Issue Brief on Public Campaign Finance

Issue Brief on Public Campaign Finance

The question before progressive advocates of public campaign financing in New York State is whether we push for full public campaign finance on the Clean Money model of equal and sufficient funding grants for all qualified candidates, or whether we settle for partial public campaign financing on the Matching Funds model used for presidential primaries since 1976 and for New York City local elections since 1989. 

Green Party of New York State Issue Brief, Revised March 29, 2015

Prepared by Howie Hawkins, hhawkins@igc.o

Public Campaign Finance 

Full or Partial? 

Public, Not Private? Or Public Supplement to Private Financing?

The question before progressive advocates of public campaign financing in New York State is whether we push for full public campaign finance on the Clean Money model of equal and sufficient funding grants for all qualified candidates, or whether we settle for partial public campaign financing on the Matching Funds model used for presidential primaries since 1976 and for New York City local elections since 1989. 

A coalition of high-donor capitalists, elected Democrats, and liberal pro-Democratic organizations such as Citizen Action and MoveOn.org are behind the Matching Funds bill. See this Nation article from April 2012, http://www.thenation.com/blog/167529/all-eyes-new-york-unlikely-coalition-pushes-cuomo-make-good-public-finance#, for an account of this grouping and their objectives. The same forces -- now including Soros fortune heir, Jonathan Soros, and President Obama's tax-exempt advocacy organization, Organizing for Action – became even more focused on New York State in 2013 (see http://www.nytimes.com/2013/04/01/nyregion/ads-to-urge-change-in-ny-state-campaign-financing.html). There is little evidence in 2015, however, of a similar push. The website of Fair Elections for New York, which was the coalition funded by the high-donor capitalists, has not been updated in nearly a year.

The proposed 2015 Fair Elections Act for New York State is a partial public campaign financing bill based on the Matching Funds model. It provides for a 6 to 1 match of public funds for qualifying individual contributions of up $250 per donor, with maximum amounts of total public matching funds for each type of race: $150,000 for Assembly, $350,000 for State Senator, $12 million for Governor.  

The Senate bill is: 

S3502-2015, "Fair Elections Act," http://open.nysenate.gov/legislation/bill/S3502-2015, sponsored by Minority Leader Andrea Steward-Cousins.

No companion Assembly bill had been introduced as of March 28, 2015. The 2013-2014 Assembly adopted a bill, which is virtually identical to the 2015 Senate bill, in May 2013:

A4980-2013 – http://open.nysenate.gov/legislation/bill/A4980-2013, sponsored by Assembly Speaker Sheldon Silver

These bills are modeled after the New York City system in place since 1989. Governor Cuomo has expressed support for Matching Funds system at the state level modeled on the New York City system and introduced a program bill for such a system in 2013.

 

Greens have four major problems with this Matching Funds bill.

First, the Matching Funds are only supplementary to unlimited private funding. While the bill does limit individual and PAC donations to $2000 each, it does not limit the overall total of private funding. It does not provide full Clean Money public campaign financing in place of private funding to all ballot qualified candidates who opt for public financing (an option which must be voluntary due to the 1976 US Supreme Court decision in Buckley v. Valeo). It is sad to see progressive organizations like Citizen Action that once supported a Clean Money system of full public campaign finance switch to this Matching Funds proposal that will further entrench the status quo of private campaign finance dominance. At least the New York City matching funds system on which it is supposedly modeled sets a limit on private funding for those who opt into the matching funds system.

Second, the bill also allows for large backdoor funding for Matching Funds candidates by wealthy individuals and corporate PACs. This bill does not address the $102,300 maximum contribution (in 2012) that individuals may make to state and county party committees, which in turn may send additional contributions to the publicly funded candidates in addition to matching funds. These maximum additional contributions by state committees to matching funds qualified candidates range from $2.5 million for gubernatorial candidates to $100,00 for State Senate candidates and $50,000 for Assembly candidates. This gives undue advantage to candidates of the major parties which are funded primarily by the wealthy.

Third, the eligibility requirements that are too high for all but very strong and well-organized independent third party candidates to qualify.

State Assembly: $10,000 from at least 100 contributions of $250 or less is required.

State Senate: $20,000 from at least 200 contributors of $250 or less.

Governor: $650,000 from at least 6500 contributors of $250 or less is required.

These qualifying thresholds make it in practice a public campaign financing system for major party candidates only, especially incumbents who have many organizational advantages to begin with.

Proponents of the state Fair Election Act say it is modeled after the New York City matching funds model. But the state bill makes it more than twice as hard to get funding for state assembly and senate races than a NYC council races:

For NYC Council districts with populations of 157,025, it takes $5,000 to qualify.

For State Assembly districts with populations of 129,089 it takes $10,000 to qualify.

For State Senate districts with populations of 307,356 it takes $20,000 to qualify.

A major party candidate for state Comptroller, Republican Bob Antonacci, tried and failed to qualify for matching funds under one-year pilot program adopted for the 2014 election for state Comptroller candidates. To qualify, Antonacci was required to raise at least $200,000 with at least 2000 contributions of between $10 and $175. He raised about $225,000 in total, but not all of it was qualified for matching funds.

Fourth, the matching funds model of public funding can multiply the differences between candidates in public funding. Suppose one Assembly candidate raises just the $10,000 to qualify and then gets $60,000 more in matching funds for a total of $70,000. Suppose another Assembly candidate raises $20,000 in qualified contributions and gets $120,000 more in matching funds for a total of $140,000. This matching funds system would changes the funding in this race from a difference of $10,000 to a difference of $70,000 between the two candidates' funding.

In practice in New York City, and if projected on to the New York State legislative candidate fundraising in 2010 (see the attachments in this paper on the matching funds model in NYS: http://www.cfinst.org/Press/PReleases/12-1203/CFI_Study_on_Public_Financing_in_New_York_State.aspx), both major party candidates in most of these races are likely to max out on matching funds. Their funding differences will be in the additional private funding they raise.

But for an upstart party like the Green Party, its candidates will be hard pressed to barely cross the qualification threshold. In these cases, the difference between the major party candidates' matching funds and the Green Party candidates' matching funds will multiply the inequities in public funding up to six fold.

Moreover, the Green Party and its candidates refuse contributions from corporate PACs or any individual or entity doing business with the government. The corporate parties and their candidates seek out this corporate money, which means they will still have far more funding under the provisions of the Matching Funds bill that was supposed to end, or at least reduce, the influence of wealth special interests.

 

The Green Party supports a Clean Money system of

Full Public Campaign Financing

 The Green Party calls for full and equal public campaign funding for all qualified candidates on the full public campaign financing Clean Elections model, not the partial public campaign financing Matching Funds model. The Clean Elections model provides for equal allotments of public funding for all candidates who qualify.

This Clean Elections model has been adopted by Arizona and Maine. In Arizona (in 2012), it takes a state house candidate 220 $5 contributions ($1100) to qualify for the full public campaign funding allotment. In Maine (in 2012), it takes a state house candidate 60 $5 contributions ($300) to qualify for full public campaign funding.

There has been no Clean Elections bill introduced in the 2015-2016 session of the New York State legislature as of March 28, 2015, but there has been a bill for many years called The New York State Clean Election Campaign Finance Reform Act. The most recent was in the 2013-2014 session:

In the Senate, S4501-2013, http://open.nysenate.gov/legislation/bill/S4501-2013, sponsored by Senator Avella.

In the Assembly, A4116-2013, http://open.nysenate.gov/legislation/bill/A4116-2013, sponsored by Assembly Member Ortiz.

The Green Party supports this type of full public campaign financing bill for six reasons:

First, the Clean Money bill eliminates private campaign funding for those who opt into this voluntary system. The Matching Funds bill does not eliminate private campaign funding but just adds supplementary public funds to private funds.

Second,the Clean Money bill has reasonable qualifying requirements that require far lower amounts of money be raised from more contributors than in the Matching Funds partial public funding in the proposed Fair Elections Act:

State Assembly: 400 contributions of $5 to $250

State Senate: 1000 contributions of $5 to $250

Governor: 20,000 contributions of $5 to $250

Third, the full public financing grants in the Clean Money bill are equal for all qualifying candidates and sufficient to run an effective campaign:

For primaries: $2 per voter enrolled voter in the party of the candidate in the district.

For general elections:

State Assembly: $100,000

State Senate: $300,000

Governor: $7.5 million

Fourth, political parties may receive public funding, reducing "pay to play" politics. The Clean Money bill provides any political party that agrees not to accept contributions of over $5,000 a year from any entity with a 2 to 1 match on all contributions from registered New York voters of up to $250 per calendar year and up to a total of $2.5 million for the whole state party in any calendar year.

Fifth, office holders are limited in their campaign fundraising and spending in non election years, reducing "pay to play" lobbying influence and personal misuse of campaign funds by corrupt politicians. Office holders who participate in the Clean Money system are limited in their non-election year campaign account fundraising and expenditures:

State Assembly: $10,000 in both receipts and expenditures

State Senate: $25,000 in both receipts and expenditures

Governor: $100,000 in both receipts and expenditures

Sixth, the party contributions to gubernatorial candidates are much lower in the Clean Money bill, reducing the influence of wealthy individuals who can give over $100,000 to party committees and unlimited amounts the party housekeeping committees. While there is little difference in party contributions between the full and partial public funding bills for State Assembly ($40,000 in Clean Money, $50,000 in Matching Funds) and no difference for State Senate ($100,000 in both), there is a substantial difference for governor ($1 million in Clean Money, $2.5 million in Matching Funds). 

The 2013-2014 Clean Elections bill needs to be updated and improved. But it provides a much better framework for Fair Elections than the Silver/Cuomo Matching Funds model.

Why can't New York State adopt full and equal public funding for all qualified candidates on the Clean Elections model? Isn't New York more progressive than Arizona?

 

US Supreme Court DID NOT Strike Down the Clean Money Model

You will often hear proponents of the matching funds model say the US Supreme Court ruled in McComish v. Bennett (which was consoidated with Freedom Club PAC v. Bennett) (2011) that the voluntary Clean Money public financing system is unconstitutional. That assertion is not true. 

The Supreme's disqualified the "fair fight" or “trigger” supplementary grants that could top off the basic public funding grant when a privately funded candidate's spending reached a certain threshold. As the New York Times reported on the June 2011 decision: 

"The decision Monday, the Roberts court’s first direct look at public campaign financing, concerned only systems that use matching funds, as opposed to lump-sum grants…. 'We do not today call into question the wisdom of public financing as a means of funding political candidacy,' Chief Justice Roberts wrote. 'That is not our business.'" (http://www.nytimes.com/2011/06/28/us/politics/28campaign.html)

Clean Money has not been ruled unconstitutional any more than a voluntary Matching Funds public financing system has. The NYC matching funds and presidential primary matching funds and presidential general election grants continue without any changes.

What the court decisions have ruled out are the "fair fight" or “trigger” public financing grants that top-up initial grants with a further public financing grant when well-financed privately-funded candidates pass a certain threshold.

These court decisions did not stop the voluntary Clean Money public financing equal grants systems in AZ, ME, or CT, just the second additional grants when privately financed candidates spend very high amounts. Here is a Public Citizen memo that states this conclusion: http://www.citizen.org/documents/short-history-of-public-financing-of-elections.pdf.

In response to the 2011 Supreme Court decision on AZ's Clean Money system in McComish v Bennett, in 2012 the CT legislature increased their basic public funding grant to incorporate the "fair fight" additional grant into the original grant. The Democratic Governor Malloy used the Clean Money grant plus a fair fight additional grant beat a well-financed privately funded Republican in a close race in 2010. In 2014, Malloy won with a larger single grant participating in the Clean Money system again, as did his Republican opponent. 

 

Connecticut Clean Money System Discriminates Against Third Parties

CT may have a clean money system, but it is no model for NY in one important respect: it discriminates against 3rd party candidates. Discrimination is not really the word for it. It's as exclusionary as a Jim Crow grandfather clause.

Democrats and Republicans get equal grants for collecting a reasonable number of qualifying contributions. But Greens have the additional burden getting petition signatures greater than 20% of the last vote for the office. For NY Governor in 2014, for example, that would be a petition of at least 953,943 signatures, or 64 times the 15,000 signatures than Greens had to collect in 2010. This additional petitioning effectively excludes third parties from participation in the CT public financing system.

The Greens sued the state over this. Unfortunately, the US Appeals Court overturned the district federal court ruling against the law's bias against third party candidates and the US Supremes declined to hear the Greens' appeal. So the practical exclusion of the Greens remains in place (http://www.democracy21.org/category/inside-the-courts/green-party-v-lenge/).

The CT qualifying contributions of $5 to $100 are less onerous than the proposed NY Fair Elections Law. For State Senator, $15,000 in at least 300 contributes gets you a $37,590 primary election grant and a $91,290 general election grant. For State Representative, $5000 in at least 150 contributions gets you a $10,740 primary election grant and a $26,850 general election grant. For Governor in 2010, $250,000 in at least 2500 contributions got you a grant $1.25 million primary election grant and a $3 million general election grant in 2010.

The latter grant was raised by legislation to $6 million after the court decision on the Arizona clean money system knocked out supplementary grants when private money candidates go above a threshold. So the Democratic CT legislature voted their candidate $3 million more to compete with the GOPers' $10 million private funds, which was just enough to elect the Democrat to the governorship. 

Since the CT system was instituted in 2006, almost all the major party candidates go with the public system. The partisan balance in the legislature remains stable around a 65-35% majority for Dems in both houses. Nothing changed. The Dodd/Lieberman CT Dems are still as pro corporate (Hartford insurance cos., Wall Street banksters in CT suburbs, etc.) as our NY Democrats. The CT public financing system is public financing for the duopoly and none for any independent challenge.

The CT public funding system was undermined further by a 2013 bill that Malloy signed that opened a party spending loophole in support of candidates who already receive public funding (http://jonathanpelto.com/2014/09/15/three-cheers-campaign-finance-corruption-connecticut/).

 

Matching Funds Did Not Change New York City Elections

The Matching Fund system in New York City has not diversified the political representation or ended political corruption in New York City. Why should it be a model for New York State?

The Matching Funds system was supposed to get the wealthy special interest money out of city elections. The claim that it has is laughable. Everybody knows the private money is what counts in New York City elections. 

One only had to follow the news on the 2013 NYC mayoral race to see that the horse race was handicapped by how much private money each candidate was raising over and above the matching funds for which all the serious major party candidates were maxing out. Public matching funds were a $3.5 million dollar public supplement to the over $13 million they can raise in private contributions. Private contributors can give up to $4950 each (http://www.nyccfb.info/candidates/candidates/limits/2013.htm#spending).

It is therefore no surprise that the news is full of stories about the massive amounts of donations from corporate interests that do business with the city, particularly real estate interests and – not surprisingly given the fight over the soft drink sizes – from Coke and other soft drink interests.

The matching funds system has not led to the election of third party or independent candidates. Letitia James may switched to enrollment in the Working Families Party to win her council seat in 2003. when she first won a council seat. But she then switched to Democratic enrollment and has since been re-elected to council and then public advocate with the support of the Working Families Party but getting most of her votes on the Democratic line.

Nor has the matching funds system changed the composition of the city council since 1989 when the matching funds system was instituted. Today, the council is 47 Democrats and 4 Republicans, the same as it was after the first Matching Funds election in 1991 (http://en.wikipedia.org/wiki/New_York_City_Council, http://www.manhattan-institute.org/html/miarticle.htm?id=3250#.UWJPcb-Up-0). The partisan balance never got closer than 44 Democrats to 7 Republicans in the mid 1990s (http://www.nytimes.com/2009/11/30/nyregion/30repubs.html).

The claim that Matching Funds cleans up corruption falls on its face when one remembers council members Larry Seabrook, Angel Rodriquez, Dan Halloran, and Miguel Martinez as well as others particiopating in city politics, like Malcolm Smith, Jay Savoino, and Vincent Tabone, have all been convicted for public corruption since the Matching Funds system was instituted.

 

Congressional "Fair Elections Now Act" is a

Partial Public Funding Marching Funds Bill 

The NYS Fair Elections Act for partial public campaign financing on the Matching Funds model is similar to three bill introduced into Congress in 2013:

H.R. 268, Grassroots Democracy Act

H.R. 269, The Fair Elections Now Act (http://www.govtrack.us/congress/bills/113/hr269).

H.R. 270, Empowering Citizens Act

The coalition of high-rolling donors, Democratic leaders, and pro-Democratic nonprofits were declaring in 2013 that NYS campaign finance reform will set an example for the nation. Meant the next step for the coalition would be a Matching Funds system for Congressional elections like HR 269.

There used to be full public campaign finance bill's introduced into Congress on the Clean Money model. Called the Clean Money, Clean Election act, it was first introduced into the Senate by Paul Wellstone in 1997. A model piece of federal legislation for full public campaign financing that Public Campaign, which once led the national movement for full public financing used to have on its website reproduced here: http://www.thirdworldtraveler.com/Political_Reform/Model_CleanMoney_Bill_PC.html. Public Campaign now supports matching funds.

It seems the liberal Democrats decided to substitute a Matching Funds bill of supplementary public funds for privately financed candidates in place of a Clean Money bill of full public financing. It's similar to these same groups pushing for the Obamacare system of supplementary public subsidies for private health insurance in place of full public insurance through single-payer full Medicare for All.

 

The Myth of Small Contributors Being Empowered by

Matching Funds 

The proponents of the Matching Funds model are arguing that it empowers the small contributor and enhances their influence in politics. See, for example, http://www.cfinst.org/pdf/state/NYC-as-a-Model_ELJ_As-Published_March2012.pdf.

It is true that matching funds in New York City has increased the campaign giving by ordinary people. But has it increased their influence? 

That claim doesn't hold up when private financing for big corporate party candidates has been much larger than public funding from matching funds. We saw that in the New York City mayoral election in 2013.

Or look at the 2012 presidential election. Both major party candidates declined to use the primary matching funds or the general election grant because they could raise and spend over ten times more by relying on private contributions.

And most of those private donations came from the very well to do. The Obama campaigns of 2008 and 2012 promoted the myth that they were largely funded by small contributors.

In fact, contributions adding up to less than $250 supplied barely 1 percent of the Obama campaign’s funds in 2012. These small contributors were only 10 percent of all of Obama's contributors (http://www.alternet.org/news-amp-politics/revealed-why-pundits-are-wrong-about-big-money-and-2012-elections).

It would be closer to the truth to say that small contributors are being suckered into supporting the same old candidates – and the corporate special interests that finance them -- by the matching funds system.

  

Who Is Behind the Push for Matching Funds?

Q: Why would high-rolling financiers and corporate bosses bankroll a campaign that would take away their power to decide which candidates get funded?

A: Maybe they are backing the Matching Funds to head off a Clean Money full public financing system. Maybe they intend to bamboozle well-meaning progressives and small donors into contributing to the corporate-backed candidates they already fund with their big private donations and now add supplementary public funding for their chosen candidates.

What is not in doubt is that the money that is funding the supposedly grassroots push by non-profits like Citizen Action, Working Families Party, MoveOn, and others comes from the very richest and elite corporate circles.

According to a 2012 article in The Nation,”On the forefront is the New York Leadership for Accountable Government (NY LEAD), a coalition of philanthropic luminaries and high-dollar contributors. With marquee names like media-mogul Barry Diller and Facebook founder Chris Hughes as the face of the effort, this is the first credible wedge of political donors on the issue of campaign finance reform.” The author of that article, Illsye Hogue, a former MoveOn executive, would soon be doling out campaign contributions herself as Co-Director of Friends of Democracy PAC, more about which below.

The Nation also reported that the Committee on Economic Development (CED), a policy think tank and lobbyist since the 1940s for Fortune 500 companies is organizing corporate backing for the campaign (http://www.thenation.com/blog/167529/all-eyes-new-york-unlikely-coalition-pushes-cuomo-make-good-public-finance#).

In 2013, the campaign planned to spend $815,000 in the April-May period before the state legislature concluded its business to build support and lobby for a Matching Funds bill (http://www.nytimes.com/2013/04/01/nyregion/ads-to-urge-change-in-ny-state-campaign-financing.html).

Among the contributors are Jonathan Soros, a son of the billionaire currency warrior George Soros, whose Friends of Democracy PAC funded negative ads against anti campaign finance reform candidates in the 2012 congressional elections.

Another major donor is Sean Eldridge, a 26-year old “investor” who ran for Congress on 2014 in the Hudson Valley. Eldridge contributed $250,000 toward the effort. He is the husband of Facebook founder Chris Hughes, already mentioned above and who recently bought The New Republic and is now its publisher and editor in chief.

A big source of resources for this effort is the Obama campaign's post-election organization, Organizing for Action (OFA), which launched a $50 million fundraising drive with big corporate donations from the likes of Citigroup, Duke Energy, and Lockheed Martin and big donations from billionaires like George Soros.

At first, Organizing for Action said that as a 501(c)(4) organization it did not have to disclose its donors, like its counterpart “dark money” 501(c)(4) operation run by Karl Rove, Crossroads Grassroots Policy Strategies (Crossroads GPS).

After receiving much criticism for these donations and lack of disclosure, OFA said it would stop taking corporate donations and disclose its donors. However, the donor forms will not disclose the donors employer and occupation information, though it collects it on its online donation form. The Center for Public Integrity criticized this lack of disclosure on March 21, 2013, saying, “As a practical matter, a lack of employer and occupation information makes it more difficult for the public to determine the corporate, union or special interest ties donors may have” (http://www.publicintegrity.org/2013/03/21/12345/obama-nonprofit-not-disclosing-all-donor-data).

These are big donors. In February 2013, the NY Times reported that donors who gave $500,000 or more would go on to OFA's advisory board and go to quarterly meetings with Obama at the White House (http://www.nytimes.com/2013/02/23/us/politics/obamas-backers-seek-deep-pockets-to-press-agenda.html). The first meeting occurred in Washington on March 13, 2013(http://www.latimes.com/news/politics/la-pn-organizing-for-action-national-network-20130314,0,7410024.story). The next week, OFA announced that in addition to each board of trustee member being expected to raise at least $500,000 a year, donors who gave at least $1 million in two consecutive years would gain membership on the board (http://thecaucus.blogs.nytimes.com/2013/03/26/pro-obama-group-details-fund-raising-and-policy-goals/).

This top-down, elite-funded campaign is astroturf, not grassroots.

**********

Further Reading:

League of Women Voters Briefing Paper on Campaign Finance Reform in New York State:

http://www.rockinst.org/forumsandevents/audio/2012-12-03/BackgroundPaper_PreservingOurDemocracy102612.pdf

The old Citizens Action website, from when they used to support Clean Elections, was still online as late as 2013 and had some good information. It is now offline: http://cleanupelections.com.

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