Campaign Finance Reform

Unshackle Upstate Blasts Public Financing Ad Campaign

The pro-business Unshackle Upstate in a statement on Monday blasted the $1 million ad campaign backing the public financing of political campaigns.

“Wealthy special interest groups spending millions in an effort to promote taxpayer funded political campaigns is the height of hypocrisy,” said the group’s executive, Brian Sampson. “Forcing taxpayers to provide a blank check to candidates for their robocalls and hiring of high-priced political consultants is wasteful and won’t fix Albany’s culture of corruption. Individuals have found ways to game New York City’s own vaunted public financing system and the same will occur in a statewide system. Putting taxpayer dollars at risk when millions of New Yorkers are in desperate need of tax relief is unacceptable. Cleaning up Albany must be done in a way that restores the public’s trust in state government and protects taxpayers from further harm. Enacting a taxpayer financed of political campaign system will only make overburdened taxpayers feel used and abused.”

Unshackle Upstate has largely focused on regulation and tax issues, but last year began opposing the public financing effort as a mutli-million dollar effort has sprung up to push the issue.

The Public Campaign Action Fund this week is beginning a month-long ad campaign to back Gov. Andrew Cuomo’s public financing plan, which was inserted in his $142 billion budget, but does not have any fiscal implications for the coming budget year, which begins April 1.

BOE Referring 3 Committees To Prosecutors

The state Board of Elections will refer three campaign committees found to be in violation of campaign finance laws to local prosecutors for potential prosecution for receiving donations for more than the legal contribution limit.

Four additional campaign committees, meanwhile, will receive letters of reprimand from the board.

The names of the committees won’t be made public until after they are notified, about three weeks, elections officials said at the meeting.

Up until this point, no local district attorney has prosecuted a case referred by the state Board of Elections, but officials today there stressed they were sending a robust package of evidence showing the contributions over the legal limit.

Douglas Kellner told the board the two-year statute of limitations for contributors that do not adhere to the legal limit is too tight and that anyone “serious” about overhauling campaign laws should change it.

Also Tuesday, subpoenas have been set to five different political committees that have not filed campaign finance reports, board enforcement counsel William McCann said Tuesday at a meeting of the board.

At the same time, subpoenas were also sent to the banks those committees had used, McCann said.

The subpoenas, as well as the prosecutorial referrals, were sent as the BOE also says more than 2,500 letters were sent to committees that are yet to file the most recent campaign finance reports, that were due last month.

McCann said it was the largest batch of the so-called “dunning” letters to go to political committees.

The news comes also, however, following criticism of the BOE from the Moreland Commission on Public Corruption, which has criticized the board for lax enforcement of existing campaign finance laws.

Board attorney Kim Galvin told commissioners on Tuesday the Moreland panel continues to seek documentation from the board.

Gov. Andrew Cuomo in his 2014-15 budget proposed more than $5 million for the board to hire more enforcement officials, as well as a tightening of existing campaign-finance laws.

Public Financing Advocates Fete Public Financing In Budget (Updated)

The coalition of advocacy groups backing publicly financed campaigns in New York is happy that Gov. Andrew Cuomo plans to include a donor-matching system in his 2014-15 budget proposal.

The New York Times this morning reported Cuomo will include the public financing system, plus measures designed to overhaul ethics in state government, in his budget address.

“By including public financing of elections in the budget, Governor Cuomo has demonstrated national leadership,” said Karen Scharff, the executive director of Citizen Action, in a statement that was released by the group Fair Elections.

“The Governor is showing he is serious about cleaning up Albany and fixing our broken political system. Public financing is essential to changing Albany’s pay-to-play legal bribery culture and giving more power to the voters. As today’s Siena poll showed, nearly 2/3 of New Yorkers in every part of the state support real reforms that limit the size of fat-cat contributions and replacing them with small donations that are matched by public money. We applaud the Governor’s budget proposal as a major step in the right direction and urge the Legislature to follow his lead by passing it into law.”

UPDATE1: Common Cause released a statement as well in support of the move.

“Two weeks ago at the State of the State, Governor Cuomo said that ‘when government has the public trust it has the ability to do good work,’and today he’s taken a major step toward that goal, by including public financing of elections in the state budget.”

“There is no excuse for continued failure in the face of such obvious malfeasance, and even more obvious solutions. Common Cause/NY is committed to working with the Governor and legislative leaders to stem the tide of corruption, and reduce the corrosive influence of money in politics.”

Cuomo has supported public financing of political campaigns in the past, but has up until this point not included such a system in the state budget proposal – a process that the governor’s office has broad power over. It should be noted, however, that according to today’s Times, Cuomo does not plan to put any money into the budget to fund a publicly financed system, which complicates matters somewhat.

He will, apparently, propose adding $4 million to create an independent oversight entity at the state Board of Elections that will beef up the currently all-but nonexistent enforcement of the existing election laws.

Senate Republicans have opposed publicly financed campaigns, citing the cost at $200 million annually. Cuomo and pro-public financing advocates have said the figure is half that amount.

The majority of the members on Moreland Commission on Public Corruption recommended in a December report that the state create a public financing system based on New York City, with seven members dissenting.

The city’s system provides a 6-to-1 match for donations up to $175.

As Liz noted in her Capital New York column, Cuomo’s support for public financing is a key policy item for the liberal base of the Democratic Party.

A concerted lobbying effort last year pushed for publicly financed campaigns, with advocates ranging from Jonathan Soros to Democratic House candidate Sean Eldridge contributing money for the effort.

UPDATE3: WFP National Director Dan Cantor issued the following statement:

Governor Cuomo has taken a bold step towards cleaning up corruption in Albany by putting public financing of elections in the budget. Across New York State, from Buffalo to the Bronx, voters support small donor matching funds and limiting the size of big campaign contributions as a way to fix our broken political system.”

“Public financing of elections is critical to making New York a national leader on the question of whether it’s ‘one dollar, one vote’ or ‘one person one vote.’ We commend the Governor’s budget proposal as a critical step in the right direction and are heartened by Speaker Silver and the Assembly’s support for public financing, leaving the pressure on the Senate GOP to follow their lead and help pass public financing into law.”

Fitzpatrick: Ethics Reform Still A Victory Without Public Financing

Moreland Commission co-chairman and Onondaga County District Attorney William Fitzpatrick is a supporter of public financing for political campaigns, but said in a radio interview that an ethics package without a donor matching system would still be a victory.

Fitzpatrick, a Republican, told Susan Arbetter on The Capitol Pressroom Monday morning that he was still hopeful a public campaign system would be approved in the Senate, which is controlled by a coalition of Republicans and four independent Democrats.

Senate Republicans oppose the public financing measures that have been approved in the Democratic-led Assembly over the years.

“I’m reading that there’s only one vote short in the Senate,” Fitzpatrick said. “That doesn’t sound like dead on arrival to me.”

It’s actually a bit more complex than that, as Gannett pointed out last week: Not all Democrats in the mainline conference are on board, and several lawmakers have an uncertain future in the chamber come 2014.

While a majority of Moreland Commission members backed a recommendation in a preliminary report to create a public financing system, seven members joined a dissent that argued against the proposal, which is backed by labor groups and good-government advocates.

Still, Fitzpatrick insisted the commission would be a success if the remaining recommendations — better enforcement of campaign finance laws, stronger anti-bribery penalties among them — were approved.

“If everything we recommended is put in place except for public financing, I would consider that a tremendous victory,” he said.

Fitzpatrick confirmed that the commission had reviewed the campaign finances of Gov. Andrew Cuomo and Attorney General Eric Schneiderman, while adding Onondaga County Executive Joanie Mahoney’s comments on Capital Tonight that it would be a “mockery” to probe Cuomo and Schneiderman “counterproductive.”

Like Cuomo, Fitzpatrick said the commissions focus is meant to be on the Legislature, given the spate of corruption arrests in the last year.

“I’m not going to issue subpoenas because of what Eliot Spitzer did,” Fitzpatrick said. “I’m not going to issue a subpoena to placate a reporter.”

However, when asked about a Jim Odato column in Monday’s Times Union that found corporate sponsors — some with business before the state — were being sought to underwrite state agencies’ events, Fitzpatrick said that raised questions.

“Somebody is tone-deaf in Albany to have done this,” he said.

The Enemies Within

(A shortened version of this morning’s Memo – with video).

We already knew there were divisions among the 25 Moreland Commission members, thanks to the seven-member dissent on public campaign financing included in the preliminary report released Monday.

But that disagreement morphed into open warfare yesterday as Commission Co-Chair Kathleen Rice lashed out at one of the dissenters, Onondaga County Executive Joanie Mahoney, all but accusing her of lying when it comes to the commission’s ability – and willingness – to include anyone other than state legislators in its public corruption probe.

Rice’s comments came during a Capital Tonight interview last night, and were in response to Mahoney’s appearance on the show Monday evening, in which the Republican Onondaga County executive said it would be a “mockery” for the commission to “pretend” it would investigate the governor.

To do so, Mahoney said, would be a conflict of interest, since the commission was appointed by Cuomo and then deputized by state Attorney General Eric Schneiderman. (She did not address the fact that a Moreland Commission, by definition, is supposed to restrict its efforts to executive agencies).

Mahoney also said there had been “no conversations” within the commission to look at anything other than legislative corruption.

With very little prompting on my part last night, Rice, who is also a Democrat and the district attorney of Nassau County, insisted that Mahoney “doesn’t speak for the commission,” adding: “I think some of the things she said were just out-and-out not true.”

“In fact, the governor and the attorney general have made statements in direct contradiction to what commissioner Mahoney said about the ability to look into the governor,” Rice continued.

“The governor made it very clear and the commission has made it very clear that this commission’s mission is to follow the money where ever it goes without fear or favor.”

Rice also played down the dissent over public campaign financing, saying: “We had more than a majority of people saying (that) was the way to go.”

I asked her about reports that the Cuomo administration had actually encouraged this dissent, in hopes of providing cover for the governor if he fails to get a deal with the Senate Republicans, who have dug in their heels against the idea of using taxpayer dollars to fuel the ambitions of aspiring elected officials.

(Cuomo actually fueled that belied himself yesterday by initially saying leaders should focus on getting a deal on the reform measures where agreement already exists, and then walking that back by issuing – through a spokeswoman – a statement reiterating his strong support for creation of a publicly financed system).

Rice stuck to the administration’s talking points, saying it’s “very clear” where the governor stands on public financing. “We felt it was important for the dissent to be able to be heard,” she said, “and they were.”

You can watch my entire interview with Rice here.

Watch Excerpt Here (No Login Required)
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Will Cuomo Put State Money Where His Mouth Is? (Updated)

Since last night’s release of the Moreland Commission report, Gov. Andrew Cuomo has played his cards relatively close to the vest when it comes to creation of a public campaign finance system.

Keep in mind that Cuomo has been expressing support for using taxpayer dollars to fund campaigns for years now – at least since he was running for governor in 2010 – but has not yet expended significant political capital to actually achieve that goal the way he did with similarly controversial issues like same-sex marriage (a supposed non-starter with the Senate Republicans) and Tier 6 (particularly unpopular with Democrats in both houses).

Given Cuomo’s supposed enthusiasm for a publicly funded system, you might think he would have embraced the commission’s report. But instead, he issued the following relatively innocuous statement following the report’s release last night:

“I want to thank the Commission members and staff for their dedication and public service, and look forward to reviewing the Commission’s findings in detail and continuing to work with the Legislature to enact systemic reform.”

And then this morning, (as Nick reports below), Cuomo suggested that the dissent on public campaign financing might be too much to overcome, vis-a-vis the Senate Republicans, and should not hold up a deal on areas of reform on which both houses of the Legislature and the governor can agree.

This sounds a lot like Cuomo’s explanation during the last legislative session on why he wasn’t able to land a deal on all 10 points of his Women’s Equality Agenda – including the abortion rights plank, which the Senate Republicans staunchly refused to allow onto the floor for a vote.

So far, campaign finance reform advocates are trying to remain calm and optimistic. It’s very early in the game, after all, and the 2014 session hasn’t even officially started yet.

But several advocates I spoke with today said the true test of whether Cuomo is serious about creating a public campaign finance system is if he puts funding for said system in his 2014-15 executive budget proposal (assuming, that is, no deal is reached prior to the start of the 2014 session, which, given the Senate GOP’s opposition to the idea, seems highly unlikely at this point).

Two sources close to the campaign finance debate said Cuomo has suggested to advocates that it would somehow be illegal for him to include revenue for a taxpayer-funded system in the budget. But state Attorney General Eric Schneiderman’s office disagrees.

“Article VII of the New York State Constitution grants the Governor broad authority to include substantive legislation in his proposed executive budget,” Schneiderman spokesman Matt Mittenthal said. “The governor’s authority was challenged by the Legislature in Pataki v. Assembly, and the challenge was rejected by the Court of Appeals.”

Unshackle Upstate recently argued in an anti-public campaign finance system white paper that using public funds for a political purpose would be unconstitutional. But advocates noted that the New York City system has existed for decades, and hasn’t never been challenged on constitutional grounds.

UPDATE: Mittenthal sent the following statement on the constitutionality question:

“No law prevents the legislature from giving public money to private individuals when doing so promotes a clear public purpose. There is no doubt that a small donor matching program – as part of a public financing law – would do just that.”

A number of funding mechanisms for a publicly financed system have been floated, including everything from using cash captured by closing corporate loopholes (a lefty favorite) to casino licensing fees (an idea put forth by Democratic activist/gadfly Bill Samuels and promptly shot down by Cuomo).

I emailed Cuomo’s press office to ask whether the governor might put money for a public campaign finance system in the budget, but have yet to receive a response.

Common Cause: Moreland Dissenters Misinterpreting IE Findings

It’s always nice to be cited, but the good-government group Common Cause isn’t happy the public financing dissenters in the Moreland Commission’s preliminary report used one of its studies to argue against a small-dollar matching system.

Common Cause released a report last month showing the rise of independent expenditure groups in the 2013 elections, primarily in New York City.

The seven commission members who broke with the 25-member panel on the public financing recommendation pointed to that Common Cause report as a sign that public financing of political campaigns can be easily undermined thanks to IE groups.

Full stop, says Common Cause’s Susan Lerner.

“Unfortunately it seems they did not read to the end of the report,” she said in a statement on Tuesday. “As the report concludes, public financing is in fact the only factor which mitigated the impact of millions in independent expenditures which flowed to various council races. Without public financing, we would not have Council Member Carlos Menchaca, who won election despite the fact the Jobs for NY outspent him and his opponent. Without public financing we would not see Council Members with the courage to claim their independence despite receiving support from the REBNY backed PAC. And without public financing we would not have a minority majority Council representing the great diversity of New York City.”

Still, Lerner says the commission got the broader picture right when it comes to the prevalence of IE spending.

“But the Commission is correct to highlight the fact that independent expenditure spending has become rampant, and that candidates who can’t keep up, risk falling behind,” she said. “That’s exactly why we need public financing of elections at the state level. So that candidates can compete by prioritizing their constituents over special interests.”

The Fate Of Public Financing In The Senate

The passage of a public financing system in the state Senate has not fared well in the most recent legislative sessions, but good-government advocates hope that with the 101-page preliminary report from the Moreland Commission on Public Corruption, the needle will move in their direction.

The Democratic-led Assembly has approved public financing measures in the past, including bills originating in that chamber creating a small-donor matching system similar to New York City (the bills have not included a ban on housekeeping accounts, a back-door way of raising unlimited cash).

And despite a multi-million dollar effort to boost public financing — most notably in a tag-team effort from House candidate Sean Eldridge and Jonathan Soros — the effort has largely failed.

Senate Minority Leader Andrea Stewart-Cousins in a statement noted the conference has backed many of the recommendations in the past, which includes public financing and a tightening of ethics enforcement.

“This preliminary report details common-sense steps to clean up Albany. As evidenced by our own package of reforms introduced last year, Senate Democratic Conference members have been staunch advocates for many of these recommendations. We look forward to helping restore the public’s trust in government.”

Senate Republicans, not surprisingly, seized on the seven-person dissent in the commission’s preliminary report that gave a pointed rebuttal to the public financing recommendation.

In a statement, Senate GOP spokesman Scott Reif indicated the conference would be open to discussing some of the ethics overhaul ideas (keep in mind, the Republican conference alongside the Assembly Democrats and Senate IDC filed a legal challenge to the legitimacy of the commission itself to subpoena outside business interests and clients).

But public financing, again, will be a non-starter for the Republicans, who share power with the four-member IDC.

“We will review the recommendations released by the Moreland Commission late last night, and expect that these proposals will be a part of our discussions during the next legislative session. One interesting aspect of the report is that it includes a bipartisan dissent on taxpayer-funded political campaigns, which have been estimated to cost upwards of $200 million. Senate Republicans continue to oppose the creation of a statewide campaign finance system funded by taxpayers, which would needlessly divert resources away from our schools, infrastructure and initiatives to provide tax relief for hardworking families.”

The Independent Democratic Conference released an omnibus package earlier this year that included a public financing piece with an end to housekeeping accounts (the IDC does not have a soft money account, but does control a PAC).

Moreland’s Mahoney: Would Be ‘A Mockery’ To Investigate Gov

ICYMI: One of the 25 Moreland Commission members, Onondaga County Executive Joanie Mahoney, said during a CapTon interview last night that the corruption-busting body is unlikely to train its sites on the executive branch, despite multiple calls (largely from legislators) to do so.

“I think we’re making a mockery of this whole process if we try to pretend that a group of us that’s been appointed by the attorney general and the governor is investigating the attorney general or the governor,” Mahoney told me.

“So, I never subscribed to that notion to start with, and there has been no conversations inside the Moreland Commission to do anything other than address public corruption and these instances that are outlined in this report, which are all legislative.”

Mahoney, a Republican who crossed party lines in 2010 to endorse Cuomo’s first gubernatorial run, went so far as to say it would be a conflict of interest for the commission to investigate the executive branch.

She said it would only be appropriate for an “independent” commission – in other words, one whose members are not appointed by the governor – to undertake that sort of probe.

Cuomo, as you’ll recall, stressed the Moreland Commission’s independence when he first announced its creation over the summer, saying its members would be free to consider any aspect of the state’s loophole-riddled campaign system they saw fit – including his own massive fund-raising operation.

“It’s an independent commission that is free to investigate whatever they feel needs to be investigated on the merits,” the governor said at the time.

But then came reports of the Cuomo administration’s micromanagement of the commission, including directing some subpoenas and blocking others from being issued.

Amid those reports, AG Eric Schneiderman, whose office was used by Cuomo to beef up the commission’s investigatory powers, reiterated that the body could not succeed unless it was truly independent, saying:

“It has to be to follow the money wherever it goes. I am opposed to anything that stands in the way of those goals.”

Mahoney also spoke about the tremendous pressure – from both inside and outside the commission – to include public campaign financing among the reform recommendations in the report released yesterday, though she shied away from saying the administration itself pushed for that outcome.

Mahoney was one of seven commissioners to sign onto a dissenting opinion about public financing, and told me last night she remains unconvinced that using taxpayer dollars – especially at a time when so many upstate cities are facing financial peril – to fund political campaigns is an idea that will sell to New York voters.

You can see my entire interview with Mahoney (which was conducted on the phone, as she was traveling back to Central New York from White Plains) here.

Watch Excerpt Here
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Common Cause Charts The Explosion Of IE Spending

Labor groups and the real-estate industry spent heavily on independent expenditure campaigns in 2013, a symptom Common Cause says was facilitated by the Citizens United decision of 2010.

A report released by the good-government group on Tuesday found 47 different independent expenditure or “IE” committees were created in 2013, spending nearly $15.4 million to influence city-wide races as well as council contests.

Organized labor spent the lion’s share, $8.2 million, while business-related interests poured in $5.7 million.

Groups like 1199 SEIU, DC37, 32BJ SEIU, and the New York State Nurses, spent $297,000 on behalf of Letitia James in the Democratic run-off for Public Advocate.

“If not for their investment, James would have been outspent by Daniel Squadron by roughly $150,000,” Common Cause found.

The muscular IE spending is expected to continue into future elections.

“The data reveal that independent expenditures have clearly had an influence in the New York City elections, and will likely increase in future cycles,” Common Cause found. “The onslaught of IE spending was fortunately somewhat offset by the City’s matching fund system, which empowers voters to make their voice heard over special interest spending. However, independent spenders often obscure their agenda through misleading names and content irrelevant to their true agenda. As such, voters deserve to know upfront who is funding the flood of advertising they receive.”

The group is caller for great disclosure of IE campaign’s spending and their donors, which would scale back their ability to generate cash as well as their influence.