Campaign finance board clamps down on Super PAC–style spending

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New York’s next elections for mayor and city council are still a year and a half away, but this month the city Campaign Finance Board passed a new set of rules that could have a big impact on how those races are run. For the first time, New York City will require groups making so-called independent expenditures to influence elections to disclose detailed information about their spending, including their sources of funds and the campaign materials – from TV ads to phone banks to website banners – they’re buying with that money.

That brings New York City into closer alignment with federal election rules, under which groups supporting a candidate generally have to say where they’re getting their cash, and how much they’re spending on ads and mailings. Until two weeks ago, New York City allowed independent expenditures on political campaigns without disclosure. Groups didn’t have to say who they got their money from, or where it was going.

“There was no requirement at all at the city level, for outside parties to disclose what they’re spending in city elections,” said Eric Friedman, spokesman for the New York City Campaign Finance Board.

To put it another way, says Laurence Laufer, former counsel for the city’s Campaign Finance Board, New York had a loophole that doesn’t exist at the federal level.

“New York City has had a campaign finance law for 25 years, and it’s always regulated candidate activity,” said Laufer. “In terms of independent expenditures, those were simply outside of the disclosure regime.”

The disclosure gap applied to any so-called independent efforts, which could be backed by labor unions, corporations, even wealthy individuals.

For example, several 2009 city council races were influenced by a $500,000 independent campaign backed by real estate companies. Only after the race did citizens get the details—too late to inform decisions at the polls.

Voters passed the new independent expenditure disclosure rules in a citywide ballot measure in 2010. After revisions and public comments, the Campaign Finance Board approved the changes on March 15.

Friedman says the rules are an improvement. “We have the disclosure so that voters can identify candidates’ supporters,” said Friedman. “And that’s information that’s going to help them determine who they vote for.”

In recent mayoral races, independent money has played only a small role. Laufer says that’s because of the unique situation of Mayor Michael Bloomberg, who has bankrolled his own campaigns. “The story of the last decade has been spending a quarter of a billion dollars in three mayoral elections—that dwarfs everything else,” said Laufer. “Right now, there doesn’t seem to be anyone on the horizon who’s going to do something similar.”

Bloomberg’s absence will likely increase the clout of the independent groups in November 2013.

In both city and federal races, there are rules forbidding coordination with a candidate’s campaign. In national elections, though, groups like Super PACs have a lot of leeway. It’s a point driven home by satirist Steven Colbert, who has been running for president.

“Nation, so much to get to tonight, but first, I am calling on the Super PAC,” Colbert told a television audience in January. “I cannot coordinate with them. I can’t communicate directly, but I can speak out directly as a citizen talking to you and I’m calling on them not to run vicious character assassination ads that impugn and borderline slander any candidate, if in any way those ads can be traced back to me.”

The Federal Election Commission hasn’t gone after Colbert for those shenanigans. But it’s unlikely he could get away with it in New York, since the city’s definition of coordination is more expansive.

That means that independent groups will have to tread carefully if they opt to spend in the 2013 elections — something for Colbert to keep in mind if his presidential bid flops and he decides to run for mayor.

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