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Housekeeping! How "soft money" political slush funds rule state politics; Common Cause calls it "legal bribery"

Forest City Ratner's contributions in 2008 to the Democratic Assembly Campaign Committee's Housekeeping account and last year to the New York State Democratic Committee are just the tip of the iceberg, with many, many donors giving such unrestricted "soft money" contributions.

Though state law says party housekeeping accounts are supposed to be reserved for party-building administrative expenses but not to promote specific candidates, Common Cause/NY has shown that housekeeping expenditures somehow spike each election season for spending on political consultants and campaign-related advertising.

"There are no contribution limits on housekeeping accounts, nor does the Board of Elections conduct any meaningful auditing or enforcement of how soft money funds are spent, making them an ideal outlet for New York's most powerful and entrenched special interests to influence New York State government," said Common Cause last August.

In 13 years, special interests have given $133.8 million to housekeeping accounts in return for influence and access to lawmakers, Common Cause/NY stated 5/21/13 in the press release, Common Cause/NY Unveils Explosive Analysis of Housekeeping Accounts, "The Life of the Party 2013"


State law limits individuals to giving no more than $150,000 in the aggregate in any single year, and no corporation $5,000 in a single year. Party committees may accept no more than $102,300 from an individual and $5,000 from a corporation.

The loophole? Housekeeping accounts allow unlimited sums, "soft money".

"Housekeeping accounts are a notorious loophole which both contributors and committees exploit to ignore our state's campaign contribution limits and undermine the voters," said Susan Lerner, Executive Director of Common Cause/NY. "The system of legal bribery in which Albany operates is largely responsible for the wide scale corruption we've seen in recent months."

Common Cause calls for campaign finance reform, based on a system of small dollar matching funds. While that system, as in New York City, can be open to exploitation, there's far less opportunity for big donors to run the show.

Donations grow

From 1999-2005, donors gave a total of $46.7 million to the soft money committees of the state parties and the state legislature, according to the report.

From 2006-2012, contributions to the state parties and state legislature increased by 24% to $58 million. But that total, including local/county contributions, reached $87.1 million for the second seven year period alone. (The state did not begin tracking local/county contributions until 2006.)

Businesses made $45.4 million (52%) of all soft money contributions from 2006-2012, while individuals gave $23.3 million (27%). Political committees gave $9.4 million (11%) while labor unions contributed $7.7 million (9%).

The top 20 donors, as shown in the graphic above right: Mayor Michael Bloomberg ($7.2 m), New York State United Teachers ($3.2m), the Greater New York Hospital Association ($3.0m), 1199/SEIU Healthcare Workers East ($2.0m), Cablevision ($1.6m), Verizon ($1.5m), the Pharmaceutical Research and Manufacturers of America ($1.4m), Time Warner Cable ($1.2m), Philip Morris ($1.2m) , the Healthcare Association of New York ($1.1m), Robert Mercer ($1.0m), the Rent Stabilization Association ($941k), Wal-Mart ($929k), the estate of Henry Sanders ($813k), the Red Apple Group and John Catsimatidis ($780k), Coca-Cola ($664k), the Law PAC of New York ($651k), AT&T ($624k), and Diageo Guinness ($566k).

Recipients: state party committees top the list

From 2006-2012, the State Legislature party committees were the top recipients of soft money contributions, accounting for a total of $33.8 million (39%).

County parties across the state raised a total of $25.7 million (30%), state parties raised $24.1 million (28%), and local level parties raised $1.9 million (2%).

The top ten committees took in $64.3 million (74%).

They include, as shown in the graphic at right: the NYS Senate Republican Campaign Committee ($19.9m), the NYS Democratic Committee ($7.0m), the NYS Democratic Assembly Campaign Committee ($7.0m), the Conservative Party NYS ($5.7m), the Democratic Senate Campaign Committee ($5.3m), the New York Republican State Committee ($4.9m), the Independence Party of NYS ($4.5m), the Monroe County Republican Committee ($4.4m), the Queens County Democratic Party ($3.5m), and the Kings County Democratic Party Committee ($2.1m).

Both the Independence Party and the Working Families Party--which raised $2.0 million from 2006-2012--showed significant growth.


Biggest expenditure: "Other"

Where does the money go? It's a mystery.

"Without clear guidelines and consistent auditing, it is impossible to rely on accurate self-reporting of expenditures by the parties," Common Cause said, noting that the largest single category of soft money expenses is "Other" ($37.3 million).

In fact, nearly $3.8 million in expenses have no purpose code or a purpose code not identified by the BOE--which means the recipients are simply misleading the agency.

Less than 0.2% of expenses were itemized as "Voter Registration Materials or Services"--purportedly the type of expenditure used to defend soft money.

Housekeeping expenditures typically peak in the months prior to an election, which suggests much of the spending is campaign related.

The need for limits

Common Cause states:
With no limits to the size of donations or enforcement of "non-campaign" spending, soft money accounts have become an integral part of Albany's "show me the money" culture and an important contributor to the power of wealthy special interests at both the state and local levels of New York State government.
If Albany is serious about reform, it must rein in the parties' housekeeping accounts and empower small donors through enacting a Fair Elections system of public matching funds.
And it got worse

On 6/16/13, Common Cause/NY revealed that the $5.9 million in soft money raised by the New York State Democratic Committee (NYSDC) so far in 2013 was already the largest amount ever raised by a soft money committee in a single year in New York State and more than the total raised in the previous five years.

"As widely reported in the press, the NYSDC's record-breaking soft money fundraising in 2013 is the result of Governor Cuomo's decision to use it as the fundraising vehicle for an advertising campaign promoting his policy agenda," Common Cause stated.

And while Common Cause recognized "the improved transparency" in using the party committee rather than Cuomo's ad hoc Committee to Save New York--it expressed concern "about the influence afforded to wealthy special interests by the soft money loophole and the ability of donors to contributed unlimited sums to New York's political parties."

The majority of the funds raised in 2013 ($4.1 million out of $5.9 million) came from 46 new donors which were said to not contribute at all during the five year period from 2008-2012.

(One contribution, of $25,000, came from Forest City Ratner, which knew it was involved in another round of state approval for Atlantic Yards. Also, Forest City did contribute in January 2008.)

Graphing the increases


Note how real estate is nearly the top category.


Leading donors of soft money

Last August, Common Cause updated its findings, noting that, since 2006, parties have taken in nearly $98 million in soft money contributions, more than half of it from just 59 donors. Forest City didn't make that cut. It's one of many, many companies and organizations trying to wield influence. 

Leading recipients of soft money

More than 90% of the money went to 20 recipients, starting with the state Republicans and Democrats, though not the Republicans in the Assembly.

Comments

  1. Anonymous7:26 AM

    Always astounding the time and work you put into this important research. One thing the charts do not enlarge when clicked and I can't see much of them, maybe just me.

    ReplyDelete
  2. Thanks. Some of the graphics when clicked are more legible, some not. But they should still be discernible. Or links back to original Common Cause documents should help.

    ReplyDelete

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