This article was produced in partnership with Capital New York.
If the 2014 elections are anything to go by, the package of campaign finance reforms enacted this year by Governor Andrew Cuomo and the state Legislature will have little, if any, impact on the business of campaigning in New York.
The reforms, which Cuomo points to as justification for his controversial decision to disband the Moreland Commission to Investigate Public Corruption, were considered meager by many good-government advocates when they were first announced. They include a pilot public financing program for the state comptroller’s race, new disclosure rules for independent expenditure groups, and the creation of an independent office at the State Board of Elections charged with enforcing the state’s oft-flouted election laws.
So far, each one of the three initiatives Cuomo and the Legislature agreed to is off to a wobbly start. With barely more than two weeks left until Election Day, the public financing system pilot program is all but dead. The enforcement counsel is already facing concerns about possible political interference. And the new disclosure rules have revealed little in the way of so-called “dark money” from shadowy independent groups.
“Certainly this legislation, imperfect as it is, was no justification for shutting down Moreland,” said Blair Horner, legislative director for the New York Public Interest Research Group.
“The trade off wasn’t worth it,” said Citizens Union’s Rachael Fauss.
The deal was nobody’s first choice.
Republicans in the state Legislature opposed a public campaign finance proposal from Cuomo, saying it was a waste of taxpayer dollars and would unfairly tilt the political playing field in favor of Democratic-leaning unions. The failed push for campaign finance overwhelmed all other reform efforts.
Cuomo reinvigorated his push in April of 2013, after federal prosecutors indicted two sitting legislators and announced that a third had been wearing a wire. The governor’s proposals—including a system of public campaign finance for all statewide offices as well as the Assembly and Senate—did not advance in the final days of the legislative session.
When lawmakers recessed for the summer, Cuomo followed through on a threat to empanel a Moreland Commission to examine the relationship between money and politics. The commission, vouched for by the governor as legitimate-intentioned and independent, issued subpoenas to legislators and their campaign accounts—which were challenged in court—and released a draft report in December. But before a judge could rule on the propriety of the commission’s work, the governor disbanded it.
After it was revealed that the governor’s aides steared the commission away from investigating administration allies, and with the U.S. attorney looking into the possibility of illegal interference in its workings, the governor presented the Moreland Commission as simply a point of leverage in legislative negotiations. Cuomo told U.S.A. Today that he “got 85 percent of what I wanted” in the final law.
“This is a political dispute more than anything,” Cuomo told Charlie Rose, referencing an ongoing federal probe. “I didn’t explain it, before the fact, which is the mistake. I should have said—more often than I said—that when I get the law, I will decommission the effort.”
After the fact, in other words, the reform package became the justification for the entire Moreland exercise, from beginning to abrupt end.
The pilot public financing program in the state comptroller’s race, modeled on the New York City campaign finance system, provides a six-to-one match for contributions between $10 and $175 from New York residents.
Matching programs are designed to limit established politicians’ dependence on wealthy donors and create openings for candidates who would otherwise be hamstrung by a lack of financing.
Barely a week after the program was announced, the incumbent, Democrat Tom DiNapoli, announced he would opt out of the program despite his longtime support for public financing.
DiNapoli spokesman Russell Murphy said the program should have been implemented before the race began rather than in April, after the race was well underway and candidates had already started raising money.
And while DiNapoli’s Republican challenger, Onondaga County Comptroller Bob Antonacci, opted in to the program, he has yet to raise enough money on his own to quality for any matching funds.
Antonacci must raise $200,000 in matchable contributions from 2,000 donors to qualify for the funds. As of October 16, Antonacci has raised just $69,011 in such contributions from 551 donors.
Susan Lerner, executive director of the watchdog group Common Cause, called the matching program “half-baked.”
“It was designed to fail,” she said, “and it appears to be failing.”
The new regulations intended to force disclosure of previously hidden contributions and expenses have failed to expose a significant amount of “dark money.”
As so-called social welfare organizations, 501(c)4 groups emerged on the national level as a potent force in campaign funding, sliding through existing regulatory frameworks because they do not coordinate directly with candidates and do not expressly advocate for or against them.
They have been active in New York, too, particularly on Cuomo’s behalf. In 2011 and 2012, the Committee to Save New York spent $17 million promoting the governor’s agenda, acting as a counterweight and disincentive to hostile spending from labor groups. The committee was never formally required to disclose its donors (and its efforts were construed as lobbying, not campaign spending).
During the 2012 cycle, a Virginia-based 501(c)4 group called Common Sense Principles spent $950,000 attacking Democratic candidates. It declared its spending as issue-based lobbying, and also shielded its donors so well that the Moreland Commission was unable to find anyone to subpoena.
The new disclosure rules require organizations, like 501c(4) groups, to reveal the source of their donations regardless of whether or not they expressly support or oppose a particular candidate.
“The Board of Elections was just ensuring that everyone that spends money on our elections, whether it’s a super PAC, a 501(c)4 or a wealthy individual, discloses information about its donors to public,” said David Earley of N.Y.U.’s Brennan Center for Justice.
As of October 16, a total of 24 independent expenditures groups have disclosed their donors. The list of organizations includes traditional political action committees and a single 501c(4) – Citizens Union of the City of New York, a good government group.
Attorney General Eric Schneiderman’s originally proposed the rules but pulled them after the budget deal included a mandate for the Board of Elections in implementing similar regulations.
“These new rules make our office’s regulations largely redundant, and leaving them in place would create an unnecessary burden on organizations,” said attorney general spokesman Matt Mittenthal.
Thus far, the new disclosure rules affect a small percentage of total contributions and expenditures. New York’s relatively high limits on direct contributions to candidates ensure that most money flows to authorized campaign and party committees rather than independent groups, said Bill Mahoney, NYPIRG’s research coordinator.
As of October 16, independent expenditure groups have reported a combined $9.6 million in contributions and $6.4 million in expenditures since the new rules took effect on May 22. Far more money has been contributed directly to candidates.
“[Independent expenditure groups have] always played a pretty minimal role in New York,” Mahoney said. “If someone has $100,000 to spend, it’s much easier to go directly to a candidate or a party committee.”
INDEPENDENT ENFORCEMENT OFFICE
Though it operates under the umbrella of the state Board of Elections, the new enforcement office is designed to operate separately from the board, which in the past had been neutered by a bipartisan structure that made it loath to investigate wrongdoing by political actors on either side of the aisle.
“The board’s ‘bipartisan’ structure has effectively led to a tacit, bipartisan agreement to do nothing,” according to the preliminary report from the now-defunct Moreland Commission.
Risa Sugarman, who in June was confirmed as chief enforcement counsel for the new unit, has the tiebreaking vote on decisions over whether to launch investigations or subpoena documents, a move designed to cut through bipartisan gridlock.
But good government advocates, like NYPIRG’s Horner, remain skeptical about whether the enforcement division can free itself of the Board of Election’s inefficiency.
“It’s an interesting idea that’s been grafted on top of a fatally slow agency, so how effective they’ll be, it’s too early to tell,” Horner said. “We’d hoped for the creation of a real enforcement agency outside the board of elections.”
Board of Elections spokesman John Conklin said the enforcement division’s office, in recognition of its independence, is walled off from the rest of the Board of Elections, and B.O.E. staff outside the division cannot enter the room without permission.
Conklin’s description of the unit’s segregation differs from that of the board’s co-executive director Robert Brehm.
“I have never had any problem getting in there or they getting in here,” Brehm said.
Sugarman’s only visible action has been to chide John Cahill, the Republican candidate for attorney general, for failing to disclose the complete results of an internal poll after he released only the portion that would benefit him.
More troubling to those unconvinced of the division’s independence was a Daily News report that Sugarman copied Cuomo spokesman Rich Azzopardi on an email to subordinates that concerned of the division’s investigation of the Cahill poll.
“We believe that there needs to be a truly independent enforcement arm with real teeth,” Lerner said. “We have concerns that this arrangement is not strong enough.”
Azzopardi referred all questions about the email to Sugarman, who declined to comment for this story. Cuomo and Sugarman explained earlier this month that Sugarman was simply making it known that reporters should contact her directly.
“When all of these things drop on the board of elections at the last minute,” Horner said, “it doesn’t really give an agency which under the best of circumstances has a hard time getting its job done a good chance to succeed.”
Clarification: An earlier version of this article stated that 501(c)4 organizations “were previously exempt from disclosing their donors and expenditures.” Under New York State law, 501(c)4 groups were never entirely exempt from such disclosure but were able to conceal the identities of their donors as long as they didn’t expressly call for voting for or against a particular candidate.