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Campaign Reform Would Curb Albany Corruption

Although no system can stop individuals from behaving badly, public financing combined with strong enforcement, disclosure, and reasonable contribution limits can change Albany’s “show me the money” culture.

Published: April 24, 2013

The public has been shocked at the recent corrup­tion scan­dals marring New York polit­ics, and calls for reform have grown louder. Address­ing the “show me the money” culture in Albany requires a systemic solu­tion, and that solu­tion must include compre­hens­ive campaign finance reform includ­ing public finan­cing, lower­ing contri­bu­tion limits, and improved enforce­ment of elec­tion laws. Public finan­cing is crucial because it will release candid­ates from their depend­ence on big-money donors and restore public trust in govern­ment.

Public Campaign Finan­cing Curbs Corrup­tion

New York City enacted a public finan­cing system in response to a massive corrup­tion crisis in the 1980s. Mayor Ed Koch’s admin­is­tra­tion was slammed with a series of scan­dals involving graft, bribery, and extor­tion. Party bosses packed several city agen­cies with patron­age appoint­ments and created a system in which thou­sands of park­ing meter attend­ants and muni­cipal inspect­ors took graft. With party bosses’ tight control over their agen­cies, multiple whis­tleblowers were ignored. In the decade prior to the passage of public finan­cing in 1988, four of the city’s elec­ted offi­cials, includ­ing a borough pres­id­ent, were convicted of corrup­tion charges, one was censured by the City Coun­cil and later convicted of tax crimes, and another borough pres­id­ent commit­ted suicide as more and more evid­ence came to light implic­at­ing him in bribery and kick­back schemes.

Since the enact­ment of public campaign finan­cing, New York City has not seen another corrup­tion crisis remotely resem­bling that of the 1980s. Although there have been indi­vidu­als who sought personal gain at the expense of the public fisc, they have been caught quickly and faced the consequences. The city’s public fund­ing system has succeeded in making elec­tions more compet­it­ive, allow­ing candid­ates to campaign more than they fundraise, and making sure candid­ates play by the rules. In its over­sight of the 2009 elec­tions, the New York City Campaign Finance Board penal­ized several campaigns for improper spend­ing: The agency imposed fines and required campaigns to return more than $400,000 in public funds. The system has also dramat­ic­ally increased the diversity of donors, greatly increas­ing the influ­ence and voice of small donors without access to large sums of money.

In neigh­bor­ing Connecti­cut, compre­hens­ive campaign finance reform with public finan­cing has been a smash­ing success since it was imple­men­ted in 2008. A recent report shows that Connecti­c­ut’s system has decreased the number of uncon­tested elec­tions and reduced the influ­ence of lobby­ists. The number of federal public corrup­tion convic­tions in Connecti­cut decreased drastic­ally after the adop­tion of their public fund­ing system as compared to the years imme­di­ately preced­ing reform. And the four-year stretch since reforms were imple­men­ted has had the fewest convic­tions of any four consec­ut­ive years since the Depart­ment of Justice star­ted report­ing this data.

Further­more, public finan­cing programs are highly popu­lar where they have been imple­men­ted. Connecti­cut voters are strongly in favor of the program, support­ing it at a rate of 79 to 15 percent after hear­ing how it works. And voters under­stand the connec­tion to the influ­ence of money and corrup­tion: They were more than three times more likely to agree with the state­ment, “The state needs the Citizens’ Elec­tion Program because, in the past, lobby­ists and state contract­ors received special deals in exchange for polit­ical contri­bu­tions which has even landed some politi­cians in jail,” than an altern­at­ive criti­ciz­ing the cost of the program. Arizon­a’s public finan­cing system is simil­arly popu­lar with its voters, and Maine’s system is even more popu­lar, with 88 percent of Main­ers in support.

Oppon­ents are Wrong that New York City’s System has Fostered Corrup­tion

Oppon­ents wrongly claim that public finan­cing won’t help to address the prob­lem of money in polit­ics, even suggest­ing that public finan­cing will increase corrup­tion. Oppon­ents have seized on a 2011 report by the Center for Compet­it­ive Polit­ics (CCP) that argues public finan­cing systems in Arizona, Maine, and New York City are char­ac­ter­ized by the “rampant” abuse of public funds and corrupt prac­tices.

The CCP report’s section on New York City lists 24 scan­dals that are supposed to be evid­ence that the city system has not deterred corrup­tion. But a closer look reveals severe flaws in CCP’s analysis.

Several cases had noth­ing to do with public finan­cing, includ­ing one state legis­lator who never parti­cip­ated in the city system. Half of the cases involve no wrong­do­ing: They either describe activ­ity that is legal and not corrupt or cite invest­ig­a­tions that never found a crime or elec­tion law viol­a­tion. Finally, there are a number of examples of candid­ates attempt­ing to viol­ate the rules of the city’s public fund­ing system. Every campaign in this last category was caught by the city’s effect­ive enforce­ment agency and either fined or denied public funds. This shows that enforce­ment works, and it is a neces­sary part of compre­hens­ive campaign finance reform that includes public fund­ing.

The follow­ing list breaks down the 24 alleged scan­dals described in the CCP report to show how little they tell us about the rela­tion­ship between corrup­tion and public finan­cing, suggest­ing that the CCP’s zeal to attack public fund­ing motiv­ated it to trump up these cases.

Cases that have noth­ing to do with public campaign fund­ing

  • The report lists one member of the State Assembly who never parti­cip­ated in the city’s public fund­ing system, even though the CCP claims its list consists of “New York City ‘Clean Elec­tions’ candid­ates.”
  • Six cases of abuse of City Coun­cil members’ discre­tion­ary funds are described.* These have noth­ing to do with public fund­ing or campaign finance. New York State legis­lat­ors do not have access to discre­tion­ary funds.

Cases with no offi­cial find­ing of wrong­do­ing

  • Two candid­ates accep­ted public funds for elec­tions that the report claims were not compet­it­ive. This is not illegal, and it’s not corrup­tion.
  • Eight candid­ates were allegedly involved in collu­sion between the Work­ing Famil­ies Party and Data & Field Services. Federal prosec­utors decided not to file charges against those candid­ates, and there was no find­ing of wrong­do­ing in a civil lawsuit that WFP settled.
  • There are two unfoun­ded alleg­a­tions that candid­ates spent public funds improp­erly. The report cites a news article that presents no evid­ence that the expendit­ures in ques­tion viol­ated the law.

Cases that were caught by New York City enforce­ment

  • Two candid­ates were found by the Campaign Finance Board found to have coordin­ated with a labor union, result­ing in in-kind contri­bu­tions that exceeded contri­bu­tion limits. Both candid­ates paid hefty fines.                                                                                 
  • Four candid­ates viol­ated campaign finance laws but were caught by the Campaign Finance Board’s routine audits.* The agency either denied the candid­ates public funds or ordered them to repay all the public funds they had received.

*Former City Coun­cil­mem­ber Miguel Martinez engaged in both discre­tion­ary funds abuse and campaign finance viol­a­tions that were caught by routine audits.

In short, three-quar­ters of the scan­dals discussed in the CCP report had noth­ing to do with public finan­cing and the hand­ful that did were all read­ily caught by the city’s enforce­ment agency.

New York State Needs Compre­hens­ive Reform with Public Finan­cing at its Core

Today, Albany’s corrup­tion prob­lems are threat­en­ing to completely destroy public faith in govern­ment. In the last 10 years, at least 13 state elec­ted offi­cials have been convicted on charges relat­ing to corrup­tion, and several more have been indicted. The corrup­tion has reached the highest levels of state govern­ment: Former Comp­troller Alan Hevesi steered $250 million of the state pension fund’s money to a company in exchange for almost $1 million in cash and travel bene­fits from the company’s founder. Three of the last five Senate Major­ity Lead­ers or Co-Lead­ers have been indicted or convicted on corrup­tion charges: Joseph Bruno is await­ing retrial after his 2009 convic­tion was over­turned due to a change in the law, Pedro Espada pleaded guilty last year and faces a trial on more charges, and Malcolm Smith was charged this month. The damage to public trust is undeni­able: A recent poll found that 87 percent of New York­ers think that corrup­tion is a some­what seri­ous or very seri­ous prob­lem.

Although no system can stop indi­vidu­als from behav­ing badly, public finan­cing combined with strong enforce­ment, disclos­ure, and reas­on­able contri­bu­tion limits can change the culture of Albany. It will end the mad chase for campaign cash that starts some elec­ted offi­cials down the road to corrup­tion, and it will make candid­ates depend­ent on ordin­ary voters rather than special interests. A system of match­ing small dona­tions with public funds will encour­age New York­ers to parti­cip­ate in elec­tions and give them a greater sense of owner­ship of their govern­ment. Contrary to the exag­ger­ated claims by ideo­lo­gical oppon­ents like the Center for Compet­it­ive Polit­ics, public finan­cing systems have been a crucial element of anti-corrup­tion reform in New York City, Connecti­cut, and else­where.