Campaign Finance Reform

What Does The McCutcheon Ruling Mean For New York? (Updated X2)

Good-government advocates fear this morning Supreme Court ruling could have wide-reaching effects for New York’s own aggregate limits on campaign contributions in a given election cycle.

The U.S. Supreme Court in a 5-4 decision struck down a cap on overall contributions limits of $48,600 by individuals to candidates for federal office. At the same time, the court ruled the $74,600 cap to political party committees also violated the First Amendment.

For supporters of public financing in New York, the concern is that the case, McCutcheon v. Federal Election Commission, could be imposed on New York should its aggregate limits be challenged.

And indeed, the successful challenger in the case is already involved in New York politics.

As Jessica Alaimo at Capital notes, Shaun McCutcheon was the Alabama-based Republican activist who in 2013 challenged New York’s cap on independent expenditure campaign committees, which ultimately paved the way for a super PAC fueled by David Koch to support Republican mayoral candidate Joe Lhota.

Right now, the state caps election-cycle contribution limits at $150,000 for an individual donor in a calendar year and $5,000 for corporations.

“It is unclear whether this decision will be applied to incorporated entities, but if future decisions decide this is the case, a massive new loophole will be added to New York’s election regulations,” said NYPIRG analyst Bill Mahoney. “The candidate and party receipt limits for corporations are the same as those for individuals.”

Of course, there are ways around these caps, ranging from the so-called LLC loophole to donating unlimited amounts of money to a “housekeeping committee.”

Still, supporters of public financing believe today’s ruling bolsters their case for a statewide system.

The $138 billion budget for the 2014-15 fiscal year applies a public financing system, but only for the state comptroller’s race.

Gov. Andrew Cuomo has pointed out the votes aren’t available in the Senate to support a public financing system, with opposition coming principally from Senate Republicans.

“The Governor and Legislature must immediately act to establish reasonable receipt limits on corporations, including incorporated labor unions,” Mahoney said. “They must establish a system of public financing designed to motivate the participation of small donors.”

Updated: Attorney General Eric Schneiderman said in a statement he is “deeply disappointed” by the Supreme Court decision striking down the contribution limits.

“The majority decision ignores both the Court’s own precedent and common sense regarding the corrupting influence of unlimited contributions to parties or candidates if they are spread across different committees,” Schneiderman said. “Campaign finance laws protect the integrity and fairness of elections and help ensure that everyone—not just the wealthy or powerful corporations—are represented in our system of government. Together with Citizens United, this decision guts our campaign finance system and opens the door to corruption by handing a small minority of wealthy individuals the power to exercise undue influence over our government.”

Updated X2: Assemblyman Bill Nojay in a statement applauded the decision, saying it could help create a “level playing field” for businesses to compete with organized labor in the state.

“As today’s Supreme Court decision filters down to state campaign finance rules, we’ll hopefully see a level playing field so businesses and their supporters can compete with the likes of SEIU, Acorn and the Working Families Party. That would be real campaign finance reform, instead of throwing tax dollars at politicians.”

Soros-Backed Group Bemoans Public Financing Compromise

The group supported by Jonathan Soros, Friends of Democracy, blamed both Gov. Andrew Cuomo and legislative leaders for compromising on a public financing system that limits the donor-matching program to the state comptroller’s race.

In a statement from Friends of Democracy’s David Donnelly, the group accuses Cuomo of an “abdication of leadership” in the final push to include a statewide public financing system.

“Friends of Democracy is deeply disappointed with the failure of Governor Cuomo and legislative leaders to address the systemic corruption in Albany through a comprehensive publicly funded Fair Elections program. Governor Cuomo’s abdication of leadership during the budget process resulted in little or no reform when an historic opportunity was at hand. One silver lining is the Senate Republicans’ willingness to vote for public funding for one state office as a pilot program. While we vigorously disagree with the scope and the content of this pilot program, we are encouraged that the vote may be a sign of openness for further negotiations.”

Cuomo had included a statewide campaign financing system in his January budget proposal that was based on the New York City model.

However, the final agreement limits the system to the comptroller’s race and is considered a “pilot” program.

Senate Republicans have been staunchly opposed to the use of taxpayer funds for elections, but did agree to a host of ethics reform legislation under the umbrella bill known as the Public Trust Act that tightens anti-corruption and bribery penalties.

Independent Democratic Conference Leader Jeff Klein is now attempting to negotiate a new, phased-in public financing proposal to be considered in the coming weeks.

What happens with public financing by the end of the June legislative session could have deep political ramifications down the road.

Advocates had hoped for some action in the budget process, considering that the governor tends to hold maximum leverage in the negotiations. A broader program could shore up his left flank as well as he heads into re-election.

Friends of Democracy is a deep-pocketed organization that has vowed to get involved in state legislative races heading into the election season.

New Public Financing Bill Would Phase In System

State lawmakers in the Senate are negotiating a new public financing proposal that would phase in a donor-matching system by 2020, sources familiar with the talks said.

Under the proposal, Senate and Assembly candidates would be eligible for the public financing system by 2016, with all statewide offices eligible by 2020.

The new proposal is the subject of closed-door talks with Independent Democratic Conference Leader Jeff Klein, Senate GOP Leader Dean Skelos, Deputy Republican Leader Tom Libous, Senate Republican Campaign Committee Chairwoman Cathy Young and Senate Finance Committee Chairman John DeFrancisco.

The bill will be considered in the “coming weeks” according to one source, making it one of the more closely watched items in a post-budget legislative session.

The proposal is an alternative – and a far broader one – than the public financing pilot program included in the state budget that would apply only to this year’s state comptroller’s race.

The pilot program, which advocacy groups say doesn’t go far enough, is expected to be approved by both the Assembly and Senate on Monday.

House Progressive Caucus To Cuomo: Country Is Watching On Public Financing

A letter from the House Progressive Caucus on Thursday to Gov. Andrew Cuomo urges him include the public financing of political campaigns in the state budget.

The letter comes as Cuomo and state leaders are finalizing the 2014-15 state budget, and an announcement is expected Friday morning.

It also comes as Cuomo comes under increasing pressure from liberal and progressive advocacy groups that are part of a well-funded campaign to push for public financing.

“The country is watching as your state has an opportunity to lead on an issue of local, state and national importance,” the caucus wrote. “Many of the policy goals progressives advocate and fight for may never come to fruition without a change in our electoral system. And with elections costing more and more each year, public officials and candidates throughout the country feel more and more beholden to those with the deepest pockets.”

Cuomo’s $142 billion budget proposal included the public financing program, which would be based on the model of New York City’s donor matching system.

A variety of compromise measures for public financing were floated on Thursday at the Capitol, including proposals that would allow the program for the comptroller’s and attorney general’s campaigns.

Another proposal that emerged on Thursday would create a commission to study the public financing issue.

Nevertheless, Senate Republicans remain firmly opposed to the use of taxpayer funds or public dollars to fund political campaigns.

3-27-14 CPC Co-Chair Letter to Governor Cuomo by Nick Reisman

With The Latest Whiff Of Corruption, Ethics Eyed In Budget

A day of marathon meetings between Gov. Andrew Cuomo and state legislative leaders yielded no white smoke on the state budget.

“They are all being negotiated. A lot of issues have been resolved and we’ll see how it goes,” Senate GOP Leader Dean Skelos told reporters.

As lawmakers head into the home stretch, good-government advocates hope a package of ethics overhaul legislation is approved.

However, it’s unclear if the latest corruption news — including the FBI raid of Queens Assemblyman Bill Scarborough and the reported investigation into a land purchase by Senator Kathy Marchione — will spur officials to include ethics in the budget.

“How many problems does it take before they start take this seriously? We heard from the leaders they’re discussing ethics reforms. We hope it’s meaningful,” said NYPIRG legislative director Blair Horner.

Cuomo introduced an ethics package in his $142 billion budget that calls for stricter anti-bribery and corruption penalties as well as increased oversight at the state Board of Elections.

Advocates are also closely to watching to make sure the public financing of political campaigns is included. Doing so could repair the frayed relationship between Cuomo and the well-funded organizations that have pushed for public financing.

“We definitely think this is Governor Cuomo’s opportunity to make good on his representations that public financing is a part of his agenda,” Common Cause’s Susan Lerner said.

Some sources over the last several hours said proposals have included public financing options for both the state comptroller and attorney general’s race, though publicly Senate Republicans have not softened their opposition on the issue.

At the same time, the fate of Cuomo’s panel to investigate corruption is up in the air. The governor’s Moreland Commission was defunded by both the Senate and Assembly’s one-house budgets, denying $270,000 in spending for contracts with Moreland.

Underlying any ethics negotiations, though, is the ongoing court challenges to the commission’s authority to subpoena lawmakers to gain more access to their outside income.

The state attorney general’s office and lawyers for the Assembly and Senate agreed to adjourn the legal challenge to April, or until after the budget process is presumably finalized.

“I never thought they were legally empowered anyway,” Assembly Speaker Sheldon Silver said.

Senate IDC Leader Jeff Klein said ethics reform remains on the budget negotiating table.

“The Public Trust Act is being discussed,” Klein said. “Very close to an agreement on that.”

Top Donors Urge Cuomo, Lawmakers To Pass Public Financing

Advocates for the public financing of political campaigns on Tuesday released letters sent to Gov. Andrew Cuomo and the top legislative leaders in the Assembly and senate urging them to include a public financing program in the state budget.

The letter, sent also to Sens. Dean Skelos, Jeff Klein and Assembly Speaker Sheldon Silver, includes the signatures of Jonathan Soros, who has contributed to a well-funded public financing campaign, as well as the founder of Craigslist, Craig Newmark.

A third of the signers are New York residents.

The letter was circulated by the Public Campaign Action Fund, which has also aired TV ads urging Cuomo to focus on campaign finance issue.

The campaign earlier sent mailers to the districts of Republican Sens. Mark Grisanti of Buffalo and Jack Martins of Nassau County (Grisanti responded by publicly re-stating his opposition to the program).

“In federal and many state and local elections, and even elections for state courts, extraordinarily wealthy individuals and powerful corporations exercise vastly outsized influence,” the donors write in the letter. “We urge you to fix today’s broken campaign finance laws. Nothing less than our democracy is at stake.”

Cuomo had proposed a public financing system with a donor-matching program based on New York City’s model in his 2014-15 state budget proposal.

But Republicans in the state Senate continue to be opposed to a program that uses either taxpayer dollars or even settlement money from lawsuits.

Skelos, the Republican leader in the Senate, left this morning’s closed-door budget meeting saying that all issues remain on the table during the talks, even public financing.

Lawmakers on Monday said they expected Republicans to remain opposed to public financing, but did not rule out a different ethics reform package that includes tightening anti-bribery and corruption laws.

Cuomo Donor Letter by Nick Reisman

Cuomo Gets A Starring Role In Public Financing Ad

From the morning memo:

A 60-second TV ad released by advocates for public financing on Wednesday uses a speech Gov. Andrew Cuomo last year pitching the measure.

But the message from the deep-pocketed backer of public financing is this: Actions speak louder than words.

No other sound is heard in the ad beside Cuomo’s speech, but full screen text flashes while the governor talks.

“Governor Cuomo has said all the right things,” the ad says. “He’s gone through all the motions. But action is what matters now.”

The ad is the latest from the Public Campaign Action Fund, which has already released a series of spots for television trying to boost the effort.

The campaign earlier sent mailers to the districts of Republican Sens. Mark Grisanti of Buffalo and Jack Martins of Nassau County.

For now at least, the mail campaign did not have the intended impact. Grisanti held a news conference in his district over the weekend angrily denouncing the Public Campaign Action Fund and re-asserting his opposition to the measure.

Still, advocates for public financing have reason to hope.

In January, Cuomo included the plan, along with a suite of ethics and anti-corruption legislation, in his $142 billion budget proposal.

Consultant Firm Pushes Back Against Effort To Reveal Common Sense Super PAC Donors

Court documents filed late last week by lawyers for a political consultant firm hired by a GOP-aligned super PAC argue Gov. Andrew Cuomo’s anti-corruption commission hasn’t made a convincing case for them to reveal the group’s donors.

The Moreland Commission on Public Corruption last year sent a subpoena to the firm Strategic Advantage International, a vendor for the group Common Sense Principles, in order to gain more information on who funded the group’s efforts during the 2012 campaign cycle on behalf of Senate Republicans.

Attorney General Eric Schneiderman’s office argued in court filings last month that more sunlight on who funded the group’s activities would give the anti-corruption panel a better understanding of how the organization functioned.

The organization, designated a 501(c)4 non-profit, spent millions in the 2012 political campaign blasting three Democratic candidates for Senate: Sens. Ted O’Brien, George Latimer and Joe Addabbo.

Strategic Advantage helped develop a website for Common Sense Principles.

Common Sense Principles filed a disclosure report last year with the Joint Commission on Public Ethics that showed a single contribution from an apparent shell organization.

But in a filing in state court meant to quash the Moreland Commission’s subpoena, lawyers for Strategic Advantage argue that Common Sense Principles followed the law in disclosing what it did, while also filing the proper paperwork.

Strategic Advantage also took aim at Schneiderman’s filing last month, which it says included “an irrelevant polemic against ‘dark money,’ highlighting the Commission’s bias against an out-of-state organization that has chosen to express opinions and support policies of which the Commission and the Governor disapprove.”

Indeed, the firm argues that is precisely that negative-sounding language that threatens the identities of the donors to the group.

“The high-profile, inflammatory nature of the Commission’s investigation heightens the risk of reprisal against Common Sense’s donors,” the filing says.

The company also argues the press bias against Common Sense Principles is biased and would give contributors unfavorable attention in the media.

“If the names of Common Sense’s donors were to be publicized, the media scrutiny of those donors would surely be intense – and the prevalent media view of the organization is not favorable,” the filing says.

Finally, the company makes the case that if the Moreland Commission members are so upset with the current political disclosure laws, they should take their case to Congress.

“If the Commission believes that the privacy protections granted by the IRS undermine accountability in the electoral process, then it should lobby Congress to make changes, but the Commission’s charge does not pertain to reevaluation of those federal laws and policies,” the filing says.

Document by Nick Reisman

Biz Group Sends Action Alert On Public Financing

As a Senate resolution is expected offer supportive language for public financing, the pro-business Unshackle Upstate blasted out an action alert to members urging them to oppose the effort.

“Powerful labor unions and New York City millionaires want to spend your money to support their political candidates and their tax-and-spend agenda. Join us in telling Albany: There is nothing “fair” about using public money to pay for political campaigns,” the group said in its email.

Members were urged to email, call or even tweet at Republican members of the chamber to oppose the plan.

It’s not entirely clear what the language on public financing will ultimately look like, but the expectation is that the resolution will not offer a framework for how to pay for the system or where the money would come from.

Still, the concern from business groups over public financing comes into relief with the alert with the worry that organized labor would be empowered by the move.

Common Cause To IDC: Stay Firm On Public Financing

As Senate lawmakers continue to haggle on Thursday on a one-house budget resolution, the good-government group Common Cause is urging the Independent Democratic Conference to continue to push in the negotiations for a public financing system.

“The IDC standing firm to insure that important budgetary issues like Fair Elections remain in the budget is not dysfunction, it’s how the legislative process should work. We applaud Senator Klein for his willingness to stand by his principles,” said Common Cause Executive Director Susan Lerner.

It is possible non-taxpayer funds could be used for a public financing system as a compromise for Senate Republicans, who have been opposed to a system.

Gov. Andrew Cuomo included a public financing system, along with a package of ethics reform legislation, in his $142 billion budget proposal.

No dollar amount was attached, but Cuomo suggested a voluntary income tax form check-off box could be used to pay for a fund.