For immediate release: Monday, January 7 2013

For more information: Bill Mahoney (518) 817-3738

CAPITAL INVESTMENTS 2012

ANALYSIS OF CAMPAIGN FUNDRAISING IN THE 2012 ELECTION Endorsed by: Citizens Union Common Cause New York League of Women Voters of New York State (LWVNYS) EXECUTIVE SUMMARY New Yorkers sense that big money has a big impact on elections, yet their understanding is often based on reports about outsized fundraising for Congress and the President. However, given New Yorks sky high contribution limits, the states campaign finance system offers even greater opportunities to cultivate influence through the use of campaign contributions. State law allows huge campaign donations far in excess of those allowed in federal elections. The general election donation limit for each two-year election cycle to an Assemblymember whose district has only a fraction of the population of Congressional districts is set at $4,100, while a general election donation to a Congressional candidate is $2,500. State Senate candidates can receive $10,300 per contributor for the general election. Party committees enjoy limits of over $102,300, and can receive unlimited donations if these are directed to their housekeeping committees. This report examines legislative fundraising for the 2011-2012 election cycle as a window into how the New York campaign finance system and laws operate and the implications for public policy. It is written to help the public better understand the states system of campaign finance. SUMMARY OF FINDINGS This report examined the most recent election period for state legislative candidates, specifically donations received between December 2010 and November 2012. Some filings most notably, those of the legislative campaign committees housekeeping accounts are not yet publically available. The reports that were examined were those that existed as of December 13, 2012, ten days after the last filing period; it is possible that some have since been amended. Nevertheless, these filings are sufficiently comprehensive to provide a detailed look at some of the broad trends during this election cycle.

Key findings include: The total fundraising in 2011-12 for legislative candidates and their party committees decreased relative to the 2009-10 election cycle. Total contributions dipped from $87 million to $85 million; total receipts fell from nearly $117 million to $105 million. See page 3. This decline was due to a drop of nearly 21% in fundraising in the Senate. Total fundraising in the Assembly increased by almost 10%. In the Senate, where the Republicans controlled the chamber more tightly than in the previous election cycle, total receipts dropped significantly as donors may have abandoned attempts to hedge their bets. See page 3. Businesses gave the most money. They accounted for 35.90% of all receipts, and were followed by individuals (23.46%) and unions (13.10%). See page 4. Among businesses, real estate and construction interests accounted for a plurality of donations. They were followed by businesses in the health and financial sectors. See page 8. Most of the money from individuals came from large donors. Over half of the money coming from individuals came from those giving $2,500 or more. See page 11. New York City residents gave over 40% of the money coming from individuals. Residents of the Capital Region, Manhattan, Nassau, and Westchester gave the most per capita. See page 11. Senate Majority Leader Dean Skelos raised more money than any other legislator. See page 14. The largest donations made by individuals appear to have been driven by gay marriage. Among Senators, the four recipients of the most maximum donations were Republicans who supported marriage equality. See page 15.

TOTAL FUNDRAISING The total receipts reported by all legislative candidates and their conferences party committees declined relative to the previous election cycle: Shift 2011-12 2009-101 $85,247,517.95 $87,181,389.52 $105,288,158.32 $116,678,071.57

Total Contributions Total Receipts2

-2.22% -9.76%

Several factors may have contributed to this drop. While exact numbers are unavailable, several groups, most notably NYSUT, appear to have diverted resources toward independent expenditures, for which data is not available and this report cannot properly analyze. Additionally, some special interests may have given money to non-campaign organizations, such as the Committee to Save New York, that would have traditionally been budgeted for direct donations to candidates. It should also be noted that the nature of the recently-completed election cycle differed from that of two years ago. The presidential election drew record-shattering donations, and may have diverted resources to the federal level. This theory is given credence by the fact that the biggest drops appear to have come in the closing weeks of the election. The disclosure reports filed 11 days before the general election in 2012 included a total of about $11 million in receipts. Two years prior, the total for the same filing was over $17 million. The biggest reason for this shift, however, seems to be in the difference between the Senate in each election cycle. As the following chart reveals, the total raised by Assemblymembers, candidates, and their party committees increased, while the total raised by the Senate counterparts fell precipitously: 2011-12 Total Receipts Senate $64,543,122.93 Assembly $40,745,035.39 2009-10 Total Receipts $81,614,806.08 $37,372,969.54

In 2010, pundits were unsure which party would obtain a majority after that years elections. The Democrats had controlled the chamber for most of the preceding two years, yet had revealed several weaknesses that seemed to leave the door open for Republicans to regain control. As a result, donors may have hedged their bets. Two years later, after recapturing the Senate, however, Republicans held tighter control over the chamber and had the benefit of running in newly-gerrymandered districts. Additionally, the creation of an Independent Democratic Conference presented challenges that might have prevented regular Democrats from serving in the majority. Donors seeking to influence legislative
1

As mentioned above, housekeeping totals for dates after July 11, 2012 are not yet available. To keep the comparisons constant, housekeeping donations for the comparable period in 2010 are not included. 2 Total receipts is a more encompassing category than contributions as it includes donations as well as interest, candidate loans, and transfers from parties and other candidate committees.

decisions, therefore, were no longer forced to buy access to both parties, as the IDC decreased their confidence that Democrats would be able to win a governing majority. Indeed, donors gave overwhelmingly to the majority parties in each chamber. While Senate Democrats outraised Republicans by about $14 million in 2009-10, Republicans outraised Democrats by over $23 million in 2011-12: House Party Senate Republicans + Conference Committees Senate Democrats + Conference Committees Senate Independent Democratic Conference Senate Other3 Assembly Democrats + Conference Committees Assembly Republicans + Conference Committees Assembly Other Total Receipts $42,320,138.78 $19,096,121.72 $3,032,480.83 $94,381.60 $29,596,026.04 $11,054,446.12 $94,563.23

Receipts by Source We have labeled the source of 98.4% of the receipts reported by candidates in the two years preceding December 1st, 2012 into one of ten source categories. Businesses accounted for more than a third of all money raised by candidates. Type of Donor Business, LLC or Trade Association Individual Union Not for Profit Other Candidate Party Directly from Candidate From Candidate's Family Interest & Expenditure Refunds Native American Tribes Loans Unitemized by Filer Total Given % of All Money $37,798,813.72 35.90% $24,705,039.25 23.46% $13,791,460.07 13.10% $1,165,673.80 1.11% $10,045,250.03 9.54% $8,786,150.83 8.34% $3,385,102.01 3.22% $947,140.07 0.90% $1,119,239.51 1.06% $422,050.00 0.40% $90,000.00 0.09% $1,318,621.65 1.25%

Other candidates are primarily those that did not run in a major partys primary in 2012 and were on the general election ballot for either the Conservative, Independence, or Green parties.

The most notable shift in the source of donations over the previous two election cycles has been a decreased reliance on loans. Much of this is attributable to several large loans taken out by the Democratic Senate Campaign Committee before the 2010 election. Type of Donor Business, LLC or Trade Association Individuals, Candidates, and Family Union Not for Profit Other Candidate Party Interest & Expenditure Refunds Native American Tribes Loans Unitemized by Filer 2011-12 Total $37,798,813.72 $29,037,281.33 $13,791,460.07 $1,165,673.80 $10,045,250.03 $8,786,150.83 $1,119,239.51 $422,050.00 $90,000.00 $1,318,621.65 2011-12 Pct 2009-10 Total 2009-10 Pct 33.69% 25.42% 11.63% 1.19% 10.47% 8.35% 0.87% 0.19% 5.10% 1.16%

35.90% $40,086,913.25 27.58% $30,243,697.06 13.10% $13,836,423.25 1.11% $1,412,267.17 9.54% $12,454,250.15 8.34% $9,938,269.11 1.06% $1,032,809.57 0.40% $222,405.00 0.09% $6,071,353.22 1.25% $1,379,683.79

Legislative campaign committees and their housekeeping affiliates relied on individuals for their donations to a much smaller degree than candidate committees. It is clear that any attempt to increase the role that individuals play in the campaign finance system must remove the loopholes that let party committees raise huge contributions from donors, benefiting groups such as businesses and unions that can afford to write larger checks.

Source of Donation Business, LLC or Trade Association Individuals Union Not for Profit Other Candidate Party Native American Tribes Unitemized by Filer Loans Interest Expenditure Refunds
4

Party, Total $ $14,266,081.30 $3,142,394.70 $4,695,682.45 $474,600.00 $7,028,871.24 $916,234.22 $265,000.00 $72,189.77 $0.00 $5,782.11 $187,926.62

% of Party $ 45.75% 10.08% 15.06% 1.52% 22.54% 2.94% 0.85% 0.23% 0.00% 0.02% 0.60%

Candidates, Total $ $23,532,732.42 $21,562,644.55 $9,095,777.62 $691,073.80 $3,016,378.79 $7,869,916.61 $157,050.00 $1,246,431.88 $90,000.00 $503,889.27 $421,641.51

% of Candidate $4 33.73% 30.90% 13.04% 0.99% 4.32% 11.28% 0.23% 1.79% 0.13% 0.72% 0.60%

Donations directly from candidates or their family members were not included when calculating the percentage raised by candidates, since these cannot be compared to money raised by parties. If they were included, the percentage of money that candidates raised from individuals would increase significantly.

Individual Candidates Sources of Funding Due partially to a relative dearth of transfers from other candidates and party committees, members of the IDC were more reliant than members of other conferences on donations from both unions and businesses. Business % Union % Business Total of all $ Union Total of all $ $11,485,501.70 40.61% $2,434,876.66 8.61% $3,066,579.57 23.01% $2,244,447.01 16.84% $1,350,014.09 44.52% $583,716.00 19.25% $5,727,724.20 26.78% $3,395,628.23 15.87% $1,875,809.86 23.80% $432,010.72 5.48% Individual Individual % Total of all $ $7,518,342.53 26.58% $4,401,221.34 33.02% $821,032.89 27.07% $6,477,856.77 30.28% $2,293,826.62 29.11%

Conference Senate GOP Senate Dem Senate IDC5 Assembly Dem Assembly GOP

Committees that received the most total money from businesses Committee FRIENDS FOR THE ELECTION OF DEAN SKELOS FRIENDS OF SENATOR LIBOUS COMMITTEE (2010) NEW YORKERS FOR KLEIN FRIENDS OF MARTIN GOLDEN COMMITTEE TO ELECT MAZIARZ STATE SENATE NEW YORKERS ON THE BALL CITIZENS FOR HANNON ZELDIN FOR SENATE COMMITTEE TO RE-ELECT ASSEMBLYMAN JOE MORELLE FRIENDS OF SENATOR SEWARD KENNEDY FOR SENATE Total $ from Business $1,045,809.55 $798,462.13 $703,958.00 $668,099.01 $585,221.58 $424,570.24 $420,773.34 $420,701.80 $418,132.73 $409,710.00 $406,616.00

For the purposes of this chart, IDC members were limited to those members who declared their affiliation with this conference before election day: Senators Klein, Savino, Valesky, and Carlucci, and Albany County Legislator Shawn Morse.

Committees that received the most total money from unions Committee SAVINO FOR NEW YORK FRIENDS FOR THE ELECTION OF DEAN SKELOS FRIENDS OF MARTIN GOLDEN ABBATE FOR ASSEMBLY ADDABBO FOR SENATE FRIENDS OF SENATOR LIBOUS COMMITTEE (2010) COMMITTEE TO ELECT MAZIARZ STATE SENATE GUSTAVO RIVERA FOR STATE SENATE TED O'BRIEN FOR STATE SENATE FRIENDS OF TOBY STAVISKY CITIZENS FOR JOSEPH ROBACH (SENATE) Total $ from Unions $276,225.00 $268,550.00 $254,883.56 $208,157.00 $193,306.00 $138,649.00 $134,230.00 $132,831.00 $129,750.00 $129,733.76 $127,575.00

Committees that received the most total money from individuals Committee(s) SALAND FOR SENATE COMMITTEE TO ELECT MCDONALD TO THE SENATE GRISANTI FOR SENATE NEW YORKERS FOR KLEIN FRIENDS OF JIM ALESI FRIENDS FOR THE ELECTION OF DEAN SKELOS FRIENDS OF MARTIN GOLDEN LATIMER FOR SENATE + LATIMER FOR ASSEMBLY NEW YORKERS ON THE BALL FRIENDS OF SENATOR LIBOUS COMMITTEE (2010) FRIENDS OF BOB COHEN Total $ from Individuals $648,680.50 $642,676.59 $531,235.35 $450,495.14 $419,313.00 $397,300.00 $380,146.21 $377,232.84 $349,168.65 $321,318.13 $312,619.12

BUSINESS DONATIONS BY SECTOR We reviewed 85.2% ($32.2 million) of the $37.8 million from business donors and categorized them according to the fifteen labels found below.6 Based on this categorization, it appears that businesses in the fields of real estate and construction continued to be the top source of corporate donations. Their lead can partially be attributed to the loophole in campaign finance law that lets LLCs donate more than other forms of business.

Business Sector Real Estate & Construction Health & Mental Hygiene Insurance, Financial, Banking Lobby Firms Food, Alcohol, or Tobacco Production Law Firms7 Entertainment, Tourism, Restaurants Telecom Transportation, Shipping, Car Dealers Energy Miscellaneous Service Sector General Retail Miscellaneous Industry Business Associations and Chambers of Commerce Education

Amount Donated $7,523,955.25 $6,228,494.00 $4,152,821.36 $2,333,924.24 $2,279,268.31 $2,157,708.70 $1,655,275.37 $1,607,973.70 $1,363,949.15 $813,271.64 $587,282.47 $542,883.42 $525,209.29 $380,704.82 $57,900.00

In general, the total from different sectors remained remarkably constant with the same figures from the previous election cycle. The most notable change came in businesses categorized as being in the entertainment industry. The total from these businesses increased almost 50%, due to a surge in spending by casinos and other gambling companies.
6

These categories are based on those used by the Joint Commission on Public Ethics, which categorizes lobbying clients, with some changes added by the authors. 7 Several law firms are grouped with lobby firms for the purpose of this analysis. While they often engage in similar work to other law firms, those who are registered to represent clients before the state legislature have a fundamentally different relationship with the lawmakers whom they contribute to.

Sector Real Estate & Construction Health & Mental Hygiene Insurance, Financial, Banking Lobby Firms + Law Firms Food, Alcohol, or Tobacco Production Entertainment, Tourism, Restaurants Telecom Transportation, Shipping, Car Dealers Energy Miscellaneous Service Sector General Retail Miscellaneous Industry Business Associations and Chambers of Commerce Education

2011-2 Total 2011-2 % of $ Business $ $7,523,955.25 19.91% $6,228,494.00 16.48% $4,152,821.36 10.99% $4,491,632.94 11.88% $2,279,268.31 $1,655,275.37 $1,607,973.70 $1,363,949.15 $813,271.64 $587,282.47 $542,883.42 $525,209.29 $380,704.82 $57,900.00

2009-10 Total 2009-10 % of $ Business $ $7,610,306.62 18.98% $6,191,863.27 15.45% $4,226,249.74 10.54% $4,103,466.81 10.24% 7.19% 2.76% 3.31% 3.10% 2.04% 1.56% 1.02% 0.88% 1.12% 0.13%

6.03% $2,882,727.68 4.38% $1,104,416.75 4.25% $1,327,524.91 3.61% $1,242,459.82 2.15% $819,681.70 1.55% $623,962.99 1.44% $408,208.95 1.39% $351,963.00 1.01% 0.15% $450,161.97 $52,925.00

For members of three of the four major conferences, the three most generous business sectors were Real Estate & Construction; Health & Mental Hygiene; and Insurance, Financial & Banking. It should be noted that since 85.2% of business donations were labeled by sector, some of these totals might be higher. % of Conferences Total $ Business $ $4,525,008.96 24.55% $2,905,660.77 15.77% $2,183,319.51 11.85% $909,419.45 18.64% $880,665.00 18.05% $514,616.01 10.55% $1,880,028.73 18.45% $1,283,808.28 12.60% $1,136,363.95 11.15% $464,993.56 15.91% $356,020.50 12.18% $233,028.56 7.97%

Conference/ Rank Senate GOP 1 Senate GOP 2 Senate GOP 3 Senate Dem 1 Senate Dem 2 Senate Dem 3 Assembly Dem 1 Assembly Dem 2 Assembly Dem 3 Assembly GOP 1 Assembly GOP 2 Assembly GOP 3

Sector Real Estate & Construction Health & Mental Hygiene Insurance, Financial, Banking Real Estate & Construction Health & Mental Hygiene Law Firms Health & Mental Hygiene Real Estate & Construction Insurance, Financial, Banking Real Estate & Construction Health & Mental Hygiene Insurance, Financial, Banking

The following two charts present the top recipients of money from the two business sectors Real Estate & Construction and Insurance, Financial, & Banking - that gave the most directly to candidate committees.8 Real Estate & Construction Donations $252,882.00 $198,207.49 $194,650.00 $188,850.00 $184,354.00 $183,800.00 $174,547.00 $160,917.00

Committee FRIENDS OF BOB COHEN NEW YORKERS ON THE BALL KENNEDY FOR SENATE FRIENDS OF MARTIN GOLDEN NEW YORKERS FOR KLEIN FRIENDS FOR THE ELECTION OF DEAN SKELOS BOYLE FOR SENATE ULRICH FOR SENATE

Committee FRIENDS OF SENATOR SEWARD FRIENDS FOR THE ELECTION OF DEAN SKELOS COMMITTEE TO RE-ELECT ASSEMBLYMAN JOE MORELLE FRIENDS OF SENATOR LIBOUS COMMITTEE (2010) FRIENDS OF SENATOR BRESLIN FRIENDS OF MARTIN GOLDEN FRIENDS OF SILVER CITIZENS FOR HANNON

Insurance, Financial, & Banking Donations $203,555.00 $192,100.00 $150,450.00 $92,700.00 $90,050.00 $80,424.00 $75,550.00 $55,750.00

A large percentage of money from businesses in health & mental hygiene went directly to party committees and their housekeeping accounts.

10

Most Individual Money Comes from Large Donors Over half of the money donated by individuals, not including donations made by candidates family members or the candidates themselves, came from donors who gave amounts of $2,500 or more to legislative candidates. Total from all donors of this amount Percentage $7,121,246.63 28.83% $5,753,590.88 23.29% $4,400,390.62 17.81% $4,690,989.85 18.99% $2,738,820.32 11.09%

Amount Donated $10,000 or more $2,500 to $9,999 $1,000 to $2,499 $250 to $999 Less than $250

44,894 unique individuals donated to legislative candidates or party committees over the past two years. 40,381 of the unique individual donors had New York state addresses.9 By comparison, this number is Less the number of votes the Rent is Too Damn High candidate for governor received in 2010.10 Almost 15,000 fewer than the inmates in state prisons (55,328). 11 Less than the population of 55 New York counties. Individual Donations By Geographic Region12 Economic Development Region Capital Region Central NY Finger Lakes Long Island Mid-Hudson Mohawk Valley New York City North Country Southern Tier Western NY Out of NY State No Address Reported Total Donations Percentage of All $ $1,637,782.34 6.63% $504,777.55 2.04% $746,586.29 3.02% $2,871,091.92 11.62% $3,325,006.21 13.46% $277,249.31 1.12% $9,917,374.84 40.14% $151,192.31 0.61% $358,315.98 1.45% $1,419,413.35 5.75% $2,666,892.93 10.79% $829,356.22 3.36%

1,399 did not have a complete addresses reported. It is likely, though unverifiable, that many of these individuals lived in New York. 10 http://www.elections.ny.gov/NYSBOE/elections/2010/general/2010GovernorRecertified09122012.pdf 11 http://rocdocs.democratandchronicle.com/database/new-york-prison-population 12 These totals do not include donations directly from candidates or their family members.

11

Of the six counties whose residents donated the most money per capita, three Albany ($2.77), Columbia ($1.91), and Saratoga ($1.43) are in the Capital Region and contain the homes of many individuals closely tied to state government. The other three New York ($3.75), Westchester ($2.28), and Nassau ($1.48) have high numbers of wealthy residents. The amount contributed by out-of-state donors eclipsed those from all but three regions of the state: New York City, Mid-Hudson and Long Island. County Albany Allegany Bronx Broome Cattaraugus Cayuga Chautauqua Chemung Chenango Clinton Columbia Cortland Delaware Dutchess Erie Essex Franklin Fulton Genesee Greene Hamilton Herkimer Jefferson Kings Lewis Livingston Madison Monroe Montgomery Nassau New York Niagara Oneida Onondaga Total Donations Average per Resident $841,705.24 $2.77 $12,740.00 $0.26 $384,945.56 $0.28 $197,883.00 $0.99 $21,122.50 $0.26 $46,344.00 $0.58 $78,563.24 $0.58 $39,110.00 $0.44 $21,462.04 $0.43 $27,166.86 $0.33 $120,481.15 $1.91 $27,999.00 $0.57 $24,669.94 $0.51 $373,190.67 $1.25 $1,150,025.96 $1.25 $27,895.00 $0.71 $6,771.00 $0.13 $10,172.00 $0.18 $59,033.00 $0.98 $22,799.67 $0.46 $446.00 $0.09 $29,263.88 $0.45 $54,787.45 $0.47 $1,851,553.51 $0.74 $6,400.00 $0.24 $16,684.00 $0.26 $37,429.00 $0.51 $487,879.29 $0.66 $37,002.85 $0.74 $1,985,509.21 $1.48 $5,952,018.21 $3.75 $156,961.65 $0.73 $139,748.58 $0.59 $370,055.55 $0.79 12

Ontario Orange Orleans Oswego Otsego Putnam Queens Rensselaer Richmond Rockland Saratoga Schenectady Schuyler Schoharie Seneca St. Lawrence Steuben Suffolk Sullivan Tioga Tompkins Ulster Warren Washington Wayne Westchester Wyoming Yates Out of NY State No Address Reported

$121,053.00 $268,125.85 $4,805.00 $22,950.00 $40,222.00 $106,074.10 $1,220,529.37 $118,309.11 $508,328.19 $259,074.00 $313,778.69 $137,629.48 $2,305.00 $20,840.00 $7,305.00 $27,726.00 $44,653.00 $885,582.71 $54,440.12 $7,375.00 $20,858.00 $98,440.29 $66,740.00 $16,339.00 $24,665.00 $2,165,661.18 $16,237.00 $8,925.00 $2,666,892.93 $829,356.22

$1.12 $0.72 $0.11 $0.19 $0.65 $1.06 $0.55 $0.74 $1.08 $0.83 $1.43 $0.89 $0.13 $0.64 $0.21 $0.25 $0.45 $0.59 $0.70 $0.14 $0.21 $0.54 $1.02 $0.26 $0.26 $2.28 $0.39 $0.35

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Senate Candidates: Most Total Receipts Dec 2010 through November 2012 In each house, the top fundraisers were typically in the majority party. Most were either leaders or had especially competitive elections. Candidate FRIENDS FOR THE ELECTION OF DEAN SKELOS GRISANTI FOR SENATE FRIENDS OF MARTIN GOLDEN FRIENDS OF SENATOR LIBOUS COMMITTEE (2010) ULRICH FOR SENATE NEW YORKERS ON THE BALL FRIENDS OF BOB COHEN NEW YORKERS FOR KLEIN FRIENDS OF SEAN HANNA COMMITTEE TO ELECT MAZIARZ STATE SENATE Total Raised $1,780,831.78 $1,647,043.00 $1,416,985.87 $1,413,997.07 $1,400,321.10 $1,356,726.24 $1,340,395.51 $1,338,043.12 $1,262,145.44 $1,055,170.86

Assembly Candidates: Most Total Receipts Dec 2010 through November 201213 Candidate FRIENDS OF SILVER COMMITTEE TO RE-ELECT ASSEMBLYMAN JOE MORELLE SANTABARBARA FOR ASSEMBLY FRIENDS OF DIDI BARRETT FOR ASSEMBLY FRIENDS OF DAN QUART MARK GJONAJ 2012 CITIZENS FOR AL STIRPE FRIENDS OF BRIAN KOLB FRIENDS OF DAVID BUCHWALD STECK FOR ASSEMBLY Total Raised $782,804.33 $683,469.09 $482,082.98 $451,618.60 $436,713.35 $403,885.00 $397,621.40 $389,165.93 $385,812.40 $384,359.29

13

This includes donations received for special election efforts.

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The Senate: Individuals Donating the Maximum Depending on the number of races in which a candidate runs, the maximum amount a non-relative of a senate candidate can give to a campaign ranges between $10,300 and $16,800. 137 contributions in amounts equal to or greater than this legal maximum were reported by candidates. More than half (71) of these contributions went to the four Republican senators who supported marriage equality: McDonald (20), Saland (20), Alesi (16), and Grisanti (15). No other senate candidate received more than five donations at this level. 68 individuals made at least one maximum donation; 21 of them gave contributions to at least two of the four aforementioned Republican gay marriage supporters. Mayor Michael Bloomberg, who gave 11 candidates maximum donations totaling $126,300, made the most contributions of this sort. Total Donations at Maximum Level or Greater 20 20 16 15 5 4 4 4 4 3 3 3 3 2 2 2 2 25

Candidate COMMITTEE TO ELECT MCDONALD TO THE SENATE SALAND FOR SENATE FRIENDS OF JIM ALESI GRISANTI FOR SENATE FRIENDS OF BOB COHEN KENNEDY FOR SENATE ZELDIN FOR SENATE SIMCHA NY FRIENDS OF MARTIN GOLDEN NEW YORKERS ON THE BALL NEW YORKERS FOR KLEIN FRIENDS OF DAVID STOROBIN FRIENDS OF MIKE GIANARIS SAVINO FOR NEW YORK FRIENDS OF KATHY MARCHIONE COMMITTEE CARLUCCI FOR NEW YORK COMMITTEE TO RE-ELECT JOHN SAMPSON Candidates with one maximum individual donor

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Donations by Month More than a third of the cycles contributions from unions, businesses, and individuals were raised in the first year of the election cycle, despite the fact that most non-incumbents did not even create campaign committees until the spring or summer of 2012. This illustrates the head-start that incumbents have over potential challengers that contributes to their huge monetary advantages. The only date over the two-year election cycle in which no contributions were reported was December 25, 2010. Total Percent of Cycle's Contributions Contributions $564,150.93 0.74% $795,226.26 1.04% $1,828,045.35 2.40% $3,001,868.30 3.94% $1,634,443.90 2.14% $3,070,853.13 4.03% $2,964,148.82 3.89% $3,717,183.06 4.88% $2,321,765.86 3.05% $2,272,528.01 2.98% $2,550,074.21 3.35% $2,441,309.73 3.20% $3,382,525.18 4.44% $3,358,462.29 4.41% $3,139,926.54 4.12% $3,771,997.22 4.95% $2,235,743.97 2.93% $5,062,874.48 6.64% $4,054,546.50 5.32% $5,338,938.37 7.00% $4,507,221.71 5.91% $4,596,494.96 6.03% $7,203,956.29 9.45% $2,420,480.15 3.18%

Month December 2010 January 2011 February 2011 March 2011 April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011 January 2012 February 2012 March 2012 April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 October 2012 November 2012

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Recommendation: Enact comprehensive campaign finance reform. Solution #1: Create a voluntary system of public financing modeled on New York City. Many states have developed voluntary systems of public financing half the states operate some sort of public financing program.14 However, New York lawmakers do not have to look far for a model of how to reform its campaign finance system. As The New York Times commented New York Citys campaign finance system ranks among the best in the country.15 In 1988, New York City created a voluntary system of public financing in the wake of series of political corruption scandals. New York City created a Campaign Finance Board to be an independent, nonpartisan agency to oversee the program. The system grants public matching funds to qualifying candidates, who in exchange submit to strict contribution and spending limits and a full audit of their finances. Initially, the program matched every dollar raised by a candidate up to a total of $1,000 per donation. Over time the program expanded and now matches $6 for every $1 raised up to $175 per donation. In addition, candidates running for citywide office (mayor, comptroller, public advocate) must agree to participate in debates. Corporate contributions are banned and political action committees must register with the city.16 As a result of this system, New York City now has competitive elections in which average citizens have a shot at elective office. Moreover, once in office, those legislators now owe little to rich special interests. It is the model that state lawmakers should emulate in Albany. Benefit #1: More Competitive Elections. Key results of the 2009 New York City elections: Five incumbents were beaten, an unprecedented number for a single election. Other incumbents won by slimmer-than-expected margins. More incumbents faced primaries, fewer candidates ran unchallenged, and the average margins of victory were closer than in previous elections. Under-represented voters gained significantly in the 2009 election. After the 2009 elections, the New York City Council had a non-white majority for the first time ever.17

14

National Conference of State Legislatures, Public Financing of Campaign An Overview, 1/6/10, accessed 12/22/10 http://www.ncsl.org/default.aspx?tabid=16591. Arizona, Connecticut, Florida, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, New Jersey, New Mexico, North Carolina, Rhode Island, Vermont, and Wisconsin all provide funding to candidates. Arizona, Arkansas, Hawaii, Minnesota, Montana, Ohio, Oklahoma, Oregon and Virginia provide tax credits for contributions. Arizona, Idaho, Iowa, Minnesota, New Mexico, North Carolina, Rhode Island, Utah and Virginia provide funding to political parties. 15 New York Times editorial, Questions for Data and Field, 8/22/09. 16 For more information on the history of the New York City campaign finance system, see: http://www.nyccfb.info/press/info/history.aspx. 17 New York City Campaign Finance Board, New Yorkers Make Their Voices Heard: A Report on the 2009 Elections, p. 22.

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Clearly, New York Citys system of public financing is creating a robust, competitive election atmosphere. The number of candidates is up, the percentage of participating candidates is up, and the number of matchable contributions is up. Candidates cannot simply overwhelm their opponents with truckloads of money. They must compete with shoe leather and policy proposals. In this environment, the public is certainly the big winner. Voters can choose candidates whose policies they agree with, rather than vote for the candidate with the greatest name recognition. Benefit #2: Citizen Empowerment. In addition, new research on the New York City campaign financing system documents an additional benefit: Drawing in voters who would ordinarily not participate beyond voting. Recent US Supreme Court decisions have eroded the benefits of a public financing system. The Courts 2010 decision in Citizens United v. FEC allowed interest groups, like the U.S. Chamber of Commerce, to spend as much money as they wanted on behalf of candidates for office. As a result, the Court greatly diminished the benefits of public financing programs in reducing the influence of special interests. So, if the Supreme Court has sharply curtailed the ability of policymakers to eliminate the flow of special interest dollars, is it beneficial to enact a public financing system? There is innovative research that demonstrates additional benefits from a public financing system. The Washington-based Campaign Finance Institute18 has released a series of data-based reports that have identified a new and important benefit of a voluntary system of public financing enhanced voter participation. The Institute has looked at systems that have incentives to get small donors to participate in elections. Research shows small donors are more representative of the public at large not surprisingly, since few can write big campaign contribution checks. The Institute also found that small donors are interested in candidates positions while large donors are far more interested in their own commercial or legislative interests. The Institute also found that small donors are more likely to buy into the candidates campaigns and that there is some evidence that such participation leads to greater participation in civic life generally. 19 In addition, the Institute examined how well small donors are involved in campaign finance by comparing participation in the New York City system with New York State. The Institute then showed what impact the City system would have on the State if such a voluntary public financing system was enacted.

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For more information on the Institute, see: http://www.cfinst.org/. Wesley, Y., Malbin, M., et al, Do Small Donors Improve Representation? Some Answers from Recent Gubernatorial and State Legislative Elections, Paper delivered at the 2008 Annual Meeting of the American Political Science Association.

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Campaign Finance Institute: Donor Role in New York State Legislative Races, Current vs. Establishment of NYC-style System20 Current percent participation Participation if New York State Donation size (Gubernatorial and Legislative Lowered Contributions and Enacted a Candidates, 2006). $4 to $1 match21 $1-$250 $251-$999 $1,000+ Non-party Party 7% 6% 33% 45% 10% 35% 8% 20% 26% 10%

As the chart above shows, enactment of a voluntary public financing system modeled on New York City would dramatically increase the participation of small donors. Moreover, the Institute estimates that such as system would cost roughly $34 million of public funds. However, if the state got the same small donor rate as New York City currently does, the percentage of small donors jumps to 57% and the cost of the system increases to $68 million.22 And when it comes to civic participation, New York needs a boost. In a recent survey conducted by Siena Colleges Research Institute, New York ranked near the bottom in civic participation.23 And voter participation levels in the last election placed New York again as one of the nations worst.24 This reports analysis of voting by region shows that some New Yorkers particularly those in most upstate regions - participate less than those from downstate or Albany. A small donor matching system would lead to a more even balance among individuals participating in the states democracy.

Solution #2: Overhaul existing campaign finance law. Moreover, strengthen existing law for those who opt not to participate in the voluntary system. New York State can only create a voluntary system
20

Malbin, M., Brusoe, P., Should New York Citys Campaign Finance System be a Model for the State?, Presentation at the Nelson A. Rockefeller Institute of Government, 12/1/10, accessed 12/20/10 http://www.rockinst.org/pdf/public_policy_forums/2010-12-01-Malbin_slides.pdf. 21 For the purposes of this analysis, the Campaign Finance Institute uses the requirements found in Assembly bill 8902 (2009) and lowers contribution limits to $4,000 per election cycle for individuals and limits PACs to $10,000. 22 Malbin, M., Brusoe, P., Should New York Citys Campaign Finance System be a Model for the State?, Presentation at the Nelson A. Rockefeller Institute of Government, 12/1/10, accessed 12/20/10 http://www.rockinst.org/pdf/public_policy_forums/2010-12-01-Malbin_slides.pdf. 23 Siena Research Institute, New York Civic Health Index, 2010, New York Trails Nation in Two of Five Civic Health Areas Participation in Civic Responsibilities and Duties Low New Yorkers Highly Social and Informed; Engagement in Group Meetings and Community Participation Lacking, 12/8/10.
24

United States Election Project, 2010 General Election Turnout Rates, accessed 12/22/10 http://elections.gmu.edu/Turnout_2010G.html.

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of public financing, it cannot force all candidates to participate. Significant changes must be made to the existing campaign finance law in order for the benefits of a public financing system to be realized. Ban soft money. The federal government now bans soft money donations to the political parties. Yet, the federal law allows state and local parties to continue to receive these huge donations. New York State should close the soft money loophole. Lower contribution limits. candidates. New York States limits should not exceed those for Congressional

Close loopholes. Eliminate the loophole that allows corporations to circumvent New Yorks $5,000 annual aggregate corporate limit by funneling contributions through subsidiaries as well as the loophole that allows LLCs to be subject to individual contribution limits, instead of corporate limits. Candidates should be limited to one committee each. Allowing candidates to maintain multiple committees serve only to obfuscate their total fundraising. Expand disclosure. Require disclosure of the name of the employer or the occupation of the contributor as well as the name of any bundler involved in collecting the contributions. Both New York City and federal laws requires such disclosures. Limit Pay-to-Play. Lobbyists, whose donations are presumably driven solely by a desire to influence legislative action, should face tighter limits than other donors. Ban fundraisers in Albany on session days. The numbers above show that incumbent legislators heavily rely on these fundraisers to fund their campaigns. When they attend these, they are diverting attention from their legislative duties and the constituents who would likely attend fundraisers in their districts. They are also given a monetary advantage over New Yorkers who might be interested in running for office by challenging them.

Solution #3: Limit the use of campaign contributions to those activities directly involved in campaigning. New York State law not only allows the use of campaign contributions for purposes relating to a candidacy, but also to spending relating to an officials role as a public or party official.25 This loophole allows incumbents who are rarely challenged in elections to use campaign donations for essentially personal uses. This loophole must be closed.

Solution #4: Boost campaign finance enforcement. As mentioned earlier, New York States Board of Elections is underfunded and limited by law in its ability to punish election law scofflaws. Essentially, the State Board focuses its efforts on the formidable task of running New York States elections. Therefore, legislation must be enacted that develops more effective enforcement mechanisms, including: centralized reporting at the state level; increased civil fines; increased criminal sanctions and
25

New York State Election Law 14-130.

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criminal fines for willful violations of Article 14; creation of an independent and nonpartisan entity for administering both Article 14 compliance and the public funding system fines for exceeding contribution limits and violations of campaign finance disclosure laws, as well as appropriate and clearly delineated criminal sanctions. We also believe that, should you not follow our recommendation and assign administration of the public funding system to another entity, the State Board of Election must also be afforded additional resources to be able to adequately enforce the law and any new responsibilities.

Solution #5: Strengthen the states campaign finance database. The State Board of Elections should perform more comprehensive and thorough checks on the data supplied by the treasurers. Simple checks include using software to verify that addresses and zip codes match up and are entered without obvious typos. Software to provide these checks is readily available and commonly found in a wide variety of commercial applications.

Candidate and Party committees should be required to record the filer identification number of the contributing state-registered PAC. This would aid in the determination of top PAC donors and also help curb the number of misreported transactions on schedule C. The database descriptions that are provided with the downloadable ASCII files need to be updated. They fail to make reference of schedule Rs (money spent by parties on behalf of candidates) in the data descriptor files. Additionally, outside parties should record the filer identification number of the committee on whose behalf they are spending. Finally, the Board should periodically review independent expenditures to make sure they are all properly reported. The Board should require firms paid large sums by candidates to disclose how they spent this money. There are hundreds of examples of payments being made to consultants where descriptions of how this money is ultimately spent are vague or nonexistent. In 2010, a major gubernatorial candidate obfuscated most of his spending by writing large checks to corporations he established, and providing no itemization beyond these payments. Finally, the Board should investigate ways in which they can make simple modifications to their filing procedures to reflect the modernization of campaigns over the past decade. For example, treasurers are required to select one of nineteen expenditure purpose codes for each transaction leaving their committees' bank accounts. While there are separate options for radio, television, and print advertisements, there is no option to identify an expenditure as an internet ad. Thus, the increasing amount of money spent buying online ads is nearly impossible to measure. Solution #6: Ensure adequate oversight of independent expenditure efforts. In 2010, the US Supreme Court ruled that corporations -- and by extension unions -- should be allowed to spend as much as they want to support or oppose candidates. The Courts decision, known as Citizens United, struck down federal restrictions on corporate spending on candidates and issues as long as the spending is not coordinated with those candidates. Under state law, any individual, corporation, union or other entity that wishes to spend money directly on an election should file disclosure reports with the Board of Elections. Current regulations by the Board exempt many of these groups, and do not require independent expenditure committees to 21

identify which candidates their spending benefits. Since New York cannot limit spending by these independent expenditure efforts, policymakers must re-examine this area of law to ensure that public disclosure requirements cover this type of activity.

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