Thursday, April 20, 2017

NYC Council Members Opt-Out of Campaign Finance Program


With few Competitive races in the 2017 New York City Election cycle, a number of sitting City Council Members seem to be eschewing the Public Matching Donation New York City Campaign Finance Board (CFB) program, with some having spent significant sums in the past three years and others having already raised more than they could Legally spend if they participated. The level of Non-Participation may to some degree undermine the overall system, though the vast Majority of Candidates will still participate, and raises questions about those Council Members choosing not to Opt-In. A potential wave, however small, of Council Members not participating also drew a rebuke from Mayor Bill de Blasio.

Those who opt to participate in the CFB’s Public Matching Funds program must meet two Fundraising Thresholds:

- A Minimum number of Contributions from the District or other Geographic area covered by the office they seek.

- A Minimum amount of matchable Contributions. For instance, City Council Candidates who Opt-In to the program must receive at least 75 Contributions from Residents of their District, and only Contributions up to $175 are matchable with Public Funds at a 6 to 1 match.

The CFB usually issues Matching Funds the month before the Primary, which is on September 12th this year. It also matches a maximum of 55% of the Spending Cap for the Seat. For the City Council, the Spending Cap for Candidates who participate in the system is $182,000 each for the Primary and General Elections. Candidates who do not have an Opponent do not receive Public Funds.

In the 51-Seat City Council, more than 40 Members are seeking Reelection this year in something of a quirk given that some Members are pursuing their Third term, grandfathered in through the Term-Limit Extension passed by Mayor Michael Bloomberg and the City Council in 2008.

At least 10 Council Members have already surpassed the out-year, the years prior to Election year, limit of $49,000 on Campaign Spending for participants in the program, Campaign Finance filings show. If any of them were to participate in the Program, their Over-the-Limit Spending would be Deducted from the Election year Spending Cap.

Certain Council Members, such as Julissa Ferreras-Copeland and David Greenfield, have even spent more than the Primary Limit already and are effectively precluded from participating in the Matching Funds program since they then would have zero dollars to spend on the first leg of the Race. In out-years, Ferreras-Copeland, who is pursuing the position of City Council Speaker, which is Elected among Council Members in January, spent more than $277,000. Her total spending is $318,000. Greenfield spent nearly $308,000 in out-years, with a total spending of $326,000, largely to air the council Member’s radio program. “Councilwoman Ferreras is not participating because the Councilwoman has successfully raised enough money to communicate effectively with voters,” said a Campaign spokesperson in an email, insisting that her choice to not participate in the program “in no way means that she doesn't support it. Quite the contrary. By voting for a stronger program it shows a commitment to increasing participation in the electoral process for challengers regardless of the effect it may have on her own election.”

The Public Funds program, adopted in 1988, has consistently encouraged Competition and allowed Candidates with a lack of access to deep pockets, either their own or their Donors, to run against wealthier ones. Participation in the Program has been overwhelming in the last few cycles. In 2013, 92% of Candidates in the Primary were participants, and 54 of the 59 City Elected Officials participated. In 2009, participation was 93%, and 56 of 59 officials were participants.

It’s currently unclear which members may or may not Opt-In, only Council Members Stephen Levin and Robert Cornegy Jr. have officially indicated to the CFB that they will participate. The official deadline for Opting-In is June 12th, less than two months away.

Incumbent Council Members who won’t be participating presented varying rationale for their decisions, even as they all acknowledged the Public Funds program as a Model for Campaign Finance Systems Nationwide.

“I can raise money without the matching funds,” said Queens Council Member Peter Koo. “Why use public funding if I can do it privately?” Koo praised the program as an equaliser for first-time Candidates. “It’s good, for some people it’s necessary,” he said. “Especially for newcomers, they want to try Politics. Their ability to raise Funds is not as good as some business people. The system is good as long as they use it fairly and they obey all the rules.”

Council Member Brad Lander doesn’t envision taking Matching Funds, he said, and has spent $228,000, with just over $219,000 in out-years. But he said he would Voluntarily commit to the $182,000 spending Cap that applies to participants. “It is a great system and it makes it much more possible for people to run,” he said of the Matching Funds Program, “and if an opponent runs against me in the primary or general election, this system will make sure that they can run against me on an equal playing field.” “It’s not as simple as participating and not participating,” added Lander, who said he has spent the bulk of his money for “useful, pedestrian public purposes.” Campaign filings show that he has paid at least $80,000 to one firm for Fundraising services. “By voluntarily committing to the funding cap, I’m making sure that my race will be fair and competitive and that any opponent who participates in the matching system will be able to utilize it and spend the same amount that I am.”

Last year, the Council moved through a robust set of Reforms to the Campaign Finance system, some of which were prompted by Complaints by Council Members and Candidates who have participated. Some of the nearly two dozen Reforms, on the other hand, were those asked for by the Campaign Finance Board after its analysis of the 2013 Election Cycle and Championed by Good Government Groups.

Lander was one Member at the forefront of Council hearings on the proposals, insisting that the Reforms would encourage participation and make it easier to run for Elected office. Asked if that push for Reforms was at odds with his decision to not participate, Lander said, “I don’t think so. I think by committing to the election-year spending cap, I’m fully honoring not just the spirit but the entire goal of the system, [which] is to enable challengers to run against incumbents, everybody to participate on a level playing field. All of that exists in my race.”

A few reasons can explain why Council Members may spend significant amounts of money and not participate in the Public Funds Program. It is no coincidence that of the 10 Council Members who have passed the out year limits, at least five have indicated their interest in running for Speaker of the City Council next year. For others, a lack of an Opponent might mean that participation is irrelevant.

“Over the years, a number of incumbents who did not face significant opposition have opted not to participate in the program,” said Matt Sollars, a CFB spokesperson, in an email. “Other incumbents join the Program, but decline public funds. But almost every member of the Council has experience with the program; of the 51 members of the City Council, 50 were first elected as program participants.”

Council Member Corey Johnson is one of the Members running for Speaker and he conceded that if he faces a Primary Opponent, he would be hard pressed to participate in the Matching Funds Program because of his $136,000 in spending, with $78,000 of it in the out-years. He also hasn’t thought of whether he will Voluntarily abide by the spending cap. “I don’t know at this point,” he said in a brief phone interview. Johnson also defended the Bills passed by the Council last year that tweaked the Campaign Finance System, some of which seemed to a number of observers, including good Government Groups, as potentially self-serving. “I think they were smart bills,” he said, “responding to concerns not only raised by incumbent Council members but also by candidates and elected officials who are no longer in office but participated in the program.”

Among the Reforms were new Restrictions and Monitoring Mechanisms for Nonprofits affiliated with Elected Officials; Elimination of Matching Funds for Contributions Bundled by those who do Business with the City; greater Disclosure Requirements for Entities with City business; earlier Disbursement of Public Matching Funds; and Prohibitions on Contributions from Non-Registered Political Committees to Candidates who don’t join the Public Funds Program.

The City Council’s Committee on Governmental Operations, which has oversight of the CFB, is set to hear a Bill on April 27th that would raise the Cap on Matching Funds from 55% of the spending Cap to a Full Match of the Cap. The Bill is sponsored by the Committee’s Chair, Council Member Ben Kallos, who is a participant in the Public Funds Program and has spearheaded Campaign Finance Reform in the Council. Kallos had reservations about some of the Bills that were expedited through the Council late last year and believes his Bill will significantly shift the Election landscape. “I was concerned with recent amendments and their impact on the campaign finance system,” he said, “and as we get closer to the June deadline for opting in or out of the system, we will learn just what impact that legislation had and whether it improves participation in the system or actually discourages it. And whatever the results, I hope to create new incentives for people to participate.” The CFB is reviewing Kallos’ Proposal and will testify at the Hearing.

Government Reform Advocate Dick Dadey, executive Director of Citizens Union, expressed concern about Incumbents relying heavily on large Private Donations, instead of Public Funds. “The city’s campaign finance program with public funds was put in place not just for challengers but for incumbents so that there was not any kind of advantage given to either,” he said. “The fact that some incumbents are also going to abide by the spending limits is a good thing but the source of money is always a concern. Public money lessens the risk of undue influence and corruption. More private money increases that risk.”

Citizens Union was among those that questioned the rationale behind some of the Campaign finance Reforms that were pushed through the Council, such as allowing Non-Public Campaign Funds to be used for broader purposes supporting an Elected official’s Public Duties, and another that prohibits CFB staff from being present in Adjudications of Campaign Violations. Many of these supposed complaints seemed novel and presented solutions to problems that weren’t entirely apparent, critics said. “That some of these Council members pushed changes to make the program more candidate friendly and then they did not participate when it was accomplished, makes me wonder why they pushed these changes so aggressively if they weren’t going to participate themselves,” Dadey said.

Council Member Mark Levine, another Contender for Council Speaker has spent nearly $100,000, and feels comfortable that he is well below the combined out-year and Election year spending limit of $231,000 for participants of the program. His participation in the program, he said, “depends on what kind of race I have. I would not take matching funds if I have something less than a viable opponent so I’m waiting to see how the field shapes up.” He added, “If someone has only a token opponent and takes taxpayer money, I don’t think that’s appropriate and that’s the standard I’m gonna hold myself to.”

Mayor de Blasio, who is a Participant in the Public Matching Funds system, was asked about Council Members choosing not to Opt-In to the program. “I would discourage it,” he said. “I think it’s a mistake. One of the best campaign finance systems in the country. I’ve said many times that one of the reasons I’m mayor is because of that system. I would never have been able to raise the kind of money my competitors were able to raise. Only because of matching funds am I here. I believe it is a tremendous reform. I believe it’s democratizing and everyone should participate in it.”











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