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December 7, 2006 – Citizens Union Testimony to the Committee on Government Operations

Review of the New York City Campaign Finance Board’s
“Report on the 2005 Elections: Public Dollars for the Public Good”

Dick Dadey, Executive Director and
Doug Israel, Director of Public Policy and Advocacy
December 7, 2006

Good Afternoon Chairman Felder and members of the Government Operations Committee. We are Dick Dadey and Doug Israel representatives of Citizens Union, a century old good-government organization committed to ensuring fair and competitive elections. Citizens Union has long been a supporter of the city’s campaign finance program since its inception in 1988. Even more so, Citizens Union has supported the notion that ensuring a level playing field for candidates competing for office and limiting the role that money plays in elections and politics are two of the cornerstones of a healthy democracy.

Citizens Union very much appreciates the comprehensive reporting and evaluation that the Campaign Finance Board engaged in after the 2005 elections, and finds its report very helpful in evaluating the weaknesses and strengths of the program. We wish to formally congratulate Amy Loperest on her selection as the new executive director of New York’s Campaign Finance Board and express our public appreciation for Nicole Gordon, whose leadership was integral to the program’s success. We look forward to working with Ms. Loprest and her staff in ensuring the continued strength and use of the city’s model campaign finance program. We also appreciate the opportunity provided today by the Government Operations Committee to testify on the report and the subject of campaign finance.

Citizens Union supports many, though not all, of the recommendations that the Campaign Finance Board makes in the report. We provide a table that we’ve prepared that outlines the Board’s recommendations and Citizens Union’s positions on each of those recommendations. I will not go through each of those recommendations here today, but we ask that you do review the table and not hesitate to reach out to us if we can further elaborate. There a few areas on which we have yet to reach a final decision, but hope to do so in the near future. The following recommendations represent our five top priority interests.

1. Enacting Pay-to-Play Requirements

As we’ve previously stated, we believe that the influence that contractors, developers, and lobbyists have with elected officials, not only here but throughout the country, is at times enhanced by the ability of these persons and entities to contribute directly to a candidate’s campaign for office. Whether it is done with or without the assistance of lobbyists, the right to express oneself and to influence the actions of government is critical to the functioning of our democracy. But what needs to be watched is the special advantage campaign contributors who are lobbyists or have business with the city may have over the process of influencing the actions of elected officials and those in government. The unfettered ability of such campaign contributors to do so can potentially undermine the public’s trust in the integrity and even handedness of the decisions being made by government, be they policy decisions or the awarding of contracts. We are heartened by the momentum that appears to be growing for restrictions in this area and we applaud all parties for taking steps in the right direction on this subject.

The Board recommends a legislative mandate redesigning the city databases of city contracts and a similar effort for land use applicants that would allow compatibility with the CFB’s own databases. We support this call to continue to improve and make the city’s vendor database more accessible and encourage the City Council, Board and Administration to work together to make this a reality.

The Board also appears to support the call for legislation aimed at restrictions on “doing business” contributions, along the lines of the Securities and Exchange Commission’s rule on municipal securities brokers emphasizing self-enforcement. The rule prohibits a dealer or broker from engaging in business with a municipality if that broker made a donation to a public official in that municipality of $250 or more. Enforcement is the responsibility of the bond professional looking to do business, thus putting brokers who violate the law at risk of losing business. Placing the compliance burden upon the individual or entity making the contribution is a position that we have supported since the outset and are happy that the Board is now pushing for that itself. We encourage the Council to work with the Mayor’s office in crafting that legislation.

2. Limiting the Amount of Public Money Available in “Sure Winner” Races

Establishing fair and effective requirements aimed at curbing the outlay of public funds to candidates facing minimal opposition is a prudent cost saving provision that is borne of previous misuse of public funds by candidates who have taken advantage of the present system and unnecessarily spent taxpayer dollars to win re-election against nominal candidates.

Citizens Union has previously called for the elimination of the “Statement of Need” letter that candidates were allowed to submit to receive the full allotment of public matching funds. These letters were a mere formality as requests were not denied. While not widespread, this did lead to an abuse of the system that should be curbed. We are pleased that the Campaign Finance Board recommends eliminating this pro forma letter process and instead create a system of “escalating tiers for the disbursement of public funds. The Board proposes a series of campaign fundraising or spending benchmarks; each would trigger a successively higher disbursement of public funds to a participating campaign until the maximum payment is reached.” We believe that such triggered tiers should be based on how much money challengers are raising and their position in reliable public opinion polls. This coupled with a process for candidates to apply for the full funding should they face opponents with high name recognition, or other significant factors such a broad network of connections, is a welcome improvement to the program and will help save the taxpayers of the city money each election year.

3. Restricting Contributions Eligible to be Matched with Public Funds to the Same Year as an Election

Citizens Union has been an advocate of more competitive elections and has sought to create a level playing field for challengers running against incumbents at all levels of elected office. The results of the 2005 election, and the analysis provided in the 2005 CFB report, make a strong case for more stringent requirements on the outlay of public funds each election season. The Board makes a strong case for permitting matching funds to be granted only to contributions raised during the calendar year of an election. Citizens Union supports this proposal not only as a means to reduce incumbent advantage but to create a more level playing field going into each election year and to reduce the role of that money plays in elections overall.

4. Lower Campaign Contribution Limits

Citizens Union has argued in the past that the contribution limits for candidates running for elected in office in New York City are too high. To amplify the voice of small individual donors, Citizens Union supports efforts to mitigate the disproportionate influence that large donors have in the process. While we have not taken a position as to what level of contribution limit is appropriate, we have nevertheless continued to call for them to be lowered. We believe that the proposal to reduce the limit for contributions to a council campaign at $250 is too low, and would suggest a limit at or below $1250 for city council members (a threshold at which a non-participating candidate would not be able to receive a contribution greater than that of participant who receives a $250 contribution with a $1000 match). The proposed limit for citywide candidates ($4,000) seems appropriate though the one for borough president at $3,000 seems high.

In terms of spending, we would advance a recommendation that the spending limits for borough president vary from borough to borough depending upon the size of the borough. For example, we do not think that a candidate for borough president in Brooklyn should have the same limit as that for Staten Island given the huge variance in population size.

5. Addressing the disparity that exists for candidates participating in the program who face a well-funded or self-funded opponent.

While this topic was not fully explored in the 2005 report it is the subject and focus of a report issued in 2006 by the board entitled “The Impact of High-Spending Non-Participants on the Campaign Finance Program.” Citizens Union supports many of the concepts outlined in that report as well, although not all. Specifically, Citizens Union supports: strengthening the debate program by creating incentives for non-participating candidates to appear at debates, or extending additional support to candidates facing non-participants who refuse to debate; creating equal access to broadcast media for under-funded candidates; making “limited participant” status more appealing to attract candidates who might otherwise choose to opt out of the program.

We have not yet reached a position on whether or not the city should provide more public money above the $6 to $1 bonus match for candidates facing high spending opponents but will consider the several proposals the Board has outlined and inform both the Council and the Campaign Finance Board of our future position.

We believe the Council has been given many good and solid recommendations on how to improve and strengthen the program and urge the Council to seize the opportunity to enact many of these needed reforms. The Council made itself proud when it enacted far reaching reforms regarding the regulation of lobbying activity. It has a similar opportunity with the campaign finance program and asks that the Council to approach it with the same commitment to shake up the system with its changes.

Thank you for taking the time to consider these worthy proposals and for the opportunity to present testimony to you hear today.

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