by outside groups increased by more than 255 percent between 2008 and 2012. Fifty-nine percent of the $1 billion spent on television and radio advertisements by independent groups during the 2012 election cycle remains undisclosed, meaning we still have no idea who the donors behind all of those negative ads were. The Follow the Money Act has elements similar to the DISCLOSE Act proposed earlier this year, with a few exceptions. Under the new legislation, the floor for the disclosure of individual donations has been raised from $200 to $1,000. In addition, the FEC is required to set up a real-time reporting system for all independent groups and candidates, so that voters are informed about political donations and expenditures on a daily basis rather than every three months.

Lack of Transparency in Campaign Finance Laws Threatens National Security
Potentially serious consequences of our nation’s free-for-all campaign finance system are exemplified in K Street’s relationship with a Chinese telecommunications firm closely tied to the People’s Liberation Army. The Shenzhen-based Huawei Technologies has spent $1.2 million to build an in-house lobbying shop stocked with former members of Congress, and Congressional and White House staff, in an effort to gain prominence among tech and intelligence circles in the capital. Federal records illustrate that Huawei paid another $1 million to APCO Worldwide, a powerhouse Washington-headquartered public relations and lobbying giant. The excessive political spending comes after the U.S. House Intelligence Committee charged that Huawei was implicated in corporate espionage activities, including the insertion of malicious hardware and software into U.S. telecommunications networks that are critical to the American defense system. “Huawei, in particular, provided evasive, nonresponsive, or incomplete answers to questions at the heart of the security issues posed,” the committee said in its unclassified report on the issue. Charles Fried, a Harvard law professor and former U.S. Solicitor General said “I think it stinks… Everybody is entitled to a lawyer. I didn’t know that everybody is entitled to a lobbyist.”

Special Election in South Carolina Attracts Mega-Donors
The May 7 special election for South Carolina’s 1st District for Congress is drawing in several big money donors. Former South Carolina Governor Mark Stanford is the Republican candidate, with $284,000 in his campaign account. The Democratic nominee Elizabeth Colbert Busch has $254,000 on hand. Stanford’s disappearance from office during his governorship and Busch’s quasi-celebrity status due to her brother, Stephen Colbert, have attracted national attention, not only from late night comedians but also wealthy donors and PACs. The National Republican Congressional Committee has disowned Sanford’s candidacy after accusations that he trespassed on his ex-wife, Jenny Sanford’s property. Subsequently, the Democratic Congressional Campaign Committee has picked up steam and invested $458,000 in the election via independent expenditures, while House Majority PAC, a Super PAC that supports Congressional Democrats, has spent $90,000 already on television advertising and direct mail. Despite his trouble with the RNCC, Stanford is still receiving donations from prominent out-of-district contributors including $2,600 from Patrick Byrne, CEO of, $5,200 from Howard Rich, a major backer of the conservative 501(c)(4) Club for Growth and $5,200 from Richard Chilton, a Connecticut investor. Busch’s benefactors include Hollywood activist Peg Yorkin, who gave $1,000, the Teamsters PAC, which donated $2,500 and the American Federation of State, County and Municipal Employees PAC, which provided $5,000.