Monday, March 10, 2014

Proposed NYS public matching dollars at risk of being gamed, just like with "model" NYC campaign finance system

  • During the same election cycle, campaign finance loopholes allowed Melissa Mark-Viverito to accept, on one hand, New York City public matching dollars hinged on a spending cap through a city campaign finance account with indifferent oversight from the New York City Campaign Finance Board for a total election cycle spend of $284,000 ;
  • Followed by a parallel state campaign account, that allowed Councilmember Mark-Viverito to raise and spend more campaign money subject to no cap and with no oversight by the New York State Board of Elections for her speakership campaign for an additional spend of $72,000 ; and
  • And book-ended by another city Campaign Finance Board account that allowed Councilmember Mark-Viverito to raise $30,000 from real estate developers and other supporters for her transition/inauguration celebration.
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The Moreland Commission, a state panel formed by Gov. Andrew Cuomo and delegated with the charge to investigate public corruption, is recommending nominal reforms to the campaign finance system for New York State elected officials.

"New York needs comprehensive campaign finance reform. The Commission recommends, among other things, lowering contribution limits and closing campaign finance loopholes, empowering regular New Yorkers with a small donor matching system of public financing, limiting the use of campaign funds, and creating tough new disclosure rules for shadowy outside spending groups," the Commission is recommending on its Web site.

But the general Moreland Commission recommendations will do nothing to address how municipal candidates can open several campaign accounts at city and state levels to exceed spending caps imposed on the city level. Because city campaign regulators are not accountable to state Board of Elections and vice versa, candidates for public office can exploit weaknesses of laws relating to lobbying, conflicts of interest, and public ethics, as was seen in the case of the $386,000 spent by New York City Council Speaker Melissa Mark-Viverito during one single election cycle when the private spending cap imposed by the New York City Campaign Finance Board was $168,000 for her official post at the City Council -- a limit more than once over exceeded.

The "compliance apathy" noted by Moreland Commission co-chair Kathleen Rice in the panel's report calls into question how city and state campaign finance regulators will police spending caps, public matching dollars, and rules violations when some candidates can jurisdiction-shop for the loopholes between city and state regulations. Extending the New York City model of campaign finance to the rest of New York State will do nothing to curb the undue influence of large-money donations and lobbyists in our elections if there is no robust regulatory compliance review. What effect does a spending cap have on the campaign finance account of a candidate in one jurisdiction, if the candidate can skirt that spending cap by opening a campaign finance account in another jurisdiction ?

Campaign finance regulators with the state's Board of Elections should have been able to determine that Councilmember Mark-Viverito's intent in opening a state campaign finance account was to skirt the spending cap imposed by the city's Campaign Finance Board. But the Board of Elections did nothing to stop the exploitation of the loophole that did not subject state Board of Elections account openings to spending caps governing an elected official's public post. In this past election cycle, Councilmember Mark-Viverito was running for reëlection. Campaign finance laws help candidates run for public office ; these laws do not promise that candidates, once elected, can keep opening further campaign finance accounts to fund further political campaigns, either for leadership posts, to lobby other publicly-elected officials, or for other purposes -- during the same election cycle. If candidates can open a series of parallel campaign finance accounts across various jurisdictions, what good is it to impose spending caps ?

The dangerous precedent set by Melissa Mark-Viverito : An elected official can hire outside lobbyists to "lobby" other elected officials.

By receiving lobbying services from The Advance Group, Pitta Bishop Del Giorno & Giblin LLC, and others, Councilmember Mark-Viverito effectively outsourced official acts, which she needed to personally undertake, to seek the speakership post. This means that Councilmember Mark-Viverito very visibly retained, as an elected official, teams of lobbyists, either paid or unpaid, to lobby other elected officials with dangerous consequences to transparency and democracy. Cloaked behind the imperfections of the same campaign finance regulations which allowed Councilmember Mark-Viverito to open three campaign finance accounts during the same election cycle, these lobbyists skirted the reach of the do-nothing Campaign Finance Board ; took advantage of the fact that only dollar amounts associated with their activities, not their activities themselves, would be disclosable to the public ; took advantage that some payments, if any, for post-Election Day work could be had by opening a Board of Elections campaign finance account in Albany ; may have enjoyed the opportunity made available by the further loophole that allows subcontractor operatives to skirt disclosure requirements ; and took advantage of the fact that the dueling city and state regulators would not have exclusive authority over the provision of free campaign services. The combined effect of this imperfect system gave unfair advantages to each of (i) The Advance Group, other lobbyists, and the clients of those lobbyists over other lobbying firms and (ii) Councilmember Mark-Viverito over other candidates for the City Council speakership. When elected officials are allowed to hire lobbyists to do the public's business, all the work that those lobbyists do constitutes a subversion of the government's work.

Indeed, it was believed that this was the first reported instance when a public official intentionally opened at least three campaign finance accounts during one election cycle for the same elected office, but the public official, flush with about $400,000 in cash, still needed, for economic or other reasons, to receive free lobbying services. At each step of the way, Councilmember Mark-Viverito's "need" to raise money opened new opportunities for wealthy campaign contributors to have a role in and to influence Councilmember Mark-Viverito's public activities. It was reported by Crains Insider that Jon Del Giorno, a lobbyist with Pitta Bishop, on Councimember Mark-Viverito's behalf, was "involved in setting up the structure of an 'appointments committee' charged with council staffing." Another lobbyist, Alison Hirsch, also worked to select the Councilmember Mark-Viverito as Council speaker, but Ms. Hirsch's work was reported to have been being provided on behalf of the Progressive Caucus of New York City Councilmembers. It's not known who was paying for the post-Election Day functions of Pitta Bishop or Ms. Hirsch in relation to Councilmember Mark-Viverito's "transition." Were members of the Progressive Caucus expected to file fundraising and expense disclosure reports to campaign finance regulators, too, for the outside lobbying services they directed ? If so, to which campaign finance regulators, at city or state levels, or both, were the Progressive Caucus supposed to report ? Moreover, further reporting by Crains Insider has revealed that, that separate from campaign finance regulation loopholes, another exception that lobbyists exploit are City Clerk Office's disclosure rules that specifically do not require the reporting of lobbying for leadership posts. These serious questions and loopholes come on top of the fact that neither The Advance Group nor Ms. Hirsch were not paid through Councilmember Mark-Viverito's state Board of Elections campaign account for their roles in Councilmember Mark-Viverito's successful speakership campaign. When lobbyists are not paid for work they provide to elected officials, the provision of these free lobbying services are said to violate city ethics regulations. "The city’s conflict of interest rules bar public officials from accepting freebies from lobbyists, and they prohibit lobbyists from dispensing same to public officials," wrote the Editorial Page editors of The New York Daily News.

Councilmember Mark-Viverito accepted public matching dollars from the Campaign Finance Board in exchange for promising to keep her political expenditures under a cap during the 2013 election cycle. But she opened a state campaign finance account to skirt around the cap under the loopholes of state regulations, opening the door for others to do the same.

Campaign finance regulations aim to each of expand disclosure and transparency, enforce spending caps to limit undue influence of special interests, and to add elements of public financing, like matching public dollars, to level the playing field. Campaign finance regulators are supposed to monitor electioneering to maintain voters' faith in the acts of elected officials. Regulators maintain the integrity of fair elections by curtailing the situations whereby contributors of large campaign donations or free lobbying services give some candidates unfair advantages over other candidates. It's supposed to be a level playing field.

Since Councilmember Mark-Viverito raised nearly $400,000 through three separate campaign accounts, she signaled to other Councilmembers that big business interests and other wealthy constituents had voted with their dollars to give her a special dominance over other elected officials. One consequence of this unfair advantage is that voters of other Councilmembers, seemingly equal to Councilmember Mark-Viverito's own voters, have had their voices and roles diminished before the City Council compared to the contributors to Councilmember Mark-Viverito's three campaign finance accounts. This opens the door to lobbyists and insiders, like The Advance Group, Pitta Bishop, Mr. Levenson, Mr. Del Giorno, Ms. Hirsch, NY-CLASS, and other Super PAC-funded groups, to have greater access to Councilmember Mark-Viverito than mere voters, especially voters, who were not wealthy enough to be campaign contributors.

Besides determining whether there was illegality in each of the provision of unpaid lobbying services and the possible coordination of independent expenditures, city and state campaign finance regulators must deal with how "compliance apathy" and "regulatory apathy" have created Swiss cheese out of city and state campaign finance and ethics regulations. But as has been noted before, city campaign finance regulators answer to the mayor and to the Council speaker, leaving voters to conclude that city campaign finance regulators are not independent enough over the public officials whose campaign finance accounts they are charged to regulate.

The politicized Campaign Finance Board spent the first municipal election cycle under the undue influence of Citizens United by seemingly persecuting John Liu's campaign, but not focusing on the obviously corruptive role of Super PAC's.

Councilmember Mark-Viverito was allowed to keep her public matching dollars, even though she opened three campaign finance accounts through two different jurisdictions, but former Comptroller John Liu was denied public matching dollars when his mayoral campaign was beset by controversy when it was reported that his campaign may have received "straw donations," an illegal tactic that masks the true identity of donors in an attempt to game the city's public matching dollars. Mr. Liu's campaign challenged the allegations, but his campaign's ex-treasurer and a former fund-raiser were charged with wrong-doing. Martin Connor, Mr. Liu's campaign finance attorney, acknowledged issues with 35 out of more than 6,300 donations, but the Campaign Finance Board, in an unusual move, denied any matching money to Mr. Liu's mayoral campaign in a move that did not seem proportional to the problem, if it was, indeed, isolated to only a small percentage of donations at the same time when, for example, Crains Insider was reporting serious questions with the finances of some Super PAC's operating during the same election cycle.

The impact of the Campaign Finance Board's controversial decision essentially put an end to Mr. Liu's mayoral campaign. Because he was denied matching money, totaling approximately $3.5 million, he was put in a "severe financial disadvantage," The New York Times reported, "because he will now have significantly less money to buy television advertising." To the last, Mr. Liu challenged the decision by city campaign finance regulators, because he said that his campaign committed no wrong-doing, and prosecutors never had proof of wrong-doing against he himself. "There’s no question that this weakens my campaign. For the last couple of years, I have taken body blow after body blow," Mr. Liu said after the Campaign Finance Board's decision. Many astute political observers never understood why The New York Times metropolitan reporters seemed obsessed with taking down Mr. Liu's campaign, since it was The New York Times, which first reported these allegations in 2011 after having sent reporters to stalk Mr. Liu's donors, and The New York Times never seemed to let up, in spite of the questions being isolated to such a small proportion of donations. Less than three weeks after the Campaign Finance Board dealt its lethal blow to Mr. Liu's mayoral campaign, the editors of The New York Times endorsed Mr. Liu's rival, former City Council Speaker Christine Quinn in the Democratic mayoral primary. Speaker Quinn, who had a role in approving the board members of the Campaign Finance Board, was said to have a close working relationship with the editors of The New York Times, some activists said.

2014-03-08 Moreland Commission - Follow-Up E-Mail Re Loopholes

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