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Good afternoon Chairman Schwarz, members of the Board and staff. I am Doug Israel, Public Policy and Advocacy Director for Citizens Union. Citizens Union, a century-old good-government organization, has consistently supported provisions to strengthen the city’s campaign finance program that seek to reduce the role of money in politics and campaigns.

While campaign contributions are an essential part of democracy and protected by the first amendment to free speech, the use of political contributions to gain access to decision-makers is a troublesome aspect of our current political system. In many ways it is the result of a system that forces candidates to raise large sums of money to compete for political office.

The influence that contractors, developers, and lobbyists have over elected officials, not only here but throughout the country, is enhanced by the ability of these persons and entities to contribute directly to a candidate’s campaign for office. The ability to do so can lead to a less independent body of elected officials and erode the integrity of government in the course of it making policy decisions and awarding contracts. Even the mere perception of impropriety can lead to a lack of public confidence in elected officials and the policy making process and undermine the legitimacy of the political system.

Citizens Union has testified previously on the need for greater restrictions on contributions from those entities “doing business with the city.” As our organization is still in the process of deliberating on the most effective way of regulating the pay-to-play system, I would simply like to reiterate our previous position and lend our support of the effort put forth on behalf of the Campaign Finance Board, the Administration and the City Council.

Citizens Union believes the steps taken to strengthen the rules governing lobbyists and political contributions is good. We also believe continuing efforts to improve the vendor database is a very positive course of action.   We believe these should be coupled with sound legislation that aims to further regulate pay-to-play activities.

It is important that legislation be consistent with measures being deliberated by the City Council to regulate contributions of lobbyists so that the city does not set up a multi-tiered system that is lacking in clarity and purpose. The city should also be careful not to overreach by limiting the legitimate ability of citizens to express their political viewpoints and contribute to candidates that they support for office.

Citizens Union supports pay-to-play legislation that would:

  1. Apply to all candidates for elected office, not just those participating in the campaign finance program. While the Campaign Finance Board can enforce disclosure requirements on all candidates it can only apply contribution restrictions on participating candidates. In order to not unfairly burden those in the program, and create a disincentive for participation, Citizens Union believes the City Council should pass legislation that restricts contributions to all candidates.
  2. Place the onus upon the city, and not the candidates, to determine and report who is doing business with the city and therefore subject to the terms of the proposed pay to play provision.
  3. Ensure that the definition of “doing business with the city” is clear and specific. Those who do business with the city should at the very least include contractors, lobbyists and those who stand to receive immediate financial gain from the decisions of government. The city should examine the ability to restrict contributions from individuals and other entities seeking budgetary, administrative, regulatory or legislative action, as well as those seeking zoning variances, tax breaks, or are otherwise involved in the real estate transactions without unduly restricting the right of the public to participate in the political and electoral process.
  4. Enact a tight definition of “seeking” to do business with the city or being “in negotiation” with the city to do business to at least apply to anyone who has submitted a bid or a response to a Request for Proposals.
  5. Place the compliance burden upon the individual or entity making the contribution. With this a no-liability provision for candidates should be considered to ensure new provisions do not place an undue burden upon the candidate.
  6. Not entirely ban contributions from those who do business with the city, but significantly limit the size of the contribution and prohibit such contributions from being eligible for matching under the campaign finance program.   As the city seeks to prohibit lobbyists’ contributions from being matchable under the campaign finance program it would be prudent to prohibit matching funds for contributions from those that are doing business at the same time.
  7. Restrict contributions by individuals or entities doing business with the city for a set amount of time after a contract expires, potentially up to 1 year or more.
  8. Ensure a “size of a contract(s) trigger” on contribution restrictions. The New Jersey executive order trigger applies to contracts above $17,500. Los Angeles is deliberating legislation with a trigger of $100,000.   Perhaps this trigger should apply to total value of all contracts that the entity has with the city as the financial gain from five contracts valued at $20,000 each is arguably as relevant as one $100,000 contract.
  9. Include in its definition of those doing business with the city, any “spouse, domestic partner and unemancipated children of such person or intermediary…and any officer, any person who “exercises managerial control or responsibility over the entity doing business, or any person owning more than a 5% interest in the entity doing business.”

Citizens Union again thanks the Campaign Finance Board for the opportunity to provide our thoughts on the solution to the problem of influence peddling in the City and commends it for taking the time to ensure thoughtful deliberations are a central part of the regulatory and legislative process.

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