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Contents
FOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. NEW YORK CITY CAMPAIGN FINANCE LAW . . . . . . . . 3
A. History of Reform . . . . . . . . . . . . . . . . . . . . . . . . 3
B. Current Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1. Matching Funds Program . . . . . . . . . . . . . . . . . . . . 5
a. Offices Covered . . . . . . . . . . . . . . . . . . . . 5
b. Funding the Program . . . . . . . . . . . . . . . . 5
c. Ballot Qualification . . . . . . . . . . . . . . . . . . . . 5
d. Written Certification . . . . . . . . . . . . . . . . . . . . 5
e. Campaign Finance Disclosure . . . . . . . . . . . . 6
f. Public Matching Funds . . . . . . . . . . . . . . . . 6
g. Fundraising Threshold . . . . . . . . . . . . . . . . 6
h. Spending Limits . . . . . . . . . . . . . . . . . . . . 7
i. High-Spending Opponent Trigger Provision . . . . . . . . 8
j. Mandatory Debates . . . . . . . . . . . . . . . . . . . . 8
2. New York City and State Contribution Limits . . . . . . . . 8
a. City Limits on Contributions to Participating Candidates . 8
b. Comparing City and State Contribution Limits . . . . 9
c. City Limits on Contributions to and from Corporations,
PACS and Political Party Committees . . . . . . . . 10
d. City Limits on Candidate Personal
Wealth Expenditures . . . . . . . . . . . . . . . . 10
e. City Loan Restrictions . . . . . . . . . . . . . . . . 11
f. State Limits on Contributions to Candidates
from Non-Relatives . . . . . . . . . . . . . . . . 11
g. State Limits on Contributions to Candidates
from Relatives . . . . . . . . . . . . . . . . . . . . 12
h. State Limits on Contributions to and from
Political Party Committees . . . . . . . . . . . . . . . . 12
i. State Limits on Contributions from Corporations . . . . 13
j. State Loan Restrictions . . . . . . . . . . . . . . . . 13
k. State Aggregate Limit on Contributions and Loans
to Candidates and PACs . . . . . . . . . . . . . . . . 13
3. Voters Guide . . . . . . . . . . . . . . . . . . . . 13
4. New York City Campaign Finance Board . . . . . . . . 14
iv
III. A MODEL FOR THE NATION . . . . . . . . . . . . . . . . . . . . 15
A. $4-to-$1 Match Increases Importance of Small Contributions,
Expands Political Participation and Reduces Candidate
Dependence on Wealthy Donors . . . . . . . . . . . . . . . . 15
B. Public Financing Enables Candidacies by Individuals
Who Otherwise Would Not Have Run for Public Office . . . . . . . 18
C. Candidate Participation is Near 100% and Has Risen
Dramatically Since 1989 . . . . . . . . . . . . . . . . . . . . . . . . 21
D. Public Financing Qualification Thresholds
Are Appropriately Set . . . . . . . . . . . . . . . . . . . . . . . . 23
E. Electronic Disclosure Has Revolutionized
Dissemination of Campaign Finance Information . . . . . . . . 26
F. Program Funding Mechanism Serves as a Model
for Other Jurisdictions . . . . .. . . . . . . . . . . . . . . . . . . . 28
G. Program Costs Are a Tiny Fraction of the Total
City Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
H. Campaign Finance Board Does a Difficult Job Well . . . . . . . . 31
IV. ROOM FOR IMPROVEMENT . . . . . . . . . . . . . . . . . . . . 34
A. New York City Possesses Greater Campaign Finance
Legislative Authority Than Is Currently Being Utilized . . . . . . . . 34
Recommendation 1: Make City Contribution Limits Mandatory on
All Candidates and Committees Participating in City Elections . . . 41
Recommendation 2: Make City Disclosure Laws Mandatory on All
Candidates and Committees Participating in City Elections . . . . 41
Recommendation 3: Grant Local Jurisdictions Authority to
Regulate Local Campaign Activities Through Legislative Action
at the State Level . . . . . . . . . . . . . . . . . . . . . . . . 41
B. Weak Disclosure Requirements and Lax Enforcement Render
Independent Spending Invisible . . . . . . . . . . . . . . . . 42
Recommendation 4: Require Disclosure of Independent
Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Recommendation 5: Adopt a Trigger Provision Lifting Spending
Limits and Increasing Public Funding to Candidates Facing
Large Independent Expenditures . . . . . . . . . . . . . . . . 47
C. Candidates Facing Opponents Who Exceed Spending Limits
Require Additional Assistance . . . . . . . . . . . . . . . . . . . . 50
Recommendation 6: Require Any Candidate Who Exceeds Spending
Limit to Report the Fact Within 24 Hours . . . . . . . . . . . . 52
Recommendation 7: Provide Additional Public Financing To
Candidates Facing Opponents Who Exceed Spending Limit . . . . 52
D. Large Contributions Threaten Corruption or the
Appearance of Corruption . . . . . . . . . . . . . . . . . . . . 53
Recommendation 8: Lower New York City Contribution Limits . . 56
E. Time Spent Fundraising Varies . . . . . . . . . . . . . . . . . . . . 57
Recommendation 9: Impose Fundraising Blackout Period . . . . 60
v
F. Spending Limits Are Too Complex and Need Adjustment . . . . 61
Recommendation 10: Simplify Spending Limits . . . . . . . . 63
Recommendation 11: Lower Spending Limits for Public Advocate,
Comptroller, Borough President and City Council . . . . . . . . 64
G. Draconian State Ballot Access Laws and City Spending
Limit Exemptions, Enable Well-Financed Candidates to Keep
Challengers on Sidelines . . . . . . . . . . . . . . . . . . . . 65
Recommendation 12: Eliminate All But One Spending
Limit Exemption . . . . . . . . . . . . . . . . . . . . . . . . 67
H. Officeholders Convert City Funds to Personal Political Use . . . . 68
Recommendation 13: Strengthen Law Prohibiting Elected Officials
From Using Public Dollars to Promote Their Candidacies . . . . 69
I. Substantial Public Funds Are Distributed to Candidates
With No Serious Opposition . . . . . . . . . . . . . . . . . . . . 70
Recommendation 14: Distribute Public Funds Only to Candidates
with Serious Opponents . . . . . . . . . . . . . . . . . . . . 72
V. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
vii
Foreword
The Center for Governmental Studies (CGS) has spent more than a year studying
the strengths and weaknesses of campaign finance laws and practices in New York City.
The ensuing report draws on a detailed textual analysis of New York City law; New York
State law; interviews with candidates, government administrators and political experts;
relevant literature; experience from other jurisdictions; and court decisions.
This New York City report is the fourth in the series of CGS reports examining
local government public financing programs. Earlier reports focused on public financing
programs in Los Angeles, San Francisco and Suffolk County (NY). Forthcoming reports
in the series will examine public financing programs in local government jurisdictions
such as Tucson (AZ), Long Beach (CA), Oakland (CA) and Boulder (CO), as well as
public financing programs in the states of Maine, Massachusetts, Vermont, Arizona,
Hawaii, Minnesota, Wisconsin and others.
CGS research on state and local campaign financing issues dates to 1983. Its first
report, The New Gold Rush: Financing California’s Legislative Campaigns (1985),
examined campaign financing problems in the California State Legislature and offered
two model laws to remedy them. The 353-page report served as the model for
California’s statewide Proposition 68 in the June 1988 election and New York City’s
1988 campaign finance law. CGS published an Update to the New Gold Rush in 1987.
The third CGS report, Money and Politics in the Golden State: Financing California’s
Local Elections (1989), focused on campaign financing in seventeen California cities and
counties.
These reports provided the foundation for the 1990 Los Angeles City campaign
finance ordinance, analyzed more than a decade later in the 2001 CGS report, Eleven
Years of Reform: Many Successes—More to be Done, Campaign Financing in the City of
Los Angeles. The CGS March 2002 report, On the Brink of Clean: Launching San
Francisco’s New Campaign Finance Reforms, and its most recent report, Dead on
Arrival? Breathing Life Into Suffolk County’s New Campaign Finance Reforms, have
stimulated reform debates in both jurisdictions. Local campaign finance laws throughout
the nation have been based on CGS work, including the laws of Los Angeles County,
Long Beach, Oakland, San Francisco and Miami-Dade County, Florida.
CGS wishes to thank its Project Director, Paul Ryan, who prepared this report,
and its entire staff. CGS Chief Executive Officer Tracy Westen and President Bob Stern
supervised the study and provided valuable editing suggestions. Consultant Carmen
Williams assisted in legal research. The New York City Campaign Finance Board and its
staff provided valuable information for the preparation of this report. Richard Briffault,
Vice-Dean of Columbia Law School, provided insightful comments on early drafts of the
report. CGS especially thanks Carnegie Corporation of New York for funding this study.
The views in the study do not necessarily reflect the opinions of Carnegie Corporation,
and it takes no responsibility for any of the statements or views in the report.
ix
Executive Summary
New York City’s public campaign financing law, enacted in 1988 by a combined
city council-approved local law and a voter-approved charter amendment, serves as a
model for the United States. By contrast, New York State’s election and campaign
finance law ranks among the nation’s worst. Unfortunately, New York City’s campaign
finance laws only apply to candidates who voluntarily agree to comply with them; those
who do not are governed by New York State’s law.
New York City provides candidates who voluntarily comply with a detailed
regime of campaign fundraising and spending restrictions with $4 in public funds for
every $1 in private contributions of $250 or less made by New York City residents. This
$4-to-$1 match has enabled candidates lacking access to wealthy campaign contributors
to wage competitive campaigns, increased the importance of small campaign
contributions from city residents, encouraged nearly all of the city’s serious candidates to
agree to limits on fundraising and spending and dramatically improved campaign finance
disclosure.
New York City’s campaign finance program, combined with the city’s term limits
law, encouraged a record number of candidates to run for office in 2001, noticeably
increasing the racial and gender diversity of New York City’s elected leaders. New York
City’s nationally recognized public financing program has cost city residents only $0.57
per year over the program’s 14 year history.
New York City candidates who do not voluntarily abide by New York City’s
laws, however, are subject only to the much weaker New York State law. They may
accept contributions up to $200,000 in a citywide office race, compared to the city’s
$4,500 limit. New York state law also allows large independent expenditures to go
unreported. New York state ballot access laws force the late distribution of public funds
to city candidates. Ambiguous state “home rule” laws discourage New York City from
applying its campaign finance laws to all candidates.
Based on legal analyses and interviews with candidates, government
administrators and political experts, CGS proposes a series of reforms to city and state
law to make New York City’s public financing program operate more effectively. The
core CGS recommendation is to urge New York City to extend its contribution limits and
disclosure laws to all candidates, regardless of a candidate’s willingness to participate in
the public financing program. CGS also recommends that both the city and state of New
York adopt strong independent expenditure disclosure laws. Only if independent
expenditures are disclosed can New York City provide assistance to candidates opposed
by large independent expenditures. CGS recommends that New York City lift its
spending limits for candidates facing large independent expenditures and provide them
with additional public financing as well.
Other recommendations include increasing the additional public funds received
by candidates facing high-spending opponents; imposing time limits on when candidates
may fundraise; distributing public funds to candidates earlier; simplifying and adjusting
spending limits; and reducing the city’s contribution limits.
I. Introduction
New York City’s public campaign financing program, enacted in 1988, provides
candidates, who voluntarily agree to contribution and spending limits and meet other
requirements, with public dollars to match private contributions raised by candidates.
The number of candidates participating in the city’s program and the amounts of public
funds distributed to them have grown throughout the last fourteen years.
New York City’s 2001 election provided the most significant administrative
challenges ever to the city’s Campaign Finance Board. In 1998, the city council
quadrupled the matching funds rate to $4 in public funds for every $1 in private funds
raised, up to specified limits. This public matching funds increase coincided with the
city’s term limits law, inspiring the largest number of candidates to run for public office
in the public financing program’s history. In 2001, 355 candidates appeared on the city
ballot, up from a former high of 239 candidates in 1991.
Compounding the administrative difficulties created by the sheer number of
candidates were the tragic events of September 11, coincidentally the scheduled date of
New York City’s primary election. The election was abruptly halted by the terrorist
attacks on the World Trade Center. The Campaign Finance Board’s office is located just
three blocks away from the World Trade Center. The events of September 11 forced both
the rescheduling of the primary election and the temporary relocation of the Campaign
Finance Board’s office.
The New York City Campaign Finance Board and staff responded to the crisis in
exceptional fashion. Despite losing access to office space, equipment and on-site
records, the Campaign Finance Board effectively administered the public financing
program for the rescheduled primary election on September 25, the October 11 runoff
primary election and the November 6 general election. The Campaign Finance Board
received the international Council on Governmental Ethics Laws’ (COGEL) Special
Recognition Award for “extraordinary service rendered by the board and staff . . . during
the tragic events surrounding the 2001 primary election.”1
Notwithstanding the events of September 11, New York City’s public financing
program combined with its first term limits made the 2001 elections the most competitive
in the city’s history. For this reason, 2001 is an excellent opportunity to examine the
city’s public financing program both to determine its strengths and weaknesses and to
suggest improvements for future elections.
While New York City’s public financing program involves some of the best
provisions in the United States, they are undermined by unnecessary exemptions,
undisclosed independent spending, wealthy candidate spending and excessive deference
to state law.
New York City’s contribution limits, for example, only apply to candidates who
voluntarily participate in the city’s public financing program. Candidates who choose not
to participate in the public financing program, as well as all non-candidate political
committees, are regulated only under state law, which is among the weakest in the United
States. The state’s contribution limits are among the highest in the country, its disclosure
2
requirements for independent expenditure activity are virtually nonexistent and New
York State Board of Elections enforcement of law violations is notoriously lax.
Loopholes in New York State’s and New York City’s campaign finance laws
threaten the integrity of the city’s public financing program. New York City has
interpreted state law conservatively, insisting that state law prohibits the city from
applying its campaign finance laws—including contribution limits and disclosure
requirements—to all city office candidates. Instead, the city applies its laws only to
candidates who voluntarily agree to participate in its public financing program.
Consequently, candidates who choose not to participate in the public financing program
must comply only with the state’s ridiculously high contribution limits and lax disclosure
requirements. CGS believes that New York City has the authority to extend, and should
extend, its contribution limits and disclosure requirements to all candidates for city office.
Candidates who voluntarily comply with spending limits should be eligible for public
financing, as in other cities.
Evidence gathered in preparation of this report reveals significant independent
expenditure activity in New York City elections. Yet weak independent expenditure
disclosure laws at the state and local level make it impossible to measure how much
money is being spent to affect city elections by labor unions and other organizations
independently of candidate campaigns. Candidates bound by spending limits but
opposed by large independent expenditures are at a significant disadvantage. New York
City should amend its laws to release such candidates from spending limits and provide
these candidates with additional public funding.
New York City’s 2001 mayoral race was one of the highest profile races in the
United States. The Democratic Party primary race was hotly contested between four
highly qualified frontrunners, all of whom participated in the public financing program.
Mark Green, the Democratic Party primary runoff winner, faced Republican nominee
Michael Bloomberg in the general election. Bloomberg, a billionaire businessman with
no prior elective office experience, rejected public financing and spending limits and
spent more than $73 million of his personal fortune to defeat Green—outspending Green
by more than 4-to-1. New York City should increase the amount of public funding
available to candidates who face high-spending and often personally wealthy opponents.
This report thoroughly explores the shortcomings of New York City’s public
financing program, along with its many strengths. The report begins with a brief history
of campaign finance reform in New York City, followed by a summary of the city’s
campaign finance law. The remainder of the report is dedicated to specific
recommendations for addressing identified weaknesses.
II. New York City Campaign Finance Law
A. History of Reform
New York City is the most populous in the United States. Its total population of
8,008,278 includes 6,068,069 residents of voting age2 and just over 4 million registered
voters.3 New York City also has the largest municipal government in the nation. Voters
elect 51 city council members, 5 borough presidents, a comptroller, a public advocate and
a mayor in partisan elections held once every four years in an odd-numbered year. Party
primary elections are held in September of an election year, followed by a November
general election.
Unlike most city governments, which exist within a single larger county, New
York City comprises five separate but smaller counties—the borders of which coincide
with those of New York City’s five boroughs.4 The five counties that make up New
York City have no separate county governments.5 New York City residents live only
under city, state and federal governments.
As of April 2001, eight political parties qualified for the ballot in New York City.6
The Democratic and Republican parties hold primary elections, while the six minor
parties frequently do not. Voter registration in New York City favors Democrats five-toone
over Republicans.7 As a result, the most intense competition takes place in the
Democratic primary election. Winning the Democratic nomination is tantamount to
winning office in most districts.8 All eight parties typically nominate candidates in the
general election, with the major party candidates frequently receiving cross-nominations
by one or more minor party. The state of New York is one of very few states to allow
such cross-nomination ballot fusion, and the only state in which such fusion is used
extensively.9
State law entirely governed New York City elections prior to 1988, when the city
adopted its own laws. The state’s campaign finance laws are among the least restrictive
in the United States. The major state provisions were adopted in 1974, during a flood of
post-Watergate political reform activity that occurred throughout the country. The state
campaign finance law, which includes contribution limits and disclosure provisions, is
riddled with loopholes that allow near unregulated flows of money into the electoral
process.
New York City activists had for years advocated campaign finance reform. The
city’s 1988 adoption of public financing, lower contribution limits and stricter disclosure
requirements, however, was spurred by a corruption scandal with no direct relationship to
campaign finance. In 1986, the U.S. Attorney for the Southern District of New York
launched an investigation into the operations of the city’s Parking Violations Bureau,
revealing a lucrative scheme of bribes to a small group of city officials made in exchange
for an exclusive city contract. At the center of the scandal was Queens borough president
and Democratic party leader Donald Manes—a close political ally of Mayor Koch.
Shortly after the scandal broke, Manes committed suicide. Several of his cohorts were
tried, convicted and sentenced to prison for their participation in the bribery scheme.10

4
In the scandal’s aftermath, then-Governor Mario Cuomo created the New York
State Commission on Government Integrity (the Feerick Commission) to examine state
ethics and campaign finance laws. Cuomo and Mayor Koch jointly created a New York
City equivalent, the State-City Commission on Integrity in Government (the Sovern
Commission). These commissions issued reports calling on the state and the city to
overhaul campaign finance and ethics laws and establish public financing programs at the
state and local levels. The state legislature failed to act, forcing campaign finance
reformers in New York City to design their own system that would co-exist with state
law.11
With less than two years remaining in their terms, the mayor and many
Democratic council members were anxious to distance themselves from the scandals that
had dominated newspaper headlines for two years. Although the scandals were unrelated
to campaign finance, incumbents saw campaign finance reform as the most visible means
of demonstrating their commitment to good government. Compounding the pressure on
elected officials was the fact that a Charter Revision Commission was prepared to place a
proposal for public financing on the 1988 ballot for voter approval. With voters expected
to approve the public financing charter amendment, the mayor and council chose to take
credit for campaign finance reform they would be forced to live with in any event.
Koch submitted a draft public financing bill to the city council late in 1987. The
city council adopted the New York City Campaign Finance Act in February 1988 by a
vote of 24 to 9. Mayor Koch signed the public financing act into law later that month.12
Koch referred to the public financing law as “the most fundamental reform of the
political process ever enacted by the city.”13 The public financing program was further
strengthened in November of 1988, when the voters approved the Charter Revision
Commission’s charter amendments related to the public financing program by a 79%
majority. The charter amendments established the Campaign Finance Board as a charter
agency—which added a significant degree of security to the board’s continued existence
and independence.14
All aspects of New York City's public matching funds program are administered
by the New York City Campaign Finance Board. Mechanical aspects of city elections
are administered by the city’s Board of Elections.15
B. Current Law
The New York Campaign Finance Act, combined with the 1988 charter
amendments, mandated the creation of a city Campaign Finance Board to administer a
voluntary matching funds program and a comprehensive regime of campaign finance
regulations not existing under state law. Because city officials have incorrectly
interpreted state law as prohibiting local governments from enacting mandatory campaign
finance regulations, including contribution limits that bind all candidates for local office,
they have only applied the local Campaign Finance Act to candidates who voluntarily
agree to participate in the matching funds program.
New York City’s voluntary public financing program participants must agree to
spending limits, lower contribution limits and more stringent disclosure requirements
5
than non-participants. By contrast, most other jurisdictions with voluntary public
financing programs require all candidates to abide by the same contribution limits and
disclosure regulations whether or not they accept public financing. The sections that
follow describe New York City laws that bind voluntary program participants, as well as
New York State contribution limits and disclosure requirements that cover nonparticipating
candidates.
1. Matching Funds Program
a. Offices Covered
Public campaign financing is available to candidates for the city offices of mayor,
public advocate, comptroller, borough president and city council.16 Public financing is
not available to candidates running for district attorney in each of the five boroughs.
b. Funding the Program
The Campaign Finance Act created the New York City campaign finance fund as
the financial instrument for distribution of matching funds to program participants. The
act requires the Campaign Finance Board to submit an estimated budget to the mayor for
inclusion in the city’s executive budget. Two city charter provisions significantly
strengthen the appropriations mechanism of the Campaign Finance Act. First, the charter
requires that the mayor include the Campaign Finance Board’s budget estimate in the
executive budget without revision.17 This provision was the result of a charter
amendment adopted by city voters in 1998. Prior to adoption of the amendment, the
mayor could, and frequently did, reduce the board’s estimated budget before submitting
his executive budget to the city council.18
Second, a charter amendment approved by voters shortly after the city council’s
passage of the Campaign Finance Act in 1988 gives the Campaign Finance Board
authority to draw program funding directly from the city’s general fund if the mayor and
council have failed to appropriate a sufficient amount to fulfill candidates’ matching
funds claims.19 This general fund “draw down” provision is unique to New York City
and is considered a last-resort funding mechanism. The draw down provision has never
been utilized.
c. Ballot Qualification
To receive public financing, a candidate must first qualify to have his or her name
on the ballot.20 A candidate must also be opposed by a candidate who qualifies for the
ballot in order to receive public funds.21
d. Written Certification
Candidates wishing to participate in the public financing program must file with
the Campaign Finance Board a written certification of the candidate’s agreement to
comply with the rules and regulations of the public financing program no later than the
first day of June in the year of a regular election, or the seventh day after the
proclamation of a special election.22
A participating candidate must also agree that if he or she is a candidate for such
office in any other election held in the same calendar year (e.g., runoff-primary election
or general election), he or she will be bound in each such other election by the rules and
6
requirements of the public financing program.23 Candidates who are contested in a
primary election and do not file this written certification are not eligible for public funds
for any election to that office in the same calendar year (e.g., runoff-primary election or
general election) other than a special election to fill a vacancy.24 New York City’s
system differs in this respect from the federal presidential public financing system, where
a candidate can reject public financing for primary elections but opt into the public
financing program for the general election. (George W. Bush accepted public financing
in the 2000 general election, but not in the primary.)
e. Campaign Finance Disclosure
A participating candidate must disclose campaign finance activity in detailed
periodic statements filed with the Campaign Finance Board. Candidates who choose not
to participate must submit less detailed disclosure statements to the city’s Board of
Elections. In addition to the campaign finance information mandated by the state, the
Campaign Finance Board requires participating candidates to disclose the occupation and
employer of each campaign contributor and “intermediary”—meaning an individual or an
organization that collects and delivers contributions from another person to a candidate’s
committee.25 Campaign finance information disclosed to the Campaign Finance Board is
available to the public on the board’s Web site.
This disclosure of campaign finance activity by intermediaries is intended to shed
light on the practice of “bundling,” where a single individual or organization collects a
large number of contributions within the contribution limits and delivers those
contributions in one bundle to a candidate.
f. Public Matching Funds
Program participants who meet all qualifying requirements are eligible for $4 in
public matching funds for every $1 in private contributions received from residents of the
city, up to $1,000 in public funds per contributor in the case of a regular election, or up to
$500 per contributor in the case of a special election. Public funds may not exceed 55%
of the applicable spending limit, except in the event that the candidate qualifies for
additional public financing and the elimination of the spending limit because of a highspending
opponent.26
In the event of a runoff primary election or an election held pursuant to court
order, a participating candidate receives public funds in the amount of $0.25 for each
dollar of public funds received by the candidate for the preceding election.27
g. Fundraising Threshold
To qualify for public matching funds, a participating candidate must raise a
specified sum of money in matchable contributions.28 A matchable contribution is a
contribution to a candidate made by an individual resident of the city (as opposed to a
political committee) of up to $1,000 in a regular election, or up to $500 in a special
election, but only the first $250 of a contribution can be matched with public funds.29
· Candidate for mayor: 1,000 contributions of $10 or more for at least
$250,000 total.
7
· Candidate for public advocate or comptroller: 500 contributions of $10 or
more for at least $125,000 total.
· Candidate for borough president: 100 contributions of $10 or more from
residents of the borough for at least $.02 per borough resident, or $10,000,
whichever is greater.
· Candidate for city council: 50 contributions of $10 or more from residents
of the council district for at least $5,000 total.
Any participating candidate who meets the fundraising threshold for a primary election is
deemed to have met the eligibility threshold for any other election for the same office
held in the same calendar year (e.g., runoff-primary election or general election).30
h. Spending Limits
New York City’s public financing program requires participants to limit campaign
spending during the four years prior to the election. The limits on non-election year
spending are intended to reduce the ability of officeholders to begin significant
campaigning for re-election as soon as they take office, while still allowing officeholders
to raise and spend modest sums of money for work-related expenses that the city budget
will not fund (e.g., sponsoring a baseball team in the district, mailers to constituents
regarding important community policy issues, conference travel). Other jurisdictions,
such as the City of Los Angeles, accomplish this goal through the creation of
“officeholder accounts.”
To be eligible to receive public matching funds, a participating candidate’s
expenditures during the next citywide election year (2005) may not exceed the following
amount per election, which are adjusted for changes in the cost of living:31
· candidate for mayor: $5,728,000
· candidate for public advocate or comptroller: $3,581,000
· candidate for borough president: $1,289,000
· candidate for city council: $150,000
A participating candidate's expenditures in the calendar year prior to the election
year must not exceed the following amounts, which are not adjusted for changes in the
cost of living:32
· candidate for mayor, public advocate or comptroller: $180,000
· candidate for borough president: $120,000
· candidate for city council: $40,000
A participating candidate's combined expenditures in the third and fourth calendar
years prior to the election year must not exceed the following amounts, which are not
adjusted for changes in the cost of living:33
· candidate for mayor, public advocate or comptroller: $90,000
· candidate for borough president: $60,000
· candidate for city council: $24,000
8
i. High-Spending Opponent Trigger Provision
If a candidate declines to participate in the public financing program and receives
contributions or makes expenditures in excess of 50% of the applicable spending limit,
the spending limit is no longer binding on any other candidate running for the same
office, in the same election, who is participating in the program. Furthermore, the
participating candidate receives matching funds at the increased rate of $5 in public funds
for each $1 in matchable contributions, up to $1,250 in public funds per contributor in a
regular election or up to $625 in public funds per contributor in a special election.
However, the participating candidate may under no circumstances receive public funds
exceeding two-thirds of the applicable spending limit for the office.34
j. Mandatory Debates
To be eligible to receive public matching funds, participating candidates for
citywide office are required to appear in two public debates prior to the primary election,
at least one debate prior to the general election, and possibly a second debate prior to the
general election if the program participant is determined to be a leading contender. The
Campaign Finance Board selects sponsor organizations for the debates. Any organization
that is not affiliated with any political party, officeholder or candidate, and has not
endorsed any candidate in the pending election, is eligible to sponsor a debate. Choosing
the date, time, location, and rules for conducting the debate is the responsibility of the
sponsoring organization. The second debate prior to a general election includes only
those candidates whom the sponsor has determined are the leading contenders for the
office on the basis of objective, non-partisan and non-discriminatory criteria and may
include nonparticipants.35
2. New York City and State Contribution Limits
New York State law limits contributions to all candidates running for public
office in the state. New York City law only limits contributions to candidates
participating in its public financing program. New York State law uses complicated
formulas to determine contribution limits, based on the number of registered voters in the
electoral district, but with statutory minimum and maximum amounts which vary
depending on the office. State contribution limits in primary elections vary depending on
the political party. State law also places different limits on contributions from a
candidate’s relatives and non-relatives.
New York City’s limits are lower than state limits in most instances. There are
circumstances, however, when the state’s formula for determining the contribution limit
yields a lower limit than the city’s.36 Under such circumstances, a New York City
candidate must abide by the lower state limit regardless of whether the candidate chooses
to participate in the public financing program. In races where the city’s limit is lower,
candidates choosing to participate in the public financing program must abide by the
city’s lower limit, while nonparticipants are bound only by the state’s higher limit.
a. City Limits on Contributions to Participating Candidates
To receive public funds, a candidate must agree to the following limits on
contributions from all sources. The city’s limits are aggregate limits on contributions
from any single contributor made during the four-year election cycle for all elections held
9
in the same calendar year.37 State contribution limits apply to only a single election,
making it necessary to combine state primary and general election limits for an accurate
comparison to the city’s limits. The city’s adjusted limits for the 2003 and 2005 elections
are as follows:
· Citywide Office: $4,950
· Borough President: $3,850
· City Council: $2,750
In the event of a runoff primary election or special election, participating
candidates may accept additional contributions up to one-half of the contribution limit
listed above. Where state law prescribes a contribution limit of a lesser amount than the
city limit, the lower state contribution limit is binding on public financing program
participants.38
b. Comparing City and State Contribution Limits
Figure 1 provides a side by side comparison of city and state limits on
contributions from non-relatives to Democratic party candidates. State limits on
contributions from relatives are much higher and are discussed below. Due to the
variation in state primary election contribution limits from party to party, only a single
party’s limits could be displayed in the chart below.
Figure 1
Comparison of City and State 2001 Limits on Contributions
from Non-Relatives to Democratic Party Candidates
City Limits on
Contributions Per
Election Cycle
State Limits on
Contributions to
Democratic
Primary Election
Candidates
State Limits on
Contributions to
General Election
Candidates
Total State Limits
for Democratic
Primary and
General Elections
Combined
Citywide
Office $4,500 $14,700 $30,700 $45,400
Borough
President $3,500 $38,345—
$5,14339
$50,000—
$11,25640
$88,345—
$16,399
City
Council $2,500 $3,597—
$1,51541
$4,513—
$2,37742
$8,110—$3,892
State contribution limits applicable to all parties are detailed below. Because
Democrats outnumber Republicans five-to-one in the city and outnumber other minor
parties by an even greater margin, state contribution limits for primary elections—based
on the number of voters registered with the party—are much higher for Democrats than
all other candidates.43
10
For example, the state contribution limit for candidates in the 2001 9th council
district Democratic Party primary was $3,597, while the state contribution limit for
candidates in all other party primaries in the 9th council district was $1,000.
Finally, for the offices of borough president and city council, the chart displays
the range of contribution limits applicable in the five boroughs and 51 council districts.
c. City Limits on Contributions to and from Corporations, PACs and
Political Party Committees
Participating candidates may only accept contributions from political committees
that have voluntarily registered with the Campaign Finance Board.44 Contributions to
participating candidates from all political committees—including PACs and political
party committees—are limited to the amounts noted in the previous subsection.
The city charter and campaign finance law prohibits participating candidates from
accepting campaign contributions from corporations.45 A corporation may form a PAC,
which in turn is permitted to make contributions to participating candidates so long as the
PAC agrees not to use any corporate funds for contributions. Instead, the corporate PAC
must fundraise from individuals and non-corporate entities. The PAC may, however, use
corporate funds to pay operating costs (e.g., office space, phones, salaries, fundraising
activities).
State law provides the only limits on the size of contributions that an individual
may give to PACs and political party committees. In 2001, an individual could
contribute up to $76,500 to a political party, and up to $150,000 to a PAC. However, the
city’s “single source” rule prevents an individual contributor from evading the city’s
candidate contribution limit by establishing multiple PACs, contributing large sums to
those PACs, and then directing the PACs to contribute to a participating candidate.
Under the “single source” rule, an individual and any political committees controlled by
that individual are considered a single source.46
Likewise, the city’s “earmarked contribution” rule prevents an individual from
evading the candidate contribution limit by making contributions to a political party that
are earmarked to be transferred to a particular candidate. Earmarked contributions are
considered to be from both the individual and the political committee and thus, when
totaled with contributions made directly to the candidate by the individual, must not
exceed the contribution limit.47
d. City Limits on Candidate Personal Wealth Expenditures
A participating candidate’s contributions to his or her own campaign are also
limited. A participating candidate may not use personal funds in excess of three times the
contribution limit for the office sought in connection with his or her campaign. In the
2003 and 2005 elections, candidate personal wealth expenditures are limited to the
following amounts:
· Citywide Office: $14,850
· Borough President: $11,550
· City Council: $8,250
11
e. City Loan Restrictions
City law mimics state law with regard to loans. A loan made to a candidate not in
the regular course of the lender’s business is deemed a contribution by the lender, to the
extent not repaid by the date of the election. A loan made to a candidate in the regular
course of the lender’s business is deemed a contribution by the obligor on the loan and by
any other person endorsing, cosigning or otherwise providing security for the loan, to the
extent not repaid by the date of the election.48
f. State Limits on Contributions to Candidates from Non-Relatives
State contribution limits are based on the number of registered voters in a district
and, consequently, vary based on the office sought by the candidate. A candidate is
permitted to receive larger contributions from relatives than from non-relatives. The state
law formulas for limits on contributions to New York City candidates from non-relatives
are as follows:49
· Party Nominating Elections (Primary and Primary Runoff Elections): the
number of active registered voters in the candidate’s party in the district
multiplied by $0.05.
· General Elections: the total number of active registered voters in the
district multiplied by $0.05.
· However, in the case of a party primary election for any citywide office in
New York City the amount shall not be less than $4,000 nor more than
$12,000, adjusted for changes in the cost of living (2001 COLA: $4,700
and $14,700, respectively).
· In the case of a general election for any citywide office in New York City,
the amount shall not exceed $25,000, adjusted for changes in the cost of
living (2001 COLA: $30,700).
· In the case of any election for borough president or city council, the
amount shall not be less than $1,000 nor more than $50,000, with no
adjustment for changes in the cost of living.
Figure 2
State Law Limits on Contributions from Non-Relatives (2001)
Democratic
Primary
Republican
Primary
Minor Party
Primary
General
Election
Citywide
Offices50 $14,700 $14,700 $4,900 $30,700
Borough
President51
$38,345—
$5,14352
$6,884—
$2,28853 $1,000
$50,000—
$11,25654
City
Council55 $3,597—$1,515 $1,662—$1,000 $1,000 $4,513—$2,377
12
This combination of statutory formulas, minimums and maximums, has created a
confusing regime of contribution limits. In many electoral districts the contribution
limits are determined by application of the formula, while in other districts the limits are
determined by statutory minimums or maximums. To clarify this complicated scheme,
Figure 2 displays the actual contribution limits in effect for the 2001 elections. The
accompanying endnotes detail how the limits were derived.
g. State Limits on Contributions to Candidates from Relatives
New York State law establishes higher limits on contributions from a candidate’s
relatives as compared to other persons. The state law formulas for limits on contributions
to city candidates from any candidate’s child, parent, grandparent, brother, sister, and the
spouses of such relatives are as follows:56
· Party Primary Elections: the number of active registered voters in the
candidate’s party in the district multiplied by $0.25.
· General Elections: the total number of active registered voters in the
district multiplied by $0.25.
· However, under no circumstance shall the contribution limit be less than
$1,250 nor more than $100,000.
Figure 3 lists the actual limits on contributions to candidates from relatives in the 2001
New York City elections. The amounts listed in the rows for borough president and city
council, as well as in the column for minor party primaries, denote the range of
contribution limits (from highest to lowest) in the multiple races covered by these
categories.
Figure 3
State Law Limits on Contributions from Relatives (2001)
Democratic
Primary
Republican
Primary
Minor Party
Primaries
General
Election
Citywide
Offices $100,000 $100,000 $11,059—
$1,250
$100,000
Borough
President
$100,000—
$25,71557
$34,424—
$11,444 $3,564—$1,250
$100,000—
$56,28458
City
Council
$17,988—
$7,576 $8,310—$1,250 $1,250
$22,569—
$11,888
h. State Limits on Contributions to and from Political Party
Committees
Under New York State law, a political party committee is excluded from the
definition of “contributor” and is therefore not bound by state contribution limits.59 A
party committee may make unlimited contributions to the party’s candidates.
13
Contributions by individuals to political parties are limited, although these limits are very
high. In 2001, aggregate contributions to a political party by an individual were limited
to $76,500 per year.60
State law includes a provision that purports to limit party spending on behalf of
candidates. As a result of the 1976 U.S. Supreme Court decision in Buckley v. Valeo,
striking down mandatory spending limits, the provision has never been enforced.61
i. State Limits on Contributions from Corporations
New York State law limits corporations, except corporations organized or
maintained only for political purposes, from making political contributions or
expenditures in excess of $5,000 in the aggregate to all candidates running for office in
the state in any calendar year.62 Each affiliated or subsidiary corporation, if a separate
legal entity, has its own limit.63
j. State Loan Restrictions
Under New York State law, a loan made to a candidate or a non-party committee
not in the regular course of the lender’s business is, to the extent not repaid by the date of
the election, deemed a contribution.64 A loan made to a candidate or a non-party
committee in the regular course of the lender’s business is, to the extent not repaid by the
date of the election, deemed a contribution by the obligor on the loan and by any other
person endorsing, co-signing or otherwise providing security for the loan.65
k. State Aggregate Limit on Contributions and Loans to Candidates
and PACs
No individual, other than the candidate and the candidate’s family members, may
contribute or loan more than a total of $150,000 in connection with the nomination or
election of persons to state or local public office in any one calendar year. This aggregate
limit only applies to such loans as are not repaid or discharged in the calendar year in
which they are made.66 The aggregate limit applies only to individuals.67 Consequently,
this provision limits the amount of money that an individual may contribute to a PAC, but
there is no limit on the amount of money that one PAC may contribute to another PAC.
The $150,000 aggregate limit serves as the only limit on the size of contribution that an
individual may make to a PAC.
3. Voters Guide
The city charter charges the Campaign Finance Board with the publication of a
voters guide for every contested city election containing information about all candidates,
regardless of whether or not the candidate participates in the matching funds program.68
Each voters guide must contain material explaining:69
· biographical information on each candidate;
· concise statements by each candidate;
· concise statements explaining each ballot proposal or referendum;
· the date and hours during which the polls will be open for the election;
· how to register to vote;
· how to vote by absentee ballot; and
· maps showing the boundaries of council districts.
14
4. New York City Campaign Finance Board
The Campaign Finance Board is composed of five part-time members, with two
members (not registered in the same political party) appointed by the mayor, two
members (not enrolled in the same political party) appointed by the speaker of the
council, and the fifth member—who serves as chairperson—appointed by the mayor after
consultation with the speaker. Each board member must be a resident of the city. The
board members serve staggered five year terms, are not subject to term limits and thus
may be reappointed.
The board is charged solely with the implementation of the matching funds
program and does not regulate government ethics or the campaign finance activities of
non-program participants. The board’s duties include:70
· Investigation and auditing to ensure compliance with program rules and
regulations;
· Rendering advisory opinions with respect to questions arising under the
Campaign Finance Act;
· Receiving campaign finance disclosure reports from program participants;
· Development and maintenance of a computer database of campaign
finance information for all program participants, which is accessible to the
public via the internet;
· Improving public awareness of the candidates, proposals or referenda in
all city elections through publication of a non-partisan, impartial voters
guide.
The Campaign Finance Board has the power to investigate all matters relating to
its administration of the city’s campaign finance laws. The board has the power to
subpoena persons and evidence related to an investigation, as well as examine and take
testimony under oath of such persons.71 The board may also institute civil lawsuits
against candidates and campaigns.
In addition to collecting any public funds wrongfully obtained, the board may
assess a penalty on participants who violate the city’s campaign finance law in an amount
not to exceed $10,000, except in the event that a violator has exceeded an applicable
spending limit. A participating candidate who exceeds the spending limit may be fined
up to three times the amount by which the limit was exceeded. In addition to these
penalties, the intentional or knowing violation of the campaign finance law is punishable
as a class A misdemeanor crime.72 Finally, the Campaign Finance Board is authorized to
publicize violations of the campaign finance law and does so regularly.73
15
III. A Model For the Nation
A. $4-to-$1 Match Increases Importance of Small Contributions,
Expands Political Participation and Reduces Candidate Dependence
on Wealthy Donors
New York City’s public financing program, as originally enacted in 1988,
matched contributions up to $1,000 per contributor on a dollar-for-dollar basis. The
Campaign Finance Board recommended in its first major report, Dollars and Disclosure
(1990), that city law be amended to match contributions up to $500 per contributor at the
increased rate of $2 in public funds for each $1 contributed. The law was not amended
and the board repeated this recommendation in its second report, Windows of Opportunity
(1992). The board believed that matching smaller contributions at a higher rate would
“provide added financial rewards for candidates who collect smaller contributions”74 and
“democratize” fundraising.75
The Campaign Finance Board again recommended an increase in matching funds
in its report A Decade of Reform (1998). This time, however, the board changed its
earlier recommendation and suggested that the city match contributions up to $250 at the
rate of $3-to-$1.76
The city council finally amended the campaign finance law in 1998, making
candidates willing to forego corporate contributions eligible for matching funds at the
increased rate of $4-to-$1. Candidates choosing to accept corporate contributions would
still be eligible for matching funds at the $1-to-$1 rate.
Shortly after the council increased the matching rate for candidates foregoing
corporate contributions, New York City voters adopted a charter amendment banning
corporate contributions to all candidates participating in the public financing program.
The Campaign Finance Board interpreted the charter ban on corporate contributions as
making all publicly financed candidates eligible for the $4-to-$1 match.77
In 2001, after several special elections in which matching funds were distributed
by the board at a $4-to-$1 rate, the Giuliani administration challenged the board’s
interpretation of the law in court, arguing that the $4-to-$1 match was intended only as an
enticement for candidates to forego corporate contributions. Before the lawsuit was
decided, the city council adopted a local law—over Giuliani’s veto—supporting the
Campaign Finance Board’s position and clearly establishing the $4-to-$1 match for all
participating candidates. Giuliani’s lawsuit was dismissed as moot.78
New York City’s 2001 elections were the first citywide elections to be held under
the $4-to-$1 match. Participating candidates were eligible to receive $4 in public funds
for every $1 in private contributions of $250 or less from individual residents of the city.
By raising the matching funds rate to $4-to-$1, the city council hoped candidates
would solicit more small contributions from New York City residents who could not
afford to make large contributions. A candidate in 1997 needed to receive a $1,000
contribution from a donor to leverage the $1,000 available in public funds per
contributor. In 2001, the new matching formula rewarded a candidate with $1,000 in
16
public funds for a $250 contribution. In other words, a $250 contribution was worth
$500 to a candidate in 1997 but $1,250 in 2001.
Candidates forced to raise as much money as possible without the benefit of a
generous matching funds program typically ignore small donors and focus instead on
wealthy donors capable of writing $1,000 checks. Contributing to a political campaign is
a form of electoral participation. Broader participation means more democracy.
According to Campaign Finance Board statistics, the number of contributions to
candidates participating in the campaign finance program nearly doubled, from 71,600 in
1997 to 139,400 in 2001. The number of contributors increased by more than 40,000—
from approximately 60,000 in 1997 to about 102,000 in 2001.79 As a result of the
increased number of candidates and the $4-to-$1 match, the 2001 elections involved the
largest number of contributors in the program’s history.
Newly elected Councilwoman Helen Foster, an African American who represents
a predominantly African American district in the Bronx, noted that the $4-to-$1 match
“allowed people from [her] district, which is a district that is relatively poor, to make
their donations count.” She testified, “I was very encouraged. People would come and
give me $10 and happily give the $10 knowing that it could multiply.”80
Candidates were asked if any voters criticized their use of public funds to run
their campaigns. Candidates said they received nothing but positive feedback from the
public. Newly elected Councilman David Yassky told CGS:
I never had anyone raise it to me in a critical way. At all of my
fundraisers, when I explained the campaign finance system and the 4-to-1
match, people were often astonished at the generosity of it. People
undoubtedly gave more money than they otherwise would have, because
of the campaign finance system. I explained the matching system,
somebody would give me a check for $100, who I think would have given
$50, because of every dollar being matched 4-to-1. I got a lot of
contributions of $250, which is the maximum amount that gets matched,
from people who I’m sure would have given $100 in the absence of the
matching program.81
Yassky’s weren’t the only contributors to increase the size of their contributions
to maximize the $4-to-$1 match. The most popular contribution size (the mode) rose
from $100 in 1997 to $250 in 2001. The mode was $100 in 1993 and $25 in 1989.82
This increase in the modal contribution size might cause concern to the extent that larger
contributions increase the risk of corruption. Given that contributions above $250 are not
matched, however, it is unlikely that the modal contribution size will continue to rise. A
contribution of $250 is low enough to present little risk of corruption of a candidate
raising hundreds of thousands if not millions of dollars.
The average contribution size decreased from $412 in 1997 to $388 in 2001,
though it remained higher than the average contribution of $326 in 1989 and $303 in
1993.83 It is clear from these averages that, while the $4-to-$1 match has encouraged
more contributors to give to candidates, the city’s high contribution limits allow
candidates to receive a significant number of large contributions.
17
The $4-to-$1 match is undoubtedly a significant factor in the increased
competitiveness of city council elections. New York Public Interest Research Group
(NYPIRG) Senior Attorney Gene Russianoff praised the $4-to-$1 match, explaining:
The truth is, that the program was not doing a lot for the competitiveness
of the city council overall until now—the twelfth year of the program.
The set of incumbent advantages in New York are enormous. You can’t
get on the ballot. Challengers get knocked off before they ever even get
started. They run the district lines so they perfectly suit the incumbent.
The whole thing is set up in a way that really dramatically favors
incumbents, particularly in the local legislature [i.e., city council], which
is precisely why Ron Lauder came along in 1993 and proposed term
limits. The campaign finance program wasn’t changing any of the reality
on the council level. But now the 4-to-1 match also makes a big
difference.84
The Campaign Finance Board administered a post-election survey to all
candidates late in 2001 asking, “Do you believe that the 4-to-1 public funds matching rate
is appropriate?” Candidate responses were mixed, with 14 candidates supporting the $4-
to-$1 match and seven candidates advocating a reduction or elimination of public
financing. Candidate responses included:
· “Yes, it encourages contributors to participate by giving.”
· “The rate is fair and if anything raised not lowered.”
· “I believe it is too high. Candidates should work harder at fundraising,
especially at the grass-roots level.”
· “Absolutely not. Optimally there should be no matching fund
program, but if the public must have it (of which I am not certain) an
even match would be more than sufficient.”
· “4-1 is great, but it could be increased.”
· “No, I believe that any matching rate of public funds is immoral, but
the 4-to-1 rate is particularly egregious. It amounts to stealing
taxpayers’ money for the benefit of candidates whom the taxpayer may
not support.”
· “It was a good amount. More would have been helpful.”85
Some candidates were initially skeptical, but then changed their minds. Robert
Cermeli, a candidate in the 30th council district Democratic primary, said, “At first I
thought it was too generous. I don’t think the 4-to-1 rate pertains to every city but, given
the demographics and the size of the population I had to deal with, I had a lot of people to
mail to and I needed the money.” Cermeli continued, “I think what they’re trying to do is
equalize the playing field, so that a person like me—who does not come out of the party
machinery, but does represent the public—can run a competitive campaign.”86
The Campaign Finance Board also asked its survey respondents whether joining
the campaign finance program led candidates to change their fundraising strategy.
Twenty-four candidates answered “yes,” while 22 said “no.” Candidates commented:
18
· “More people were willing to give $100 donations to see their
contribution become $500.”
· “The emphasis shifted to getting smaller donations from more people.”
· “Obviously, I focused my solicitations locally instead of making more
universal appeals and could not solicit from businesses I might have
otherwise targeted.”
Nonetheless, political pundit Fred Siegel was skeptical about the $4-to-$1 match leading
to increased grassroots fundraising, at least among council candidates. Siegel
commented, “There are very few fat cats who contribute to council campaigns in the first
place. If I look at how people have run the city council races that I’ve been involved in,
at least peripherally, they’ve always involved endless house parties. City council is too
insignificant.”87
A corollary to the increased importance of small contributions in candidates’
campaigns is the decreased need of candidates to rely on wealthy special interests to fund
their campaigns. Donors who make large contributions to candidate campaigns want
something in return for their investment. Candidate reliance on a large number of small
contributions substantially reduces the threat of corruption posed by candidate reliance on
a small number of large contributions. Newly elected Brooklyn Borough President Marty
Markowitz, praising the public financing program at the Campaign Finance Board’s
public hearing, put it this way:
[I]t is a system that allows those of us who have no access to wealth . . . an
opportunity to be beholden to no one other than the people who elect us . .
. . The [public] campaign financing gave me the freedom of not having to
take money from the financial powerhouses in the borough of Brooklyn.
It gave me the freedom that I didn’t have to enter into any arrangements,
whether spoken or expected, in terms of payback if I become elected. It
gave me the freedom to encourage people like myself that work for a
living, that don’t make a great income . . . [to give] me $25 to be able to
make that $125.88
New York City’s $4-to-$1 match has contributed in two distinct ways to an
increase in the number of city residents participating in the electoral process. The $4-to-
$1 match has increased the total number of candidates running for city office. The $4-to-
$1 match has also inspired more city residents to participate in elections by making small
donations to candidates. The $4-to-$1 match makes it just as worthwhile for a candidate
to campaign among voters who can write $250 checks as special interest political action
committees that make $1,000 contributions. The $4-to-$1 match also makes it possible
for candidates without access to $1,000 donors to run competitive campaigns. For these
reasons, New York City should retain its $4-to-$1 match.
B. Public Financing Enables Candidacies by Individuals Who
Otherwise Would Not Have Run for Public Office
Public financing enables individuals without access to wealthy donors to wage
competitive campaigns for public office. Public financing can increase the political
19
representation of historically underrepresented communities: women, people of color and
lower-income people of every race. In the words of C. Virginia Fields, the African
American Manhattan borough president:
The underlying purpose . . . of the Campaign Finance Program is to make
our elective process more democratic and encourage people of limited
resources to run for office . . . . [C]andidates from communities of color
should not be constrained from seeking higher office because of not
having access to the financial resources required.89
In 1989, one year after adoption of the public financing program, New York City
voters adopted a charter amendment increasing the size of the city council from 35 to 51
seats. The twin reforms of public financing and city council expansion were intended to
give greater representation to historically underrepresented communities.90
A special off-year election was held in 1991 to elect representatives for the 51
newly-drawn council districts. Twelve new people of color were elected to the city
council, ten of whom had participated in the public financing program.91 Una Clarke, a
Caribbean-American city council member elected in 1991, said that the public financing
program enabled “a larger number and a more diversified group of persons, both
economically and racially, to run an effective campaign and to win.” Clarke pointed to
herself as an example.92
The availability of public financing dovetailed with term limits in 2001 to produce
an unprecedented number of candidates running for public office in New York City.
More than 350 candidates joined the public financing program in 2001, nearly 100 more
candidates than the 1991 record of 256.93 As a result of New York State’s draconian
ballot access laws, however, 73 of these candidates did not qualify for the ballot.
Nonetheless, encouraged by 4-to-1 matching funds and the absence of incumbents in
most races, more candidates than ever before threw their hats into the ring.
New York City’s trend toward increased political representation of traditionally
underrepresented communities continues today. As a result of the 2001 elections,
approximately half of the city’s 51 council seats, three of five borough president seats
and one citywide office are held by people of color. Asians and Asian Americans,
however, make up nearly 10% of the city’s population and continue to be dramatically
underrepresented, having just elected the first Asian American to city government in
2001.94
Nevertheless, progress has clearly been made over the past decade toward more
democratic governance. New York City’s public financing program has enabled
candidates from a wide variety of backgrounds—candidates who without public
financing would not have run for office—to run competitive campaigns and win.
Most candidates interviewed cited both the availability of public financing and
term limits as equally important to their decision to run for office. District 1 city council
candidate Rocky Chin stated:
I chose to become a candidate in part because of the term limits, but also
in large part because of the campaign finance program. . . . One of the
highlights of our fundraising campaign was we were able to track a very
20
broad and diverse base of donors, among the largest number of individual
donors of any City Council candidate.95
City council candidate Steven Banks told CGS:
The confluence of term limits in New York City and the availability of
public financing is what led to me running. Frankly, I wouldn’t have run
if it wasn’t for the two things occurring. Although I didn’t win, people
thought it was a good race to have a nontraditional candidate in. And I
think, when I look around the city, the availability of matching funds made
it possible for lots of different kinds of people to run—not necessarily
win—but run.96
When asked whether the availability of public financing influenced his decision to run for
office, first term Councilman David Yassky replied, “Unquestionably! I wouldn’t have
done it without public financing. And couldn’t have done it. I think there were a ton of
races in New York City this year where the person who won would not have won without
the campaign finance program.”97 City council district 22 candidate Sandra Vassos said
that “The campaign finance program was a definitive factor in my decision to run for
office.”98
Public advocate candidate and former New York State Assemblyman Scott
Stringer insisted that “middle-income New Yorkers who were not blessed with a lot of
money in their families . . . were able to run competitive races because of the [public
financing] program. I’m very grateful for it.”99 And Campaign Finance Board Executive
Director Nicole A. Gordon noted:
At the city council level, the value of having public funds has changed the
face of the races. It really did give an opportunity to people who might
otherwise not have run. And this year we had some examples of that at
the citywide level as well. In the mayoral primary, we would in all
likelihood have had a different candidate coming out of that primary if
there hadn’t been a campaign finance program. I think that Freddy Ferrer
would not have had as meaningful an opportunity. [Former Comptroller
Alan] Hevesi would possibly have raised so much more money than the
others that the other candidates might not have even entered the race. I
know one candidate for controller who said “I’m a guy from Brooklyn, a
city council member. I never could have dreamed of running a citywide
race without the 4-to-1 match.”100
Candidate after candidate testified at the Campaign Finance Board’s public
hearing in December 2001 that the availability of public financing made their candidacies
possible. To be sure, some candidates would have run regardless of the availability of
public financing. First term Councilman John Liu, for example, told CGS that the
availability of public funds did not influence his decision to run for office. But when
asked whether public financing effected his ability to run a competitive campaign, Liu
responded, “Absolutely. It takes the onus of fundraising largely out of the picture. It
levels the playing field for candidates. My campaign benefited from being able to get
matching funds. The public benefits from the incentive for candidates to give full
disclosure.”101
21
It is clear that the public financing program, particularly as amended in 1998 to
increase the matching funds rate to $4-to-$1, has met or exceeded the program’s goal of
enabling candidates with limited access to wealthy donors to mount viable campaigns.
C. Candidate Participation Is Near 100% and Has Risen Dramatically
Since 1989
Matching funds were first available to New York City candidates in 1989, when
48 of 139 candidates (35%) appearing on the ballot participated in the public financing
program. (“Participating” candidates agree to abide by spending limits and other
campaign finance restrictions, but may not meet all of the requirements to receive public
funds.) In 1989, 37 candidates (27%) met all program requirements and received public
matching funds. (The raw data on candidate participation can be found in Figure 6,
below.)
Figure 4 shows the increasing trend in candidate participation between 1989 and
2001. Among all candidates qualifying for the ballot during this period, overall candidate
participation in the program has risen from 35% to 79%. Figure 4 also shows the
percentage of candidates on the ballot that received public matching funds. Candidate
receipt of public financing has more than doubled from 27% to 56% between 1989 and
2001.
Figure 4
Overall Candidate Participation
35%
57%
63% 62%
79%
27%
46%
39% 36%
56%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1989 1991 1993 1997 2001
Candidates Participating in the Program
Candidates Receiving Public Funds
22
Both the number of candidates receiving public funds and the total amount of
public funds distributed to candidates has risen dramatically between 1989 and 2001. In
1989, 37 candidates received $4.5 million in public funds. In 2001, 200 candidates
received a total of more than $41 million in public funds.
An arguably more accurate estimation of the popularity of the program is
participation among serious candidates, as opposed to candidates who wish merely to
appear on the ballot. Figure 5 shows program participation among serious candidates,
with “serious” defined as a candidate who has raised or spent at least $5,000. A
candidate who raises or spends only $5,000 for a mayoral campaign in New York City
might not be deemed a serious candidate. However, a low threshold of exclusion was
chosen in order to be over-inclusive rather than under-inclusive.
Figure 5 shows that program participation among “serious” candidates who
raised or spent at least $5,000 is substantially higher than overall candidate participation,
rising from 77% in 1991 to 97% in 2001. New York City’s serious candidate
participation rate is among the highest in the United States, rivaled only by the public
financing program in Los Angeles which also has nearly full participation. The
percentage of New York City’s serious candidates who actually received public funds is
the highest in the United States, surpassing even Los Angeles.102
Figure 5103
"Serious" Candidate Participation
77%
82% 81%
97%
70%
58% 57%
78%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1991 1993 1997 2001
Serious Candidates Participating in the Program
Serious Candidates Receiving Public Funds
23
Figure 6
New York City Candidate Participation
1989 1991 1993 1997 2001
Total Candidates 139 239 170 229 355
Candidates Participating in the
Program
48
35%
136
57%
107
63%
141
62%
280
79%
Candidates Receiving Public
Funds
37
27%
111
46%
66
39%
82
36%
200
56%
Total “Serious” Candidates104 NA 159 113 145 256
“Serious” Candidates
Participating in the Program NA
123
77%
93
82%
118
81%
248
97%
“Serious” Candidates Receiving
Public Funds NA
111
70%
66
58%
82
57%
200
78%
As is clear from Figures 4, 5, and 6, candidate participation and receipt of
matching funds has grown steadily throughout the program’s history. The percentage of
serious candidates participating in the program, and thus agreeing to spending limits, has
exceeded 80% in the last three elections, reaching nearly 100% in 2001. The jump in
candidate participation from 81% in 1997 to 97% in 2001 is likely due to the increased
matching funds rate from $1-to-$1 to $4-to-$1. In 2001, 47 of 51 city council members
elected were participants in the public financing program. Consequently, these
candidates abided by limits on the size of contributions accepted, the source of
contributions and the total amount of campaign funds spent. These candidates also
agreed to far more extensive campaign finance disclosure than nonparticipating
candidates.
New York City’s high levels of candidate participation suggest approval by
candidates of the public financing program as a whole. This near-full participation is
solid evidence that the spending limits, contribution limits, disclosure requirements,
public funding levels and other provisions of the program are reasonable. The general
trend of increasing candidate participation shows the value of the city’s willingness to
revisit and revise the campaign finance law following each election. This evolution of
the public financing program, resulting in increased levels of candidate participation,
bodes well for the future of New York City elections.
D. Public Financing Qualification Thresholds Are Appropriately Set
Public financing programs, like any government program, must spend taxpayer
dollars wisely. Public financing programs must thus provide funding to qualified
candidates, not to any and every candidate that seeks it. One of the greatest challenges
facing architects of public financing programs is distinguishing between serious
24
candidates worthy of receiving public funds and fringe candidates with little popular
appeal.
If the qualification threshold is too high, then few candidates will be publicly
funded and the goals of the program will be frustrated. If the threshold is too low and
fringe candidates receive funding, program costs will skyrocket and limited public
resources will be squandered on candidates with no realistic chance of election.
New York City’s program requires candidates to demonstrate a broad base of
popular support by collecting a specified number of contributions that total a specified
dollar amount, depending on the office sought, in order to qualify for matching funds. A
candidate for mayor, for example, must collect at least 1,000 contributions of $10 or
more for at least $250,000 in total. A candidate for city council must collect 50
contributions of $10 or more from residents of the council district for at least $5,000 in
total. The qualification thresholds for other city offices are listed in section II(B)(above).
To illustrate the difficulty of candidates seeking public financing to meet all
program requirements and actually receive funding, Figure 7 shows the candidates who
received public funds as a percentage of all candidates who agreed to the campaign
finance program restrictions. If anything, these figures overstate the difficulty of meeting
the qualification thresholds because, undoubtedly, some of the candidates who joined the
public financing program had no intention of waging serious campaigns.
Figure 7
Candidates Receiving Public Funds
as a Percentage of Candidates in
Campaign Finance Program
77%
82%
62%
58%
71%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1989 1991 1993 1997 2001
25
In its 2001 post-election survey, the Campaign Finance Board asked candidates if
the fundraising thresholds were too high, too low, or appropriate. Among the 47
candidates who responded to the questions, 17% said the thresholds are too high, 9% said
the thresholds are too low and 74% thought the thresholds appropriate. Campaign
Finance Board Executive Director Nicole A. Gordon told CGS:
One of the things that we’ve found is very difficult with our local
campaigns is that, this year, the campaigns that had a hard time meeting
the threshold in the city council races did not have a hard time meeting the
monetary amount. They had a hard time meeting the number of district
resident contributions, which is 50 per city council district. And that’s
troubling because you want the program to be something that is generating
a lot of local support, and if you can’t show that you have 50 council
district residents who are supporting you, that’s not a very good sign for
your campaign.105
Council candidate Ethel Chen suggested that the number of required in-district
contributions be increased from 50 “to 100, or even 200.” Chen complained that the
opponent who beat her in the Democratic primary raised most of his money from outside
the district.106
Council candidate Steven Banks commented that the 50-resident contribution
requirement should be higher if the goal is to force people to raise money in district. But
Banks feels the number is appropriate if the goal is simply to encourage nontraditional
candidacies, because nontraditional candidates have a hard time raising any money.
Banks suggested that one answer might be to institute a requirement that a certain
percentage of total contributions must be raised from inside the district.107
Political attorney Carmen Williams, who has worked as the campaign finance law
compliance officer for candidates at the federal, state and New York City levels and
serves as a CGS consultant,108 applauded the in-district contribution requirement for
council candidates. Williams asserts that:
The campaign finance program forces candidates to think about things
completely differently from the way they have in the past. The first
instinct of the typical candidate is not to prioritize fundraising within their
district. Most candidates raise money outside of district. The good that
the program does goes beyond eliminating corruption. The program
brings more people into the process.109
Throughout the history of New York City’s public financing program nearly 500
candidates have met the qualification thresholds and received public funds. The
percentage of campaign finance program participants that received public funds has
exceeded 70% in three out of five elections, and has exceeded 50% in every election.
The data and candidate testimony show that serious candidates are able to meet the
qualification thresholds with little or no difficulty. No adjustments to the thresholds are
recommended.
26
E. Electronic Disclosure Has Revolutionized Dissemination of
Campaign Finance Information
The New York City Charter mandates that the Campaign Finance Board maintain
a computer database containing candidate campaign finance information and that this
database be accessible to the public.110 The Campaign Finance board has taken this
mandate seriously. Throughout the history of the city’s public financing program, the
Campaign Finance Board has explored ways of using technology to improve disclosure to
the general public.
Prior to the city’s launch of the public financing program in 1988, campaign
finance disclosure for city elections was in a miserable state. The authors of Power
Failure, a detailed history of New York City politics published in 1993, described the
state’s campaign finance disclosure law:
Lack of enforcement has exacerbated the law’s weaknesses. The New
York State Board of Elections delegates responsibility for enforcing
the election laws to local election boards. However, these boards are
not given resources adequate to ensure compliance and to make the
data available to the public. For the most part, these offices serve only
as storage places for the candidates’ filings. Summaries of the data are
nonexistent and computerization of the statements is rare. This lax
enforcement essentially negates the [state] law’s public disclosure
requirements.111
The Campaign Finance Board immediately changed this. In October 1989, the
board released its first computerized public disclosure reports. In January 1990, the
board made available to the public computer diskettes containing complete campaign
finance data for the leading mayoral candidates.112
The city’s electronic disclosure of campaign finance information has continued to
improve throughout the years. The Campaign Finance Board developed its own
candidate campaign finance reporting software, known as C-SMART, and introduced it
during the 1993 election cycle.113 The board launched its Web site in July 1997 which,
by the summer of 1998, contained a searchable database of all campaign contributions.114
The Web site was redesigned for the 2001 elections. Improvements included the addition
of candidate expenditure information to the searchable database.115
Campaign Finance Board Executive Director Nicole A. Gordon noted the great
strides that have been made since the program’s inception:
At the citywide level, the program’s been tremendously effective on
disclosure. There’s no question now that we are light years away from
where we were before the program was in place. And part of the
effectiveness of the disclosure is the incentive that candidates have to do it
right, because if they don’t, they won’t get public funds. I think that’s a
very important component. I’m always very skeptical of the people who
propose the “disclosure only” solution to campaign finance problems. I
don’t believe in that. But I think the disclosure has been a tremendous
success, particularly in New York, where we have a very poor past record
of disclosure on the state level.116
Thousands of voters, candidates, journalists and scholars utilize the Campaign
Finance Board’s electronic campaign finance information annually. (Much of the
analysis in this report would have been impossible without access to campaign finance
information in an electronic database format.) New York City is setting the standard
nationwide for electronic campaign finance disclosure. When asked what the greatest
strengths of the city’s campaign finance program are, NYPIRG’s Gene Russianoff
replied:
Disclosure! Reporters, the media and even the public really know what’s
going on with the candidates. A lot of stuff came out about the candidates
during the [2001] campaign that affected how people view them. Alan
Hevesi, the way his consultant reported his costs, became an issue which
was a liability for him. Mark Green’s brother’s bundling issues became a
front page Times story on him; Peter Vallone, the speaker, spending $2
million of council money to promote his name and face. All that stuff
came out, and shaped how people viewed the candidates. You know, you
are what you eat—how you fundraise tells a lot about the candidate and
how they’ll behave if elected. It’s all in a database and it’s all accessible.
It’s a very, very powerful tool.117
Candidates voiced near-unanimous praise of the program’s electronic disclosure
component. Councilman David Yassky described the electronic filing succinctly as,
“Perfect, great.” Yassky was asked if he used the Campaign Finance Board Web site to
keep track of his opponents fundraising and he replied:
Absolutely. There are 51 council districts. My opponent raised more
money than the candidates in any of the other races [except for one
candidate in district one]. He raised maybe $315,000 or $320,000,
something like that. The newspapers wrote stories about how much
money this guy raised. And I think that put him in a bad light.118
A few shortcomings of the C-SMART software were noted by candidates
testifying at the board’s public hearings. District 22 council candidate Sandra Vassos
recommended that the electronic filing systems be redesigned so as to allow candidates to
file their campaign finance reports over the Internet, rather than submitting diskettes to
the board. Vassos also recommended that the C-SMART software be modified to
interface with popular accounting software that is often used by candidates for record
keeping.119
Aside from these minor areas for improvement, the electronic filing and
disclosure component of the campaign finance program is a resounding success.
Candidates, voters, journalists and scholars are able to access candidate contribution and
expenditure information almost instantaneously when it is filed with the Campaign
Finance Board. The level of disclosure detail required by the city is far greater than that
required by the state of New York. Electronic disclosure has revolutionized the
dissemination of campaign finance information in New York City elections.

28
F. Program Funding Mechanism Serves as a Model for Other
Jurisdictions
The most critical factor in the success or failure of a public campaign financing
program is whether the program is sufficiently funded. At one end of the spectrum are
programs doomed to failure by a lack of funding, such as the program in Suffolk County,
New York. Suffolk County’s program is the subject of Dead On Arrival: Breathing Life
Into Suffolk County’s New Campaign Finance Reforms, a report published by CGS in
June 2002. Suffolk County’s public financing program relies entirely on volunteer
donations from individuals who respond favorably to the Suffolk County Campaign
Finance Board’s solicitation included with annual property tax bills. Not surprisingly, the
program is woefully underfunded.
At the other end of the spectrum are public financing programs in New York City
and the City of Los Angeles. The public financing program of the City of Los Angeles
relies on a charter-mandated annual appropriation of $2 million (adjusted for changes in
the cost of living) into a public financing trust fund. The city charter completely insulates
public financing program appropriations from political pressures. As a result, the city’s
public financing program has been fully funded for every election cycle.
New York City’s program funding mechanism has proven equally well insulated
from political pressures. New York City’s program relies on a modified version of the
standard legislative budget process. The Campaign Finance Board submits its budget
estimate to the mayor and, because of a 1998 voter-approved charter amendment, the
mayor must include this estimate without revision in the executive budget sent to the city
council for approval.120 This differs from the standard legislative process used to fund
public financing programs in jurisdictions such as San Francisco, where the mayor has
the power to submit a budget to the legislative body with no public financing program
appropriation whatsoever.
New York City’s legislative appropriation process is backed up by a unique
charter provision which authorizes the Campaign Finance Board, in the event that
insufficient funds are allocated through the legislative budget process, to draw necessary
funding directly from the city’s general fund via written order to the city’s commissioner
of finance.121 The Campaign Finance Act was passed by the city council in February
1988 without a guaranteed funding source. The council initially promised to set aside
$28 million for the 1989 elections, but then recanted in June due to a looming fiscal
crisis. NYPIRG Senior Attorney Gene Russianoff lobbied the charter revision
commission to include the draw-down provision among its charter amendments about to
go before the voters. The commission did so and the amendments passed. The drawdown
provision was codified in the charter and the Campaign Finance Board was
established as a charter commission.122
The “draw-down” provision has never been utilized because the mayor and
council have fully funded the program in every election year. But the draw-down
provision serves as valuable insurance for the Campaign Finance Board. Its very
existence in the city charter makes it unlikely that the city would refuse to appropriate the
necessary program funding, because elected officials would be publicly criticized for
29
undermining the voter-approved program and the funding would be obtained by the
Campaign Finance Board from the city’s general fund: a lose-lose situation for officials.
New York City’s program funding mechanism has advantages and disadvantages
when compared to that of Los Angeles. The major advantage of New York City’s
funding mechanism is that it allows for greater flexibility in funding levels, whereas the
funding mechanism in Los Angeles, a $2 million annual appropriation, would require a
voter-approved charter amendment to increase its amount. The disadvantage of New
York City’s funding mechanism is that the modified legislative budget process is still
subject to the approval of elected officials who often oppose campaign finance reform
because they believe it tends to aid political challengers. And some have suggested that
New York City’s draw-down provision may be susceptible to legal challenge because it
empowers an un-elected administrative board to circumvent the legislative process. The
legality of the draw-down provision has never been tested.
New York City’s public financing program funding mechanism has worked well,
fully meeting all qualified candidate requests for public funds throughout the program’s
history. The city’s 2001 elections were a serious test for the funding mechanism, with
over $41 million of public funds distributed to 199 candidates. New York City’s
program funding mechanism serves as a model for other jurisdictions.
G. Program Costs Are a Tiny Fraction of the Total City Budget
The amount of money [distributed through the Program] is, in the budget of
New York City . . . infinitesimal. You can’t find it. It’s a percentage of a
percentage of a percentage of a percentage.
--Rudolf W. Giuliani (1991)123
Giuliani’s statement was true in 1991, when he was gearing up to challenge
incumbent Mayor David Dinkins, and continues to be true today. Giuliani went on to
beat Dinkins in the 1993 general election. But 10 years later, Giuliani had changed his
tune. In January, 2001, the Giuliani administration sued the Campaign Finance Board in
an attempt to prevent the board from distributing public funds to candidates at the new
$4-to-$1 matching rate. Giuliani’s suit was dismissed and the implementation of the $4-
to-$1 match proceeded on schedule.124
Prior to the 2001 elections, the Giuliani administration estimated that the public
financing program would cost New York City taxpayers more than $120 million. The
Campaign Finance Board estimated that public funding to candidates would exceed $60
million.125 Both estimates proved to be high. The Campaign Finance Board actually
distributed just over $41 million to candidates in the 2001 elections—far more than had
ever before been distributed to candidates in New York City—but still a tiny fraction of
the total city budget.
Throughout the public financing program’s 14 year history, program costs have
been a small portion of the budget. Like other cities’ programs, the burden imposed on
New York City voters and taxpayers is light. Figure 8, below, breaks down the cost of
New York City’s public financing program in relationship to the total city budget, each
30
registered voter and each city resident. (Annual budget figures are aggregated for the
entire four-year election cycle.)
Figure 8
Public Financing Program Costs
Election
Cycle
Total
Matching
Funds
Distributed126
Total City
Budget for
Election
Cycle127
Percent
of Total
Budget
Cost Per
Registered
Voter Per
Year
Cost Per
Resident Per
Year
1988-89 $4.5 million $51.8 billion 0.0009% $0.71128 $0.31129
1990-93 $9.4 million $117.4 billion 0.0008% $0.71130 $0.32131
1994-97 $7.2 million $129.4 billion 0.0006% $0.51132 $0.22133
1998-2001 $42.7 million $146.6 billion 0.003% $2.64134 $1.33135
Total /
Annual
Average
$63.8 million /
$4.56 million
$445.2 billion
/ $31.8 billion 0.001% $1.13136 $0.57137
As Giuliani stated in 1991, the public financing program costs are a percentage of
a percentage of a percentage of the total city budget. During the 1998-2001 election
cycle, the public matching funds program cost three thousandths of one percent of the
total city budget.
The public financing program cost $2.64 per registered voter per year for the
1998-2001 election cycle. The $4-to-$1 matching funds rate, combined with an
unprecedented number of candidates, caused an increase of $2.13 per voter from the
1994-97 election cycle. The average cost throughout the program’s history is $1.13 per
voter. The program cost per resident per year is roughly half of the per voter cost. Public
financing in the 2001 election cycle cost $1.33 per resident, with an average cost of $0.57
per resident throughout the program’s history.
Figure 8 does not include program administration costs. The Campaign Finance
Board’s total operations budget appropriation for fiscal year 2001-02 was approximately
$13.9 million. This figure includes $6 million for production of the voter guide, leaving
administrative costs of the city’s campaign finance program at just under $8 million for
31
the largest election in the city’s history. The board’s 2002-03 operations budget is
approximately $1 million less.138
Program administration costs are higher in New York City than in other
jurisdictions with public financing programs. This is due to a number of factors. Most
significantly, the New York City Campaign Finance Board regulates the campaign
finance activities of far more candidates than any other jurisdiction with a public
financing program. The campaign finance board monitored the campaign finance
activities of 353 participating candidates. In comparison, the Los Angeles City Ethics
Commission, with an operations budget of just under $2 million per year, regulated the
campaign finance activities of only 64 candidates in the 2001 citywide elections.
In exchange for this expenditure, New York City residents get a broader selection
of candidates to choose from, and elected officials with far fewer favors to repay than
they would have, had they needed to raise hundreds of thousands more dollars in
contributions from private donors.
H. Campaign Finance Board Does a Difficult Job Well
The Campaign Finance Board is charged with regulating the campaign finance
activities of the very elected officials who hold the board’s purse strings—not an enviable
position. On top of its responsibility to publicize any campaign finance wrongdoing by
officeholders, the board distributes public funds that enable candidates to challenge
officeholders in their reelection bids. Furthermore, the board must balance the demands
of hundreds of candidates in each election who seek public funds, with the duty of
spending limited public tax dollars wisely.
Despite the difficulty of their position, the Campaign Finance Board is praised not
only in New York City but nationwide for a job well done. While testifying before the
Campaign Finance Board in December, 2001, Los Angeles City Ethics Commission
Executive Director LeeAnn Pelham remarked:
I want to say for the record and very publicly, that the assistance your
Board has provided to our agency in the decade that we have been in
existence has been extraordinary. And I think having come from the
annual [Council on Governmental Ethics Laws] meeting where state,
federal and local agencies gather together every year, you should know
that your staff is held in very high regard, as is the Board, for the work you
have done over the years.139
Perhaps the most telling aspect of the public’s perception of the Campaign
Finance Board’s performance is the fact that the board is perceived as fair but tough.
Praise for the board does not stem from attempts to please everyone. The board and its
staff is respected for its competency.
When asked how he would rate the administrative performance of the Campaign
Finance Board, Councilman David Yassky referred to the board as “Very good. Tough.
Very nit-picky, which is good. As somebody who followed all the rules, I want them to
be nit-picky, because I want everyone else to follow all the rules.”140 Councilman John
32
Liu called the board, “Superb. Very professional, dedicated individuals. They’re wrong
sometimes, but I guess no one’s perfect.”141 Green Party 20th council district candidate
Paul Graziano testified:
You know, I have heard from other candidates that I ran against,
candidates from other districts, how harsh the Campaign Finance Board
was on them on their audits and that it was very unfair. I found it
extremely fair, maybe because I just followed the rules, and people should
be following the rules if they are planning to get public funding.142
Candidate after candidate testified at the board’s 2001 post-election public
hearings as to the competency of the board and its staff. Council district 22 candidate
Sandra Vassos testified, “I would also like to commend the staff of the CFB [Campaign
Finance Board]. They were very helpful. They were always there when we called and
they always followed up. So I thank them for that.”143 Councilwoman Helen Foster
commented, “Fortunately, the person that we worked with at the Campaign Finance
Board, Patrick Wehle, was excellent. I cannot give him enough praises.”144
Despite this widespread praise for the integrity and competency of the Campaign
Finance Board, candidates and elected officials do not always respond to the board’s
actions with candor and respect. During the 1993 election cycle, for example, the board
assessed a penalty of $320,000 on then-Mayor Dinkins’ ultimately unsuccessful reelection
campaign for violation of the campaign finance law. On December 30, 1993,
after losing to Rudy Giuliani in the general election, and on the eve of leaving office,
Dinkins replaced Campaign Finance Board Chairman Joseph A. O’Hare with Thomas
Schwartz. O’Hare’s term had expired the previous March and he had continued to serve
without appointment. The New York Times, among others, viewed Dinkins’s act as
purely retributive and called for the resignation of the new chairman. Schwartz resigned
after eight days, and Mayor Giuliani reappointed O’Hare to his second term on January
10, 1994.145
One of most difficult areas of responsibility for the Campaign Finance Board is
deterring fraud. The board does have success stories, such as the prosecution of Ron
Reale, former head of the city’s transit police union and 1993 candidate for public
advocate. According to Campaign Finance Board Executive Director Nicole A. Gordon:
Reale’s campaign used fraudulent money orders to get $150,000 in
matching funds. We discovered in post-election auditing that the money
orders were serially numbered, and in the same handwriting. We turned it
over to the US attorney’s office and it turns out that he was facing a lot of
other kinds of fraud as well. He went to jail for seven years and the
Campaign Finance Board just got the money back last week.146
According to Gordon, however, the type of fraud detected by the board is typically very
difficult to prosecute. Gordon explained that the Campaign Finance Board staff
continues to see occasional fraudulent money orders, cash contributions, and forgeries.
The board turns them over to the district attorney. But the amount of money involved is
so small, relatively speaking, that the district attorney often chooses not to prosecute.
The board denies the funds to the perpetrators of fraud, but has power to do little else
when the district attorney refuses to press charges. If public money is never distributed in
33
the first place, then the district attorney often may not be interested because of a
perception there has been no actual harm to the city.147
The Campaign Finance Board’s strongest line of defense against violators of the
campaign finance laws is its policy of closely scrutinizing candidate contribution records
before distributing public funds to candidates. The board conducts extensive auditing of
campaign finance records both before and after an election; every participating
candidate’s campaign is audited. The most common violations of city law in the 2001
election cycle were candidate acceptance of prohibited corporate contributions, late or
missing disclosure reports and candidate acceptance of contributions from political
committees that had failed to register with the campaign finance board.148
The board assessed civil penalties against at least 119 campaigns totaling more
than $86,000 for violations of city laws during the 2001 election cycle. The board
maintains a list on its Web site of candidates who fail, after repeated notice, to pay
penalties and to repay public funds owed to the city. According to the board, this tactic
to encourage payment of fines has produced “extraordinary” results.149
Political attorney Carmen Williams, who served as compliance officer for several
candidates in New York City’s 2001 elections, praised the board’s program
administration overall but noted several areas where improvements could be made.
Williams would like to see the board offer different levels of trainings. “They have the
same training over and over. They should have the basic class. But they should also
have advanced training.”
Williams sees public funding as a reward for rising to a higher level of campaign
finance law compliance. But she insists that many candidates do not realize this and,
consequently, “think many of the rules are stupid and resent the rules.” Williams
personally feels the rules are “mostly valuable and defensible,” but thinks the board
would have an easier time if it explained the rules better. Williams characterized the
board as “more inclined to tell you answers than to teach you why the answer is the
answer. They should explain the philosophy behind the rules.” Williams is a
professional who understands the rules and easily interprets them for her clients, but she
claims, “The people who have been hurt most by the program administration are the
people who have the least sophisticated campaigns. And those are the people who are
supposed to be helped by the program.”
Throughout the history of the public financing program, the Campaign Finance
Board has solicited and responded to the comments of its critics. The Campaign Finance
Act requires that the board review and evaluate the effect of the Act after every city
election, and submit a report to the city council and the mayor on or before September
first of the year following the election.150 Following the 1989 elections, the board held
two days of public hearings as part of this post-election review process. Thirty-eight
speakers testified—including former Mayors Koch, Giuliani, and many other candidates
and elected officials.151 The board has repeated this practice following every major
publicly financed election.
The Campaign Finance Board has published reports following each election,
containing in-depth analysis of the public financing program’s implementation and
recommendations for improving the program. The board published its first
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comprehensive report, Dollars and Disclosure, in September 1990. Following the 1991
elections, the board published Windows of Opportunity (1992). On the Road to Reform
(1994) was published by the board following the 1993 elections. A Decade of Reform
(1998), analyzed the board’s administration of the public financing program in its first 10
years. Most recently, the board published An Election Interrupted . . . An Election
Transformed (2002), analyzing the 2001 citywide elections.
Candidate campaign finance practices are constantly changing; campaign finance
law must change with them. Many of the board recommendations contained in its reports
have been made into law. This constant evolution of the public financing program is the
program’s greatest strength. It is in this spirit of evolution that it is hoped the Campaign
Finance Board will support the CGS recommendations and keep New York City at the
forefront of public campaign financing.
IV. Room For Improvement
A. New York City Possesses Greater Campaign Finance Legislative
Authority Than Is Currently Being Utilized
New York City’s campaign finance laws regulate only the activities of candidates
who voluntarily agree to abide by those laws in exchange for public funding. Some
candidates forego public funding and, consequently, are permitted to raise campaign
funds under much higher state contribution limits. Such candidates are also not required
to disclose campaign finance data to the New York City Campaign Finance Board. Nor
are such candidates required to disclose to the Board of Elections the same level of detail
regarding fundraising activities that is required by the Campaign Finance Board of
publicly financed candidates. To properly administer the public financing program, the
Campaign Finance Board must obtain paper copies of nonparticipants’ reports and enter
the information into their electronic database by hand. Voters seeking disclosure
information for nonparticipants must go in person to the office where the report was filed
and sort through the pages by hand.
New York City officials have taken a conservative approach to the question of
whether the city may impose campaign finance restrictions on all candidates, regardless
of the candidate’s willingness to participate in the city’s public financing program.152
U.S. Supreme Court rulings have held that spending limits be voluntary.153 But a strong
argument can be made that New York State’s “home rule” law does, in fact, empower
New York City to impose other regulations, specifically contribution limits and
disclosure requirements, uniformly upon all candidates for New York City office.154
New York’s state constitution provides that “every local government shall have
power to adopt and amend local laws not inconsistent with the provisions of this
constitution or any general law relating to its property, affairs or government.”155 The
constitution specifically lists the following policy areas in which local governments may
legislate: the powers, duties, qualifications, number, mode of selection and removal, and
terms of office of its officers and employees; the membership and composition of its
35
legislative body; and the government, protection, order, conduct, safety, health and wellbeing
of persons or property therein.156
Local laws found to be “inconsistent” with state law are preempted by state law.
New York courts recognize two distinct types of inconsistency as grounds for
preemption: “conflict” preemption and “field” preemption.157
1. Conflict Preemption
Conflict preemption analysis focuses on whether the state and local governments
have legislated commands that clearly conflict. A clear conflict would exist, for example,
if state law prohibited the use of public funds to finance candidate campaigns and New
York City law required candidates to accept public financing.
The approach taken by New York courts to determine the presence of conflict
preemption has changed over time. Older decisions tended to find preemption and
restrict the ability of local governments to legislate in substantive areas where the state
had adopted laws. More recent decisions have tended to grant greater home rule
authority to local governments. The older, more restrictive approach to home rule is best
exemplified by the state high court’s upholding of the appellate court’s decision in
Wholesale Laundry Board of Trade, Inc. v. City of New York (1963).
In Wholesale Laundry, the appellate court struck down a New York City law
setting a minimum wage of $1.25 an hour on the ground that the city law was
inconsistent with a state law establishing a minimum wage of $1.00 an hour. Whereas
many states define “inconsistent” to mean “less restrictive,” this older approach
considered a local law to be inconsistent with state law if the local law was either more
or less restrictive than state law. In other words, a local law was inconsistent with state
law if it was merely different than state law. Specifically, the Wholesale Laundry court
ruled that a local law is inconsistent with state law if the local law prohibits what state
law permits or allows what state law forbids.158 In Wholesale Laundry, state law would
permit employers to pay $1.00 an hour, so the city’s higher minimum wage law was
preempted.
New York’s high court—the Court of Appeals of New York—affirmed the
appellate court’s decision in Wholesale Laundry without publishing a majority opinion.
Two high court dissenters, however, did write opinions foreshadowing the direction New
York preemption law would take. Both dissenters argued that any local law furthering
the public policy behind a state law should be found consistent with state law and upheld
as a permissible exercise of home rule.159
The high court, in its 1974 People v. Cook decision, rejected Wholesale Laundry’s
notion that a local law cannot prohibit what state law permits.160 In Cook, the court
upheld a New York City law that required a differential tax on cigarettes—based on the
cigarettes’ nicotine content—to be reflected in the retail prices of cigarettes, despite the
fact that state law also imposed a differential cigarette tax but permitted cigarette sellers
to charge the same price for cigarettes regardless of nicotine content. Cook argued that
the city did not have the legislative authority to impose the retail price differential. The
court reasoned that the city’s authority was rooted in its home rule police powers.
36
The court acknowledged that a city may not exercise its police power by adopting
a local law which is inconsistent with constitutional or other state law.161 The court
reasoned, however, that the city’s enforcement of a more stringent version of a state law
was a permissible exercise of the city’s home rule authority. The court dismissed Cook’s
claim that the price differential would need to be explicitly authorized by state law in
order to be permissible.162 Instead, the court held that because the city law was consistent
with the legislative purpose of the state law, the city law was consistent with state law.163
This decision marks a significant departure from the court’s earlier position that any
difference between state and local law on the same subject was an impermissible
inconsistency.
In Town of Clifton Park v. C.P. Enterprises (1974), a state appellate court adopted
the high court’s Cook reasoning, upholding a local ordinance specifying a method of
publication for new laws that differed from the state’s general law specifying a method of
publication. Interpreting state home rule law, the court stated:
We do not perceive the use of the word “inconsistent” to be the equivalent
of “different” . . . . To define the word “inconsistent” narrowly as
meaning merely “different” would vitiate the flexibility of home rule as
enunciated by the legislature and the executive branch in enacting the
Municipal Home Rule Law.164
The more recent trial court decision in Mayor of the City of New York v. Council
of the City of New York (1999) explicitly recognized the deference to be given locally
enacted laws, stating:
The home rule provision of [the] NY Constitution . . . gives local
governments broad police powers relating to the welfare of their citizens.
Duly enacted local laws have the same presumption of constitutionality as
do State laws, and the party challenging a local law has a “heavy burden”
to prove that the law is inconsistent with the New York State Constitution
or any general law of New York State. The presumption of
constitutionality must be rebutted beyond a reasonable doubt, and a court
should only declare a law unconstitutional as a last resort.165
These decisions make it clear that New York’s courts have moved from a
constitutional interpretation severely limiting the home rule authority of local
governments to an interpretation that allows local governments much greater freedom in
legislating. When faced with the question of whether a local law is in conflict with, and
thus preempted by state law, a New York State court today would likely consider the
extent to which the local law furthers the legislative purpose of the state law. To the
extent that the local law furthers the legislative purpose of the state law, a court would
likely find the local law not in conflict with state law but, rather, a permissible exercise of
home rule authority—so long as the state legislature has not indicated an intention to
preempt all local legislative action in the particular substantive field.
2. Field Preemption
Field preemption analysis focuses on whether extensive state regulation in a
particular substantive field of law indicates an intention by the state legislature to be the
37
sole regulators in that field. Though clear examples of conflict preemption are easy to
find, finding clear examples of field preemption is more difficult. The doctrine of field
preemption requires courts to discern the intent of the legislature—not an easy task.
Courts recognize two types of field preemption, express and implied. Some statutes
expressly indicate the desire of the legislature to preempt local lawmaking in the field
using unambiguous language. Most statutes, however, neither confirm nor deny
legislature’s intent to preempt local legislation.166
In Jancyn Manufacturing Corp. v. County of Suffolk (1987), the state’s high court
considered preemption of a local law prohibiting the sale of toxic cesspool additives.167
The plaintiff, a cesspool additive manufacturer, argued that the local law was superseded
by a less restrictive state law regulating the content of cesspool additives.168 The court
began by finding that there was no direct conflict between the state and local law, noting
that “The fact that both the State and local laws seek to regulate the same subject matter
does not in and of itself give rise to an express conflict.”169
Instead, the court’s decision turned on whether the state preempted the entire field
of sewage system cleaners. The court found no preemptive intent in either the
legislature’s declaration of state policy or the statutory scheme itself.170 On the contrary,
the court found the statute to be “entirely absent” of any expressed desire for “across-theboard
uniformity.”171 The court firmly rejected the plaintiff’s argument that any local
law prohibiting what state law would allow is invalid under Wholesale Laundry. The
court responded that the rule set forth “in Wholesale Laundry applies only when the
Legislature has evinced a desire that its regulations should pre-empt the possibility of
varying local regulations or when the State specifically permits the conduct prohibited at
the local level.”172
“Implied preemption” was again at issue in Incorporated Village of Nyack v.
Daytop Village, Inc. (1991), where a corporation with a state license to run a drug
rehabilitation facility claimed that a local government’s zoning laws were preempted by
the state’s substance abuse treatment law, to the extent that the local zoning law
prevented the corporation from opening a residential treatment center in an area zoned
non-residential. Again the state’s high court upheld a local law, finding no preemption
where “two separate levels of regulatory oversight can coexist.”173 The court again
rejected the reasoning of Wholesale Laundry, stating:
[T]he test is not whether the local law prohibits conduct which is
permitted by State law, because that test is much too broad. Rather . . . we
look to whether the State has acted upon a subject, and whether in so
acting has evinced a desire that it’s regulations should pre-empt the
possibility of varying local elections.174
In a more recent case, DJL Restaurant Corp., dba Shenanigans v. City of New
York (2001), the state’s high court articulated the grounds on which field preemption will
be found. In upholding a New York City zoning law, the court explained:
An implied intent to preempt may be found in a declaration of State policy
by the State Legislature . . . or from the fact that the Legislature has
enacted a comprehensive and detailed regulatory scheme in a particular
area. In that event, a local government is precluded from legislating on
38
the same subject matter unless it has received clear and explicit authority
to the contrary.175
DJL Restaurant Corp. makes it clear that a New York State court’s finding of implied
field preemption depends on whether the court finds that the Legislature has enacted a
“comprehensive and detailed regulatory scheme.” Where the state legislature has enacted
a comprehensive and detailed regulatory scheme, a court will likely find any local law on
the subject which differs in any way from the state law to be preempted by state law.
3. Applying the Law to New York City’s Regulation of Campaign Financing
New York’s constitution, statutes and case law make it clear that local laws must
not be inconsistent with state laws. A local law will be found to be inconsistent with state
law, and thus preempted, under two circumstances: (1) the local law directly conflicts
with a state law and does not further the legislative purpose of the state law, or (2) the
local law regulates activity in a field which the state legislature has either expressly or
impliedly indicated its intent to be the sole regulator.
When asked in 1987 whether New York City’s proposed voluntary public
financing program would be preempted by state law, New York State Attorney General
Robert Abrams opined,
I believe that the Election Law does not preempt the subject of the [public
financing] bill. Clearly, there is no explicit statement by the legislature
that local legislation is preempted. Nor is there any indication from the
nature of the regulatory scheme of the Election Law of a legislative intent
to occupy the field of campaign financing. The mere fact that State law
deals with a subject does not withdraw home rule power from a local
government.176
The attorney general’s opinion regarding to the constitutionality of a voluntary local
campaign finance law might apply with equal force to a mandatory local campaign
finance law. The constitutionality of a mandatory law was not addressed.
a. Conflict Preemption
With regard to New York City and New York State campaign finance law, a
finding of direct conflict, without more, would likely have no bearing on the
constitutionality of the local law under the constitution’s home rule provisions. Absent
field preemption, a conflicting local law will only be struck down if it fails to advance the
legislative purpose of state campaign finance regulations. The state of New York has
enacted laws in two areas of campaign finance regulation: disclosure and contribution
limits.
Though state statutes make no mention of legislative purpose or intent, it is safe to
assume that the state’s purpose for enacting such restrictions on political speech is the
only purpose accepted by the U.S. Supreme Court: avoiding corruption or the appearance
of corruption in the electoral process. More stringent local government laws regulating
campaign finance activities—such as contribution limits lower than current state limits—
further the legislative purpose of state campaign finance laws.
39
One might argue that enactment of a state contribution limit (e.g., a $50,000 limit
on general election contributions to certain borough president candidates) evinces a state
determination that contributions below the limit (e.g., a $49,000 contribution) could not
create an appearance of corruption. According to such an argument, the legislative
purpose was to allow contributions of $49,000 to certain borough president candidates.
Lower city limits, therefore, would be inconsistent with the legislative purpose.
More likely, the legislature determined that contributions above the state limits
posed significant threat of corruption or the appearance of corruption, justifying the limits
as established and leaving open the question of whether lower limits might be necessary
to avoid the appearance of corruption under certain circumstances. In fact, the legislature
has acknowledged that contributions of less than $50,000 to borough president candidates
can pose a serious threat of corruption. State law provides that candidates for Manhattan
borough president in the 2001 general election could accept contributions up to $50,000
under state law, while candidates for Staten Island borough president were subject to a
state limit of $11,256. Similarly, 2001 Democratic primary candidates for Manhattan
borough president could accept contributions up to $38,345 while minor party candidates
were subject to a $1,000 limit. (See Figure 2, p. 11.)
Under Mayor of the City of New York, local laws are presumed to be
constitutional. The party challenging a local law has a “heavy burden” to prove that the
local law is inconsistent with state law. The constitutionality of the local law must be
rebutted beyond a reasonable doubt. There is certainly reason to doubt that the
legislature considered no contribution below $50,000 to threaten corruption. The
establishment of lower contribution limits for different boroughs and different political
party candidates belies such a claim.
Under Cook, Town of Clifton Park and Mayor of the City of New York, stringent
local campaign finance laws, even those in direct conflict with state campaign finance
laws, should not be preempted by state law.
b. Field Preemption
Field preemption seems a possible—but unlikely—barrier to stronger New York
City campaign finance regulation. Field preemption may be either express or implied.
There is no express indication in New York’s Election Law of any intent by the
legislature to be the sole regulators in the field. On the contrary, the Election Law section
titled “Applicability of chapter” states, “Where a specific provision of law exists in any
other law which is inconsistent with the provisions of this chapter, such provision shall
apply unless a provision of this chapter specifies that such provision of this chapter shall
apply notwithstanding any other provision of law.”177
This provision clearly indicates the legislature’s intent not to be the sole regulator
in the field of campaign finance. Nevertheless, an opponent of New York City campaign
finance law might argue that this provision applies only to other state law and that
preemption of local law may be implied where the legislature has enacted a
“comprehensive and detailed regulatory scheme.” While some might argue that the New
York State legislature has enacted such a campaign finance regulatory scheme, the
argument is not convincing.
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New York State campaign finance laws are far from comprehensive and are
among the least restrictive in the United States. The state does not provide public
financing to candidates—an element considered critical to comprehensive campaign
finance regulation by many political scientists. Furthermore, the state’s campaign
finance disclosure laws fail to bring independent campaign expenditures that support or
oppose specific candidates into full public view. Labor unions and other organizations
spend tremendous sums to influence New York State and local elections without having
to fully disclose such expenditures. State disclosure laws are likewise deficient in that
they do not require campaign contributors to disclose the identity of their employer—
information essential to detecting illegal efforts to evade contribution limits.
One might argue that the operative question is whether the state of New York’s
campaign finance law was comprehensive, and therefore indicative of a legislative intent
to preempt the field, when enacted in 1976. The answer is no. In 1976, for example, 13
states and the federal government had adopted some form of public financing, but New
York failed to do so. Its contribution limits were far higher than any other campaign
finance reform jurisdiction, and its disclosure requirements were weaker. Furthermore,
though the state legislature has amended its election law countless times since 1976, it
has repeatedly failed to close obvious loopholes in the law, thereby evidencing an
apparent lack of interest in creating a “comprehensive and detailed regulatory scheme.”
New York State’s spotty performance thus suggests no clear intent to occupy the field of
campaign finance regulation.
4. Public Policy Considerations
Public policy concerns cut strongly against finding field preemption. Local
elections are the very core of local home rule principles. The state’s allowance of
stringent local campaign finance laws would create little or no extra-local impact. The
monetary cost of local campaign finance laws are borne by local taxpayers. Stricter local
campaign finance laws would impact only candidates running for local office and
political committees participating in local elections. The existence of differing campaign
finance laws in local jurisdictions would impose no additional burdens on candidates,
who do not run for local office in more than one jurisdiction at a time.
To be sure, some political committees are active in both city and state elections.
Requiring such committees to comply with differing state and local campaign finance
laws might impose a burden upon them. But requiring state committees to abide by local
laws when engaged in local electioneering is fair to local voters. To comply with local
contribution limits, a political committee active statewide should be required to
demonstrate that it received enough contributions within the city’s limits to fund all
political expenditures supporting or opposing New York City candidates. The burden of
complying with differing disclosure laws would be avoided altogether if the state
legislature were willing to bring its disclosure requirements up to the standards of New
York City. Both the city and the state should enact independent expenditure disclosure
requirements. The city and the state currently utilize electronic campaign finance
disclosure technology, which should be interfaced to further reduce potential burdens on
political committees.
41
Recommendation 1: Make City Contribution Limits Mandatory on All
Candidates and Committees Participating in City Elections
New York City should make its contribution limits mandatory and binding on all
candidates and political committees participating in city elections, not just those
participating in the public financing program. In accordance with its constitutional power
of home rule, New York City may enact and enforce campaign finance laws furthering
the legislative purpose of state campaign finance law for all city candidates, regardless of
the candidates’ willingness to participate in the public financing program. The U.S.
Supreme Court’s interpretation of the federal constitutional law prohibits the imposition
of mandatory spending limits on candidates, and also prohibits limits on the amount of
personal funds a candidate may contribute to (i.e., spend on) his or her campaign.178 The
city’s public financing and spending limits should, therefore, remain voluntary. The
city’s contribution limits should not be applied to a nonparticipating candidate’s use of
personal funds.
Extending the city’s contribution limits to all candidates and committees
participating in city elections will eliminate the unfair fundraising advantage currently
enjoyed by nonparticipants. Under current law, for example, a citywide office candidate
who chooses to participate in the public financing program is subject to a $4,500
contribution limit. A candidate for the same office who refuses to participate in the
public financing program may accept contributions ten times larger—up to $45,400. (See
Comparing City and State Contribution Limits, p. 9.) With the city’s contribution
limits extended to all candidates, candidates will be bound by the same fundraising rules.
Recommendation 2: Make City Disclosure Laws Mandatory on All
Candidates and Committees Participating in City Elections
New York City should extend its disclosure laws to all candidates and political
committees participating in city elections, not just those participating in the public
financing program. This will shed light on the fundraising and spending activities of
nonparticipating candidates, political parties and independent expenditure committees.
Mandated electronic disclosure by nonparticipants will, at the same time, save city tax
dollars currently spent by the Campaign Finance Board collecting paper campaign
finance reports from the Board of Elections and manually keying this data into the
Campaign Finance Board’s electronic database. Furthermore, development and
enforcement of city disclosure laws for all political committees active in New York City
elections will enable the Campaign Finance Board to address independent spending
activity that currently goes undisclosed in New York City.
Recommendation 3: Grant Local Jurisdictions Authority to Regulate
Local Campaign Finance Activities Through Legislative Action at the
State Level
The state of New York should clarify the status of New York City’s home rule
power by explicitly granting all local governments in the state authority to enact and
42
enforce stricter campaign finance laws for all candidates and political committees
participating in local elections.
The right to elect local officials is critical to democratic municipal governance.
New York City residents should be permitted to choose their elected officials as they
deem fit, within the constraints of the federal and state constitutions. New York City
residents and elected officials are clearly the individuals best situated to determine the
most appropriate campaign finance regulations for the conduct of fair and democratic city
elections.
B. Weak Disclosure Requirements and Lax Enforcement Render
Independent Spending Invisible
Independent expenditures are playing an increasingly significant role in elections
throughout the United States, as wealthy individuals and organizations seek to exert
political influence beyond that which is possible under a regime of contribution limits.
There is substantial evidence of undisclosed independent expenditures in New York
City.179
Independent expenditures are of particular concern in jurisdictions with public
financing programs, because those candidates who agree to limit their spending are faced
by independent expenditure committees without limits. Independent expenditures
undermine the spirit of contribution limits by enabling wealthy special interests to exert a
level of influence exceeding that which is possible through campaign contributions.
Prohibited from giving a $50,000 contribution to a mayoral candidate by the Campaign
Finance Board’s $4,500 limit and the state’s $5,000 limit on corporate contributions, a
special interest group may instead choose to spend $50,000 on a campaign mailer
independently of the candidate’s campaign.
To date, the U.S. Supreme Court has protected independent expenditures as a
form of free speech.180 Yet such large independent expenditures do, in fact, pose a risk of
corruption or the appearance of corruption, a risk recognized by the Court when
justifying limits on campaign contributions. Though candidates would prefer to control
their own message, most would accept the support of large independent expenditures or
fear such expenditures made against them.
One candidate told CGS in confidence, “There was an independent expenditure
made on my behalf. In retrospect, I appreciate what [the independent spender] did. I
didn’t know he was doing it, but I really appreciate what he did.” While the general
public may not know the identities of independent spenders, candidates are typically well
aware of them. Big independent spenders may receive the same preferential treatment
they would expect had they given a large contribution directly to the candidate.
Independent expenditures pose a direct threat to publicly financed elections.
Publicly financed candidates who agree to spending limits often lack the resources to
respond to independent expenditures attacking them. New York City lifts the spending
limits for publicly financed candidates facing opponents who exceed the spending limit.
It does not monitor independent expenditures or lift the spending limit for candidates who
43
are attacked by independent expenditures or whose opponents benefit from large
independent expenditures. Other jurisdictions do. In Los Angeles, for example, a
publicly financed city council candidate’s spending limit is eliminated when independent
expenditures in the race exceed $50,000. No local government jurisdiction currently
offers additional public funds to candidates facing large independent expenditures,
though several are considering such a policy.
When asked whether independent expenditures play a significant role in New
York City elections, Campaign Finance Board Executive Director Nicole A. Gordon
replied:
This is one of the great mysteries of New York City. We keep waiting to
see the independent expenditure issue raise its ugly head, and so far it has
not. The unions do have a very active operation which they direct to their
members. And they certainly do get-out-the-vote [GOTV] activities and
so on but, so far we’re not aware of any significant independent spending
and have not received complaints about it.181
The Campaign Finance Board’s latest report, An Election Interrupted . . . An Election
Transformed (September 2002), makes little mention of independent expenditure activity
in New York City elections.182
The fact that labor unions are very active in New York City elections is common
knowledge. Nonetheless, a survey of campaign finance reports filed with the state by the
city’s most active unions disclose nothing about union GOTV expenditures, even though
state law requires them to do so.
1. Current Disclosure Requirements
The New York City Campaign Finance Act imposes no separate disclosure
requirements on non-candidate political committees active in city elections. Political
committee disclosure is regulated only by state law. New York State law requires
political committees to disclose, among other things: the dollar amount of every
expenditure, the name and address of the person to whom it was made, the date of the
expenditure, and the purpose of the expenditure.183
State law defines “political committee” as any combination of one or more
persons operating or cooperating to aid or promote the success or defeat of a political
party or candidate, but not including such a combination of persons whose only political
activity is making contributions to a registered candidate or political committee.184 The
New York State Board of Elections has advised that a labor union is deemed a political
committee if it:
(a) solicits or accepts funds (other than regular dues no portion of which are
specifically collected for political purposes) from its members . . . for political
purposes, or (b) expends funds directly in behalf of any candidate or “political
committee” (e.g., posters, mailings, media advertisements, etc.).185
The State Board of Elections was asked to issue an opinion whether “partisan
communications (i.e., telephone calls, letters, mailings, etc.) requesting that the recipient
vote for or against a particular candidate or proposition, whether directed to the union’s
members and their families or to the general public” would make the union a political
44
committee subject to state disclosure requirements.186 The board opined that such
activities would bring a union within the definition of a political committee if the
activities caused an expenditure of funds, unless the activity was reported as an in-kind
contribution.187 It seems impossible that a campaign mailer would not cause an
expenditure of funds, and the cost of a single mailer for any city office would exceed the
Campaign Finance Board’s contribution limits.
It is clear that under New York State law, expenditures for GOTV activities
supporting particular candidates must be disclosed by the organization making the
expenditures as either in-kind contributions to the beneficiary candidate (subject to
contribution limits) or as independent expenditures. In New York City, however, labor
union GOTV activity on behalf of specific candidates is commonplace and goes
unreported.
2. Abundance of Anecdotal Evidence
When asked whether labor union independent expenditures played a significant
role in his race, first-term City Councilman John Liu replied, “Some of the larger unions
had strong get-out-the-vote operations . . . I was strongly backed by labor. It was
generally a whole slate, getting out the vote for the mayoral candidate they backed and
the other citywides and the borough president candidates.”188 “Did this include SEIU
1199?” he was asked. “Yeah, they did send out flyers to their members giving them a
suggested slate and I was on that slate in my district. I have no idea how much that stuff
costs.”189
Steven Banks, who finished second in the Democratic Party primary for the 39th
city council district seat, told CGS, “There are labor unions that supported me and labor
unions that supported other candidates. I received tremendous help from unions.
[Independent spending] is a concern. It influences the outcome of certain races.” When
asked whether campaign mailers were sent out by labor unions for candidates in his race,
Banks replied, “Some of the unions that supported me certainly sent out those types of
things.”190 Banks continued:
I’m really proud to have all the labor support that I had. Other candidates
in the race were also supported by labor. Would it be a fairer system
overall if independent expenditures were chargeable to a campaign? Yes,
it would be a fairer system overall. On the other hand, I think the system
is set up to deal with the fact that workers frequently don’t do as well in
the political context as people of higher income. So to be able to
encourage labor union members to participate, that’s a good thing.191
Jerry Skurnick, co-owner of the voter contact company Prime New York and a
man the New York Times called “the master of lists,”192 confirmed that his company has
sold voter contact lists to labor unions for local election activities.193
John Siegal, chairman of Mark Green’s mayoral campaign, testified at the
Campaign Finance Board’s December 2001 public hearings that he has “no doubt that
there was significant independent campaign activity” during the weeks between
September 11 and the rescheduled mayoral primary. When asked by Nicole A. Gordon
whether it was union activity, Siegal replied, “I suspect it was, but I don’t know. There
45
were automated phone calls going to a large part of the City during that two-week
period.”194
Candidates CGS interviewed refused to publicly disclose details of union
spending. Privately, one candidate told CGS that an opponent of his was an official in a
union and that the union “essentially ran that campaign—staffed it, supplied it,
dispatched members all over the district” working for the candidate. Another candidate
in the same race had support from two other unions, which “provided mailings to a
substantial number of people in the district, phone calls, and election day operation
people.”
One candidate asked, “If a union mailer goes out and says, ‘Here’s eight races
we’re concerned about in Brooklyn,’ in other jurisdictions that’s a reportable expense?”
The candidate noted with a chuckle, “Doesn’t happen in New York City!”
Political commentator, professor and author Fred Siegel remarked that the
Campaign Finance Board’s electronic disclosure system is the most important component
of the public financing program, but noted:
What it doesn’t pick up is the in-kind contribution, the public sector union
contribution. That’s where [Democratic candidate for mayor in 2001
Fernando] Ferrer had a huge advantage. Ferrer took off when he had
[SEIU 1199 President Denis] Rivera, because what Rivera brought was a
field operation. And once you added that field operation, things looked
very different.195
Strangely, candidate after candidate acknowledged union campaign activity but
commented that it was directed only at union members, sharing a common misperception
that union member communications are exempt from campaign finance disclosure
requirements. No such exemption exists under city or state law.
3. No Smoking Gun
Candidate testimony evinces substantial independent spending activity, yet
neither the Board of Elections nor the Campaign Finance Board has acknowledged this.
Determining exactly how much money labor unions and other organizations have spent in
recent years to influence New York City elections is impossible given the state’s weak
disclosure laws and the lack of local enforcement by the Board of Elections.
State law clearly requires political committees to report all expenditures,
including independent expenditures. State law does not, however, require political
committees to disclose whether an expenditure was intended to support or oppose a
particular candidate. State law also does not require political committees active only in
New York City to file disclosure reports in an electronic format and, instead, requires
them to file paper copies of their reports with the New York City Board of Elections.
This makes it incredibly difficult for members of the public to review disclosure reports
of New York City committees and impossible to ascertain whom their expenditures were
intended to benefit. This difficulty is exacerbated by the fact that the City Board of
Elections will not provide members of the public with a list of committees filing paper
disclosure reports with the agency. Interested voters must guess the names of committees
that may have filed disclosure reports with the Board of Elections, then specifically
46
request to review the reports of the committees whose names have been correctly
guessed.
Campaign finance reports filed with the Board of Elections for the year 2001 by
the state and local political committees of SEIU 1199 disclose campaign contributions to
candidates running for New York City office, but do not list any other expenditures.
Campaign reports of the New York City Central Labor Council PAC are a bit more
revealing. The Central Labor Council’s reports list many political contributions to city
candidates. The reports also list a “political contribution” of $6,212 to the New York
City law firm of Menagh & Falcone and a payment of $13,650 for campaign mailings to
political consultants The Advance Group on Sept. 21. It should be noted that the
Campaign Finance Board had declared a moratorium on all campaign spending by
publicly financed candidates during the period from Sept. 11 through the rescheduled
primary on Sept. 25.
A single mailing for a citywide or borough president candidate typically consists
of 100,000 pieces at a cost of approximately $0.50 per piece, for a total of $50,000.196
According to candidate reports, unions were sending slate mailers supporting candidates
for citywide office, borough president and city council on a single mail piece. It’s safe to
assume that a single union mailer, even if sent only to union members, would cost at least
$50,000.197 Candidates also reported extensive use of phone calls. Though live phone
calls placed by union volunteers pose little threat to the integrity of the city’s public
financing program, pre-recorded automated phone calls costing between five and ten
cents per completed call may constitute significant campaign spending.
The public has no way of knowing how many union mailers were sent out or how
many automated phone calls were placed during the 2001 New York City elections. This
total unavailability of information is most troubling. The public relations firm for SEIU
1199, Sunshine Consultants, denied our request for an interview with SEIU 1199
president Denis Rivera. The New York City Board of Elections advised CGS that it is
“not a complaints department,” instructing CGS to raise our concerns with the State
Board of Elections in Albany. The State Board of Elections told CGS that investigations
into alleged wrongdoing are initiated only by citizen complaints—the board typically
does not initiate investigations on its own. The New York City Campaign Finance Board
has no mechanism in place, and no explicit jurisdiction under the Campaign Finance Act,
to monitor independent spending activity.
Recommendation 4: Require Disclosure of Independent Expenditures
Two things are certain: Substantial independent campaign spending is occurring
in New York City and the public has no means of knowing its extent. Independent
expenditures may undermine the integrity of publicly financed elections, particularly
when the expenditures go undisclosed. A candidate may agree to New York City’s
spending limit and, in exchange, receive hundreds of thousands—or millions—of dollars
in public financing. Though the public believes its tax dollars have been well spent,
insuring that a candidate did not rely on special interest money to win the election, the
candidate may in fact have been the beneficiary of hundreds of thousands of dollars in
undisclosed independent expenditures by a special interest group.
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The city and the state of New York should adopt disclosure laws requiring all
political committees and individuals making independent expenditures supporting or
opposing candidates to provide the public with full disclosure.
Most importantly, New York City should require all committees or individuals
spending money to influence New York City elections to report independent expenditures
to the Campaign Finance Board in an electronic format. Disclosure of independent
expenditures will enable the public to make better-informed voting decisions and will
enable the Campaign Finance Board to implement public financing program provisions
designed to aid candidates whose opponents benefit from substantial independent
spending.
Recommendation 5: Adopt a Trigger Provision Lifting Spending Limits
and Increasing Public Funding to Candidates Facing Large
Independent Expenditures
With an independent expenditure disclosure law, it will be possible to determine
which candidates benefit from independent spending. It is likely that one or two
candidates in a race benefit disproportionately from independent spending, to the
detriment of other candidates in the race. In order to maintain the integrity of its public
financing program, New York City should enact laws to mitigate the disproportionate
effects of large independent expenditures.
The regulation of independent expenditures in the context of publicly financed
elections is at the cutting edge of campaign finance reform policy. Of the 13 local
government jurisdictions in the United States with public financing programs, only four
have provisions dealing with independent expenditures.198 The City of Los Angeles
eliminates spending limits for publicly financed candidates when independent
expenditures in the race exceed specified thresholds. Los Angeles is currently
considering strengthening this independent expenditure trigger provision.
New York City should adopt a trigger provision that provides additional public
funds to and lifts spending limits for candidates opposed by substantial independent
expenditures. Adopting such a trigger would require the city to:
· Devise a mechanism to determine which candidate actually benefits from an
independent expenditure;
· Establish an independent expenditure threshold which, when exceeded,
triggers the additional funds and lifted spending limit; and
· Determine the amount of additional funds a candidate should receive.
a. Determining Which Candidate Benefits From an Independent
Expenditure
The most significant challenge to implementing an independent expenditure
trigger involves determining whether an independent expenditure was truly to a particular
candidate’s benefit. This finding would be necessary to determine whether the spending
limit should be lifted for the other candidates and those candidates given additional
public funds.
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Most independent expenditures will clearly benefit one or more specific
candidates. Independent spenders are typically attempting to exert political influence
beyond the constraints of candidate contribution limits. Consequently, most independent
spenders sincerely attempt to assist the candidacies of their preferred candidate and their
intentions are no secret. Harming a candidate’s attempt to get elected is no way to curry
favor.
It is possible, however, that an unpopular group might make an independent
expenditure attempting to benefit a candidate but, in fact, harming the candidate. An
apartment owners association, for example, might make an independent expenditure
urging voters to elect council candidate “X.” Candidate X, however, might be running in
a district with an extremely high percentage of renters. Candidate X may cringe at this
well-intended endorsement by the apartment owners association, while candidate X’s
opponents seize the opportunity to brand candidate X as an ally of slumlords.
How should the Campaign Finance Board determine which candidate benefited
from the apartment owners association’s independent expenditure? Should opponents of
candidate X have their spending limits lifted and become eligible for additional public
funds?
New York City should adopt a law requiring independent spenders to disclose,
under penalty of perjury, which candidate the expenditure is intended to support or
oppose. This disclosure would create a presumption rebuttable only by a finding of fraud
in a court of law. The Campaign Finance Board’s determination of which candidate
benefited from an independent expenditure would, consequently, depend solely on the
intent of the spender, not on the perception of a candidate or the presumed impact of the
expenditure on voters.
In the example above, candidate X would be deemed the beneficiary of
independent spending by the apartment owners association absent a court finding of
fraud. This outcome might seem harsh at first blush. Nonetheless, the proposed method
for determining which candidate benefits from an independent expenditure is the most
objective test available. A test dependent on the perception of a candidate or the
presumed impact of an expenditure on voters would be unworkable. Instances of an
independent spender harming the campaign of its preferred candidate are rare.
b. Trigger Thresholds
In addition to developing a procedure for determining which candidate benefited
from an independent expenditure, the city would need to determine the amount at which
independent spending becomes significant enough to warrant raising the spending limit
and providing candidates with additional public funds.
In the City of Los Angeles, if an independent expenditure committee, or
committees in the aggregate, spend more than $200,000 in a mayoral race, $100,000 in a
race for other citywide office, or $50,000 in the case of a city council race, in support or
in opposition to a candidate, the spending limit is no longer binding on any candidate in
the race.199
The thresholds used in Los Angeles have worked well and provide a good starting
point for New York City. New York City should consider adopting similar thresholds for
49
mayoral and citywide races, and a lower threshold for city council races, given the
smaller size of New York City Council districts and lower council spending limits.200
Once established by law, the thresholds can and should be amended if proven to be too
high or low. New York City should begin by adopting the following independent
expenditure thresholds:
· Mayor: $200,000
· Other Citywide Office: $100,000
· Borough President: $50,000
· City Council: $25,000
c. Increased Spending Limits
When total independent expenditures benefiting a single candidate have exceeded
the specified threshold, spending limits should be raised for all participating candidates in
the same race not benefiting from the independent expenditures. The new spending limit
should equal the standard spending limit plus the dollar value of the independent
expenditures.
d. Additional Public Financing
Finally, New York City must determine how much additional public financing a
candidate opposed by large independent expenditures should receive. The best approach
would be for candidates to receive one additional dollar in public matching funds for
every dollar in matchable contributions raised, up to the dollar amount of the independent
expenditures. Total public funds received by a candidate, however, should not exceed
twice the applicable spending limit for the office. (Current law limits public funding to
two-thirds of the applicable spending limit.) Figure 9 shows the maximum amount of
public funds a 2005 primary election candidate could receive under current law, under the
proposed trigger based on current spending limits and under the proposed trigger based
on CGS proposed adjusted spending limits. (See Recommendation 11 for proposed
spending limits.)
Figure 9
Comparison of Maximum Public Funds Available to Candidates
Under Current and Proposed Public Funding Limits
Maximum Public Funds
Available to 2005 Primary
Candidates Under
Current Law
Public Funds That Would
Be Available to 2005
Primary Candidates
Under Proposed Trigger
With Current Spending
Limits
Public Funds That Would
Be Available to
Candidates Under
Proposed Trigger and
Proposed Primary
Spending Limits
Mayor $3,818,667 $11,456,000 $12 million
Other
Citywide
Office
$2,387,333 $7,162,000 $5,000,000
50
Borough
President $859,333 $2,578,000 $2,000,000
City
Council $100,000 $300,000 $260,000
The recommended independent expenditure trigger provision will maintain the
integrity of New York City’s public financing program by requiring disclosure of
independent expenditures and enabling candidates to compete effectively despite
significant independent spending on their opponents’ behalf.
C. Candidates Facing Opponents Who Exceed Spending Limits Require
Additional Assistance
Under current law, if a nonparticipating candidate receives contributions or makes
expenditures in excess of 50% of the applicable spending limit, the spending limit is
lifted for every candidate in the race and participating candidates receive matching funds
at the increased rate of $5 in public funds for each $1 in matchable contributions, up to
$1,250 in public funds per contributor. However, total public funds received by a
participating candidate may not exceed two-thirds of the spending limit.201
The biggest news story in New York City’s 2001 election was the race between
self-funded billionaire Michael Bloomberg and his Democratic opponent Mark Green.
Bloomberg chose not to participate in the city’s program of public financing with
voluntary spending limits. Instead, Bloomberg spent $73 million of his personal fortune
to win the Republican Party primary and the mayoral general election. Bloomberg
outspent public financing program participant Mark Green by more than 4-to-1.
In addition to the mayoral general election, high-spending candidates triggered
additional public funds and the elimination of spending limits in three city council
Democratic primary elections (council districts 1, 13 and 18).
As a result of the high-spending opponent trigger provision, mayoral candidate
Mark Green received an additional $765,885 in public funds. Green’s Campaign
Chairman John Siegal testified before the Campaign Finance Board that, with respect to
the mayoral general election, “[t]he campaign finance system failed completely.” Siegal
continued:
The additional matching funds provided to participating candidates to
counterbalance unlimited personal spending by a candidate who opts out is
wholly inadequate and had absolutely no impact in this election. The
additional funds provided were spent on one afternoon’s television
advertising. The Republican candidate spent in direct mail alone more
than 10 times the amount of funds that we received as a result of the
additional matching [funds].202
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Siegal was not alone in his sentiments. Many candidates and political activists
were troubled by the lopsided spending in the mayoral race. When asked whether the
public financing program adequately deals with high-spending non-program participants,
newly elected Councilman David Yassky replied:
No. I think that the match should be dramatically increased for people
who are being overspent by large amounts, so that, in a council race, if
somebody’s going to spend a million bucks, matching funds should put me
close to a million, $700,000 or $800,000. Not dollar for dollar maybe, but
close enough that someone would see no gain to be made in raising that
kind of money.203
When probed as to how much the match should be increased, Yassky responded:
I don’t know, 10-to-1, 15-to-1. What you need to do is require someone to
say how much they’re going to spend. I think that would be
constitutional. If you could require someone to tell, in advance, how
much they’re going to spend, and if they’re going to overspend by, let’s
say, more than twice the amount, then it jumps.204
Council candidate Steven Banks expressed concern for the type of message
conveyed to future candidates by Michael Bloomberg’s ability to outspend a publicly
financed candidate by such a wide margin. Banks believes:
For the system to be viable, we can’t have a repeat of what just happened.
There has to be some disincentive to somebody to say, “Hey, I can run
because I can spend my own money or I can raise enough money.” And
right now there aren’t those kinds of disincentives. And the model of the
last election certainly says to people that the publicly financed candidate is
going to get swamped.205
Political pundit Fred Siegel insisted that Mark Green, a chief architect of the
city’s campaign finance law, was seriously handicapped by his decision to participate in
the public financing program and abide by its limits. According to Siegel:
What really had an impact was the fact that Green, by sticking with [the
campaign finance program], was overwhelmed. Bloomberg spent more in
the last week than Green spent in the entire campaign. One effect of
campaign finance in this election was to allow Bloomberg to buy the
election. That’s not too strong. I’m skeptical of these [campaign finance]
laws. It’s hard to argue that campaign finance reform didn’t backfire this
time. I’m not terribly partisan. I worked for Clinton in ’92 and Giuliani in
’93. I thought Green was the better candidate this time. I thought the way
the money game played out this time was pretty unfair.”206
Green’s fundraising ability was likely hindered by the Democratic Party’s
fractured state following heated primary and runoff elections between Green and
Fernando Ferrer. Bloomberg’s victory should not be attributed solely to his ability to
dramatically outspend Green. While stressing Bloomberg’s campaign spending and
Green’s inability to keep up, Siegel attributes Bloomberg’s win to many factors. “Part of
the case here was that no one thought that Bloomberg was going to win. The
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concatenation of the Giuliani endorsement, Bloomberg’s money, the war in Afghanistan,
and anthrax, driving city politics . . . because of these unusual circumstances, you could
buy your way.”207
In fact, Mark Green spent more than any other mayoral candidate in New York
City history, except for Michael Bloomberg. Campaign Finance Board Executive
Director Nicole A. Gordon commented:
The program is not intended to be, and should not be, a guarantee of
success. All it can do is help to even things out. The only question is, did
Green have enough money to be competitive to get his message out? I
think he probably did. I can imagine that he, and maybe others, would beg
to differ.208
Gordon summed up the dilemma. “Unless the Supreme Court is going to say some day
that there can be limits on spending, I don’t know that a public financing program can
ever fully address the resources that might be available to a nonparticipant.”209
The current high-spending opponent trigger provision is deficient in at least two
respects. First, the increase of one dollar in the public funds matching rate is insufficient
to make a meaningful difference in the publicly financed candidate’s campaign. Second,
the total cap on public financing at two-thirds of the spending limit dramatically limits
the effectiveness of the trigger.
Recommendation 6: Require Any Candidate Who Exceeds Spending
Limit to Report the Fact Within 24 Hours
To successfully implement a high-spending opponent trigger provision, New
York City must require a nonparticipating candidate who receives contributions, makes
expenditures or has cash on hand in excess of the applicable spending limit to report this
fact to the Campaign Finance Board within 24 hours.
The City of Los Angeles requires candidates who raise or spend funds in excess
of the applicable spending limit to report this fact to the City Ethics Commission by
telephone and either telegram or fax the day the funds are received or the limitation is
exceeded. The provision has worked well facilitating the commission’s administration of
the city’s high-spending opponent trigger.
Recommendation 7: Provide Additional Public Financing To
Candidates Facing Opponents Who Exceed Spending Limit
New York City should amend its campaign finance law to raise the threshold at
which participating candidates qualify for additional public funding. Under current law,
nonparticipating candidate expenditures above 50% of the spending limit trigger
additional matching funds and elimination of the spending limit for participating
candidates. Instead, participating candidates should not become eligible for additional
matching funds and elimination of the spending limit until a nonparticipating opponent
53
receives contributions, makes expenditures or has cash on hand exceeding 100% of the
applicable spending limit.
Under current law, candidates facing opponents who exceed 50% of the spending
limit receive increased matching funds at the rate of $5-to-$1, rather than the standard
rate of $4-to-$1. New York City should amend its campaign finance law to provide that,
if a nonparticipating candidate receives contributions, makes expenditures or has cash on
hand exceeding 100% of the applicable spending limit, participating candidates in the
race receive public funds at double the normal matching funds rate ($8-to-$1 rather than
$4-to-$1). Total public funds received by a candidate, however, should not exceed twice
the applicable spending limit for the office. (Current law limits public funding to twothirds
of the applicable spending limit.) Figure 9, p. 49, shows the maximum amount of
public funds a 2005 primary election candidate could receive under current law, under the
proposed trigger based on current spending limits and under the proposed trigger based
on CGS proposed adjusted spending limits. (See Recommendation 11 for proposed
spending limits.)
D. Large Contributions Threaten Corruption or the Appearance of
Corruption
New York City’s contribution limits are the highest local government contribution
limits in the nation among jurisdictions with public campaign financing programs.210
New York City’s 2001 publicly financed candidates were limited to contributions of
$2,500 (city council), $3,500 (borough president) and $4,500 (citywide office) per
contributor per election year. These limits have been increased to $2,750, $3,850 and
$4,950 for 2003/2005 candidates to reflect changes in the cost of living.
In the event of a primary runoff election, the contribution limits are increased by
50%. In 2001, for example, mayoral candidates Mark Green and Fernando Ferrer were
permitted to accept contributions up to $6,750 per contributor—50% higher than the
standard $4,500 limit—as a result of the Democratic primary runoff election.
In comparison, the City of Los Angeles enforces per election contribution limits
of $500 (city council) and $1,000 (citywide office). Even if the Los Angeles limits were
doubled to account for the fact that some New York City candidates must compete in two
elections—a party primary and a general election—in an election year, New York City’s
limits would be more than twice as high, and three times higher in the event of a runoff
election.211
New York City’s $6,750 contribution limit for Green and Ferrer in 2001 was
significantly higher than the recently increased federal limit of $2,000 per contributor per
election. A candidate for the presidency of the United States, for example, is limited to a
total of $4,000 per contributor for the primary and general elections combined.
As mentioned earlier, New York City’s contribution limits apply only to
candidates who voluntarily participate in the public financing program. (See section
II(B)(2).) Nonparticipants are bound only by the state’s excessively high loophole-ridden
54
limits. According to a leading published work on New York politics, Power Failure:
New York City Politics & Policy Since 1960:
The state’s contribution limits are, in effect, limitations in name only.
Individuals and organizations can legally contribute amounts in excess
of the limits through the “housekeeping” exemption and the exemption
for contributions to political party committees. . . . Combined with high
limits, these provisions erode public confidence in the law and
encourage the practices the law was designed to prevent.212
New York City’s $4-to-$1 matching funds rate is designed to encourage
candidates to solicit small contributions, but many candidates took advantage of the city’s
high contribution limits by accepting large contributions. Our research shows that 146
New York City Council candidates who participated in the public financing program
received contributions exceeding $1,000 from more than 1,200 contributors. At least 11
council candidates received contributions in excess of $1,000 from 20 or more
contributors.
Councilwoman Eva Moskowitz, for example, accepted contributions exceeding
$1,000 from more than 40 contributors for a total of $89,000. Councilman Martin
Golden received contributions exceeding $1,000 from 39 contributors for a total of more
than $78,000. Councilman Bill DeBlasio received contributions exceeding $1,000 from
more than 30 contributors for a total of more than $72,000. Councilwoman Melinda Katz
accepted contributions exceeding $1,000 from 31 contributors for a total of more than
$58,000. And Steven Cohn, who lost the 33rd council district Democratic Party primary
to David Yassky, received contributions exceeding $1,000 from nearly 50 contributors,
totaling more than $100,000.
Citywide office candidates have even greater access to wealthy contributors and
have received far more large contributions than city council candidates. Mayoral
candidate Mark Green, for example, accepted contributions exceeding $2,000 from more
than 1,800 contributors for a total of more than $7.5 million. Mayoral candidate
Fernando Ferrer accepted contributions exceeding $2,000 from more than 750
contributors for a total of more than $3 million.
Many New York City candidates and experienced observers alike feel the city’s
contribution limits should be lower, particularly in the case of city council candidates.
Gene Russianoff, Senior Attorney for the New York Public Interest Research Group, told
CGS that the contribution limits:
Were and are too high. Of all the city groups [fighting in the late 1980s
for public financing in New York City], we objected from the get go that
they were too high. They’re particularly too high in the case of the
council. We advocated a limit of about $1,000 in council races. The
tension is, you have to get the government and elected officials to restrict
the advantages they have. So, the compromises we struck are very
defensible.213
When asked to comment on the city’s contribution limits, Councilman John Liu
told CGS, “I think the key to leveling the playing field and making a candidate and future
elected official accountable to people and less to donors is the contribution limit. And
maybe we should decrease the contribution limits even more.” When asked how low the
contribution limit should be, Liu responded, “I don’t know how low they should go. I set
a personal limit myself. I did not accept any contribution over $1,000, with one
exception, that’s my direct blood family. I accepted $1,100 from them, because I wanted
them to be my biggest supporters.”
Councilman Oliver Koppell testified at the Campaign Finance Board’s public
hearings that he voluntarily limited his campaign contributions to $1,000 because he
believes that the city’s limit “may be a little bit high.” Koppell testified that, because of
the matching funds system, it wasn’t necessary for him to accept larger contributions and
now he’s an officeholder with “no substantial obligations to any special interests.”214
Councilman David Yassky, whose opponent Steven Cohn raised more than
$100,000 in contributions exceeding $1,000, was asked whether the city’s contribution
limit for council candidates is reasonable. Yassky replied, “If I was designing it I’d
probably make it lower, maybe $1,000.”215
While perhaps not being low enough, the city’s contribution limits for citywide
office candidates have had a more discernible impact. Before implementation of the
city’s public financing program, mayoral candidates commonly received contributions
ten times the size of the current $4,500 limit. Gene Russianoff told CGS, “You had all
these real estate developers giving $50,000, $100,000, $150,000 contributions to Koch.
He ran in 1985 against another citywide official, the city council president, and outspent
her 11-to-1, $11 million to $1 million—largely with these $50,000 and $100,000
contributions from developers.”216 Campaign Finance Board Executive Director Nicole
A. Gordon likewise commented:
At the mayoral level, there’s no question that the contribution limit has
changed the face of elections in a very big way. Our contribution limits
before the program was enacted enabled candidates to get as much as
$100,000 from a single contributor. They’ve been lowered somewhat at
the state level, not nearly enough.217
While noting that the mayoral contribution limits even under the program may not be low
enough, Gordon continued to emphasize the positive impacts of the current $4,500 limit:
To the extent that you can say that contributions might influence elected
officials, that’s been diminished. And the playing field leveling at the
mayoral level has been spectacular because before the program was in
place you had situations where candidates were outspent by vast
differentials and didn’t have the resources to compete. And now, you saw
a Democratic primary in New York City this year that had four campaigns
that were all able to spend the same amount of money. They all got about
the same in public funds. And there’s no question that it was a
competitive race.218
Some are not concerned about the $2,500 city council contribution limit,
contending that council candidates are simply unable to raise large contributions. Nicole
A. Gordon told CGS that “If anything, at the city council level, the contribution limit is
56
artificially high because the bottom line about city council races is that they don’t raise
contributions at the $2,000 level. They just don’t get large contributions.”219 Some
candidates echoed Gordon’s sentiments. Councilman Yassky told CGS, “I would have
been happy to have a lot of $2,500 contributions, but I couldn’t. I didn’t have people
who were willing to give me that much money.”220
Recommendation 8: Lower New York City Contribution Limits
New York City’s contribution limits are too high. Candidates solicit and accept
the largest contributions allowed under the legal limits. Such large contributions create
the potential for corruption or, at the very least, the appearance of corruption. The fact
that both citywide and city council candidates accepted thousands of contributions
exceeding $1,000 in 2001 should be cause for concern. New York City’s $4,500 limit on
contributions to candidates for citywide office is more than twice the size of the recentlyincreased
$2,000 federal limit on contributions to candidates for U.S. President, Congress
and Senate.
Only a tiny percentage of New York City’s population can afford to make
contributions exceeding $1,000. While candidates unanimously report that they are not
influenced by large contributions, most readily acknowledge that their colleagues could
be and have been corrupted by large contributions.
Some have suggested that the contribution limits should be increased when a
candidate faces an opponent who has exceeded the voluntary spending limit. When
asked whether the city’s spending limits were reasonable, for example, council candidate
Steven Banks stated, “I think in a council race they could be lower. I think what we saw
in the mayoral race recently was that perhaps they should be higher when someone is not
going to opt into the public financing system.”
New York City’s generous public financing program makes it possible for most
candidates to wage competitive campaigns without relying on large contributions from
wealthy special interests. Raising the contribution limits when a wealthy, self-financed
candidate enters the race would defeat a primary purpose of the city’s public financing
program—killing the patient with the medicine, so to speak. Where candidates are
unable to wage competitive campaigns relying only on small contributions and public
funds—candidates facing a wealthy opponent such as Mayor Michael Bloomberg—the
appropriate remedy is more public funding, not larger contributions from the handful of
wealthy donors who can afford to give more.
New York City’s contribution limits for every office are too high, threatening
corruption or, at the very least, an appearance of corruption. Many candidates running in
2001 voluntarily limited their contributions to amounts smaller than the city’s limits,
finding the city’s limits unnecessarily high. New York City should reduce its per election
cycle contribution limits to the following amounts:
· Citywide Office: $2,000
· Borough President: $1,500
· City Council: $1,000
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The city should enforce these limits for all candidates running for city office, regardless
of a candidate’s willingness to participate in the public financing program. The city
should retain its provision that increases the contribution limits by 50% in the event of a
runoff election.
Lower contribution limits will substantially reduce the threat of corruption or the
appearance of corruption in New York City politics. Furthermore, these recommended
contribution limits, when combined with the city’s generous public financing program,
will allow candidates to raise sufficient funds to wage competitive campaigns. These
lower contribution limits will also reduce the unfair fundraising advantage enjoyed by
candidates with greater access to wealthy donors.
E. Time Spent Fundraising Varies
Proponents of public campaign financing have long argued that a well funded
public financing program will reduce the amount of time candidates spend fundraising.
Less time fundraising, the argument goes, means more time for candidates to discuss
issues with voters. Less time fundraising by incumbents means more time to perform
official duties.
In reality, the amount of time candidates spend fundraising depends on many
factors beyond the availability of public financing. Public financing certainly plays an
important role in reducing the amount of time candidates spend fundraising. Other
significant factors include whether the jurisdiction has a fundraising blackout period, the
size of a jurisdiction’s contribution limits and the amount of a jurisdiction’s voluntary
spending limits.
In jurisdictions combining public financing with voluntary spending limits, the
spending limit becomes the de facto fundraising goal for serious candidates. New York
City Councilman John Liu told CGS, “My stated goal from the outset was that I would
spend the maximum allowed under law. I’m very happy that there was a spending limit,
because that was my fundraising goal. Getting into this unlimited fundraising, it just gets
to be ridiculous.”221 This attitude is by no means unique to New York City candidates.
CGS found this to be true among candidates in the City of Los Angeles, as well.222
1. Pre-Election Year Fundraising
Unlike most jurisdictions with public campaign financing programs, New York
City places no restrictions on when candidates may begin fundraising for an election.
Consequently, a city officeholder may start fundraising for a reelection campaign on the
day he or she takes office and continue fundraising throughout his or her tenure as a city
official. Contributors willing to make donations to an officeholder three years before an
election are likely seeking political access or influence rather than merely demonstrating
support.
Though all candidates are legally permitted to raise campaign funds as early as
they want, year-round fundraising is typically engaged in by incumbents, to the
disadvantage of challengers. Incumbents have no difficulty raising funds from special
interests with business before the city and sometimes use this incumbency advantage to
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build a war chest substantial enough to deter challengers. Campaign contributions to an
officeholder years before an election may at the very least create an appearance of undue
contributor influence.
Term limits have little impact on this practice. Officeholders who are termed out
of office commonly seek election to a different public office, playing political musical
chairs. In 2001, for example, all of the major candidates competing for the Democratic
Party’s mayoral nomination were “quasi-incumbents”—officeholders termed out of their
office and seeking election to a different office. Mark Green had been the city’s public
advocate. Fernando Ferrer had been borough president of the Bronx. Alan Hevesi had
been the city’s comptroller. Peter Vallone had been the speaker of the city council. All
four of these candidates began fundraising more than two years before the 2001 primary
election.
The public advocate race likewise involved three quasi-incumbent candidates who
began fundraising as public officeholders more than two years before the 2001 primary
election: former City Councilman Steven DiBrienza, former City Councilwoman Kathryn
Freed and State Assemblyman Scott Stringer. All three candidates lost in the Democratic
primary election to Betsy Gotbaum, who had never before held public office. Gotbaum
went on to win the general election with 86% of the vote.
In the comptroller’s race, the only quasi-incumbent in the race was also the only
candidate to begin fundraising more than two years before the primary election—former
City Councilman Herbert Berman.
In the Queens borough president race, three of the four major candidates were
quasi-incumbents: former Councilman Sheldon Leffler, former Councilman Alfonso
Stabile and former Councilwoman Helen Marshall, who won the race. Two of these
three quasi-incumbents, Sheldon Leffler and Alfonso Stabile, began fundraising more
than two years before the primary election. Leffler is under investigation by the
Manhattan district attorney’s office for illegal fundraising activities related to $10,000 in
contributions from a Queens real estate executive.223
In the Manhattan borough president race, incumbent Borough President C.
Virginia Fields began fundraising more than two years before the election and faced no
serious opposition, winning the race with 72% of the vote.
The race for Brooklyn borough president involved two quasi-incumbents, former
Councilman Ken Fisher and former State Senator Marty Markowitz. They were also the
only two candidates to begin fundraising more than two years before the 2001 primary
election. After a close Democratic primary contest, Markowitz went on to win the
general election with 76% of the vote.
Three quasi-incumbents ran for Bronx borough president, former Councilman
Adolfo Carrion, former Councilwoman June Eisland and State Senator Pedro Espada.
Both Carrion and Eisland began fundraising more than two years before the election,
while Espada did not begin fundraising until 2001. Carrion went on to win the office.
Two quasi-incumbents ran for Staten Island borough president in 2001, State
Assemblyman Robert Straniere and Councilman O’Donovan. O’Donovan began
fundraising more than two years before the election, while Straniere did not begin
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fundraising until 2001. Both were defeated by Staten Island Deputy Borough President
James Molinaro in the general election.
Early fundraising was not as prevalent among city council candidates, most of
whom had never before held elective city office. Out of 298 city council candidates on
the ballot, 29 began fundraising more than two years before the 2001 primary election.
Four of these early fundraisers were city council incumbents. Only one city council
incumbent who began fundraising early ran in a competitive race.224
2. Fundraising on a Daily Basis
The amount of time spent fundraising by New York City candidates on a daily
basis varies widely. Candidates for citywide office and borough president tend to
fundraise nearly full-time during the election year. Candidates for city council spend
significantly less time fundraising. Methods of fundraising also vary. Candidates for
citywide office, borough president and some council candidates rely heavily on phone
calls. Many council candidates, however, relied primarily on house parties.
District 20 council opponents Ethel Chen and John Liu both relied on phone calls
to raise funds. Council candidate Steven Banks relied on house parties, and council
candidate David Yassky used a variety of fundraising tools. Liu said he spent:
Every day, on average, an hour. But I spaced it out over a long period of
time. I started fundraising at the beginning of 1998. My goal was to have
it finished by the end of the year 2000, so that I could actually have all of
2001 talking about the issues and getting the vote out. I did finish my
fundraising by the end of 2000. The average of one hour a day amounts to
over 1,000 over three years.225
Chen began her fundraising about two years before the election and, taking the advice of
her consultant, spent approximately two hours per day dialing for dollars. Chen said:
The worst thing about raising money is to ask people to give you money.
We were told by our campaign consultants to keep asking for donations.
That’s the most painful part of elections, to ask people for money, but it’s
also the most important part. So we needed to ask every day, instead of
spending time out in the community.226
Yassky began fundraising in January 2000, about 20 months before the primary
election. Yassky gave a detailed description of his fundraising:
I did this myself. For George Bush, fundraising is calling people on the
phone and attending events. For me, a lot of the time was spent arranging
the fundraising events themselves, which were house parties. I did it
through a whole series of house parties. I’d ask somebody to host a party
at their house for me. And to make it easy for people to do that, I said “I’ll
do the work.” They would give me a guest list, I’d do the invitations, and
often mail the invitations out, all the production work. I had 30 house
parties, with maybe five hours of production work, so 150 hours, plus
phone calls. And I did a couple of mass mailings to my friends and
associates. I’d log it all into a database, so there was data entry time. So
five hours per party, plus another 30 hours of computer time total, for 180
60
hours total. Plus another 200 phone calls, times five minutes per call,
that’s 1,000 minutes. About 200 hours total, for 20 months. That makes
10 hours a month. Plus the house parties themselves were two hours each,
so that’s another 60 hours to be added. So 260 hours.227
Banks began fundraising two years before the election and held 50 house parties.
Banks chose house parties as his major fundraising mechanism because the parties also
served as a community organizing strategy. But Banks commented, “I think far too much
of my time was spent focusing on how to raise money, to the detriment of the time that
could have been spent doing door to door work, for example.”228
Recommendation 9: Impose Fundraising Blackout Period
In contrast to New York City, the City of Los Angeles prohibits candidates for
citywide office from fundraising more than 24 months before an election, while
candidates for the Los Angeles City Council may not fundraise more than 18 months
before an election.
New York City Campaign Finance Board Executive Director Nicole A. Gordon
acknowledged that so-called “off year” fundraising advantages incumbents, who can
easily raise funds years before an election.229 NYPIRG’s Gene Russianoff likewise noted
this incumbency advantage and told CGS that there has been political resistance to
proposals that would limit the fundraising time period.230
Candidates had mixed feelings about limits on pre-election year fundraising and
spending. Numerous candidates, including city council candidates Ethel Chen and
Steven Banks, told CGS that early fundraising should be allowed in order to provide
dark-horse candidates the opportunity to build credibility, but that pre-election year
campaign spending should be strictly limited. City council candidates running for office
in 2001 and participating in the public financing program were permitted to spend up to
$64,000 in the three years preceding an election year.231 Spending by candidates not
participating in the public financing is unlimited. Banks believes pre-election year
campaign spending should be prohibited for participating candidates, while Chen
advocates a limit of $10,000-$15,000 per pre-election year.232
Nonetheless, it is clear that among candidates for borough president and citywide
office, incumbents and quasi-incumbents typically begin fundraising more than two years
before the election while their opponents do not. This practice is cause for at least two
distinct concerns. First, officeholder solicitation of contributions three or four years
before an election poses a risk of undue contributor influence. Second, the greater ability
of officeholders to raise funds years before an election, in comparison to a challenger,
allows incumbents to amass warchests and deter challengers. The second concern is
mitigated, to some extent, by the city’s voluntary spending limits. But this mitigation
disappears if the officeholder chooses not to abide by the spending limits.
New York City should prohibit candidates from raising campaign funds more
than 24 months before the primary election. Officeholders should be permitted to raise
limited funds, to be used exclusively for expenditures related to official duties and not for
campaign purposes. These funds should be maintained in a segregated officeholder
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account. Officeholders should be permitted to raise up to $50,000 per year in
contributions of $1,000 or less per contributor per year. The officeholder account
balance should never exceed $50,000.
F. Spending Limits Are Too Complex and Need Adjustment
The New York City Campaign Finance Board administers a fairly complex
regime of spending limits, with separate limits regulating campaign spending:
· between the primary election and the general election;
· between January 1 of the election year and the primary election;
· during the year preceding the election year; and
· during the third and fourth years preceding the election year,
combined.
The specific spending limits that applied during these periods for the 2001 elections are
detailed in section II(B), Current Law (above). Candidates who exceed the limits
applicable to the three pre-election years are not penalized by the Campaign Finance
Board. Instead, the amounts exceeding the pre-election year limits are charged against
the first limit applicable in the election year. Candidates who are not on the ballot in a
primary election must abide by the general election spending limit for all expenditures in
the election year.
The ideal spending limit is high enough to allow candidates to communicate their
messages to voters, but low enough to allow most serious candidates to reach the limit, so
as to reduce the advantage of candidates with greater access to wealthy donors. Because
New York City’s provision of public funds is based on its spending limits, with
candidates receiving up to 67% of the spending limit in public funds, a spending limit set
too high will needlessly increase program costs.
1. City Council
New York City’s 2001 primary elections, the most competitive in the city’s
history, serve as the perfect case study for determining the appropriateness of the current
spending limits. The 2001 primary election year spending limit for city council
candidates was $137,000. The combined primary limit for the election year and the three
years preceding the election year was $201,000.
Among the 184 council candidates running in Democratic or Republican party
primaries for whom campaign finance data was available, the median campaign
expenditure was $94,597.233 The average campaign expenditure among this group was
$95,842. How much does it take to win a city council primary? The average major party
primary winner spent $126,799. The median amount spent by major party primary
winners was $123,643. Both of these figures are well below the statutory maximum
$201,000 that primary candidates were authorized to spend.
Only three percent (6 out of 192) of the council candidates on a major party
primary election ballot reached or exceeded the $201,000 limit. Four of these candidates
ran in the district 1 Democratic Party primary, where Elana Posner chose not to
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participate in the public financing program and spent $582,529. Posner’s high-spending
caused the spending limit to be lifted in the race for publicly financed candidates.
Consequently, three publicly financed candidates lawfully exceeded the $201,000
program limit. Posner’s spending did her little good. She finished fifth out of six
candidates.
The other two candidates to reach the $201,000 limit were district 4 incumbent
Eva Moskowitz and district 20 candidate John Liu. Moskowitz won her primary with
80% of the vote, while Liu edged out his nearest opponent by only two percentage points.
Less than 7% (12 out of 192) of the council candidates on a major party primary
election ballot reached the two-year primary spending limit of $177,000. The fact that so
few council candidates reached the maximum four-year $201,000 spending limit or the
two-year $177,000 limit is strong evidence that the city council spending limit is too
high. This evidence is further supported by the fact that median expenditures by winners,
as well as median expenditures by all candidates are both below the election year primary
limit of $137,000. The city council spending limits are in need of downward adjustment.
2. Borough President
The 2001 election year primary spending limit for the office of borough president
was $1,177,000. The maximum primary spending limit, including allowable
expenditures in the three years preceding the election year, was $1,357,000. Highly
competitive open seat primaries were held in four of the five boroughs. Democratic
incumbent C. Virginia Fields was running for reelection as Manhattan borough president
and faced no primary challengers. The 11 candidates running in the city’s four borough
president primary elections were all participants in the public financing program. The
average candidate spent $770,783, while the median spent by candidates was $774,378.
The average spent by winners was $930,593, while the median spent by winners was
$936, 403. The average spent by losing candidates was $679,463, while the median spent
by losing candidates was $641,024. Despite the 2001 primary elections being highly
competitive, all of these figures are well below both the election year primary limit and
the total primary limit. The borough president spending limits should be adjusted
downward.
3. Public Advocate
The 2001 election year primary spending limit for the offices of public advocate
and comptroller was $3,270,000. The maximum primary spending limit, including
allowable expenditures in the three years preceding the election year, was $3,540,000.
Competitive Democratic Party primary elections were held for both offices, with all nine
candidates participating in the public financing program. The average candidate spent
$1,579,781, while the median expenditure was $1,900,904. The average and median
expenditure of winning candidates was $2,423,177. The average losing candidate spent
$1,338,811, while the median expenditure of a losing candidate was $1,117,656. As was
the case among candidates for borough president, candidates for public advocate and
comptroller spent well below the primary spending limit. The spending limit should be
adjusted downward.
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4. Mayor
The 2001 election year primary spending limit for the office of mayor was
$5,231,000. The maximum primary spending limit, including allowable expenditures in
the three years preceding the election year, was $5,501,000. The Democratic Party held a
highly competitive mayoral primary involving five candidates who were all participants
in the public financing program. The Republican Party and the Green Party also held
primaries, though they were considerably less competitive, each of which involved one
candidate participating in the program and one candidate foregoing the opportunity to
receive public financing—most notably Michael Bloomberg, who spent $30 million of
his own money to win the Republican primary.
The average amount spent by a Democratic Party mayoral primary candidate was
$5,161,990, while the median was $6,070,886. The highest spending Democrat was
Mark Green. Green spent $7,223,026 (including exempt expenditures) and placed second
to Fernando Ferrer, who spent $6,441,587 (including exempt expenditures). Green
defeated Ferrer in a primary runoff and went on to face Bloomberg in the general
election. Four out of five Democratic candidates reached the spending limit. Three of
the four candidates in the less competitive Republican Party and Green Party primaries
spent far less than the limit, while Bloomberg spent far more than the limit.
Candidates in the Democratic primary were able to wage competitive campaigns
and communicate effectively with voters. Unlike the spending limits for other New York
City offices, there is no evidence to suggest that the mayoral primary spending limit
should be lower. There is also no evidence that the limits were too low, preventing
candidates from getting their message out. On the contrary, the mayoral limits seem
perfectly set, allowing serious candidates to compete effectively on a level playing field.
Close examination of general election spending limits is unnecessary. Spending
limits appropriate for competitive primary elections will likewise accommodate
competitive general elections. Given the overwhelming voter enrollment advantage of
the Democratic Party in New York City, competitive primary elections are far more
common than competitive general elections. In most instances, the winner of the
Democratic Party primary is considered the preordained winner of the general election.
Exceptions certainly exist, particularly in mayoral elections where the winners of the past
three general elections have been Republicans. Nonetheless, maintaining the same
spending limit for primary and general elections is appropriate.
Recommendation 10: Simplify Spending Limits
New York City’s multiple spending limits—different limits applicable to election
year and pre-election year spending—combined with the Campaign Finance Board’s list
of expenditures exempt from the spending limits, results in a system that confuses
candidates and voters alike. Most jurisdictions with public financing programs, like the
City of Los Angeles, impose much simpler systems with a primary election limit, a
general election limit and few or no exemptions. Simple spending limits make it easier
for candidates to comply with the law and for voters to track campaign spending.
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In an effort to simplify campaign accounting for candidates, and to simplify the
public financing program generally, New York City should eliminate the two pre-election
year spending limits. Instead, the city should enforce two identical spending limits—one
for the primary election and one for the general election—at the amounts recommended
in Figure 10 (below). The city should maintain its current provision establishing a runoff
election spending limit of one-half the standard spending limit.
Furthermore, New York City should eliminate all spending limit exemptions with
one exception. Candidate expenditures to defend against ballot access challenges should
be exempt from the spending limits. (See Recommendation 12.)
Recommendation 11: Lower Spending Limits for Public Advocate,
Comptroller, Borough President and City Council
New York City’s spending limits for city council, borough president, comptroller
and public advocate are too high and should be reduced. The mayoral spending limit is
appropriately set.
Figure 10 lists the median amounts spent by the winners of the major party
primaries in 2001, the total amount of money candidates will be permitted to spend on
their 2005 primary election campaigns, and our recommended spending limits for the
2005 primary elections.
New York City’s 2005 primary election spending limits are clearly higher than
necessary for every office but mayor. CGS recommends that spending limits be reduced
for all offices except mayor to the amounts listed in Figure 10. The recommended limits
will allow candidates to spend amounts adequate for communicating with voters while, at
the same time, leveling the campaign playing field and reducing the amount of time
candidates spend fundraising.
Figure 10
2001 Candidate Spending
Median Spent by 2001
Major Party Primary
Winners
Total 2005 Primary
Election Spending Limits
Recommended 2005
Spending Limits
Mayor $18,469,711 $5,998,000 $5,998,000
Public
Advocate /
Comptroller
$2,423,177 $3,851,000 $2.5 million
Borough
President $936,403 $1,469,000 $1 million
City
Council $123,643 $190,000 $130,000
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G. Draconian State Ballot Access Laws and City Spending Limit
Exemptions, Enable Well-Financed Candidates to Keep Challengers
on Sidelines
The New York City Campaign Finance Act provides that candidate expenditures
made for the purpose of complying with the state’s election law, including legal costs to
challenge or defend the validity of candidate nominating petitions, are not limited by the
public financing program spending limits.234
The state of New York’s ballot qualification requirements are among the most
onerous in the United States and the subject of countless lawsuits in every election year.
Perhaps the most visible of these lawsuits was the one filed by 2000 presidential
candidate John McCain. A 1999 Salon.com news article reporting the lawsuit began,
“John McCain may have been able to outlast his tormentors in a Vietnam prisoner of war
camp, but that doesn’t mean he’s equipped to outsmart New York’s tortuous ballot access
laws.” McCain’s lawsuit claimed that New York’s ballot access laws place an “undue
and overwhelming burden” on candidates.235
McCain won his lawsuit and did appear on the New York State Republican Party
presidential primary election ballot, but the scope of his legal victory was limited to
altering the ballot access laws for presidential primary elections. The laws that regulate
ballot access for New York City offices remain byzantine.
New York State law contains page after page of specific detail regarding ballot
qualification petition requirements. The period for filing petitions with the Board of
Elections begins ten Mondays before the primary election and ends four days later.236
Signatures on the petitions must be collected within 37 days of the filing deadline.237 The
number of signatures required is established by state law. A candidate must obtain
signatures from the lesser of 5% of the registered voters of the party in the jurisdiction or:
· 7,500 party members for citywide office;
· 4,000 party members for borough president; or
· 900 party members for city council.238
Any tiny misstep serves as grounds for a legal challenge. For example, petition
signers must note their county of residence. Though the geographic boundaries of New
York City’s five boroughs—Brooklyn, the Bronx, Manhattan, Queens and Staten
Island—are coincident with the boundaries of the city’s five counties, the formal names
of three of the counties differ from the corresponding borough’s name. The borough of
Brooklyn is named Kings County. The borough of Manhattan is named New York
County. The borough of Staten Island is named Richmond County. A signatory’s
confusion of the borough name for the county name is legal grounds for invalidating the
signature.
Of the 443 candidates who filed ballot qualification petitions with the Board of
Elections for offices covered by the public financing program, 88 (20%) failed to qualify
for the ballot. Of the 353 candidates who filed certification papers with the Campaign
Finance Board to participate in the public financing program by the June 1, 2001
deadline, 73 (21%) failed to qualify for the ballot.
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Candidates enjoying the support of the Democratic Party machine have little
difficulty qualifying for the ballot, with limitless numbers of party foot soldiers willing
and able to collect the requisite number of petition signatures in the requisite petition
format. The party’s favored candidates likewise have no difficulty raising funds
necessary to sustain legal challenges to the validity of opponents’ petitions. The fact that
expenditures to challenge opponents’ petitions are exempt from the campaign finance
program spending limits only encourages the practice.
Sandra Vassos ran for city council in district 22 against Democrat Peter Vallone
Jr., son of term-limited speaker of the city council and 2001 mayoral candidate Peter
Vallone. Vassos attempted to qualify for the Democratic Party primary ballot but had her
petitions challenged. Vassos testified at the Campaign Finance Board’s public hearing
that:
The petition challenge process . . . enables a well-funded candidate to use
political tactics to tie up another candidate in court for weeks and force
another candidate to spend a lot of money in defending those petitions
regardless of merit. It is the process that is a difficult hurdle here for
candidates who are not as well-funded as others.
For example, my Democratic petitions were challenged, brought to trial,
and then brought to appeal, costing well over $13,000. I, along with many
other candidates for City Council, were forced to drop our appeals or to
curtail them. I, in particular, was very fortunate, given that I had also
secured the Republican party endorsement for City Council, which
enabled me to survive the challenge process and go on to the general
election. It is also my understanding that many less-funded candidates just
gave up and went home and closed down their races.239
Candidates are currently prohibited from using public funds to pay for any expenditures
exempt from the spending limits. Vassos recommended that the Campaign Finance
Board allow candidates to use public funds to pay for their legal defense against petition
challenges.
When asked what the public financing program’s greatest weakness is, council
candidate Steven Banks said, “There isn’t a finite amount that can be spent because of the
use of exemptions.” Banks elaborated, “It’s a very effective law, but I think it would be a
more effective law if all expenditures were countable, but the ceiling for expenditures
was higher, because the existence of exemptions creates the ability for candidates who
raise more money to spend money differently. Many of the exempt expenditures were
related to getting on the ballot, petitioning-related expenditures.” Banks noted that
candidates with greater access to wealthy donors often pay for ballot access petition
signature gatherers. This is a form of campaign field work, building candidate name
recognition, which is exempt from the spending limits. Banks emphasized, however, that
expenses related to defending ballot qualification petitions should be exempt from the
spending limits, because the candidate playing defense has no way to avoid these
expenditures.240
Ethel Chen, a 2001 council candidate in district 20, had her petitions challenged
by the Democratic Party’s endorsed candidate John Liu. Chen had been knocked off the
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ballot in 1997 and, consequently, anticipated a ballot access challenge in 2001. Chen
took precautions, collecting five times more signatures than the 900 required, and
survived the challenge. Chen told CGS that the Democratic Party’s influence in the
ballot qualification process extends beyond financial and pro bono legal support for the
party’s chosen candidate. The county Democratic Party organizations also choose the
judges appointed to the bench in overwhelmingly Democratic New York City. These
judges, according to Chen, have “no sympathy” for candidates defending petitions
against legal challenges.241
The use of ballot petition challenges as a political tactic by well financed
candidates not only keeps opponents off the ballot, but also delays the receipt of public
financing by those opponents who eventually survive the petition challenges. New York
City law requires that a candidate qualify for the ballot before receiving public funds.
Under current state law, candidates may not submit petitions to qualify for a primary
election more than 10 weeks before the election.242 Candidates wishing to appear on the
September 11, 2001 New York City primary election ballot could not submit
qualification petitions before the first week of July 2001. This telescoped time frame
makes petition challenges all the more effective. Candidates are often tied up in legal
battles well into August, leaving only a few weeks, at best, to campaign for office using
public funds.
Candidates participating in the public financing program who challenge the
petitions of their opponents receive multiple benefits. Not only can a publicly financed
candidate wage a high-cost legal battle to knock an opponent off the ballot, but the
candidate can do so without reducing the amount of money the candidate can spend on
his or her campaign because the legal expenses are exempt from the spending limits. The
candidate may also severely delay their opponents’ receipt of public funds using this
tactic.
The process of challenging petitions gives and unfair advantage to party machine
candidates and reduces electoral competitiveness in New York City. The current
structure of the campaign finance program only encourages this practice.
Recommendation 12: Eliminate All But One Spending Limit Exemption
The New York City Campaign Finance Act exempts expenditures for compliance
with state election laws and the city’s campaign finance law from the city’s spending
limits. These exemptions further complicate an already complex system of spending
limits. The exemptions give candidates with greater access to wealthy donors numerous
advantages over other candidates. Candidates with the ability to raise funds in excess of
the spending limits may use paid signature gatherers to fill their ballot qualification
petitions, while opponents rely on campaign volunteers to collect signatures. Wellfunded
candidates may also challenge ballot petitions of their opponents in court. Such
petition challenges whittle away opponents’ limited financial resources, sometimes knock
opponents off the ballot, and always delay opponents’ access to public funds.
New York City should eliminate these advantages enjoyed by candidates with
greater access to wealthy campaign contributors by eliminating all spending limit
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exemptions, with one exception. Candidate expenditures to defend against ballot petition
challenges should be exempt from the spending limits. Legal defense expenditures are
unavoidable and in no way grant an unfair advantage to the candidate making the
expenditure.
Elimination of all but one spending limit exemption will simplify the city’s
spending limit regime and level the legal playing field between candidates with varying
access to campaign contributors—with only one possible drawback. Political attorney
and CGS consultant Carmen Williams warned that, if compliance exemptions are
eliminated, candidates will choose to spend limited resources on campaign mailers or
other forms of advertising rather than on a campaign compliance officer. Williams said:
A candidate has $10,000 left to spend. She can spend $9,000 on a mail
piece and $1,000 on compliance. Or she can spend $8,000 on a mail piece
and $2,000 on compliance. They’re going to spend $9,000 on the mail
piece and $1,000 on compliance. The only reason I’m hired to do
compliance work is because my salary is exempt.243
While it is possible that candidates would spend less on compliance if the
exemption were eliminated, a candidate’s desire to receive the maximum amount of
available public funding might offset this tendency. A campaign’s employment of a
compliance attorney would likely pay for itself through the attorney’s ability to maximize
available public funding. The City of Los Angeles amended its public financing law
prior to its 1997 elections to eliminate spending limit exemptions for compliance. The
city saw no discernable deterioration in candidate compliance as a result of the
amendment.
The benefits of eliminating all but one spending limit exemption would outweigh
the risk that candidate compliance would deteriorate. The Campaign Finance Board has a
proven record of vigorous enforcement of the city’s campaign finance law. The only one
hurt by a candidate’s failure to comply with the campaign finance law would be the
candidate. In short, if a candidate doesn’t comply, the candidate doesn’t get paid.
H. Officeholders Convert City Funds to Personal Political Use
The New York City Charter prohibits any city official running for public office
from:
· Appearing or participating in any television, radio, Internet or printed
advertisement paid for in whole or part with city funds during the
election year;
· Using government funds or resources for any mass mailing placed in
the mail less than 30 days prior to an election in which the official is a
candidate; or
· Using government funds or resources for any communication
supporting or opposing a candidate, political party or ballot issue.244
The law does not apply to city funds disbursed through the public financing program.
The law was intended by its primary sponsor, then-Speaker of the City Council Peter
69
Vallone, to prevent elected officials from abusing their office through unregulated
expenditure of public tax dollars for campaign purposes. But the law contains huge
loopholes, including an exception for “ordinary communications between elected
officials and their constituents.”
Despite this charter amendment being passed in 1998, public tax dollars were
again spent for campaign purposes in 2001—this time by the charter amendment’s
sponsor, Peter Vallone. When asked to pinpoint weaknesses in the campaign finance
program, NYPIRG’s Gene Russianoff retorted:
The Vallone problem—a powerful city official spending millions of
dollars in newsletters, flags, buttons and tote bags promoting his name all
through the election cycle. This is essentially the Dinkins-Giuliani-
Vallone problem. Dinkins spent a million dollars in 1993 on TV ads
promoting municipal bonds that looked and smelled like campaign
commercials. He did it in July of the campaign year. Giuliani denounced
him for it, but then did it in 1997. He ran a million dollars worth of ads
with the Yankees manager promoting recycling. He ran them all the way
through September. We got a law passed in 1998 which prohibits TV and
radio commercials with candidates names and faces. But then this year
Vallone spent it on mailings. So we need to fix that loophole in the law.245
Vallone, a 2001 mayoral candidate, spent more than $100,000 in city funds on
canvas tote bags, with the New York City insignia surrounded by the words
“Compliments of New York City Council, Peter F. Vallone, Speaker” silk-screened on
the side. Vallone’s spokesman defended the bags as an environmental “initiative to
encourage waste prevention.”246 One week later, Newsday reported Vallone spending
$94,000 on flags containing the same message distributed at parades and other events.
The article likewise mentioned the expenditure of public funds for mailings by Vallone
earlier in the year.247
In its most recent report, An Election Interrupted . . . An Election Transformed,
the Campaign Finance Board reported these events and encouraged the city council to
strengthen the charter provision cited above.248
Recommendation 13: Strengthen Law Prohibiting Elected Officials
From Using Public Dollars to Promote Their Candidacies
One obvious weakness in New York City’s current law is that it only prohibits
mailings within 30 days of an election, instead of a longer period of time. City officials
should be prohibited from using government funds or resources for any mass mailing
placed in the mail during the calendar year of an election in which the official is a
candidate.
Another substantial weakness is that the law makes no mention of officeholder
expenditures on gifts, such as the tote bags and flags distributed by Vallone, for the
promotion of an officeholder’s candidacy. City officials should be prohibited from using
government funds or resources for the production of any gifts, such as tote bags and
70
flags, bearing the official’s name during the calendar of an election in which the official
is a candidate.
Lastly, the law fails to define its exception for “ordinary communications between
elected officials and their constituents,” a loophole that could be exploited in future
elections. The term “ordinary communications between elected officials and their
constituents” should be defined as communication in response to letters or inquiries from
constituents.
I. Substantial Public Funds Are Distributed to Candidates With No
Serious Opposition
Critics and supporters of the public financing program alike have noted that the
program sometimes distributes public money to candidates who arguably do not need it—
candidates who are not engaged in competitive races. In the words of Campaign Finance
Board member Dale Christensen:
[O]ne of the things we are confronted with in an era of competing needs
for scarce resources is the distribution of public monies to candidates in
[general election] races . . . where, because of the registration advantage of
one party over the other, . . . there is no real contest.249
In order to receive public financing, New York City’s program does require a
candidate to qualify for the ballot, to be opposed by a candidate who qualifies for the
ballot, and to meet the program’s fundraising thresholds. There is no program provision,
however, to ensure that public funding is distributed only to candidates who face serious
opponents. Though some would argue that New York’s ballot qualification process alone
is a sufficient test of a candidate’s seriousness, most would agree that truly serious
candidates engage in a modicum of campaign fundraising and spending.
Some local government jurisdictions with public financing programs do require
that candidates face serious opposition in order to receive public funds. In the City of
Los Angeles, for example, in order to receive public financing, a candidate must be
opposed by a candidate who has either qualified for public financing or who has raised,
spent, or has cash on hand of at least:
· $200,000 in the case of a candidate for mayor;
· $100,000 for other citywide office; and
· $50,000 for city council.250
The City of Los Angeles requires extensive campaign finance disclosure by all candidates
running in city elections. Each candidate, regardless of whether the candidate
participates in the public financing program, must notify the City Ethics Commission on
the day such candidate raises, spends or has cash on hand exceeding these thresholds.251
New York City Campaign Finance Board member Christensen wasn’t the only
one expressing concern at the board’s December 2001 public hearings. District 1 city
council candidate Rocky Chin testified:
71
[I]n District 1, the candidate who received the least number of votes, just
under 1,000, or less than 10 percent of the total, being able to then go on
and get more campaign financing raises a question of maybe there should
be a limit, saying if you don’t get a percentage, whether it is 10 percent or
15 or whatever it is, maybe public funds should not be forthcoming. It
doesn’t seem to me to be a very good use of public funds.252
Chin continued, in reference to candidates in other races, “I happened to see some
television ads for candidates who I don’t think had serious opposition. I don’t think that
is really appropriate and possibly not a good use of public funds.”253 Councilman Oliver
Koppell echoed Chin’s sentiments, stating:
It turned out in my race, to be perfectly frank about it, my opponent, who I
thought would campaign actively, did not do so. We are giving money
back, because we did not spend it all. That is an indication that there was
perhaps too much money available in my case where we didn’t face any
significant opposition. I know there were other races of that sort.
I think what you should explore is the possibility of limiting public money
where there has been virtually no money spent in opposition. I realize
there are dangers in that, because even without spending money,
somebody might be a reasonably strong candidate, and you do not want to
eliminate the possibility of a candidate being able to put their message
forward. But there is a possibility of abuse there where there is very weak
or no opposition where you are putting public money in the campaign.254
Examination of campaign finance data from the 2001 elections reveals grounds
for concern. At least 35 truly noncompetitive general election contests were held in
2001, with winners receiving at least 70% of the vote. There were 21 contests in which
the winners received more than 80% of the vote. Among the winners of the 35
noncompetitive general election contests, 33 received a total of nearly $3 million in
public funds after the primary election. Most of these publicly financed candidates
outspent their highest spending opponents by at least 2-to-1 in the general election.255
In the race for Brooklyn borough president, for example, Marty Markowitz won
the Democratic Party primary by less than six percentage points. In doing so, Markowitz
raised $579,347 in contributions and received $647,350 in public funds to cover
$1,157,495 in primary expenditures. Markowitz went on to win the general election with
more than 76% of the vote, receiving an additional $519,618 in public funds.
Markowitz’s highest spending opponent in the general election was Kenneth Fisher, who
had also run and lost in the Democratic Party primary but appeared on the general
election ballot as the Liberal Party’s candidate. Fisher spent only $48,616 on his general
election campaign—less than one-tenth of the public funds received by Markowitz for
the general election. The Republican candidate on the general election ballot, Lori Sue
Maslow, did no significant campaign fundraising or spending and was not required by
state law to file disclosure reports.
Some candidates have demonstrated the capacity to police themselves, refusing to
accept public funds in noncompetitive races or returning public funds to the campaign
72
finance board when a race proves not to be competitive. Many candidates, however,
aspire to careers in politics and will use every opportunity to build name recognition,
regardless of the opponent they face in the race at hand. The purpose of the public
financing program is to foster competitive elections—not political careers.
Recommendation 14: Distribute Public Funds Only to Candidates with
Serious Opponents
New York City should distribute public funds only to candidates who face serious
opponents. A primary election candidate should be eligible to receive public funds only
if another candidate running for the same office (regardless of whether the candidate is in
the same party primary) has either qualified to receive public financing or who has raised,
spent, or has cash on hand of at least:
· $250,000 in the case of a candidate for mayor;
· $120,000 for other citywide office;
· $75,000 for borough president; and
· $20,000 for city council.
A general election candidate should be eligible to receive public funds only if an
opponent on the general election ballot has met the above thresholds in general election
funding.
This recommendation would require the Campaign Finance Board to monitor the
campaign finance activity of nonparticipating candidates. Without extending the city’s
electronic disclosure requirements to nonparticipating candidates, this will be a difficult
task. (See Recommendation 2, p. 41.)
Limiting public funding to candidates who face serious opposition could save the
city millions of dollars in each election. This money could be redirected to more pressing
needs, such as the provision of additional public funding to candidates facing large
independent expenditures (see Recommendation 5, p. 47) or to candidates facing highspending
opponents (see Recommendation 7, p. 52).
V. Conclusion
Public campaign financing has undoubtedly enhanced democracy in New York
City. The city’s $4-to-$1 match has increased the importance of small campaign
contributions which, in turn, has expanded political participation and reduced candidate
dependence on wealthy donors. Public financing, combined with term limits, encouraged
a record number of candidates to run for office in 2001. Candidates without access to
wealthy donors, including many women and people of color, have run for office under
the public financing program and won—insisting they could not have done so without the
city’s $4-to-$1 match. Nearly every serious candidate in 2001 participated in the
program, dramatically increasing public disclosure of campaign finance information in
comparison to years before the program’s adoption. All of this has been achieved for a
tiny fraction of the city’s budget.
73
New York City’s public financing program is a model for the nation. Evolving
campaign finance practices and weak New York State campaign finance laws, however,
have created loopholes in the city’s program that must be closed if New York City is to
remain among the nation’s leaders in campaign finance reform. New York City should
make its campaign finance laws mandatory for all candidates running in city elections.
New York City should join the City of Los Angeles, another national leader in campaign
finance reform, in its effort to address the deleterious impacts of independent
expenditures and wealthy self-financed candidates. New York City should require
disclosure by independent spenders and provide additional public financing to candidates
facing large independent expenditures or high-spending candidates who reject public
financing and spending limits.
New York City’s demonstrated willingness to improve its public financing
program has produced nearly fifteen years of successes. The recommendations in this
report provide New York City with the roadmap to continue its success stories well into
the future.
74
Notes
1 Council on Governmental Ethics Laws (COGEL) 24th Annual Conference Program, 29 (2002).
2 For population statistics, see United States Census Bureau 2000 General Population and Housing
Characteristics for New York City (visited Aug. 10, 2002)
<http://factfinder.census.gov/servlet/BasicFactsServlet>.
3 According to N.Y. State Board of Elections statistics, the city had 4,043,278 registered voters as of April
1, 2001. See New York State Board of Elections (visited April 25, 2001)
<http://www.elections.state.ny.us/report-output/11072473.htm>.
4 New York City boroughs are Brooklyn, the Bronx, Manhattan, Queens and Staten Island. The five
counties that correspond exactly with the boroughs are named Kings County, Bronx County, New York
County, Queens County and Richmond County, respectively.
5 The borough president, the chief elected official of the borough, is an officer of the city government, not a
separate borough government. The borough president participates in the budgeting process by developing
an annual budget statement and lobbying the city council for inclusion of projected budgetary needs in the
city budget. The New York City Charter assigns the borough president direct control over a portion of the
city budget (approximately $10-$15 million per year) for implementation of various projects and programs
in the borough. The borough president also reviews all major public and private land use proposals for the
borough, recommending approval or rejection of proposals to the city planning commission and city
council. The borough president appoints a member of the city board of education, a member of the city
planning commission, and members of many other city boards.
6 The eight political parties with ballot status in the state of New York’s 2001 elections were: Republican,
Democratic, Independence, Conservative, Liberal, Right to Life, Green and Working Families. See New
York State Board of Elections (visited April 25, 2001) <http://www.elections.state.ny.us/reportoutput/
11072473.htm>. The Liberal, Right to Life and Green parties have lost ballot status for the 2003
elections.
7 See New York State Board of Elections (visited April 25, 2001) <http://www.elections.state.ny.us/reportoutput/
11072473.htm>.
8 NEW YORK CITY CAMPAIGN FINANCE BOARD, DOLLARS AND DISCLOSURE 29 (1990).
9 Under fusion voting, a single candidate may appear on the general election ballot multiple times as the
nominee of multiple parties. The votes a candidate receives from different ballot lines are “fused” (or
added) together to determine the candidate’s vote total. Fusion voting systems facilitate the growth of
minor parties by allowing minor parties to endorse major party candidates and demonstrate the importance
of the minor party to the major party candidate’s vote total. A progressive minor party’s (e.g., Green
Party’s) ability to endorse a Democrat, for example, allows more voters to vote on the minor party’s ballot
line without fear of “spoiling” an election. Furthermore, the potential for such a cross-party endorsement
may lead the Democratic Party to nominate a more progressive candidate with hopes of gaining the minor
party’s endorsement. As a minor party grows, it may also choose to run its own candidates.
10 For a more detailed account of the numerous Koch administration scandals, see URBAN POLITICS NEW
YORK STYLE 283-86 (Jewel Bellush & Dick Netzer eds., 1990).
11 CHARLES BRECHER & RAYMOND D. HORTON, POWER FAILURE 125 (1993).
12 NEW YORK CITY CAMPAIGN FINANCE BOARD, DOLLARS AND DISCLOSURE 10 (1990).
13 Id.
14 Id. at 11.
15 For more information on the New York City Board of Elections, see (visited March 10, 2000)
<http://vote.nyc.ny.us/index.htm>.
16 New York, N.Y., Administrative Code § 3-703(1)(b) (2001).
17 New York, N.Y., Charter Ch. 46 § 1052(12)(c) (2001).
18 See Campaign Finance Board Press Release, “Campaign Finance Board Submits First-Ever CFB Budget
Under New Protection Provided By Charter Revision,” March 10, 1999.
19 New York, N.Y., Charter Ch. 46 § 1052(10) (2001).
20 New York, N.Y., Administrative Code § 3-703(1)(a) (2001).
21 Id. at § 3-703(5).
22 Id. at § 3-703(1)(c).
23 Id. at § 3-703(3).
75
24 Id. at § 3-703(4).
25 Id. at § 3-703(6).
26 Id. at § 3-705.
27 Id. at § 3-705(5).
28 Id. at § 3-703(2)(a).
29 Id. at § 3-702(3).
30 Id. at § 3-702(2)(b).
31 Id. at § 3-706(1). See also New York City Campaign Finance Board, 2005 Limits, Requirements, and
Public Funds (visited Oct. 15, 2002) <http://www.cfb.nyc.ny.us/program/program_2005_info.htm>. The
original limits enacted in 1988, which are adjusted periodically for changes in the cost of living, were $4
million for mayor, $2.5 million for other citywide office, $1.177 million for borough president and
$105,000 for city council.
32 New York, N.Y., Administrative Code § 3-706(2) (2001).
33 Id. at § 3-706(5). See also New York City Campaign Finance Board Rule 1-08(j) (2001). Spending in
excess of the limits applicable to the three years prior to an election year will be charged against the first
applicable limit in the election year. The candidate does not become ineligible to receive public funds and
is not in violation of the program rules unless the amount by which such expenditures exceed the limitation
is in excess of the expenditure limitation which applies to the candidate in the election year. As a result of
post-census redistricting, New York City is conducting city council elections in 2003 and again in 2005.
These limits do not apply to the 2003 and 2005 city council elections.
34 New York, N.Y., Administrative Code § 3-706(3) (2001).
35 Id. at § 3-709.5.
36 In 2001, the state contribution limit formula produced a limit lower than the city’s $2,500 limit in
numerous races. Republican and minor party city council primary election candidates were required to
abide by the state’s $1,000 limit in nearly every council district.
In the general election, however, the state’s city council contribution limit was lower than the
city’s $2,500 election year limit in only one race—the 21st council district general election—where the state
limit was $2,377 per election.
Nonetheless, considering that the city limit is an aggregate limit on contributions for the primary
and general elections combined, the city limit of $2,500 is typically a more stringent limit than the
combined primary and general election state limits. Consequently, Republican and minor party city council
candidates typically must raise funds for the primary election under the state contribution limits, with the
city’s $2,500 election year limit restricting their fundraising activity for the general election.
37 New York, N.Y., Administrative Code § 3-703(1)(f) (2001).
38 Id.
39 The contribution limits are linked to the registered voter population of the borough. Consequently, there
is wide variation in the size of the contribution limits in the City’s five boroughs. In 2001, the primary
election limits were as follows (from highest to lowest): Brooklyn $38,345, Manhattan $29,048, Queens
$28,342, the Bronx $21,078 and Staten Island $5,134. See New York City Board of Elections
Memorandum, “Information Relative to 2001 Contribution Limitations” (May 1, 2001).
40 The general election limits were as follows (from highest to lowest): Brooklyn $50,000; Manhattan
$42,909; Queens $44,726; the Bronx $28,100; Staten Island $11,256. See New York City Board of
Elections Memorandum, “Information Relative to 2001 Contribution Limitations” (May 1, 2001).
41 As is the case with borough president candidates, the contribution limits binding city council candidates
vary widely from district to district depending on the registered voter population. Given the 51 council
districts, there are far too many limits to list them all here. In order to show the range, both the lowest and
the highest are given in the chart. The lowest limit of $1,515.20 was in effect in the 25th council district,
while the highest limit of $3,597.65 was in effect in the 9th council district. See New York City Board of
Elections Memorandum, “Information Relative to 2001 Contribution Limitations” (May 1, 2001).
42 The lowest general election limit of $2,377.70 was in effect in the 21st council district, while the highest
limit of $4,513.90 was in effect in the 9th council district. See New York City Board of Elections
Memorandum “Information Relative to 2001 Contribution Limitations” (May 1, 2001).
43 See New York State Board of Elections (visited April 25, 2001) <http://www.elections.state.ny.us/reportoutput/
11072473.htm>.
44 New York, N.Y., Administrative Code § 3-707 (2001).
76
45 The city charter prohibits participating candidates from accepting corporate contributions. See New
York, N.Y., Charter Ch. 46 § 1052(12) (2001). Technically, nearly all political committees, including
candidate committees and political party committees, are incorporated for legal liability purposes. While
the letter of the charter prohibits participating candidates from accepting contributions from any
corporation, the Campaign Finance Act makes an exception for contributions from incorporated political
committees. See New York, N.Y., Administrative Code § 3-703(1)(l) (2001).
46 New York, N.Y., Campaign Finance Board Rule 1-04(h) (2001).
47 Id. at 1-04(j).
48 New York, N.Y., Administrative Code § 3-702(8) (2001).
49 N.Y. Elec. Law § 14-114(1)(b) (2001). The full text of the state of New York’s elections laws can be
found at the Board of Elections website (vis ited July 10, 2002)
<http://www.elections.state.ny.us/download/law/elaw2001.pdf>.
50 None of the contribution limits listed here for citywide office are the product of the statutory formula.
Instead, the limits are the results of the statutory minimum (for the minor parties) and maximums (for both
major party primaries and the general election), as adjusted for changes in the cost of living.
51 The contribution limits listed for the major party primaries are the result of the statutory formula. The
contribution limit for minor party primaries is the statutory minimum adjusted for changes in the cost of
living. The contribution limits listed for the general elections are the result of both the statutory maximum
(in Brooklyn) and the statutory formula (in the other four boroughs).
52 The contribution limit formula is based on the registered voter population of the borough.
Consequently, there is wide variation in the size of the contribution limits in the city’s five boroughs. In
2001, the Democratic Party primary election limits were as follows (from highest to lowest): Brooklyn
$38,345, Manhattan $29,048, Queens $28,342, the Bronx $21,078 and Staten Island $5,134. See New
York City Board of Elections Memorandum, “Information Relative to 2001 Contribution Limitations”
(May 1, 2001).
53 In 2001, the Republican Party primary election limits were as follows (from highest to lowest): Queens
$$6,884, Brooklyn $5,508, Manhattan $4,969, Staten Island $3,496 and the Bronx $2,288. See New York
City Board of Elections Memorandum, “Information Relative to 2001 Contribution Limitations” (May 1,
2001).
54 In 2001, the general election limits were as follows (from highest to lowest): Brooklyn $50,000,
Manhattan $42,909, Queens $44,726, the Bronx $28,100 and Staten Island $11,256. See New York City
Board of Elections Memorandum, “Information Relative to 2001 Contribution Limitations” (May 1, 2001).
55 As is the case with borough president candidates, the contribution limits binding city council candidates
vary widely from district to district depending on the registered voter population. Given the 51 council
districts, there are far too many limits to list them all here. In order to show the range, both the highest and
the lowest are given in the chart. In nearly every Republican Party city council primary, and in every single
minor party city council primary, the contribution limit is the statutory minimum, adjusted for changes in
the cost of living, and is not based on the statutory formula
56 N.Y. Elec. Law § 14-114(1)(b) (2001).
57 The statutory maximum contribution limit applied in every borough but Staten Island, where the statutory
formula produced a lower contribution limit.
58 The statutory maximum contribution limit applied in every borough but Staten Island, where the statutory
formula produced a lower contribution limit.
59 N.Y. Elec. Law § 14-114(3) (2001).
60 The statutory limit is $62,500, plus an adjustment for changes in the cost of living. Id. at § 14-114(10).
61 The language of the statute states that during the 12 month period prior to a general election, a party
committee may not spend more than the greater of $500 or $0.01 per registered voter in the district in
which the committee is organized in support of candidates running for office. Id. at § 14-114(5).
62 Id. at § 14-116.
63 See N.Y. State Board of Elections Memorandum, “Contributions and Receipt Limitations” (visited Dec.
20, 2001) <http://www.elections.state.ny.us/finance/climit.htm>.
64 N.Y. Elec. Law § 14-114(6)(a) (2001).
65 Id. at § 14-114(6)(b).
66 Id. at § 14-114(8).
77
67 See N.Y. State Board of Elections Memorandum, “Contributions and Receipt Limitations” (vis ited Dec.
20, 2001) <http://www.elections.state.ny.us/finance/climit.htm>.
68 New York, N.Y., Charter Ch. 46 § 1052(12)(b) (2001).
69 Id. at § 1053.
70 Id. at § 1052.
71 New York, N.Y., Administrative Code § 3-708(5) (2001).
72 Id. at § 3-711.
73 Id. at § 3-708(6).
74 NEW YORK CITY CAMPAIGN FINANCE BOARD, DOLLARS AND DISCLOSURE 138 (1990).
75 NEW YORK CITY CAMPAIGN FINANCE BOARD, WINDOWS OF OPPORTUNITY 91 (1992).
76 NEW YORK CITY CAMPAIGN FINANCE BOARD, A DECADE OF REFORM 131 (1998).
77 NEW YORK CITY CAMPAIGN FINANCE BOARD, AN ELECTION INTERRUPTED . . . AN ELECTION
TRANSFORMED 7 (2002).
78 Id.
79 Id. at 46.
80 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Helen Foster, New York City councilwoman district 16).
81 Interview with David Yassky, New York City councilman district 33, Dec. 6, 2001.
82 NEW YORK CITY CAMPAIGN FINANCE BOARD, AN ELECTION INTERRUPTED . . . AN ELECTION
TRANSFORMED 48 (2002).
83 Id. at 47.
84 Interview with Gene Russianoff, Senior Attorney for the New York Public Interest Research Group, Dec.
7, 2001.
85 NEW YORK CITY CAMPAIGN FINANCE BOARD, 2001 Candidate Survey Results.
86 Interview with Robert Cermeli, New York City Council candidate district 30, Jan. 16, 2002.
87 Interview with Fred Siegel, Professor of History at the Cooper Union for Science and Art and Senior
Fellow at the Progressive Policy Institute in Washington, D.C., Dec. 7, 2001.
88 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Brooklyn Borough President Marty Markowitz).
89 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Manhattan Borough President C. Virginia Fields).
90 NEW YORK CITY CAMPAIGN FINANCE BOARD, WINDOWS OF OPPORTUNITY 23 (1992).
91 Id. at 31.
92 Id.
93 See Campaign Finance Board Press Release, “Record Number of Candidates Join The Campaign Finance
Program,” June 20, 2001.
94 City Councilman John Liu is the first Asian American to ever be elected to New York City office. For
population demographic statistics see United States Census Bureau 2000 General Population and Housing
Characteristics for New York City (visited Aug. 10, 2002)
<http://factfinder.census.gov/servlet/BasicFactsServlet>.
95 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 10, 2001 (statement of Rocky Chin, New York City Council candidate district 1).
96 Interview with Steven Banks, New York City Council candidate district 39, Jan. 30, 2002.
97 Interview with David Yassky, supra note 31. Yassky went on to give specific examples: “For one, the
mayoral primary. Alan Hevesi would have won the primary without the campaign finance system. Here in
Brooklyn, the borough president race was won by a guy named Marty Markowitz. There was someone in
the race named Ken Fischer, who was able to raise and did raise at least twice what Markowitz raised and
would have beaten him for sure. Other council races, in the district that adjoins mine, a fellow named
James Davis beat a woman Tish James. And I think Tish would have raised a lot more money and that
might or might not have been enough to beat him.”
98 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Sandra Vassos, New York City Council candidate district 22).
99 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Scott Stringer, New York City public advocate candidate).
78
100 Interview with Nicole A. Gordon, executive director of the New York City Campaign Finance Board,
Dec. 4, 2001.
101 Interview with John Liu, New York City councilman district 20, Jan. 28, 2002.
102 In the Los Angeles 2001 city elections, 96% of serious candidates participated in the public financing
program and 70% received public funds. For detailed information on the City of Los Angeles’ public
campaign financing program, including candidate participation statistics, see Center for Governmental
Studies, Eleven Years of Reform: Campaign Financing in the City of Los Angeles (2001)
<http://www.cgs.org>.
103 Campaign finance data is not readily available for nonparticipating candidates in the 1989 elections, so
the 1989 elections have been excluded from our “serious” candidate analysis.
104 “Serious” is defined as a candidate who raised or spent at least $5,000.
105 Interview with Nicole A. Gordon, supra note 100.
106 Interview with Ethel Chen, New York City Council candidate district 20, Jan. 16, 2002.
107 Interview with Steven Banks, supra note 96.
108 Approximately six months after Carmen Williams granted CGS the interview cited in this report, Ms.
Williams was hired by CGS as a part-time consultant to research independent campaign spending in New
York City elections.
109 Interview with Carmen Williams, Political Attorney and CGS Consultant, Dec. 7, 2001.
110 New York, N.Y., Charter Ch. 46 § 1052 (2001).
111 CHARLES BRECHER & RAYMOND D. HORTON, POWER FAILURE 124-25 (1993).
112 NEW YORK CITY CAMPAIGN FINANCE BOARD, DOLLARS AND DISCLOSURE 113 (1990).
113 NEW YORK CITY CAMPAIGN FINANCE BOARD, ON THE ROAD TO REFORM, VOL. 1 61 (1994). CSMART
stands for Candidate Software for Managing and Reporting Transactions.
114 NEW YORK CITY CAMPAIGN FINANCE BOARD, A DECADE OF REFORM 1988-1998, VOL. 1 71 (1998).
115 NEW YORK CITY CAMPAIGN FINANCE BOARD, AN ELECTION INTERRUPTED . . . AN ELECTION
TRANSFORMED 111 (2002).
116 Interview with Nicole A. Gordon, supra note 100.
117 Interview with Gene Russianoff, supra note 34.
118 Interview with David Yassky, supra note 31.
119 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Sandra Vassos, New York City Council candidate district 22).
120 New York, N.Y., Charter Ch. 46 § 1052 (2001).
121 Id.
122 Interview with Gene Russianoff, supra note 34.
123 NEW YORK CITY CAMPAIGN FINANCE BOARD, A DECADE OF REFORM 1988-1998, VOL. 1 61 (1998).
124 City of New York v. New York City Campaign Finance Board, No. 400550/01 (Sup. Ct., N.Y. County
May 8, 2001).
125 New York City Campaign Finance Board Press Release, Campaign Finance Board’s Cost Projection
for Public Funds in 2001 is $63.3 Million, March 7, 2001.
126 Based on “Public Funds Disbursed per Election” figures presented in Fact Sheet 6.3 in NEW YORK CITY
CAMPAIGN FINANCE BOARD, AN ELECTION INTERRUPTED . . . AN ELECTION TRANSFORMED 105-06 (2002).
127 Based on budget data obtained from Carole Campolo, deputy executive director of the New York City
Campaign Finance Board (Dec. 9, 2002). Because the Campaign Finance Board was not created until
1988, only the budgets for fiscal years 1989 and 1990 were used to calculate this figure.
128 Based on 1989 voter enrollment: 3,183,739. See Voter Enrollment, New York City Board of Elections
(visited May 8, 2001) <http://www.vote.nyc.ny.us>.
129 Based on Census Bureau population statistics for 1990: 7,322,564. See United States Census Bureau
1990 General Population and Housing Characteristics for New York City (visited Aug. 10, 2002)
<http://factfinder.census.gov/servlet/BasicFactsServlet>.
130 Based on 1993 voter enrollment: 3,301,683. See Voter Enrollment, New York City Board of Elections
(visited May 8, 2001) <http://www.vote.nyc.ny.us>.
131 Based on Census Bureau population statistics for 1990: 7,322,564. See United States Census Bureau
1990 General Population and Housing Characteristics for New York City (visited Aug. 10, 2002)
<http://factfinder.census.gov/servlet/BasicFactsServlet>.
132 Based on 1997 voter enrollment: 3,514,974 . See Voter Enrollment, New York City Board of Elections
(visited May 8, 2001) <http://www.vote.nyc.ny.us>.
133 Based on Census Bureau population statistics for 2000: 8,008,278. See United States Census Bureau
2000 General Population and Housing Characteristics for New York City (visited Aug. 10, 2002)
<http://factfinder.census.gov/servlet/BasicFactsServlet>.
134 Based on April, 2001 voter enrollment: 4,043,278. See Voter Enrollment, New York State Board of
Elections (visited May 8, 2001) <http://www.elections.state.ny.us/enrollment/enroll.htm>.
135 Based on Census Bureau population statistics for 2000: 8,008,278. See United States Census Bureau
2000 General Population and Housing Characteristics for New York City (visited Aug. 10, 2002)
<http://factfinder.census.gov/servlet/BasicFactsServlet>.
136 Based on April, 2001 voter enrollment: 4,043,278. See Voter Enrollment, New York State Board of
Elections (visited May 8, 2001) <http://www.elections.state.ny.us/enrollment/enroll.htm>.
137 Based on Census Bureau population statistics for 2000: 8,008,278. See United States Census Bureau
2000 General Population and Housing Characteristics for New York City (visited Aug. 10, 2002)
<http://factfinder.census.gov/servlet/BasicFactsServlet>.
138 Based on chart entitled, Campaign Finance Board Adopted Budget History, obtained from Carole
Campolo, deputy executive director of the New York City Campaign Finance Board (Dec. 13, 2002).
139 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of LeeAnn Pelham, executive director of the Los Angeles City Ethics
Commission).
140 Interview with David Yassky, supra note 31.
141 Interview with John Liu, supra note 101.
142 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Paul Graziano, New York City Council candidate district 20).
143 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Sandra Vassos, New York City Council candidate district 22).
144 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Helen Foster, New York City councilwoman district 16).
145 NEW YORK CITY CAMPAIGN FINANCE BOARD, A DECADE OF REFORM 1988-1998, VOL. 1 114 (1998).
146 Interview with Nicole A. Gordon, supra note 100.
147 Id.
148 NEW YORK CITY CAMPAIGN FINANCE BOARD, AN ELECT ION INTERRUPTED . . . AN ELECTION
TRANSFORMED 132-33 (2002).
149 Id. at 132.
150 NYC Administrative Code § 3-713.
151 NEW YORK CITY CAMPAIGN FINANCE BOARD, DOLLARS AND DISCLOSURE 11 (1990).
152 CGS research has uncovered no published documents analyzing the authority of the city to adopt
mandatory campaign finance laws. Prior to adopting its public financing program, however, New York
City sought and received an opinion from the New York State attorney general on the constitutionality of
the proposed voluntary public financing program. The attorney general opined that the proposed public
financing law was within the scope of the city’s home rule authority. See Letter from Robert Abrams, New
York State attorney general, to New York City Mayor Edward Koch 2 (October 21, 1987).
For a thorough exploration of the city’s authority to enact voluntary campaign finance laws in the
context of state law preemption, see Jeffrey D. Friedlander et al., A Symposium On Ethics In Government:
The New York City Campaign Finance Act, 16 Hofstra L. Rev. 345 (1988). See also Richard Briffault,
Taking Home Rule Seriously: The Case of Campaign Finance Reform, in RESTRUCTURING THE NEW YORK
CITY GOVERNMENT: THE REEMERGENCE OF MUNICIPAL REFORM 35 (Frank J. Mauro & Gerald Benjamin
eds., 1989).
153 The U.S. Supreme Court has interpreted the First Amendment of the federal constitution to prohibit
mandatory spending limits. See Buckley v. Valeo, 424 U.S. 1, 49 (1976) (per curiam). The Buckley Court
did rule, however, that Congress may “condition acceptance of public funds on an agreement by the
candidate to abide by specified expenditure limitations.” Id. at 57 n. 65.
154 For a comprehensive review of both the theory and application of local government home rule law, see
Richard Briffault, Our Localism: Part I—The Structure of Local Government Law, 90 Colum. L. Rev. 1
(1990). The legislative authority of local governments throughout the United States is determined by state
80
law. According to traditional legal theory, a local government exists only as a result of state action. The
state, as a local government’s creator, has absolute power to alter a local government’s jurisdictional
boundaries, or to abolish the local government all together. During the first century of this nation’s
existence, local governments were empowered to do only that which states authorized them to do. Id. at 8.
The relationship between state and local governments began changing in the second half of the
nineteenth century. Missouri was the first state to grant significant legislative authority to a local
government in 1875, when it adopted a constitutional amendment granting the City of St. Louis the power
of “home rule.” California followed suit, granting San Francisco home rule authority in 1879 and then
extending home rule to cities throughout the state eight years later. The home rule movement spread
throughout the country during the Progressive Era, giving local government’s broad lawmaking authority.
Id. at 10.
At least 41 states have some form of home rule for local governments today. Home rule
provisions generally fall into two categories. The home rule constitutional amendments adopted from the
late 1800s into the early 1900s treated the local government as a “state within a state,” possessing full
police power with respect to municipal affairs and immunity from state interference with respect to
municipal affairs. Most states adopting home rule provisions since World War II have relied on a more
modest “legislative” model, which grants local governments all legislative authority except that which is
expressly prohibited by state law. Id. at 10.
The home rule authority invested in local jurisdictions by the state of New York would most
accurately be characterized as following the “legislative” model. The investment of “legislative” model
home rule authority in local governments is found in N.Y. CONST. art. IX, § 2(c). New York State law does
contain a trace of the “state within a state” model, prohibiting the state from passing a law targeted at a
specific local jurisdiction without the local jurisdiction’s permission. See N.Y. CONST. art. IX, § 2(b)(2).
See also N.Y. CONST. art. IX, § 3(d)(1) (definition of the term “general law”). See also N.Y. Municipal
Home Rule Law §§ 2(5), 10(1).
155 N.Y. CONST. art. IX, § 2(c). See also N.Y. Municipal Home Rule Law § 10(1).
156 N.Y. CONST. art. IX, § 2(c). See also N.Y. Municipal Home Rule Law § 10(1).
157 For a detailed analysis of the intersection between New York State law, municipal home rule authority
and campaign finance reform, see Richard Briffault, Taking Home Rule Seriously: The Case of Campaign
Finance Reform, in RESTRUCTURING THE NEW YORK CITY GOVERNMENT: THE REEMERGENCE OF
MUNICIPAL REFORM 35 (Frank J. Mauro & Gerald Benjamin eds., 1989). See also Jeffrey D. Friedlander et
al., A Symposium on Ethics in Government: The New York City Campaign Finance Act, 16 Hofstra L. Rev.
345 (1988). Briffault, Friedlander and Friedlander’s co-authors all convincingly argue that New York City
acted fully within it’s home rule powers in adopting its public campaign financing program. None of the
authors, however, explicitly address the question of whether New York City may go beyond the public
financing program with regulations binding all candidates for city office.
158 Wholesale Laundry Bd. of Trade, Inc. v. City of New York, 234 N.Y.S.2d 862, 864-65 (1st Dep’t 1962),
aff’d, 239 N.Y.S.2d 128 (1963).
159 Wholesale Laundry Bd. of Trade, Inc. v. City of New York, 239 N.Y.S.2d 128, 129-30 (1963).
160 People v. Cook, 34 N.Y.2d 100 (1974).
161 Id. at 105-06.
162 Id. at 110.
163 Id. at 111.
164 Town of Clifton Park v. C.P. Enterprises, 356 N.Y.S.2d 122, 124 (N.Y. App. Div. 1974).
165 Mayor of the City of New York v. Council of the City of New York, 696 N.Y.S.2d 761, 765 (N.Y. Sup.
Ct. 1999) (internal citations omitted) (upholding New York City Council’s creation of an independent
board to oversee police department despite mayor’s claim that oversight board violated the state
constitution).
166 See Richard Briffault, Taking Home Rule Seriously: The Case of Campaign Finance Reform, in
RESTRUCTURING THE NEW YORK CITY GOVERNMENT: THE REEMERGENCE OF MUNICIPAL REFORM 35, 39
(Frank J. Mauro & Gerald Benjamin eds., 1989).
167 Jancyn Mfg. Corp. v. County of Suffolk, 71 N.Y.2d 91 (1987).
168 Id. at 95.
169 Id. at 97.
170 Id. at 98.
81
171 Id.
172 Id. at 100 (internal citations omitted).
173 Incorporated Village of Nyack v. Daytop Village, Inc., 78 N.Y.2d 500, 507 (1991).
174 Id. at 508.
175 DJL Restaurant Corp., Doing Business As Shenanigans v. City of New York, 96 N.Y.2d 91, 95 (2001)
(internal quotation marks and citations omitted).
176 Letter from Robert Abrams, New York State attorney general, to New York City Mayor Edward Koch 2
(October 21, 1987).
177 N.Y. Elec. Law § 1-102 (2001).
178 Buckley v. Valeo, 424 U.S. 1, 49 (1976) (per curiam).
179 An “independent expenditure” is an expenditure by a person or organization directly advocating the
election or defeat of a candidate which is in no way coordinated with a candidate’s campaign. An example
of an independent expenditure might be a glossy 5” x 8 ½” mail piece sent by a labor union to all of its
members urging voters to elect a particular candidate or group of candidates endorsed by the union. In
some jurisdictions, expenditures by an organization to communicate with its members fall into a “member
communication expenditure” exception and are not subject to the same fundraising limitations and
disclosure requirements as “independent expenditures.” New York State law contains no such exception.
See Cal. Gov’t Code § 85312, which removes member communication expenditures from California’s
definition of “independent expenditure.” See also Center for Governmental Studies, On the Brink of Clean:
Launching San Francisco’s New Campaign Finance Reforms, 16 (2002).
180 Buckley v. Valeo, 424 U.S. 1, 45 (1976) (per curiam).
181 Interview with Nicole A. Gordon, supra note 100.
182 The 170 page report contains two paragraphs explaining the meaning of the terms “independent
expenditure” and “soft money.” The second paragraph concludes: “No allegations were made of
significant ‘independent’ activity during the 2001 elections.” See NEW YORK CITY CAMPAIGN FINANCE
BOARD, AN ELECTION INTERRUPTED . . . AN ELECTION TRANSFORMED 87 (2002).
183 N.Y. Elec. Law § 14-102(1) (2001).
184 Id. at § 14-100(1). See also New York State Board of Elections 1975 Opinion #2.
185 New York State Board of Elections 1975 Opinion #2.
186 New York State Board of Elections 1978 Opinion #16.
187 Id.
188 Interview with John Liu, supra note 101.
189 Id.
190 Interview with Steven Banks, supra note 96.
191 Id.
192 Dan Barry, A Diviner of Meaning in Political Names and Lists, New York Times, July 31, 2001.
193 Interview with Jerry Skurnick, co-owner Prime New York, Jan. 17, 2002.
194 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 10, 2001 (statement of John Siegal, chairman of mayoral candidate Mark Green’s
campaign).
195 Interview with Fred Siegel, supra note 37.
196 Interview with Jerry Skurnick, supra note 192.
197 SEIU 1199 has more than 150,000 members in New York City.
198 The cities of Austin, Los Angeles, Oakland and San Francisco currently enforce trigger provisions that
eliminate spending limits in a race when independent expenditures exceed specified thresholds. See Center
for Governmental Studies, Public Financing Laws in Local Jurisdictions (Chart) (2002) (visited Nov. 1,
2002) <http://www.cgs.org>.
199 Los Angeles, Cal., Municipal Code at § 49.7.14.
200 One of New York City’s 51 council members represents approximately 157,000 residents and has a
primary election spending limit of $137,000. One of Los Angeles’ 15 council members represents
approximately 246,000 residents and has a primary election spending limit of $330,000.
201 New York, N.Y., Administrative Code § 3-706(3) (2001).
202 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 10, 2001 (statement of John Siegal, chairman of mayoral candidate Mark Green’s
campaign).
82
203 Interview with David Yassky, supra note 31.
204 Id.
205 Interview with Steven Banks, supra note 96.
206 Interview with Fred Siegel, supra note 37.
207 Id.
208 Interview with Nicole A. Gordon, supra note 100.
209 Id.
210 See Center for Governmental Studies, Public Financing Laws in Local Jurisdictions (Chart) (2002)
(visited Nov. 1, 2002) <http://www.cgs.org>. The only local jurisdiction with a public financing program
and higher contribution limits is the Town of Cary, NC, with a $4,000 contribution limit established by
state, not local law.
211 New York City candidates are subject to the same “per election year” contribution limit whether they
run in both a party primary and a general election, or run in only one of the two. Given the
overwhelmingly Democratic party registration in the city, open seat races typically result in highly
competitive Democratic Party primaries with little competition from Republican or other minor party
candidates in the general election. Races involving a Democratic incumbent typically produce no
competition. Republican and other minor party primaries are rare. Consequently, though the contribution
applies to the entire election year, it often applies to only a single election.
The City of Los Angeles holds nonpartisan elections. If a single candidate fails to garner more
than 50% of the vote in the general election, then a runoff election is held between the top two vote-getters.
Open-seat races often lead to runoff elections, whereas incumbents typically win the general election
outright. Consequently, many candidates compete in only a single election and thus are subject to the per
election contribution limit for an entire election year.
Therefore, while it is tempting simply to double Los Angeles’ per election contribution limit for
the sake of comparing it to New York City’s per election year limit, this approach has its shortcomings.
212 CHARLES BRECHER & RAYMOND D. HORTON, POWER FAILURE 125 (1993).
213 Interview with Gene Russianoff, supra note 34.
214 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Oliver Koppell, New York City councilman district 11).
215 Interview with David Yassky, supra note 31.
216 Interview with Gene Russianoff, supra note 34.
217 Interview with Nicole A. Gordon, supra note 100.
218 Id.
219 Id.
220 Interview with David Yassky, supra note 31.
221 Interview with John Liu, supra note 101.
222 See Center for Governmental Studies, Eleven Years of Reform: Campaign Financing in the City of Los
Angeles, 28 (2001) (visited Nov. 1, 2002) <http://www.cgs.org>.
223 Jonathan P. Hicks, Ex-Councilman Changes His Mind And Awaits His Day in Court, New York Times,
Sept. 27, 2002.
224 Incumbent Councilman Phillip Reed won his primary race with less than 52% of the vote. The other
three incumbents who began fundraising more than two years before the 2001 primary election, Martin
Golden, Bill Perkins and Madeline Provenzano, won their races by at least 15 percentage points.
225 Interview with John Liu, supra note 101.
226 Interview with Ethel Chen, supra note 106.
227 Interview with David Yassky, supra note 31.
228 Interview with Steven Banks, supra note 96.
229 Interview with Nicole A. Gordon, supra note 100.
230 Interview with Gene Russianoff, supra note 34.
231 City council candidates may spend up to $40,000 in the year prior to the election year and up to $24,000
in each of the third and fourth year preceding an election year.
232 Interview with Steven Banks, supra note 96. See also Interview with Ethel Chen, supra note 106.
233 Campaign finance data was not available for 10 major party council candidates who registered with
either the Campaign Finance Board or the Board of Elections as small campaigns and, consequently, were
83
not required to file disclosure reports. Likewise, data was unavailable for seven candidates who chose not
to participate in the campaign finance program and failed to file timely reports with the Board of Elections.
234 New York, N.Y., Administrative Code § 3-706(4) (2001).
235 Andrea Bernstein, McCain vs. New York, SALON.COM, DEC. 9, 1999 (visited Aug. 15, 2002)
<http://www.salon.com/news/feature/1999/12/09/mccain/print.html>.
236 N.Y. Elec. Law § 6-158(1) (2001).
237 Id. at § 6-134(4).
238 Id. at § 6-136(2).
239 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Sandra Vassos, New York City Council candidate district 22).
240 Interview with Steven Banks, supra note 96.
241 Interview with Ethel Chen, supra note 106.
242 N.Y. Elec. Law § 6-158(1) (2001).
243 Interview with Carmen Williams, supra note 109.
244 New York, N.Y., Charter § 1136.1 (2001).
245 Interview with Gene Russianoff, supra note 34.
246 Dan Janison, Vallone Has Baggage, Newsday, Aug. 3, 2001.
247 Dan Janison, From Flags to Bags, Newsday, Aug. 9, 2001.
248 NEW YORK CITY CAMPAIGN FINANCE BOARD, AN ELECTION INTERRUPTED . . . AN ELECTION
TRANSFORMED 137-40 (2002).
249 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 10, 2001 (statement of Dale Christensen, New York City Campaign Finance Board
member).
250 Los Angeles, Cal., Municipal Code at § 49.7.19(A)(2) (2002).
251 Id. at § 49.7.18.
252 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 10, 2001 (statement of Rocky Chin, New York City Council candidate district 1).
253 Id.
254 New York City Campaign Finance Board, Public Hearings on Performance of Campaign Finance
Program, Dec. 11, 2001 (statement of Oliver Koppell, New York City councilman district 11).
255 It is clear from data published by the Campaign Finance Board that the highest spending opponents of at
least 17 of the 33 publicly financed candidates were outspent 2-to-1 in the general election. Campaign
finance data is not available for the opponents of 10 publicly financed candidates, as a result of the
opponents’ failure to file disclosure reports with the NYC Board of Elections. These opponents were not
participants in the public financing program and thus were not required to file disclosure reports with the
Campaign Finance Board. The Campaign Finance Board staff did attempt to obtain disclosure reports for
all nonparticipants from the Board of Elections but were unable to do so for candidates who failed to file.
New York City's public campaign financing law, enacted in 1988, serves as a
model for the United States. It has enabled candidates lacking access to
wealthy campaign contributors to wage competitive campaigns. The program
has also increased the importance of small campaign contributions from city
residents, encouraged nearly all of the city's serious candidates to agree to
fundraising and spending limits and dramatically improved campaign finance
disclosure. This CGS report, A Statute of Liberty, explores the successes of
New York City's law, but also recommends reforms to make the program operate
even more effectively, urging lawmakers to:
m Make City Contribution Limits and Disclosure Requirements
Mandatory on All Candidates and Committees Participating in City
Elections
m Require Disclosure of Independent Expenditures
m Provide Additional Public Funding to Candidates Facing Large
Independent Expenditures or High-Spending, Wealthy Opponents
m Reduce New York City's Contribution Limits
m Impose a Fundraising Blackout Period
m Simplify and Adjust Spending Limits

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