Campaign Finance Reform

Common Cause: Citizens United Isn’t Blocking Reforms

The good-government group Common Cause vehemently disagreed with Gov. Andrew Cuomo’s assertion on Monday in a radio interview that the U.S. Supreme Court decision in the Citizens United case made it impossible for major campaign-finance law changes.

“You need people in office who are going to use their best judgment in office,” Cuomo said on WNYC this morning, “because you’re not going to change the campaign finance system because of Citizens United.”

It’s argument Cuomo has made before, often in the context of creating a statewide public financing system for elections.

Common Cause Executive Director Susan Lerner, however, said the decision in the case shouldn’t hinder campaign-law changes.

“Anonymous spending is not what Citizens United is about; it’s what New York State has permitted it to become,” Lerner said. “The state is not powerless to act and I am disappointed that the Governor would suggest otherwise. Quite simply, the state has failed to avail itself of any number of reforms which would curtail the corrupting influence of money in politics.”

Common Cause pointed to a list of measures the state can adopt to enhance transparency when it comes to campaign finance, including requiring the full disclosure of donors to independent expenditure groups, have donors identify their occupation and employer, require the disclosure of campaign “bundlers” and maintain a “doing business” database at the state level that’s tied to campaign donations.

Meanwhile, Common Cause reiterated a 2013 report that found even candidates who do not enjoy support from independent expenditures can compete and win when participating in a system of publicly financed elections.

Miner To Stop Receiving LLC Contributions

Syracuse Mayor Stephanie Miner on Friday announced she would no longer accept campaign contributions from limited liability corporations — tightening the political screws on Gov. Andrew Cuomo to potentially do the same.

Miner, a former state Democratic Committee co-chair who has feuded with Cuomo in recent years, said her decision to stop accepting LLC donations was over the concern of the “corrosive” influence of money in politics.

Giving from LLCs has come under scrutiny for what good-government reformers call a “loophole” in the campaign finance law that allows unlimited giving through a network of the entities.

“We have seen across New York State how money in politics has a corrosive effect on governing,” said Syracuse Mayor Stephanie A. Miner. “The need for campaign finance reform in New York State is real and it is urgent. In absence of our state leaders taking action, I have decided to take this step for myself and forgo political contributions from LLCs. It is my hope that my action will demonstrate a commitment on my part to delivering the highest ethical standard for my constituents.”

Miner is term limited from running again for mayor, but has not ruled out running for another office one day.

The move comes as another mayor Cuomo has differed with, New York City’s Bill de Blasio, has decided to return contributions from Glenwood Management, the real-estate firm that has played a role in multiple corruption cases and donated heavily to the convicted former leaders of the Senate and Assembly, Dean Skelos and Sheldon Silver.

Cuomo supports closing the LLC loophole, but has declined to no longer accept donations from the entities. At the same time, Cuomo — whose business-backed campaign has received more than $500,000 from Glenwood and related entities — took a wait-and-see approach to the company’s donations.

Let’s see what happens with the trial,” he said during the Skelos trial. “Let’s see what the outcome is. If someone is convicted of a crime, then obviously not.”

Legislative Report Tallies Top LLC Givers

A report released on Wednesday by state lawmakers tallied the top limited liability corporation givers to political campaigns, finding they range from top real-estate companies to high-powered law firms.

The report, released by Democratic Sen. Daniel Squadron, comes as state lawmakers grapple with yet another high-profile conviction of one of their own: former Assembly Speaker Sheldon Silver, who was found guilty of theft of honest services and money laundering, among other corruption charges.

The report traced back the donations from LLCs, through which individual donors can contributed unlimited funds to candidates and political causes.

“You shouldn’t have to be Sherlock Holmes to follow the money in state elections,” Squadron said in a statement. “As we’ve seen time and time again, when unlimited, anonymous corporate dollars enter government and politics, everyday New Yorkers get muscled out. It’s time to close the LLC Loophole, once and for all.” More >

Antonacci: More Time Needed For Public Financing Implementation

antonacciOnondaga County Comptroller Bob Antonacci is, so far, the only candidate to have participated in a statewide public financing system.

It didn’t work out the way he hoped: The Republican lost to incumbent Democrat Tom DiNapoli and failed to qualify for matching funds.

Despite the experience, Antonacci more or less embraced the findings of a seven-page report released this week by the Board of Elections assessing the one-year only program that was in place last year for the comptroller’s race.

In short, the report found the Board of Elections needed more time to implement the system than introducing it in the middle of an election cycle. More >

BOE Report Assesses The One-Time Public Financing Program

dinapoliA report released this week by the Board of Elections provides an assessment on the one-time public financing program for the state comptroller’s race in which none of the major and minor party candidates actually received any matching funds.

The results for the board were inconclusive, given that none of the candidates for comptroller actually received any matching funds for their campaigns, the board found.

“The State Board was prepared to administer the entire program but anticipated potential problems with a full program roll out because of the extremely short implementation timeframe,” the report concludes. “With no qualified participant or full program implementation, it is difficult and somewhat impractical for the Board to make comments to improve the program.”

In the seven-page report, the Board of Elections calls for a longer time frame to implement the program, at least two years. More >

Brennan Center Files Suit To Close LLC Loophole

The Brennan Center, alongside a coalition of law firms, state lawmakers and others on Tuesday announced they had filed a suit against the Board of Elections to end the practice of a network of limited liability companies contributing endless cash to political candidates.

The lawsuit is the latest in the effort to end the LLC “loophole” this year.

The Board of Elections’ commissioners earlier in the year were deadlocked over a proposed regulation that would have treated individual LLCs linked to a specific contributor as a single donor.

An effort to curtail LLC political giving legislatively stalled in the Senate at the end of the legislative session, which concluded last month.

“By treating LLCs as individuals rather than artificial business entities like corporations or partnerships, the Board of Elections created a gaping hole at the heart of our state’s legislatively enacted campaign finance system,” said Lawrence Norden, deputy director of the Brennan Center’s Democracy Program. “It defies common sense and state law.”

The plaintiffs in the suit include Republican former Sen. John Dunne, Democratic Sens. Liz Krueger and Daniel Squadron, Democratic Assemblyman Brian Kavanagh and SUNY New Paltz Professor Gerald Benjamin, the father of Capital Tonight anchor Liz Benjamin.

In addition, the law firm Emery Celli Brinckerhoff & Abady LLP is also listed as a plaintiff in the challenge.

“At a time when New York government is in crisis thanks to a series of high-profile corruption scandals, the Board has opted to perpetuate its deeply flawed rule that enables frequent and harmful circumvention of the law,” said Elizabeth S. Saylor, a partner at Emery Celli Brinckerhoff & Abady LLP. “The LLC Loophole undermines the New York State Legislature’s clear intent to control campaign contributions by limiting the donations permitted and mandating full disclosure of donors. It must be closed.”

Brief.Art 78 MOL — FINAL with TOC-TOA (00220640x9CCC2).pdf by Nick Reisman

Assembly Bill Would Clarify PAC And Housekeeping Roles In Campaigns

The Democratic-led Assembly on Wednesday approved two bills that seek to clarify both political action committees, independent expenditure groups and the use of so-called “housekeeping” or soft money accounts used by party committees.

“Now more than ever, we must work to restore our constituents’ confidence in our electoral process,” said Assembly Speaker Carl Heastie. “These bills would help to ensure that the voices of all New Yorkers are heard and to limit the influence of big money in politics.”

One bill, backed by Assemblyman Michael Cusick, clarifies the distinction between political action committees and independent expenditure groups, which have grown in spending and scope in state campaigns following the U.S. Supreme Court’s Citizen United decision.

The Cusick bill provides for contribution limits to both PACs and IEs as well as penalties for violating the caps. IEs would be barred from donating directly to candidates.

There is no Senate same-as.

A separate bill, also approved today, would shore up the legal uses for housekeeping accounts, which are used by party conference committees and can raise unlimited funds with no contribution limits (then-Mayor Michael Bloomberg in 2012 gave Senate Republicans $1 million to their housekeeping account).

The money cannot be spent on a specific candidate, but can be used on purposes such headquarters, staff and other office-related functions.

The bill would regulate housekeeping accounts so that any transferred funds are kept in a separate account and not used for unintended activities, such as funding a candidate.

“These bills are a step in the right direction toward campaign finance reform,” Cusick said. “Election laws are essential to democracy and cannot be left open to interpretation. Providing clear definitions and imposing penalties for breaking the law will help level the playing field and allow for more honest elections.”

NYPIRG IDs The 3 Different LLC Givers

The New York Public Interest Research Group in a letter to the state Board of Elections identifies three different ways companies seek to circumvent the state’s campaign limits through a network of limited liability companies.

In one example, cable and broadband provider Cablevision has used LLCs based in different parts of the country to make a bundle of donations worth more than $425,000.

In other, nine LLCs with different, albeit vague-sounding names, but with the same address, made $225,000 in donations.

And finally, there’s the LLCs with different and untraceable names that are linked to the same company.

NYPIRG was able to cull together the LLC donations through the website, which was developed to track political giving in state government.

“It is clear that the Board has opened a Pandora’s Box of problems and troubles through its LLC interpretation—as demonstrated in this letter,” NYPIRG’s Blair Horner and Russ Haven wrote. “Instead of trying to justify the ruling and ignore the fact it undermines the Election Law, it’s time to acknowledge its failures and follow the federal rule.”

An effort to curtail LLC political giving has been largely blocked by the state Legislature, while the Board of Elections was deadlocked earlier this year in a vote that would have reclassified LLCs under the campaign finance regulations.

Ssboe Letter Final by Nick Reisman

Squadron Calls for Floor Vote on LLC Loophole

Good government groups and Democrats in the State Senate are making a last-ditch attempt to close the state’s controversial LLC loophole as the legislative session draws to a close.

In a letter sent to Senate Majority Leader John Flanagan Wednesday, Senator Daniel Squadron urged the majority leader to consider the issue.

Squadron has a bill that would close the loophole, which allows individuals to contribute virtually unlimited amounts of money to a campaign by funneling it through a limited liability company.

That bill was not brought up in committee, after the chair, Sen. Michael Ranzenhofer, said the proper paperwork had not been filed.

Squadron claims in the letter, however, that the paperwork was correct.

“Republican counsel apparently argued that S.60 had not been in a committee for 45 days,” Squadron says in the letter. “However, S.60 was referred to the Elections Committee on January 7, well over 45 days ago. Suggesting that the required 45 days must start again upon advancing to a secondary committee is an incorrect interpretation of [the Senate rules].”

Squadron was joined by good government groups Thursday to call for movement on the bill. He told reporters that, with a change in leadership, he’s hopeful the Senate will take action.

“There’s a new leader in the Republican conference and I have been hopeful that he would change course,” Squadron said. “Both by following the spirit and the letter of the Senate rules and by allowing a vote to close the LLC loophole.”

“At a time like this when New Yorkers have so much reason to doubt state government, closing the LLC loophole sends the message that it is no longer business as usual,” Squadron continued.

He said he hasn’t spoken to Flanagan directly about bringing the bill to the floor, but that if it were to come to the floor “this bill, once folks are forced to take a stand on it, is very hard to oppose.”

Should the bill fail, Squadron said it will at least force lawmakers to make their stance clear on the loophole through a vote.

Good government groups, including Common Cause, Citizen Action, and NYPIRG delivered a petition with signatures from more than 2,000 New Yorkers to Flanagan’s office shortly after the press conference.

A bill closing the LLC Loophole has already passed in the Assembly with overwhelming bipartisan support, 120-8.

Senate Dems Push LLC Loophole Closure

Senate Democrats on Monday pushed for a vote in the Senate Elections Committee that would reclassify limited liability companies and limit their political giving.

Sen. Daniel Squadron, the bill’s main sponsor, used a parliamentary maneuver in order to have a measure put to a vote in a legislative committee.

The measure was approved, and is now before the Senate’s corporations committee.

At the moment, a single campaign donor can give unlimited contributions through a network of limited liability companies or LLCs.

“It seems like almost everyday new allegations of corruption and abuse of the public trust are leveled at state government,” said Senate Minority Leader Andrea Stewart-Cousins at a news conference this morning.

“What does it say when the Senate Republicans are so opposed to ethics reforms that they have to be forced to even discuss these bills in committee?”

The nudging is subtle: Senate Majority Leader Dean Skelos is under investigation by federal prosecutors, while the GOP’s deputy majority leader, Tom Libous, is under indictment for lying to the FBI.

More broadly, Democratic Assemblyman Sheldon Silver is under indictment for corruption charges and will be arraigned on a superseding indictment on Tuesday.

Good-government groups have long railed against the so-called LLC loophole, but for the moment the classification has been elusive in changing.

The state Board of Elections earlier this month had considered a change in the regulation, but the commissioners deadlocked in a vote.

Republican commissioners argued at the time it should up to the Legislature to change the regulation. The Board of Elections initially opened up the LLC giving based on a federal ruling that has since been overturned.

“The Board of Elections opened up this loophole through their own action,” Squadron said. “It was consistent At the time, the federal government quickly corrected that. The Board of Elections has failed to act. The New York State Legislature has failed to act. We’ve seen this loophole get bigger and bigger.”

Candidates on both sides of the political aisle have benefited from the arrangement, though Gov. Andrew Cuomo has raked in the lion’s share of the contributions.

Nevertheless, Cuomo himself has been pushing to have the loophole closed.

“The Governor supports and will continue to fight for closing the LLC loophole,” said spokesman Rich Azzopardi. “Today’s passage of legislation out the Senate Elections Committee that would accomplish this goal is a positive development and one that we hope ends with an actual vote and passage from the full Senate.”