Koch’s Redemption: A Lesson for Albany

Published in New York’s Daily News.

It was nearly the end of Mayor Ed Koch. In 1986, some of his top political allies had been caught using their office for personal gain in one of the biggest scandals in city history. Koch himself was innocent but nonetheless devastated by the scandal and its impact on the city.

At the time, I served as corporation counsel — the administration’s chief lawyer. I urged Koch to heed Shakespeare’s words: “Sweet are the uses of adversity.” And so, rather than allow the episode to end his life in public service, we used it as an opportunity to fundamentally reform New York City’s political system by developing the framework for a new campaign finance system.

For the first time, it limited obscenely large campaign contributions and provided matching grants to small donors.

Matching small donor contributions changes how candidates campaign in a way that betters democracy. Candidates have a much greater incentive to reach out to ordinary voters, everyday New Yorkers without deep pockets. In turn, being asked to contribute — even small amounts — increases citizen participation and interest in elections.

Even in the face of a massive corruption scandal, passing comprehensive campaign finance reform wasn’t easy. But thanks to the efforts of Koch, good lawyering by my successor Peter Zimroth and the leadership of then-City Council Speaker Peter Vallone Sr., the City Council overwhelmingly adopted a small donor public financing system with greatly reduced contribution limits. It was then enshrined in the City Charter by a very substantial majority in a referendum.

Nor was this some wonky model dreamed up by good-government groups that failed to work in practice. In 1989, the first election that followed, all three mayoral candidates — Koch and David Dinkins, both Democrats, and Rudy Giuliani, a Republican — praised the new system and participated in it. Since that election, an overwhelming majority of candidates for all city offices have participated in the program.

Other mayors and Council members have improved the system over the years, twice lowering the amount eligible for matches and increasing the match ratio. The impact has been dramatic: New Yorkers are more than three times as likely to donate in city elections than in elections for state government posts, where there is no public matching.

Between 1997 and 2009, the number of donors who gave to candidates participating in the matching system grew by 35%, while the number of small donors grew by 40%.

Elections have also become more competitive. Thanks to public matching grants, in almost half of all primary races in 2009, at least two candidates spent more than 90% of the spending limit.

All this, while simultaneously reducing the influence of big money in general and corporate money in particular (only donations from living, breathing New Yorkers are matched).

But in their understandable disgust with large contributions, too many reformers have missed a big point. Political contributions are not inherently tainted. They do not always raise the specter of corruption. It’s true that large ones may, but small financial contributions are a natural part of a healthy democracy.

Today, New Yorkers are more confident that City Hall leaders are working in good faith for the people of New York. Too many still lack the same faith in Albany. But that could change.

In state elections, contribution limits are sky-high — and so is the power of big money donors. Gov. Cuomo has repeatedly called for the state to adopt a public financing system modeled on New York City’s, and many legislators have joined his call.

Unfortunately, there are still some in Albany who believe that it is inappropriate to use even small amounts of public money on elections. They would do well to remember the lesson Ed Koch learned the hard way: that the influence of money on our elections can be far more costly.