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Before Mayor Bloomberg said he'll try to run again, contenders for next year's mayoral race included (from

top left, clockwise) Council Speaker
Christine Quinn, Comptroller William Thompson, Representative Anthony Weiner and Councilman Tony Avella. Photos: NYC Council, U.S. House,
NYC Comptroller, and Tracy Collins
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Executive Director.
New York City's campaign finance law was a reform born out of outrage. In the 1980s,
New York's political atmosphere was a stew of combustible ingredients: one part pugna-
cious ebullience, definitively embodied by Ed Koch; another part a distressingly familiar
arrogance born out of a go-go, junk bond-fueled, "Greed is good" Wall Street boom and un-
derlying it all a persistent, post-Watergate skepticism about government and the integrity of
public servants. Add to that roux a raft of corruption and racketeering scandals that rocked
city government and you have all the ingredients you need for a golden era of reform.
Twenty years after the enactment of what was at the time the nation's most aggressive
municipal campaign finance law, this edition of City Limits Investigates, penned by Inves-
tigative Editor Jarrett Murphy, traces the history of that law, looks at how well in practice
it has measured up to its stated goals and, most fundamentally, asks whether the system is
working well for citizens and for candidates.
The law hoped to boost civic participation, reduce corruption, increase transparency and
stimulate debate. And, even if it wasn't an explicit goal of the law, many New Yorkers hoped
that it might spur rigorous grassroots competition and loosen the politburo-like grip on
public office that incumbency confers.
After a generation, the Campaign Finance Board clearly can claim many notable accom-
plishments. It enjoys a resolute nonpartisan reputation and maintains exemplary public
records detailing who is giving what to whom. Not least among its successes is that New
York has not been stricken by scandals nearly as brazen as those that defined the 80s. But
by some other measures, not much has changed. Newer challenges, too, have emerged to
threaten the law's relevance and viability.
The impact of credible self-financing candidates-particularly our current billionaire
mayor-has exposed a whole new set of limitations and challenges to the law's efficacy.
Who could have possibly imagined a candidate who spent more money on food during his
last campaign than the entirety of all but one City Council race that year? Who could have
possibly imagined a candidate capable of spending more than $120 per vote? Perhaps just
as troubling is that the list of successful insurgent campaigns for public office remains a
mighty short one. Since 1989, city incumbents have won 96 percent of contested primary
and general elections.
It's been said that the only solution for democracy is more democracy. But as we look at
this history of campaign finance reform in New York and the prospects for further improv-
ing the system, we need to ask just what are the best tools to add "more democracy" and
wonder how heavy a hand government should wield in shaping public participation. Before
we set about that future task we need to know where we started and where we are now. We
hope this edition of CLI begins to draw such a roadmap.
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FALL 2008
20 years of campaign
finance reform in
New York City
I. The test
II. Scandal's child
III. "It could have flopped"
IV. Swimming in Niagara
V. Following the money
VI. We interrupt this election ...
VII. Paying their dues
vrn. The $150 million elephant
DC. Reform, take six
X. Early results
Reform, redux
The city's system evolves
Less uneven
Money and power in 2005
Uncertain terms
Reform and reality at the races
Trading up
When city officials seek higher posts
Repeat expenders
Two decades of top donors
Jarrett Murphy
Investigations Editor
Karen Loew Editor
Abraham Paulos
News Assistant/Reporter
Andy Breslau
Executive DirectorlPublisher
Mark Anthony Thomas
Deputy Director
Ahmad Dowla
Administrative Assistant
Margaret Anadu. Michael Connor, Russell Dubner,
Ken Emerson, David Lebenstein, Gail O. Mellow,
Gifford Miller, Lisette Nieves, Andrew Reicher,
Ira Rubenstein, John Siegal, Karen Trella,
Peter Williams, Mark Winston Griffith
20 Years of Campaign Finance
Reform in New York City
1. The test
Four thousand nine hundred and fifty
dollars is more money than most New
York families make in a month. It's
greater than the per capita annual in-
come of 70 countries. It's twice what
a person can legally donate to a cam-
paign for president, U.S. Senate or the
House of Representatives for a single
election. In New York City, it's the
maximum contribution that an individ-
ual can make to a candidate for mayor,
public advocate or comptroller. As of
September-with the 2009 municipal
elections more than a year away-the
city's Campaign Finance Board has
recorded at least 1,932 donations of
$4,950. Some people have already
maxed out to more than one candidate.
Together, those maximum donations
represent a quarter of the $37.8 million
that city candidates have raised so far.
Twenty years ago, New York City
restricted the size of donations to lo-
cal campaigns after a series of scandals
sent several prominent politicians to
prison and one to his grave. Rebuffed
4 FALL2008
by state legislators who didn't want to
tinker with a campaign finance system
that offered virtually unlimited cash,
and navigating within constitutional
confines that sanctify much political
spending as a form of free speech, the
administration of Mayor Ed Koch and
the City Council devised a system that
offered public matching funds to can-
didates who agreed to abide by contri-
bution and spending limits. It was the
most significant reform to sweep the
five boroughs in generations. Since
then, hundreds of candidates have
mixed millions in taxpayer money with
their own private fundraising. Thou-
sands of news stories have reported in-
formation from the Campaign Finance
Board's database on who donated how
much to whom. The Voter Guide and
pre-election debates-both of which
are produced by the Campaign Finance
Board, or CFB-are now familiar parts
of New York City's election landscape.
In 2009 the campaign finance system
will oversee its sixth citywide campaign
and face new challenges. A record num-
ber of candidates could-depending on
whether term limits are offered-run,
and the CFB has been charged with
enforcing new, strict rules on donations
from lobbyists, contractors and others
who have business dealings with the
city-rules that are being challenged
in federal court by a conservative legal
activist. And once the 2009 election is
complete, the board will face new dead-
lines for completion of the post-elec-
tion audits that often trigger stiff fines
against campaigns for alleged infrac-
tions. The CFB says it's prepared for
the test that looms next year.
But some doubts go deeper. In a year
when presidential candidate Barack
Obama has made history by opting out
of public financing, when wealthy busi-
nessman Tom Golisano can affect State
Senate races from Brooklyn to Buffalo
with a promise of reform and a wave of
his checkbook and when a certain bil-
lionaire mayor is planning a third self-
financed run for City Hall, the debate
over whether campaign finance reform
at any level of government works-and
what kind works best-is on. After two
decades and more than $109 million
The 2009 municipal elections might be far off the radar
screen, but fundraising is already well under way. As of
the July reporting deadline, Rep. Anthony Weiner led
all hopefuls. Here's a look at who's leading the money
hunt, and the offices they are likely to seek- if a possible
change in the term limits law doesn't alter their plans:
Christine Quinn
Now: Council speaker
Wants to be: Mayor
Has raised: $3,1 million
Eric Gioia
Now: Councilman
Wants to be: Public advocate
Has raised: $2.1 million
John Liu
Now: Councilman
Wants to be: Comptroller
Has raised: $3,0 million
David Weprin
Now: Councilman
Wants to be: Comptroller
Has raised: $1.9 million
Anthony Weiner
Now: Congressman
Wants to be: Mayor
Has raised: $5 million
Adolfo Carri6n
Now: Bronx borough president
Wants to be: Comptroller
Has raised: $2.3 million
Simcha Felder
Now: Councilman
Wants to be: Comptroller
Has raised: $1.6 million
William Thompson
Now: Comptroller
Wants to be: Mayor
Has raised: $4.8 million
Melinda Katz
Now: Councilwoman
Wants to be: Comptroller
Has raised: $2.1 milli on
Scott Stringer
Now: Manhattan borough president
Wants to be: Undeclared
Has raised: $1.5 million
FALL 2008 5
The city's system evolves
Since its creation 20 years ago, the Campaign Finance Act has had a
tumultuous joumey, undergoing its share of changes and reforms:
1988 0 The Campaign Finance Act is passed on February 29. Within
a few months of its enactment, public officials and lawyers begin to
seriously question loopholes in the law, including its failure to restrict
candidates who reject public financing, and the lack of restriction on
contributions from corporations and law firms. In November, the pub-
lic overwhelmingly approves a City Charter revision that establishes
a nonpartisan and independent city agency known as the Campaign
Finance Board to regulate and enforce the Campaign Finance Act
1989 0 This year's citywide election marks the first test of the
campaign finance reform program. During the election, the CFB
matches private contributions from city residents at a rate of
l-to-1 up to the first $1,000 per contributor. Corporate donations
can also be accepted but are not eligible for matching funds. In
total, $4.5 million in public matching funds is distributed to the
36 participating candidates.
1993 0 In the second citywide election since its creation, the CFB
distributes $6.5 million in public matching funds to 65 candidates.
For the first time, candidates can also organize and file their financial
disclosures electronically, thanks to new computer software created
by the CFB.
1996 0 New legislation is enacted that requires citywide candi-
dates who seek public matching funds to participate in a series of
public debates.
1998 0 Contribution limits are lowered, donations from corporations
and unregistered political committees are banned and the public
matching rate is increased to 4-t0-1 up to the first $250.
2001 ... Under term limits approved by voter referendums in the
19905, all citywide officials and 37 of the 51 Council members are
unable to run for re-election, prompting an unprecedented 199
candidates to join the campaign finance program, which distributes
$42 million in public matching funds.
2004 0 New legislation requires all candidates to disclose their
financial activity, regardless of whether or not they receive match-
ing funds from the program. Anyone running for public office
must also adhere to the CFB's contribution limits and ban on
corporate contributions.
2006 0 Contributions from lobbyists and their spouses or domestic
partners are made ineligible for public matching funds.
2007 0 Another round of legislation severely restricts campaign
contributions from people doing business with the city (reduc-
ing the maximum allowed contribution to $400 from $4,950
for citywide office, to $320 from $3,850 for borough president,
and to $250 from $2,750 for City Council). The ban on corporate
contributions is extended to include limited liability corporations
and partnerships, and the matching rate is increased to 6-to-1 up
to the first $175. -Kalyn Belsha
6 FALL200B
spent in matching funds, the CFB faces the same questions it
asked in its report on the 1993 elections: "Leveling the Playing
Field: Are elections more competitive? Has the program been
successful in helping candidates without significant resources
wage competitive campaigns for public office?"
II. Scandal's child
New York's campaign finance regime wasn't born in a vac-
uum. There have been federal campaign finance laws on
the books since 1867, but enforcement was usually weak. In
1971, Congress passed the Federal Election Campaign Act,
which required disclosure of campaign contributions to fed-
eral candidates. In the aftermath of Watergate, that law was
strengthened in 1974 to limit donations, restrict spending
and offer public financing to presidential candidates; a young
congressman named Ed Koch pushed for public financing
for congressional races as well, but that measure failed. In its
landmark Buckley v. Valeo ruling in 1976, the U.S. Supreme
Court ruled that the spending limits in the 1974 law were un-
constitutional unless they were part of a voluntary system of
public financing. That decision has shaped every attempt at
campaign finance reform at every level for the past three de-
cades, including the New York City Campaign Finance Act.
As Watergate prompted to Congress to act, so did con-
troversy push New York's leaders to reform the way cam-
paigns were paid for. "We had a terrible scandal in city gov-
ernment," Koch, who served as mayor from 1978 through
1989, recalled at a Fordham University conference earlier
this year. 'The names you might remember: Donald Manes,
Stanley Friedman." Manes, the Queens borough president
and head of that borough's Democratic machine, killed him-
self in early 1986 as an investigation unfolded. At issue was
a stream of illegal payments to Manes by people seeking
contracts to collect parking violations. Friedman, then the
Bronx Democratic leader, served time in prison for racke-
teering and conspiracy. Manes and Friedman were the two
big names among many who were found to have cashed in
on their influence over city business.
The investigations didn't actually involve campaign money,
but "there was a sense at the time that the scandals repre-
sented something broader," says Gene Russianoff, an at-
torney at the New York Public Interest Research Group. "I
guess it was a concern about the culture. In '85, Ed Koch ran
against Carol Bellamy. Whatever you think of the candidates,
he outspent her 11-to-l, which made the contest kind of a
joke." While there were state campaign finance laws on the
books, they were laughably lax-the limit on contributions
was $100,000. In the '85 race, Russianoff says, mayoral can-
didates "did receive donations of $50,000 from individuals,
particularly in the real estate community." He adds, 'There
was a feeling that something needed to be done. There was
political pressure on Koch to do something."
The Koch administration at first thought that any new cam-
paign finance scheme would have to be imposed statewide.
But when City Hall-backed reform measures failed in Albany,
Corporation Counsel Peter Zimroth re-examined what the
city could do on its own. Zimroth and his staff came up with a
voluntary system requiring contribution and spending limits
and offering public financing. Koch credits Zimroth with cre-
ating a system that passed legal muster and Council leader
Peter Vallone, Sr., with getting the City Council to pass a law
that applied to its own membership.
For Vallone, the issue was personal. Manes had helped
advance Vallone's career; shortly before his suicide, Manes
was the one who had cut the deals that elevated Vallone to
majority leader of the Council, the most powerful position in
the days before there was a Council speaker. Manes wielded
much of his power through the Board of Estimate, a now-de-
funct entity on which the three citywide officials and five bor-
ough presidents sat. The Board of Estimate's portfolio, Val-
lone recalls, was lucrative. "It was all land use, which is gold
in this city, and people would bring in enormous amounts of
money-'Here's $5,000'-and that's what happened to Don
[Manes]," he says. Manes' demise pointed to the need to re-
duce those temptations. "It was shocking to us that someone
like Donald would sentence himself to death because of that
money. We had to get it out." According to Vallone, during a
floor debate about the campaign finance law, City Council-
man Michael DeMarco, a powerful member from the Bronx,
recoiled at the estimated $28 million cost of the proposed
system of taxpayer-funded matching money for campaigns.
"'I'm a firm believer in good government when we can afford
it, and I'm telling you, we can't afford it,'" Vallone recalls De-
Marco (who died in 2001) saying. Vallone adds, "It gave me
an opportunity to say, 'Can we afford not to have good gov-
ernment?'" That argument helped win the day; the Campaign
Finance Act passed in February of 1988.
Supporters of the law speak of it in historic terms. For
Koch, 83, and Vallone, 73, "the birth and creation of this pro-
gram is going to stand as their greatest accomplishment,"
Russianoff says. 'We think of it as a politician liberation act."
Miriam Friedlander, a former city councilwoman from the
East Side who enthusiastically backed the campaign finance
bill, says that people still stop her in the street to talk about
the law. Wayne Barrett, the veteran Village Voice reporter
who exposed many of the Koch-era scandals, says the law
stands as "the single most important reform in my lifetime at
the city or state level."
The Campaign Finance Act was the first in a wave of change
after those 1980s scandals. In 1989, the U.S. Supreme Court
ruled that the Board of Estimate was unconstitutional because
it violated the rule of "one man, one vote" by giving Staten Is-
land equal power to the other, much more populous boroughs.
That same year, the city elected its first black mayor. The City
Council expanded from 35 to 51 seats in 1991. And in 1993, the
city's voters approved term limits for municipal officeholders
and elected the first Republican mayor in 28 years.
Ed Koch says the reforms were a response to corruption scandals,
but his overwhelming financial edge in the 1985 campaign also led to
calls for change. Photo: City Limits Archives
Mayoral candidates' use of matching
funds, 1989-2005
'M'ark '(]'r'eei, o· 2Mi' ··· ··········· $5'.5 ·mi·lii'on· ············· .. ··········· · ···
Fernando Ferrer 0 2005 $4.3 million
Fernando Ferrer 0 2001 $3.3 million
....................... ......... ...... ............ ........................... ......
Gifford Miller 0 2005 $2.8 million
......... .............................. .
Rudolph Giuliani 0 1993 $2.5 million
............ ......... ... ... .................................. .. ..... .... .. ....... ..
Rudolph Giuliani 0 1989 $2.2 million
David Dinkins 0 1993 $2 million
............... ...... .......................................................... ....
.......... 1: ..........•... . ..... .. . , ...... .
Peter Vallone 02001 $1.9 million
................................................... ....... .........................
David Dinkins c 1989 $1.6 million
......... ............................... ......................... ..................
........... .................. . ........ . .. .
Ed Koch C 1989 $587,088
Herman Badillo 0 2001 $436,620
. .......... ......... .. ............................ ................................ .
Richard Ravitch 0 1989 $395,553
........ .. ...................... ... .................. ....... ...... .......... .......
Sal Albanese 0 1997 $346,298
........................ ... ............... ................ .. .......................
Source: Campaign Fimmce Board. (Calculations by City Limits.)
Notes: All amounts inflation-adjusted to 2008 dollars and do not include funds that were
awarded by the CFB but returned by the candidate.
FALL 2008 7

o Joe Smith
o John Citizen
o Jan Doe
o Fred Rubble
o Mary Hill
Jim, a New York City resident,
gives a $300 contribution to Jan,
a candidate for city office.
Jan spends the $300 on
buttons, posters, staff wages
or other campaign expenses.
From donation
to election,
how public
financing works
Jan qualifies for matching funds
by collecting a threshold amount
of money from a minimum number
of city residents. Jan claims
matching funds for Jim's donation.
Jan makes it onto the ballot,
so the Campaign Finance
Board can award her
matching funds.
The CFB grants Jan matching funds at a 6-to-1
ratio for the first $175 each individual city resident
gives to a candidate. In the case of Jim's $300
contribution, the CFB pays Jan $1,050 in matching
funds ($175 x 6 = $1,050) to cover campaign costs
8 FALL 2008
'That period of time was the most
significant event in New York City polit-
ical history because campaign finance
reform and the elimination of the Board
of Estimate transformed New York City
from backroom, county-machine-domi-
nated politics into a legitimate, demo-
cratic, mayor-dominated, legislatively
controlled system," says Richard Em-
ery, the litigator behind the suit against
the Board of Estimate.
III. "It could have flopped"
Carole Campolo was not a campaign fi-
nance junkie when she signed up in 1988
to be the deputy director of a new agen-
cy called the Campaign Finance Board.
"I thought it was an OK job, but what in-
terested me was seeing if you could do
it, build an agency from scratch," says
Campolo, a veteran of several city agen-
cies before she joined the CFB, from
which she retired last year. 'We had six
months to get the whole thing set up."
That challenge also attracted Nicole
Gordon, a lawyer who had been work-
ing for a state commission on govern-
ment integrity. Gordon took the helm of
the nascent CFB and held it for 18 years,
retiring in 2006. Creating a functioning
agency to perform a brand-new task in
time for the 1989 elections, when the
CFB disbursed more than $30 million in
matching funds, was no small task. Lau-
rence Laufer helped Zirnroth draft the
campaign finance measure at the New
York City Law Department, then moved
to the CFB, where he served as counsel
until 2000. Of those early days, he says
simply: "It could have flopped."
It didn't, and that was the board's first
success. The CFB proved in that 1989
race that it was not only competent, but
also nonpartisan-a reputation that has
survived over its 20 years and of which
current and former members and staff
are justifiably proud. The five-person
board is composed of two members from
different parties appointed by the mayor
and two people from different parties
named by the speaker of the City Coun-
cil, with a chairperson whom the mayor
selects in consultation with the speaker.
The board interprets city campaign fi-
nance law and decides on penalties for
candidates found to have breached it.
The law isn't the product of one act
of Council in 1988 but, as Laufer puts
it, of "20 laws over 20 years." After each
election, the CFB publishes a report
that examines how the system per-
formed and makes recommendations
for how to improve it. Its post-2005
study, for example, suggested that
the Council clarify the rules on how
much candidates can spend on gather-
ing signatures to get on the ballot. It
also asked for the law to be changed
to address the disparity between cor-
porations-which were barred from
contributing to candidates-and other
organizations like partnerships, LLCs
and unions, which were able to give
freely. The Council addressed the
spending issue and barred donations
by partnerships and LLCs, but ducked
the question of union donations.
While the CFB doesn't always get
the stricter laws it wants, the City
Council is credited for repeatedly
tightening the rules under which its
members play. Indeed, the campaign
finance system's constant evolution
since its launch-from adding a Chi-
nese edition of the Voter Guide in 1993
to restrictions on lobbyist donations in
2006-has been one of its most admired
attributes, even if the board didn't seek
all the powers it has received. "In 1996,
we got the responsibility for doing de-
bates, which we didn't want," Campolo
recalls. "Even though we were nonpar-
tisan, we were concerned about what
the perception would be." That worry
dissipated over time.
Despite the changes since 1988, the
underlying idea of the CFB is the same
now as it was then-using the offer of
matching funds to entice candidates to
limit their campaign spending and reach
out to small donors, and restricting all
contributions to reduce the power of
large donors. It applies taxpayer money
to offset the disparities inherent in a
system where private money funds cam-
paigns for public office.
Today's campaign finance system
Money and power in 2005
In 2005, many city races were marked by stark
fundraising disparities among the candidates. In
several cases, matching funds helped to dramati-
cally narrow the gaps, although lesser-funded
candidates often remained on very unequal foot-
ing. For instance:
o Domenic Recchia's 20-to-1 fundraising advantage over
general election opponent Russell Gallo was shrunk to
7 -to-1 by matching funds.
o Were it not for matching funds, the vast gap between
Melinda Katz and her primary opponent Joseph Nocerino,
would have been five times larger. As it was, Nocerino went
into the primary with $94,000 to Katz's $634,000.
In a few instances, matching funds adually
Councilman Thomas White increased the financial disparity between candi-
prevailed in 2005 despite being dates, usually because a challenger failed to get
outspent. Photo: NYC Council the maximum public payment. For example:
o When Brooklyn councilwoman Letitia James received matching funds, it increased her finan-
cial advantage over challenger Eric Blackwell (who did not participate in the campaign finance
program) from Ho-1 to almost 8-to-1 .
o John Whitehead raised less than a fifth as much as the incumbent he challenged, Charles
Barron. But Barron's matching funds stretched the gap to 12-to-1.
More money didn't always equal more votes: In seven of 27 primary contests in
2005, the candidate who spent the most did not win. Among them:
o Gifford Miller spent more than his three main rivals for the Democratic mayoral nomination
but placed fourth in the primary.
o In the 28th Council District in Queens neither the incumbent Allan Jennings nor the big-
gest spender, Albert Baldeo, won. Returning councilman Thomas White, who spent $5,000
less than Baldeo, prevailed.
One purpose of the campaign finance system is to empower small donors-
those who give $250 or less to a candidate.
As a group, when matching funds are
combined with private money, small
donations had about as much financial
impact as large contributions in 2005:
But individually, even with matching funds
added on, the average large donation was
still worth a lot more to campaigns than the
average small donation:
o L-l-.. ___ --'--
Source: Campaign FiMnce Board (Ca/cuwtiollS by City Limits)
FALL 2008 9
Ruth Messinger, the 1997 Democratic mayoral nominee, received $1.9 million in matching funds
that allowed her staff to spend less time raising private money. Photo: Andrew Goldberg
consists of two sets of rules. One batch
of regulations that applies to all candi-
dates--even those who don't want to re-
ceive public matching funds-requires
regular reporting and full disclosure of
campaign contributions and spending.
It also bars contributions from corpora-
tions and partnerships, and limits the
size of contributions that an individual or
entity can give. Every transaction-be it
a contribution or an expenditure-is re-
corded on a searchable online database
and audited.
Those who want to qualify for match-
ing funds must comply with additional
rules that constrain their total campaign
spending. And candidates running for
mayor, public advocate or comptroller
who accept matching funds must par-
ticipate in televised debates.
To receive matching funds, candi-
dates have to get a minimum amount of
donations from a threshold number of
contributors; a City Council candidate,
for example, has to raise $5,000 in small
donations from 75 people in his district
Once a candidate has qualified, the CFB
in 2009 will match at a 6-to-l ratio the
first $175 donated by a New York City
resident The system is designed to
amplify the power of small donations.
If you donate $175, the CFB matches it
with $1,050, so the campaign ends up
10 FALL 2008
with $1,225. Say someone else donates
$1,750. Matching money still only ap-
plies to the first $175, so the CFB pays
out $1,050, the candidate ends up with
$2,800-and a donation 10 times the
size of your contribution has only about
twice the financial impact. Campaigns
can only spend matching funds on a
specific set of campaign-related activi-
ties, like buying ads or paying workers,
not on paying off debts or, as some CFB
literature goes so far as to warn, costs
like "funeral expenses."
Emery, the lawyer who sued to scrap
the Board of Estimate, calls the city's
campaign finance system "the most rig-
orous and fulsome campaign disclosure
and regulation scheme" in the country.
'There have been virtually no scandals
since 1989 in New York City of a political
nature. Prior to 1989, there was a politi-
cal scandal of monumental proportions
where the public treasury was robbed
every few years. That just hasn't hap-
pened." Hank Sheinkopf, a leading po-
litical consultant, agrees that the CFB
"has removed a lot of taint from the way
campaigns are funded."
Besides keeping scandal largely out of
city politics, the matching funds system
has brought more people in. "Over the
course of time, the average size of con-
tributions has gone down, the number of
people contributing has gone up and the
number of people running for office has
increased," says CFB executive director
Amy Loprest, who replaced Nicole Gor-
don in 2006.
Matching funds have also changed
the way campaigns operate. Jesse Schaf-
fer, who worked with Ruth Messinger's
campaigns for borough president in
1989 and 1993 and her mayoral run in
1997, says public financing allows can-
didates to think about something other
than money. "You see candidates spend-
ing less time fundraising and more time
campaigning," he says. "It changes how
you staff your campaign. You don't have
to hire as many fund raising staff mem-
bers; you don't have to spend as much
time fundraising; you can spend more
time talking to voters rather than just
dialing for dollars."
And that's good news for candidates
whose social circles don't include people
who can write big checks. As Coun-
cil Speaker Christine Quinn has put it,
"It's very exciting to be a public official
in a city with a public financing system
where schoolteachers and coaches at
Little League can run for City Council."
It's an inspiring picture, and it's abso-
lutely true: In today's New York, regu-
lar J oes and Jills can run for City Coun-
cil. Whether or not they can win-or
stand any chance of winning-is an-
other question.
IV. Swimming in Niagara
Sal Albanese was a schoolteacher once,
and then a city councilman-a liberal
who'd somehow managed to represent
conservative Bay Ridge, Brooklyn for
15 years-before he mounted a run for
mayor in 1997. Media coverage of his
campaign usually included the word
quixotic, and as a largely unknown fig-
ure from the outer boroughs, he was
exactly the kind of candidate that public
financing was supposed to help.
Most politicians hate raising money,
and Albanese was no exception. "One
of the things I despised about running
for citywide office was calling people
whom I did not even know. I always felt
Sal Albanese says matching funds helped his long-odds run in 1997, but didn't really allow him to
compete. Photo: Andrew Goldberg
very leery of it Did this person expect
a quid pro quo?" he says. His fundrais-
ers wanted him to spend the day making
calls. "You almost feel like a beggar, not
someone advancing public policy-peo-
ple ducking you on the phone. It's a very
distasteful experience. People who are
Messinger. Albanese, now a financial
adviser, says that the prominent role
private money still plays in the city's sys-
tem undermines the intentions behind
the Campaign Finance Act.
'The purpose was to eliminate the in-
fluence of special interests and basically
the major contributors become the major
players in the candidate's life. You spend
time massaging their egos. It's a pretty
dehumanizing process, if you ask me."
Albanese managed to raise $770,000
on his own--enough to qualify for
$258,000 in matching funds. That money
helped: When it came in 12 days before
the primary, Albanese was able to af-
ford a week's worth of TV advertising.
"I went from 11 percent to 22 percent in
a week," Albanese says, comparing pre-
election polls with the primary results.
"If I had two more weeks of television I
would have won the primary."
As it was, he was outspent 5-to-1 by
democratize the process," says Albanese,
who was in the Council when the cam-
paign finance law passed. 'The fact of the
matter is, you still have to raise millions
of dollars from people who do business
with the city. It's not undoing the prob-
lem of undue influence but abetting it by
matching it"
Eight years later, another unknown
candidate, Andrew Rasiej, ran for public
advocate. He became associated with an
idea to make wireless Internet available
across the entire city; that proposal was
part of a larger plan to increase citizen in-
volvement. Rasiej, who entered the 2005
Democratic primary against incumbent
Reform and reality at
the races
five years after the city launched the cam-
paign finance system, voters approved a
ballot measure in 1993 that limited city of-
ficeholders to two consecutive terms. Since
then, term limits and matching funds have
interacted in complex ways, especially in
City Council races.
By forcing seats open, term limits re-
moved incumbency as a factor in many
campaigns. Incumbents tend to raise more
money, so their absence from the race
would be expected to depress campaign
costs. But the resulting open races tend to
attract several candidates-sometimes as
many as 12-who each raise and spend
some amount of money. The overall im-
pact is often higher spending.
Supporters of the campaign finance law
claim that matching funds have persuaded
more people to run for office. But term lim-
its also make races more inviting, because
contenders don't have to face incumbents.
Says election lawyer Laurence Laufer: "It
would be interesting to see how either
term limits or public financing works in
isolation from the other."
The number of candidates in some
races has altered the math on what it
takes to win. "Because of the matching
funds you wind up having, especially in
minority neighborhoods, piles of candi-
dates running, splitting up 15,000 votes
or less. So the winner doesn't need that
many votes,· says political strategist Joe
Mercurio, who is not convinced that vot-
ers are actually learning much about the
candidates in these crowded races. Term
limits and public financing get people
into the race, Mercurio says, H but they
don't have enough money to do voter
communication, so it's in some ways a
lottery. If you go into a race and know
1,000 people in the neighborhood, you
could win:
In such races, name recognition is
crucial, and that favors people who are
related to or work for people already in
office. -1M
FALL 2008 11
Since 1989, New York City incumbents have won 96 percent of contested primary and gen-
eral elections for city offices and have run unopposed dozens of times_ On only 13 occasions
have incumbents lost since the campaign finance system began operating:
1989 ° Ed Koch lost the primary for mayor. Councilman Hilton Clark lost both the primary and general election .
............. ....................................... ............................................. ... ... .. ............... .. .......... .... .....
1991 ° City Councilwoman Miriam Friedlander lost a primary, and her colleague Carol Greitzer lost in the general election .
................................................. .......................... ... ... ... ..... .. ......... .... ............... .... ..... .............
1993 ° Mayor David Dinkins, Comptroller Elizabeth Holtzman and councilmen Rafael Colon and Walter Ward were unseated .
..... ..... .... ... ...... .. .................. .... ...... ... ... ..................................................................................
. .? . . ......•....... .. .. ... ...... . .............•..
.. 0 .. .G: . !ost. pri.m.a:!' .f?r ................. . ............................ .
.. ? ............................... .. ....... . .......... . .......... . . . ... . .
Sources: Campaign Finance Board, Board of Elections, news accounts. Calculations by City Limits.
Allan Jennings, the
lone incumbent to lose
in 2005. Photo CFB
Betsy Gotbaum and civil liberties lawyer
Norman Siegel, did not enjoy his cam-
paign experience. 'The general disdain
people have for politics-you feel like
you're trying to swim against Niagara
Falls," he says. "One of the things that
I hated doing was fundraising. I was
basically making phone calls all of the
time. Once you're a candidate, you're
no longer in control of your campaign.
My staff was telling me I had to spend
three hours making phone calls. I was
in a box. I'd come out of the box to make
a speech and then go back into a box. It
was very, very painful."
Rasiej says the $785,000 in matching
funds he received, which brought his
war chest to $1.6 million, allowed him
to run a campaign operation. "But I
couldn't run ads. I don't think anybody
can run in a city of 8 million people with
anything less than $3 million." Rasiej
loaned his campaign a half-million dol-
lars to try to compete. He ended up
placing a distant third.
Albanese and Rasiej, both relative
unknowns, may have faced particularly
long odds, but their fate is common.
Even under the city's campaign finance
system, better financed candidates are
much more likely to win. And while
incumbents like Ed Koch and David
Dinkins have fallen in elections since
the Campaign Finance Act, they are the
high-profile exceptions. Since the cam-
paign finance system has been in place,
incumbents at the citywide, borough or
12 FALL 2008
Council level have faced 350 contested
primary or general elections in New
York City. On a mere 13 occasions has
an incumbent lost, for a 96 percent win
rate. In 2005, for example, the only in-
cumbent who didn't win re-election was
Allan Jennings, a councihnan who'd
been excoriated in the press over sexual
harassment complaints by two ex-staff-
ers. Often, incumbents faced no opposi-
tion at all. Since 1989, incumbents have
avoided primaries 178 times and faced
no general election opponent 48 times.
In 2005, seven incumbents faced no
primary or general election challenger.
Over 20 years, in all possible races, in-
cumbents have a winning percentage of
97.5 percent-equivalent to the Yankees
losing four games over an entire season.
That's about how they fared before the
CFB: In 1985, the last city race before
public financing, officeholders went 57
for 58.
It's a political truism that incum-
bents stand a good chance of being re-
elected, but public financing might be
expected to dent that advantage some-
what. In fact, New York City's rate
of incumbent survival is right in line
with that for New York State legisla-
tors (98 percent) and Congress, where
the rate is estimated by the Center for
Responsive Politics to have moved up
and down between 79 percent and 98
percent over the past 20 years.
Officeholders enjoy advantages
besides money-like name recogni-
tion-that campaign finance laws can't
do much about, but incumbency does
confer a financial edge as well. Statistics
from the CFB show that incumbents
consistently raise more money than
challengers or people running for open
seats, and also get a larger proportion
of their money from large donors. In-
cumbents often spend more, too--even
when they face no opponent: Council-
men Simcha Felder and Leroy Comrie
spent about $200,000 each in 2005 to win
their elections against nobody. (Felder's
staff says he raised and spent aggres-
sively to discourage potential candidates
from getting in the race, and Comrie was
trying to become Council speaker.)
Felder, Comrie and many other in-
cumbents (like Councilwoman Melinda
Katz and Councihnan Eric Gioia, who
spent more than $300,000 each despite
facing token opposition) did not accept
matching funds in 2005. But some in-
cumbents did get matching funds, even
in cases where they faced very poorly
financed opponents and had to submit
so-called "statements of need" justifying
their receipt of taxpayer money. Seven-
teen sitting Council members filed such
statements in the last two elections.
Councihnan Charles Barron, for one,
accepted about $141,000 in matching
funds in 2005 and raised $66,000 on his
own-against an opponent who man-
aged to scrape together $15,000. In ask-
ing for matching funds, Barron claimed
his opponent had the support of local
political clubs. Councilman Larry Sea-
brook, who pled for public funds saying
his opponent had "a base of support in
Coop City," used $71,000 in public mon-
ey; his foe reported no donations or ex-
penditures on his campaign.
There are situations in which a
well-funded incumbent might indeed
need public money to compete, such
as when facing a celebrity candidate.
(Would campaign spending matter in a
race between Councilman Alan Gerson
and Madonna?) Still, the use of match-
ing funds by popular incumbents has
been a long-standing target for critics
of the campaign finance system. Henry
Stern, the former Parks commissioner
and civic observer, speaks of "sham
elections" in which incumbents "took
thousands of dollars for elections that
weren't real challenges."
After recent changes in the law, can-
didates who face poorly funded oppo-
sition will have to convince the CFB
that they need matching funds. It's
unclear whether this will diminish the
problem. Says CFB executive director
Loprest, ''We'll have to see how it will
work in 2009."
Loprest isn't fazed by the poor show-
ing of insurgent candidates under pub-
lic financing. "I don't think that it is a
purpose of the program to throw in-
cumbents out of office," she says. "In-
cumbency really is the single greatest
predictor of electoral success."
And winning-or losing-isn't ev-
erything, says Loprest's predecessor,
Nicole Gordon, now a vice president at
the JEHT Foundation, a public policy ad-
vocacy organization. 'The importance of
the program is much deeper than that It
2005 Public Advocate candidate Andrew Rasiej's Wi-Fi plan. Photo: JM
means incumbents always have to wor-
ry about having a meaningful opponent,
which means that incumbents have to
worry about their constituents and not
just donors. The power of our system
is that [an incumbent) can always be
turned out," Gordon says. "And I think
that that specter, that factor out there, is
the single most important thing about
public funds. It's not just about having a
competitive election. It's about knowing
that a real challenger could emerge."
Of course, if incumbents never lose,
the threat of a real challenge might
not have as much bite. In all 2005 elec-
tions, incumbents averaged 80 percent
of the vote.
But Loprest is right: The campaign
finance act wasn't meant to legislate
defeat for officeholders. It's not an af-
firmative action program for insurgent
candidates. And in fact, many candi-
dates credit the CFB with allowing
them to make a run for office, like Mar-
ty Markowitz, who beat better-funded
or machine-backed candidates in the
2001 race for Brooklyn borough presi-
dent, and Virginia Fields, the former
councilwoman and Manhattan borough
president, who has often attributed
her success to the campaign finance
system. "I feel like someone who has
grown up with the campaign finance
program," she said after the 2001 elec-
tions, "and without it I know that my
ability to have the necessary funds to
have run for City Council two terms
and borough president now two terms
would have been greatly impacted. And
a lot of that is still due to small donors,
people who feel that they have an op-
portunity to participate. When you tell
a person, 'Give me $20,' that becomes
$20 times four, so that has made a sig-
nificant difference in terms of people
wanting to give."
This spring, however, Fields filed suit
against the CFB over $180,000 that the
board says she owes it from her 2005
run for mayor.
v. Following the money
Danny King lost his 2005 race for City
Council, ending up with about 9 per-
cent of the vote in a 10-candidate field
for an open seat in Brooklyn. One day
this past August, King and his wife,
Gwendolyn, took their seats in a hear-
ing room at 40 Rector Street. They
were about to lose again.
The Kings stood accused of 10 viola-
tions of the campaign finance act, includ-
ing "failing to report an in-kind contribu-
tion," "maintaining a petty cash fund
greater than $500" and, more seriously,
"making $20,000 in non-campaign-re-
lated expenditures" and "falsification of
contribution documentation." CFB au-
ditors found that 58 of the contribution
documents that Kings submitted had
been "altered with WiteOut" and that
six people named on those cards claim
"they didn't contribute or didn't contrib-
ute the amount stated."
King, a retired police officer and a
community activist, blamed some of his
campaign's missing invoices on a con-
sultant who, King claimed, "had a ner-
vous breakdown and ... cannot write any-
thing down." But King's main plea was
ignorance: ''We thought this basically
would be a mom-and-pop operation. It
was more complicated that that. What
FALL 2008 13
After being fined by the CFB in 1993 and losing his re-election bid, David Dinkins ousted the Campaign Finance Board's chairman, Rev. Joseph O'Hare.
Rudolph Giuliani reinstated O'Hare, then had his own dispute with the board. Photo: Gregory Mango
we found out after the campaign was you
need experts on this stuff." The board
fined King $14,600, for which he and his
wife are personally liable.
King's alleged infractions were more
serious than most, but the CFB fines a
substantial number of candidates. To
date, the CFB has fined at least 85 can-
didates a total of $382,130 for infractions
during the 2005 race. Levying fines has
always been part of the CFB's job, which
is to both distribute and protect taxpay-
er money. From the start, supporters
of public financing in the city sought to
shield the program against any scandals
that might erode public support "One
of the hallmarks of the strength of the
operation under Father O'Hare was that
every major candidate got fined," former
Mayor Koch said in February, referring
to the long-serving first chairman of the
CFB, former Fordham University presi-
dent Joseph O'Hare." Koch was hit with
a $35,000 penalty for infractions during
his failed 1989 re-election bid. In 1993,
after the CFB fined David Dinkins' cam-
14 FALL 2008
paign $320,000 for exceeding spending
limits during that year's primary, a lame-
duck Dinkins removed O'Hare from the
CFB. Rudolph Giuliani reinstated him.
But in 1997, in the midst of a hearing
during which the CFB was consider-
ing a fine of $220,000 against Giuliani's
own re-election campaign for accepting
illegal contributions, a new Giuliani-ap-
pointed member showed up to replace
a holdover from the Dinkins era who
was still on the board. The move was
seen as an attempt to defeat the fine.
O'Hare blocked the ploy, and the fine
was approved.
These actions all predated what was
arguably the most important change in
the campaign finance system's 20-year
history-the move in 1998 from a 1-to-1
match of donations up to $1,000 to a 4-to-
1 match of donations up to $250. 'There
began to be a sense that the level of
public financing wasn't really bringing
about the competition it was instituted
to bring about," recalls Laufer, the for-
mer counsel for the campaign finance
board. There was a push by outside ad-
vocates for a ballot measure to approve
clean elections, which would involve
almost total public financing. To resist
that, the City Council approved the
higher matching ratio.
This move had an impact on more
than a candidate's bank accounts. 'We
really got a very different program once
that match came in," says Laufer, who
now represents campaigns before the
board. In its early years, he says, the
CFB saw its primary mission as encour-
aging candidates to join the program.
The enforcement function grew up over
time-after incidents like 1993 public
advocate candidate Ron Reale's attempt
to obtain matching funds fraudulently-
but it was secondary. In 1998, when the
more lucrative match came in, however,
the risk of fraud increased. "I think the
dynamic of the process shifted to the
idea that vigorous enforcement became
the paramount issue."
The CFB maintains that getting
people into the process is still its top
concern. But Laufer's not the only one
who says that the board's enforcement
operation has become too onerous.
Peter Vallone Sr., the former speaker
who was instrumental in getting the
campaign finance law passed, is an-
other critic. "Now elected officials are
considered the enemy," he said in Feb-
ruary. "You can't find an elected official
who has something good to say about
the CFB. It was to stop corruption, not
technical violations." At least five sitting
members of the City Council have sued
the CFB at some point in their careers.
Tony Avella, the Queens councilman
and 2009 mayoral candidate, says the
CFB recently rejected documentation
for several $10 donations to Avella be-
cause each donor forgot to note that the
contribution was in cash. 'This is a little
ridiculous. 1 think it's a bureaucracy run
amok," Avella says. 'There's always crit-
icism in the media to crack down on ille-
gal contributions. They see the criticism
and go crazy. It doesn't eliminate the
abuse, but it does drive people crazy."
And that, Avella says, could turn
off potential candidates as much as
matching funds might lure them in.
Dan Quart, who ran and lost a race for
City Council in 2005, believes he had
enough money to compete in the race,
and credits the CFB with being fair.
But he says his background as a lawyer
helped him contend with the post-elec-
tion process. "1 was lucky. 1 was able to
do a lot of the work myself. There are
many candidates out there who aren't
attorneys. For the average candidates
it becomes very difficult and expensive
to go through this process," Quart says,
but adds, "No one forced me to enter
the system and take $82,500."
Consultant Hank Sheinkopf, who
feels the board's enforcement is gener-
ally reasonable, says the real problem
has been the length of time it takes the
board to close the books on a campaign.
The board didn't finish its audit of Mark
Green's 2001 mayoral campaign until
2006, slapping Green with a $21,000
fine in the middle of his candidacy for
statewide office. Fernando Ferrer is still
waiting to find out what he owes from
Rudolph Giuliani'. 2000 SeDate run. like many federal and state campaigns, at-
tracted donations from "maxed out" donors. Photo: Giuliani archives
When city officials seek
higher posts
For his triumphant 1997 re-election run,
Mayor Rudolph Giuliani collected the maxi-
mum individual contribution of $7,700 from
233 peoplHawyers, homemakers. develop-
ers, businesspeople and even Annette de la
Renta, wife of the famous fashion designer.
At least 140 of those maximum donors
(including de la Renta) later sent checks
to Giuliani's Senate campaign, which he
launched in 1998 before pulling out in mid-
2000. Many of these dual donors gave the
maximum $2,000 to Giuliani's federal fund,
so they maxed out under both systems.
It's not surprising that people who ad-
mired Giuliani as mayor wanted to see him
win another office. But to the extent that the
city's campaign finance laws are intended
to reduce the influence that large donors
can wield--especially with a politician who,
though seeking state or federal office, still
occupies a city seat-federal and state fund-
raising present a large, and probably irrepa-
rable, loophole.
While city officeholders have often shown
interest in higher posts-Mayor John Lindsay
ran for president in 1972 and Mayor Ed Koch
for governor in 1982-term limits encour-
aged more widespread office shopping. From
2005 into this election year. at least 10 City
Council members have sought or are seeking
seats in Congress or the state legislature.
A survey of campaign finance records shows
that Giuliani's 2000 run is not alone in seeing
crossover between federal and city contribu-
tors: Then-councilwoman Yvette Clarke and
current councilman David Yassky both had
dual donors during their race for Major Ow-
ens' congressional seat in 2006. Councilman
Michael McMahon, now running for Congress
from Staten Island, has also benefitted from
some crossover between his city and federal
Candidates for Congress. however. operate
under somewhat stricter contribution limits
than the city system sets-the maximum
federal donation per election is $2,300 (it's
been raised since 2000); a person could give
twice that amount if one donation was for a
primary race and another for the general elec-
tion. In New York City, Council campaigns can
now receive a maximum individual donation
of $2,750. Candidates for borough president
can accept up to $3,850 from one person, and
mayoral campaigns can take up to $4,950.
The limits for state office are much looser.
Assembly candidates can accept $7,600 per
person in combined primary and general elec-
tion funds; for the state senate, an individual
could cut checks totaling $15,500. Not all can-
didates are affected equally by this disparity.
When City Councilman Andrew Lanza was an
odds-on favorite to win election to a state Sen-
ate seat last year, he collected 51 donations
that would have been too large for him to
accept as a City Council candidate, including
$29,000 from a state Republican committee
and several individuals' donations exceeding
$8,000. Kendall Stewart. a councilman who
challenged an incumbent state senator in this
year's Democratic primary, collected only three
donations that would have been no-nos under
city rules. -JM
FALL 2008 15
Laurence Laufer went from helping to
draft the campaign finance law, to enforc-
ing it as the CFB's counsel, to representing
candidates in contentious hearings before the
board. Photo: JM
2005 (or is owed-some campaigns end
up receiving a final matching funds pay-
ment when the CFB discovers that a
candidate has been shorted. The 2001
mayoral campaign of Herman Badillo,
for one, received a payment of $357,000
toward campaign expenses in April
2002, seven months after he lost the Re-
publican primary).
It's unpleasant to have the possibility
of tens of thousands of dollars of fines
hanging over your head for several
years. But the passage of time causes
even more direct problems for enforce-
ment: It makes it harder for candidates
to prove their cases. Volunteer staffers
go back to their day jobs. Documents
get lost. Businesses close. People die.
Virginia Fields, whose lawsuit concerns
a CFB claim that she did not spend
her public funding properly and there-
fore must repay it, claims a computer
crashed. 'Two years after a campaign,
it's difficult to put records together.
Three weeks after a campaign, it's diffi-
cult to put records together," Sheinkopf
says. "Campaigns are entities that come
together for a single purpose, and then
they disband."
Supporters of the CFB see little the
16 FALL 2008
agency can do to ease the burden. "Any
campaign finance agency, if they're go-
ing to put some teeth into it, they're
probably going to be about as popular
as the Internal Revenue Service," says
Gene Russianoff. 'There's this tension
between people wanting to enter political
life and making sure public funds aren't
misspent. They can't just hand the mon-
ey over and hope for the best. It is a con-
troversial notion to use taxpayer funds."
Board staffers make no apologies for
being careful with the public's money.
"I know candidates bitch and moan
about enforcement," says Campolo, the
recently retired deputy director of the
CFB, "but let me tell you, that is your
tax money, and the staff and board take
that very seriously. "
Under new legislation, the CFB will
face time limits for the completion of
audits after the 2009 elections-14
months for City Council and borough
president races and 16 months for the
three citywide offices. The step is a
boon for candidates. But with so many
City Council members seeking re-elec-
tion or higher office, Campolo worries
that the Council has mandated a less
thorough review of its own campaigns.
'These are people who don't want
people looking at their finances, and
they're putting a time limit on it?" she
asks. 'That's outrageous."
VI. We interrupt this
election . . .
A number of candidates and political
professionals contacted by City Limits
said they did not wish to comment on
the record about the CFB's enforcement
practices because the agency might re-
taliate against them. Executive direc-
tor Loprest denies that the staff would
ever do so. One candidate who was not
reluctant to describe his experience was
Stephen Kaufman, a Democrat and for-
mer assemblyman from the East Bronx
who ran for City Council in 2005. 'The
board is a horrible creature that stifles
free speech and is the tail that wags the
dog of city government," he says. 'They
fucked me over."
People tend to have three kinds of
complaints about the CFB. One, as Val-
lone mentioned, is that it nitpicks. An-
other, pertaining to the audits, is that
it moves too slowly. But some critics
believe that where the board has gone
most dangerously wrong is when it
moves too soon-like in the heat of an
election, when the board runs the risk
of affecting the outcome at the polls.
Candidates who join the campaign
finance program must adhere to spend-
ing limits in exchange for matching
funds. In 2005, the limit for a candidate
for City Council was $150,000 for the
primary and another $150,000 for the
general election. Someone running
for mayor could spend $5.7 million on
the primary and that again on the gen-
eral. That spending limit included any
matching funds. But some costs were
exempt from those limits, including the
expense of circulating petitions to get
on the ballot.
CFB enforcement is particularly strict
when it comes to spending limits, be-
cause you can never unspend money.
When a campaign collects an illegal
contribution or falsifies a form, it can be
forced to return the money or pay a fine.
But if a campaign overspends, and by
doing so gains an edge at the ballot box,
that can't be corrected after the votes
are counted.
So exempt expenditures often posed
a problem: Were a campaign to disguise
costs for real campaigning as exempt, it
could violate the spending limit and gain
an advantage over other campaigns. On
three occasions in the past two elec-
tions, the CFB has accused campaigns
of doing just that.
In September 2001, just days before
the scheduled primary, the board invali-
dated about $296,000 that Alan Hevesi,
the comptroller who was running for
mayor, claimed in exempt expenditures.
The disallowed amount included costs
associated with literature that was hand-
ed out during Hevesi's petition drive,
when workers gather signatures to put
their candidate on the ballot. The ruling
theoretically limited what Hevesi could
spend in the stretch run. On Primary
Day, he placed fourth.
In 2005, just 12 days before that year's
primary, the CFB met to examine wheth-
er Kaufman had violated the spending
limit by claiming too many exempt ex-
penditures. like Hevesi, Kaufman had
his petition carriers hand out literature.
But Kaufman didn't claim the cost of
printing the literature as exempt, as
Hevesi had. Kaufman claimed only that
the petition-carriers wages were exempt.
It was unclear whether that issue had
been addressed in the Hevesi decision.
Pointing to the contracts Kaufman used
for his petition workers, which men-
tioned literature distribution as a work
duty during petitioning, the CFB decid-
ed that 50 percent of Kaufman's claimed
petitioning expenditures would actually
count against his spending limit.
That ruling posed a serious problem
for Gifford Miller's mayoral campaign.
Miller, then Council speaker, had
claimed some $1 million-far more
than his opponents-in exempt ex-
penses because he had collected a sub-
stantial number of petition signatures
for both the Democratic primary ballot
and his own third-party general-elec-
tion ballot line. His petition team had
also handed out literature. After the
Kaufman ruling, Miller asked the CFB
for guidance. The board sought public
comment, asking campaigns to weigh
in on the distribution of literature: "Is
it always, never, or sometimes exempt?
And, if the answer is sometimes, then
when and to what extent should it be
considered either exempt petitioning
or non-exempt campaigning?"
Some of Miller's rivals for the mayor-
alty jumped at the chance to highlight
what they saw as cheating by the speak-
er. Anthony Weiner's campaign submit-
ted comments that accused Miller of
using the petition drive to poll voters
would have put Miller in jeopardy of ma-
jor fines. The CFB also withheld the Mill-
er campaign's final payment of matching
funds. Even on the CFB board, there
was disagreement over whether its ac-
tions against Kaufman and Miller were
right. 'There is no rule or decision di-
rectly on point rendered by this board,"
CFB member Dale Christensen wrote in
a rare dissent. "Arguments to the con-
trary ... have the wholly unfair effect... of
changing the rules in midstream." In the
primary, Miller placed fourth. Kaufman
also lost.
Gifford Miller, seen with Bloomberg in 2002. The CFB's election eve actions against Miller
heightened concerns about the CFB acting in the heat of political battle. Photo:
and develop information on where to
target advertisements. Virginia Fields'
lawyers labeled some of Miller's peti-
tioning efforts "classic ... campaign ac-
tivity." But Fields' letter acknowledged
that there was no "bright-line rule" on
such expenditures,
It was a judgment call, and in the week
before the primary, the call went against
Miller. The board refused to accept all
Miller's petitioning expenditures as ex-
empt, but didn't say how much it would
allow. That forced his campaign to pull
some $800,000 in last-minute TV ads to
avoid violating the spending cap, which
This September, the CFB closed the
books on Miller's 2005 campaign, find-
ing that Miller had been $10,410 over
the $5.7 million spending limit. It fined
him $13,800.
Miller, who is a board member of City
Limits' parent organization, City Fu-
tures, declined to comment for this ar-
ticle. For his part, Kaufman says that the
board's withholding of $18,000 in match-
ing funds meant fewer poll workers and
last-minute mailings. He insists that his
complaint is not mere sour grapes and
that he does not regret his loss to James
Vacca. "I had no business being in that
FALL 2008 17

18 FALL 2008
race," Kaufman adds. "He's very competent."
Kaufman is now suing the CFB over the fine of $21,000 it
imposed in April .. Kaufman says the use of literature during
a petition drive was standard practice. ''What I did was some-
thing that if you didn't do you'd be guilty of political malprac-
tice," he says. Since Kaufman's audit was issued, the CFB has
sent letters to two other 2005 campaigns whose audits already
closed, saying that if the auditors had known that those can-
didates' petition carriers had distributed literature-the same
thing Kaufman's workers did-the board would have sought
to impose penalties. "It's more evidence of massive confusion
on the board's part," Laufer, the attorney for both Kaufman
and Miller, says of the letters. "It's an example of the risk of
error. When they make a ruling before the election, you can
just go into a death spiral. How intrusive do we want an agency
with this power to be before an election? What is the lesser of
two evils? What if the agency is wrong?"
New regulations have eliminated almost all exempt expendi-
tures, and spending limits have been raised to allow campaigns
to afford their petition drives-moves that the CFB hopes will
simplify compliance. It won't be clear until November whether
the change will obviate the need for the board to intervene on
the eve of the election.
VII. Paying their dues
While some candidates from the 2005 elections gripe about
how long it has taken the CFB to decide penalties, the CFB
itself is waiting-waiting for $322,621 in outstanding fines and
public funds repayments from 2001 City Council candidate
Ethel Chen, as well as $144,416 from Garth Marchant, who
also sought a Council seat that year. In 2003, Everly Brown
ran for the Council, lost the race and has $74,278 outstanding
to the CFB. Felipe Luciano's Council race racked up $73,530
in penalties in 2005, and he still owes them. The CFB has a
lien on former councilman Allan Jennings' house; he owes
There's little doubt that some candidates have tried to rip off
the system. Ron Reale went to jail for it. Sheldon Leffler, a re-
spected Queens city councilman who lost his race for borough
president in 2001, was convicted of it and subsequently dis-
barred. Ann English's 1991 Council campaign tried to count
her tenants' rent checks as donations; it was also prosecuted.
But Rev. Joseph Parkes, the current chair of the CFB, believes
that most violations are more negligent than nefarious. "Peo-
ple in the hustle and bustle of the campaign, they don't pay
attention, or usually it's their treasurer. There can be a tempta-
tion to make up invoices post/actum and so forth, " he says. But
he adds, ''We can say they didn't mean to do this or to defraud
us, but in point of fact they did, and we have to send a message
Thanks to term limits and public financing, more people are
running for city offices than were 20 years ago. But turnout is lower.
Photo: Isa Brito
FALL 2008 19
to future candidates."
The board sent a strong message to
City Councilman Miguel Martinez this
year, ruling that his 2001 campaign
owes $45,000 in fines and has to return
$129,000 in matching funds. The board
found that the campaign created re-
ceipts after the fact to account for expen-
ditures, but there was no accusation of
fraud. Martinez has sued over the mat-
ter, claiming that the campaign created
the receipts at the advice of CFB staff.
In late 2006, a state appeals court
ruled that candidates and campaign
treasurers who participate in the city's
too," Kaufman says. For Tony Avella, the
complexity of the campaign finance pro-
gram is a barrier to candidates, as well.
"In terms of enabling more independent
candidates to run for office, to do that
you should make the system easier," he
says, "and what they've done is actually
make it more complicated for indepen-
dent candidates to run."
Of course, governing the largest city
in America and overseeing a $59 billion
budget is fairly complex, too. It's fair to
wonder if the challenges of the campaign
finance system merely weed out people
who aren't suited for public office. And
Councilman Sheldon Leffler in 1988, when he opposed the campaign finance law as too
expensive. He was later convicted of defrauding the matching funds system, but maintained his
innocence. Photo: Gindy Reiman
campaign finance system can be held
personally liable for fines but not for the
repayment of public matching funds,
a blow to the CFB's enforcement ef-
forts. The 2007 update to the campaign
finance act strengthened personalliabil-
ity under the system-if a candidate's
campaign lacks documentation for its
spending, he and his treasurer are liable
for misspent public funds. That move is
designed to protect the public's money,
but the threat of personal financial ruin
might also discourage some potential
campaign workers. ''You'll never get a
treasurer, because they're on the hook
20 FALL 2008
CFB director Loprest notes that while
"some professional candidates run afoul
of the law," many grassroots campaigns
do not. "I think we try to provide as
much assistance as possible," she says.
That assistance begins with a manda-
tory training session at the CFB offices,
where candidates or treasurers are
briefed on the law and C-SMART, the
CFB-designed computer program that
allows campaigns to log contributions
and expenses in order to ease reporting
to the board. The sessions for 2009 are
already running. At one class in August,
a CFB staffer warned campaigns to
look carefully at the forms they submit
to the CFB. "Please read it, because it
contains the phrases 'Class A misde-
meanor,' 'Class E felony,' " he said. But
he also mentioned that C-SMART offers
campaigns a range of tools that have
nothing to do with campaign finance act
compliance-like generating thank-you
letters for donors and creating mailing
lists based on issues that donors have
indicated are most important to them.
Those extras are part of an effort to lure
candidates into the program and to per-
suade them to use C-SMART.
The bells and whistles don't make
complying with the program easy, how-
ever. Campaigns have to send copies of
their finance reports to the city Board of
Elections, which accepts them on paper,
and the state Board of Elections, which
takes only electronic files. If a business
donates, the campaign has to check
a state database to see if the firm is a
corporation, partnership or LLC-enti-
ties that are banned from contributing.
When returning money to a donor who
gave too much or is barred from giving,
a campaign has to use a certified or bank
check because the donor could fail to de-
posit it, leaving the bad contribution on
the candidate's books. Campaigns must
keep copies of all documents for six
years. A campaign can't coordinate with
outside groups on any spending they do
on its behalf; if the CFB suspects collu-
sion, the burden is on the campaign to
prove that there was none.
As the PowerPoint slides of dos and
don'ts fly by, one trainee shakes her
head. "It's tough," she mutters. "Bloom-
berg had the right idea."
VIII. The $150 million
When the city's Democratic establish-
ment-or at least those parts of it that
had supported their party's nominee-
crowded into a ballroom at the Waldorf-
Astoria Hotel on Election Night 2005, the
slogan of the hour was "Dignidad Con-
tra Dinero," or Dignity Against Money,
a reference to the fact that former Bronx
borough president Fernando Ferrerwas
In 2005, Fernando Ferrer was outspent eight-to-one by Mayor Bloomberg. Photo: DMI
wrapping up a campaign in which he
was outspent 8-to-l by the person whom
CFB literature often names only as "a
self-funded candidate," as in, "In each
of the past two mayoral elections, a self-
funded candidate with seemingly unlim-
ited resources has challenged the abil-
ity of New York City's ground-breaking
Campaign Finance Program to create a
level playing field for all candidates."
Early returns showed Ferrer losing
to Michael Bloomberg but getting 41
percent of the vote. His supporters
cheered, telling one another that by
avoiding a true landslide, Ferrer had
scored a moral victory. As the tally
continued, however, even that consola-
tion prize was beyond Ferrer's reach:
The mayor ended up prevailing by a
margin of 57 to 38 percent, a victory of
wipeout proportions.
In an April 2001 article in New York
Magazine that mentioned a possible
outlay of $30 million on his first may-
oral race, then-long-shot candidate
Bloomberg remarked, "At some point,
you start to look obscene." As that
2001 campaign wore on, the mayor's
press team knocked down reports that
he was spending as much as $35 mil-
lion. But in the end, he spent at least
$73 million. In 2005 as an incumbent
mayor, Bloomberg spent $84.6 million
to Ferrer's $10.5 million.
Bloomberg has said he ran outside
the campaign finance system in part
because the spending limits it imposed
made it impossible for an outsider to
make a credible run for citywide office.
He has also contended that it would
have been inappropriate for a man with
his resources to accept public matching
funds. "I have absolutely no intention
of brushing aside the city's campaign
finance reforms," he told CNN in 200l.
"For me, somebody that's as lucky as
I've been, to take city money that could
go for police and fire and education and
health and to spend it on trying to get a
better job would just be obscene."
Of course, many candidates-67
people in 2005-have opted not to par-
ticipate in the matching funds program
and still spent modest amounts. But the
mayor has also argued that the city's
campaign finance system doesn't do
enough to beat back special interest in-
fluence, saying in a 2004 speech that "the
fact of the matter is [the CFB 1 magnifies
it because if a special interest gives $250
to a candidate, the city comes along and
gives a match, another $1,000, so rather
than take away special interests, we've
empowered special interests in a way
that's probably not done in any other
place in the country."
But while he has steered clear of
the campaign finance system as a can-
didate, Bloomberg is no stranger to it
as a donor, having written checks for
at least $53,000 since 1989-a period
during which his company held several
small contracts with the city. Bloom-
berg sent $7,700 (the maximum city-
wide contribution before the law estab-
lished a lower ceiling) to Rudy Giuliani
in 1997 and cut checks to future rivals
Alan Hevesi, Peter Vallone and Mark
Green. Even after swearing off the CFB
in 2001, the mayor donated $3,850 to
Staten Island borough president James
Molinaro in 2005. And like those of any
other New Yorker, Bloomberg's con-
tributions were matched-to the tune
of $8,250 over the years. (Bloomberg
has also donated more than $300,000 to
federal candidates and committees, and
another $4 million to state campaigns
and committees.)
Those outlays, of course, are dwarfed
by what Bloomberg spent on his own
electoral ventures. Comparisons with
other campaigns underscore the scope
of Bloomberg's spending. In 2005, he
spent more merely on advertising than
the combined campaign spending of all
30 other candidates for mayor, comp-
troller or public advocate. The $12.7
million Bloomberg devoted that year
to developing his voter list-a roster
of people whom the campaign targets
with mail and phone calls-was more
than Ferrer's entire $10.6 million cam-
paign, and the mayor's spending on di-
rect mail swamped Virginia Fields' and
Anthony Weiner's combined spending.
Bloomberg paid $4.7 million in wages
and benefits, along with $923,000 in
rent, and his campaign's $359,000 food
bill surpassed the total spent by all but
one City Council campaign. Bloom-
berg's re-election outlay was greater
than the annual budget of seven city
agencies, including the Departments
of City Planning and Emergency Man-
agement as well as 30 other city offices,
FALL 2008 21
City Councilman AI Vann's 2005 re-elec-
tion bid didn't make much news, but it
was a real bargain-with Vann spend-
ing $30,107 overall and receiving 12,460
votes in the general election, he paid a
rock-bottom price of $2.42 per vote. Most
candidates had to spend a little more to
get voters to pull the lever, especially
recent mayoral hopefuls:
Mark Green
$30.22 per vote
Michael Bloomberg
$125.80 per vote
.................... ....... ................. ... ... ....
Fernando Ferrer
$23.50 per vote
Source: Campaign Finance Board. (Calculations
by City Limits.) Note: All amounts adjusted jor
inflation to 2008 dollars.
boards and commissions. It exceeded
the military budget of 50 countries.
The question, of course, is what differ-
ence all those dollars made. Ferrer had
problems besides a wealthy opponent,
from the furor over his nuanced (or vac-
illating, depending on whom you ask)
answer to a question about the police
shooting of Amadou Diallo, to a hostile
press corps; the New York Post actually
depicted him on its cover in a dunce
cap. Four years earlier, Mark Green
had troubles, too: His and Ferrer's bit-
ter runoff campaign divided the party
along racial lines and the September
11 attacks made Giuliani's endorse-
ment of Bloomberg priceless. "Despite
the money, without 9/11, Bloomberg
never would have won," argues Joseph
O'Hare, who was CFB chair at the time.
Indeed, Bloomberg's first victory was a
narrow, 2 percent win. Nicole Gordon,
the longtime CFB director, concurs.
"It may well be that it was a necessary
condition for Bloomberg to spend a
22 FALL 2008
large amount of money, but it was not a
sufficient condition," she says.
Gordon and others argue that despite
Bloomberg's resources, his publicly-fi-
nanced challengers had enough money
to run a credible campaign. "Mark Green,
with the help of public financing, spent
more money on his mayoral campaign in
2001 than any candidate in the history of
New York City, except for Bloomberg,"
Gordon says. Green benefited from a
bonus provision in the campaign finance
act that provided a higher rate of match-
ing funds and allowed higher spending
for a candidate whose opponent spends
a massive amount of money. She and
others argue that with $17.3 million on
hand, Green had enough money to get
his message out.
Green was, however, dialing for dol-
lars into the last days of that race, while
his opponent campaigned. Four years
later, even though the bonus provision
had been adjusted to be even more gen-
erous, Ferrer never raised enough mon-
ey to fully enjoy its benefits. To some
observers, the 2001 and 2005 races left
scars on the campaign finance system.
'The phenomenon of wealthy, self-
funded candidates opting out of the
public financing program represents
perhaps the greatest challenge that this
program has faced to date," Rachel Leon
of Common Cause, a government integ-
rity watchdog group, said in testimony
to the CFB in 2005. "In two consecutive
elections, the Campaign Finance Pro-
gram was seriously undermined."
No one blames the CFB for Bloom-
berg's spending. But the mayor's out-
lays "exposed the inherent weakness of
providing limited government resources
to enable fair competition," says Laufer.
What's more, "to the extent that there
had been a litmus test that editorial
boards applied to participation in public
financing, that's been exposed as hol-
low," Laufer says. "In the end, if you have
a process that's not seen by the public as
applying fairly across the board, it under-
mines people's faith in that process."
The New York Times editorial board,
for one, long had been a stalwart de-
fender of the campaign finance system.
Recalls Gene Russianoff: "In 1993, [City
Council president and mayoral candi-
date] Andy Stein pushed forward with
a campaign where he got these big con-
tributions and he got excoriated in the
press, and his campaign melted down."
In 2005, Bloomberg avoided that fate.
In its endorsement editorial, the Times
reduced the mayor's spending to a mul-
timillion-dollar caveat. Mentioning that
there was "one great flaw in his political
resume-his out-of-control campaign
spending," the Times nonetheless "en-
thusiastically" backed the mayor. News-
day, the Daily News, the Post and the Sun
all endorsed Bloomberg as well.
The Times' argument was that Bloom-
berg's competent performance out-
weighed the sin of his "obscene" spend-
ing. The question critics raise is whether
Bloomberg has paved the way for other
rich men-perhaps less competent,
maybe downright unqualified-to spend
their way into City Hall. Whether or not
money was the decisive factor in the 2001
or 2005 race, it was an important factor
and one with which the city's matching-
funds system never could have kept up.
Rich candidates do not always win.
Ronald Lauder spent $14 million but
did not make it to City Hall in 1989. Cal-
ifornia's Michael Huffington blew $28
million in a losing bid for a U.S. Senate
seat in 1994. Would-be presidents Steve
Forbes and Ross Perot spent their
own millions and came up short. Tom
Golisano is not New York's governor,
despite a $74 million attempt in 2002.
But these candidates typically have not
enjoyed the combined advantage of an
8-to-1 financial edge and incumbency,
which Bloomberg had in 2005. Huffing-
ton, for example, faced incumbent Di-
anne Feinstein and her own $15 million
war chest. As 2009 looms, one question
in New York is how much Bloomberg
might spend on his third run. Another
is whether a second deep-pocketed
candidate will emerge to try to succeed
Bloomberg. Supermarket tycoon John
Catsimatidis is the most likely to enter
the fray, and if he does, he'll probably
ape Bloomberg's two-pronged rationale
for election: that he'll bring hardheaded
Green Party Brooklyn borough president candidate Gloria Mattera's qualifying for matching funds
in 2005 was a milestone for third parties in the city. Photo:
business experience to the running of
the city and that because he is self-fi-
nanced, he cannot be bought.
The latter notion has skeptics. "I think
the last eight years show that special in-
terests have a variety of ways to influence
the political process other than cam-
paign contributions," Russianoff says.
The mayor certainly bucked the tide on
the smoking ban and congestion pric-
ing; a traditional politician might have
been cowed by campaign-contributing
bar owners or trucking companies. But
other Bloomberg policies, particularly
on some development issues, mirror
the decisions that some special inter-
ests would have hoped to encourage
with their campaign checks, Russianoff
says. "You could argue that Bloomberg's
unfettered, but he comes from an eco-
nomic class and a view of the city that
benefits a lot of the same people."
Bloomberg still depicts his first two
runs outside the campaign finance sys-
tem as part of a campaign against influ-
ence peddlers. When the CFB marked
its 20th birthday at the Fordham con-
ference in February, the mayor's office
sent an aide, Patrick Wehle, to read a
proclamation declaring it Campaign Fi-
nance Board Day. Wehle had worked at
the CFB before he joined the mayor's
stafi He summed up that shift with a ca-
nine metaphor: "You can say I went from
working for the watchdog to working for
the dog-a dog that respects the watch-
dog but prefers to take a bite out of spe-
cial interests in his own special way."
IX. Reform, take six
Even if wealthy candidates stay in their
boardrooms and away from the stump,
there's no shortage of ideas on how to
improve the campaign finance system as
it enters its sixth citywide election cycle.
Some candidates say that matching-fund
payments come too late-after the ballot
is set, which occurs late in the summer;
the CFB, however, is nervous about giv-
ing out money to campaigns that might
not make it onto the ballot. The thresh-
old to qualify for matching funds needs
to be lowered, says Tony Avella, in order
to give independent candidates a chance.
Maximum contributions ($4,950 for city-
wide campaigns, $3,850 for borough
president candidates and $2,750 for
Council races) are fairly high, meaning
big donors still wield enormous power
in the system. They could be reduced.
On the other hand, some say that the
spending limits imposed on candidates
who accept matching funds-pegged
at $322,000 for upcoming City Council
races-are too low. 'They don't give
you enough opportunity to mail and
do television," says veteran political
strategist Joseph Mercurio. Spending
limits pose a particular problem for a
candidate running from behind, lack-
ing name recognition; even if she could
raise more money, she wouldn't be able
to catch her opponent because they'll
both spend the same amount. "It doesn't
really level the playing field," says one
candidate. "It sort of freezes it." What's
more, the spending limits often ignore
differences from one race to the other.
A candidate for Brooklyn borough pres-
ident, with 1.3 billion voters to reach,
faces the same spending constraints as
a B.P. candidate on Staten Island, with
about 260,000 voters on the rolls.
The alternative view, articulated by
Sal Albanese, is that "you could spend
less." It's a fair question whether the
2005 race was worth the $65 million
that candidates other than Bloomberg
spent, with 23 percent of it going to
campaign consultants.
Worries about the city's spending
limits and the timing of payments seem
trivial compared with the problems in
New York state's campaign finance sys-
tem. A donor can give up to $37,800 to
a general-election candidate for state-
wide office. During the last election
FALL2008 23
In 2005's general elections, 14 can-
didates ran unopposed. But even in
"contested" races, truly competitive
battles were the exception. In most
of that year's primary and gen-
eral election contests, the winner
claimed more than 60 percent of
the vote-a landslide margin.
Source: Campaign Finance Board.
(Calculations by City Limits.)
A. 80-99 percent of the vote
B. 60-79 percent of the vote
C. Less than 60 percent of the vote
cycle, at least 1,000 donors gave more
than $10,000 to state candidates. To ad-
dress the massive loopholes in Albany,
advocates are lobbying for the state to
adopt a clean-money system, in which
candidates collect small amounts from
a threshold number of voters, then stop
raising private money altogether and
run their campaign using flat grants
from the state treasury.
In 1998, clean-money advocates tried
and failed to hold a referendum on
whether New York City should shift to
such a system. Clean-money rules are
now in place for some state offices in Ar-
izona, Connecticut, Maine, New Jersey
and North Carolina and for municipal
races in Albuquerque, New Mexico, and
Portland, Oregon.
"Around the country, as systems en-
act campaign finance reform, they're
moving away from New York City-style
systems to more of a clean-elections
approach," says Jessica Wisneski from
Citizen Action, a progressive advocacy
group pushing for the change. "Under
the New York system, or any matching-
funds system, you still have to raise a lot
of private money to get public matching
funds. You can still go out there and get a
large donation; they're just not matched."
24 FALL 2008
A candidate in New York City's system
is supposed to get about half her funds
from private donors. Clean money would
all but eliminate private donations; they
would serve only to qualify a candidate
for public money. Wisneski says the
clean money system that Citizen Action
has proposed for New York state would
cost up to $40 million annually for state-
wide races. If the state Senate changes
hands in November, clean money could
arrive at the state level. The question
would then be whether the city should
follow suit.
As attractive as clean money might
sound, it has its limitations. One is that
the private donations that people make
under the city's current system are be-
lieved to encourage people to volunteer
for campaigns; that "buy-in" could be
lost in a system with virtually no private
money. Another is that putting all candi-
dates on an equal financial footing could
invite fringe candidates, or people who
just want free money. "Not all things that
candidates spend their money on will be
acceptable to the taxpayers," says Nicole
Gordon, pointing to stories of candidates
who spent campaign cash on lap dances
and booze. Then there's the cost argu-
ment Are taxpayers going to want to the
full bill for campaigns?
And would such a change buy the
kind of elections the city wants? Glo-
ria Mattera, for one, isn't sure that the
financing apparatus is the only thing
wrong with the city's politics. A Green
Party member, Mattera had run for City
Council twice (in her 2001 campaign,
she wrestled with the CFB over whether
child care was a legitimate campaign ex-
pense) when she decided to campaign
for Brooklyn borough president in 2005.
She made qualifying for matching funds
a central goal of her candidacy, raised
$100,000, received twice that in public
funds and nabbed 7 percent of the vote
against popular incumbent Marty Mar-
kowitz. All were major achievements,
the latter particularly so since Mattera
did not have enough money to mail lit-
erature to the entire borough.
"I think money was a big, big factor,"
in the race, Mattera says. But there was
also the difficulty getting on the ballot
and the lack of any coverage by the main-
stream media. Needing 4,000 signatures
to get on the ballot, Mattera collected
7,000 through a completely volunteer ef-
fort. But it wasn't easy. "You have to give
candidates the ability to get on the ballot
and have access to the media. If you did,
I'm not sure money would play such a
big role."
The Democratic Party's dominance is
another obstacle to many candidates, and
is reflected in the dearth of competitive
November elections for many offices. In
2003, voters defeated a ballot initiative
backed by Bloomberg that would have
made city elections nonpartisan. The
party's hegemony, says Andrew Rasiej,
is symptomatic of a lack of public inter-
est. "More important than money are
the relationships within the Democratic
Party," he says. "To win in New York
City, you really have to get into that cul-
ture because that really is the grassroots
of the political system. The only people
who pay attention to it are the junkies,
the club members."
The CFB, however, doesn't have time
to worry about the broader political en-
vironment. As of July, 131 participants
had signed up for the 2009 races, com-
UFA president Steven Cassidy with Mayor Bloomberg in
2005. Photo:
Two decades of top donors
Since 1989, the Campaign Finance Board bas recorded more
than 816,000 transactions between donors and candidates.
Some donors consistently rank among the top givers. Here
is a look at some of the big players in the city's campaign
finance system and what they want out of city government:
1199 SEIU ., Health-care union claiming 300,000 members. The city's
No. 1 donor in 2005, 1199 has been among the top 10 donors in every
election since 1997. What it cares about: Health-care funding and
living-wage legislation. The tally: 232 donations to 100 candidates
totaling $508,071 . Most recent donation: $1,250 on July 11,2008 to
Councilman Vincent Gentile. Top recipient since 1989: Bronx borough
president and two-time mayoral candidate Femando Ferrer ($29,000)
United Federation ofTeachers ., With more than 200,000 active
and retired members. the UFT has ranked among the top 10 givers in five
of the seven cycles from 1989 through 2005. What it cares about:
Education funding and favorable contracts. The tally: 544 donations to
125 candidates totaling $457,693. Most recent donation: $250 to
councilman and public advocate candidate Eric Gioia on July 11, 2008.
Top recipient since 1989: Comptroller and 2001 mayoral candidate
Alan Hevesi ($18,500)
New York State Laborers' PAC., A statewide union of 40,000 peo-
ple who work in construction. The Laborers were the No.2 donor in 2001
and ranked fourth in 2005. What it cares about: Workplace safety and
prevailing wages. The tally: 289 donations to 115 candidates totaling
$415,150. Most recent donation: $1,000 to Councilman James Vacca
on July 3, 2008. Top recipient since 1989: Hevesi ($27,450)
Plumbers Local Union No.1" Representing plumbers and gasfitters
in the five boroughs. Local 1 topped all other donors in 2001 and was
near the top in 2003 and 2005. What it cares about: Building codes.
The tally: 273 donations to 99 candidates totaling $354,307. Most
recent donation: $1,000 to Gentile on July 10, 2008. Top recipient
since 1989: Hevesi ($19,650)
Leonard Litwin., The president of Glenwood Management. a build-
ing and parking garage operator, Utwin was among the top 10 donors
in 1989, 1993, 1997, 2001, 2003 and 2005. What he cares about:
Zoning exemptions and land use decisions. The tally: 276 donations to
104 candidates totaling $330,408. Most recent donation: $2,000 on
May 2, 2008 to Councilman David Weprin. Top recipient since 1989:
Mayor Rudolph Giuliani ($20,200)
District Council 37 ., Claiming 125,000 members in 56 locals,
D07 was the top giver in 1993 and has ranked highly in elections
since. What it cares about: City budget, jobs and contract terms.
The tally: 334 donations to 103 candidates totaling $292,265. Most
recent donation: $300 to Weprin on July 11, 2008. Top recipient
since 1989: Hevesi ($17,550)
Transport Workers Union., The union for subway and bus workers,
starved for money since a judge suspended its ability to automatically
deduct dues from members' paychecks, has shied away from giving since
its strike in late 2005. What it cares about: Transit issues and contract
terms. The tally: 283 donations to 107 candidates totaling $220,945.
Most recent donation: $ 1,000 to assemblyman and possible Council
candidate Herman Farrell on October 25, 2007. Top recipient since
1989: Ferrer ($26,550)
Uniformed Firefighters Association., The union for rank-and-file
firefighter'S endorsement is sought for not just the union's money, but
also its manpower for get-out-the-vote operations. What it cares
about: Contract terms. budget and work rules. The tally: 304 dona-
tions to 103 candidates totaling $213,264. Most recent donation:
$1,000 to Council candidate Elizabeth Crowley on May 23, 2008. Top
recipient since 1989: Giuliani ($17,200)
Real Estate Board of New York., The landlord lobbying group
was among the top 10 contributors in 1991 , 1993 and 1997, but has
made only a single donation since then. What it cares about: Taxa-
tion, zoning, landmarks and building code. The tally: 162 donations
to 57 candidates totaling $167,361 . Most recent donation: $500
to councilman and mayoral hopeful Tony Avella on January 2, 2007.
Top recipient since 1989: 1989 mayoral candidate Harrison Goldin
Melinda Katz ., The Queens councilwoman's campaign fund was
among the top 10 givers in 2003 and 2005 as she looked beyond easy
re-election to helping other Council candidates who might in tum sup-
port her for speaker. She was not successful. What she cared about:
Council leadership position. The tally: 94 donations to 46 candidates
totaling $119,165. Most recent donation: $1,000 to Manhattan Beep
hopeful Keith Wright on September 12, 2005. Top recipient since
1989: Speaker and mayoral candidate Gifford Miller ($7,565) -JM
FALL 2008 25
Major mayoral candidates ranked by
total spending, 1989-2005
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Michael Bloomberg ('05)
Michael Bloomberg ('01)
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Source: Campaign Finance Board. (Calculations by City Limits.) Note: inj/ation-<ldjusted to 2008 doUars.
pared with only 88 at this point in the
2001 cycle, when term limits cleared out
much of the City Council. Besides deal-
ing with the bumper crop of candidates,
the CFB will also have to enforce new
"doing business" rules on contributions
from people who have business deal-
ings with the city, and must complete
post-election audits under a tight time
frame. The agency, whose funding was
increased by 53 percent to $6.4 million
in the fiscal 2009 budget, is bulking up
on staff-from 67 employees to 89-to
prepare for the heavy workload ahead.
But there's some doubt whether the
"doing business" law as it stands now
will still be in place on Election Day.
From the earliest days of campaign fi-
nance reform in the city, there were con-
cerns about the reality or appearance of
corruption when contractors, vendors
and lobbyists donated to municipal cam-
paigns. When the campaign finance law
was passed in 1988, the hope was that
general contribution limits and full dis-
closure would address that "pay to play"
problem. But the worry continued. In
1998, city voters approved a Charter
revision that directed the CFB to draft
26 FALL 2008
rules addressing doing-business contri-
butions, but the technical difficulties of
enforcing the law discouraged quick ac-
tion. In 2006, a CFB report found that 27
percent of all contributions in 2001 and
22 percent in 2005 were from people who
had business dealings with the city. Last
year, the City Council passed a law that
imposed a sharply lower limit on con-
tributions from those donors-instead
of a $4,950 maximum on donations to a
mayoral campaign, for example, a doing-
business contributor can only give $400,
and it is not matched. An online data-
base of contributors to whom the restric-
tions apply is being rolled out in stages;
already, according to the New York Sun,
there are 12,000 names on it
In February, conservative legal ac-
tivist James Bopp, who successfully
challenged campaign finance restric-
tions in Vermont two years ago, filed
a federal lawsuit alleging that the new
"doing business" law impinged on the
civil rights of minority candidates to
seek office because it choked off an
important stream of campaign funding.
That case, in which Councilman Leroy
Comrie is one plaintiff, will take months
to decide. But already, some supporters
of the campaign finance system have
raised doubts about having a separate
set of contribution rules for people who
do business with the city. "I don't think
it's a great thing when someone who
knows what's going on in government
isn't able to give as much as someone
else," Peter Vallone Sr. has said. Carole
Campolo is also skeptical. "I felt that was
way off the charts," she says. "Anyone
who does campaign finance knows that
doing business has nothing to do with
campaign finance." Nicole Gordon says
lower contribution limits across the
board might be an easier way to address
worries about pay-to-play.
Next year's race will be more reward-
ing for smaller donors as the matching
ratio shifts from 4-to-1 up to $250 to 6-to-
1 up to $175. When the votes are count-
ed, it's likely that the campaign finance
system will again be amended with an
eye to improvement But Walter McCaf-
frey, a former city councilman who voted
against the 1988 law and now works as a
lobbyist, doesn't think it will make much
. difference. "I didn't believe that it would
result in the type of significant changes
to the quality of government that the
advocates were clainling," McCaffrey
recalls of his stance 20 years ago. "I
think we've seen situations where peo-
ple come into a race thinking they can
generate the kind of money they need
through the campaign finance system
and learned it was a cruel hoax. Much
of their efforts go into fundraising and
compliance. Six-to-one. Eight-to-one. It
will be 10-to-1 next and won't come near
to solving the problem."
Whether McCaffrey is right or wrong
depends on what problem New York
City's campaign finance system is sup-
posed to solve-what exactly it means to
"level the playing field."
x. Early results
Gordon believes the campaign finance
law was intended to level the field for
small donors and draw more of them
into the system, and she feels it has suc-
ceeded: The number of small donors has
CFB executive director Amy Loprest says her agency is ready for the challenges of enforcing new laws under tighter deadlines in 2009. Photo: CFB
increased. (A case in point: Peter Val-
lone, Jr.'s recent fundraiser at the Bohe-
mian Hall and Beer Garden in Queens,
where a mere $250 qualified you as a
Sauerkraut Supporter.) CFB chairman
Joseph Parkes says the board is sup-
posed to keep the field level enough to
get more people to run for office, and in-
deed, more people are running-names
on the ballot increased from about 140 in
1985 to 211 in 2005.
Still others look to the voting public for
signs that the law has worked. laurence
Laufer, who helped author the 1988 law,
recalls that "combating corrosive citizen
cynicism" was a central goal back then,
and on that point progress is less clear.
Turnout for city elections has slipped,
from 1.8 million in 1989 to 1.4 million in
1997 to 1.3 million in 2005. Two-thirds of
registered voters did not cast a ballot for
mayor last time around.
In 1993, the CFB asked if elections
had become more competitive as a re-
sult of the law. Three elections later,
the same question is begged. At the
citywide level, among candidates who
participate in the system, matching
funds have indeed limited the financial
advantage of the better-funded: In both
2001 and 2005, matching funds brought
four Democratic primary rivals closer
to financial parity. But in both years, the
story changed when Bloomberg spent
tens of millions of his own money to win.
Still, says one former mayoral candidate
who asked not to be named and is highly
critical of the board, "I think we're better
offwith [the CFB] than without them."
School teachers and Little League
coaches aren't expected to run for
mayor, but they're supposed to be able
to try for City Council. Matching funds
have allowed an increasing number of
candidates to seek Council seats and
have helped reduce the fundraising
advantage that well-funded candidates
enjoy. But incumbents still enjoy near
certain re-election. And competitive
elections are hard to find: In most 2005
races, the winner took 75 percent of the
vote or better.
The campaign finance system seems
to have made insurgent candidates
more likely to run but no more likely
to win. So gauging the system's suc-
cess in leveling the playing field-and
fostering healthier, more responsive
politics-hinges on whether one thinks
a good election is one in which the un-
derdog has a real opportunity to prevail
or merely one in which he or she has a
chance to fight.
For some, however, the value of the
campaign finance system has little to do
with the way election contests play out.
There is, says past CFB chair Joseph
O'Hare, a more limited but vital role
that the CFB has played-through the
Voter Guide, the televised debates and
reporting on who donates how much to
which candidates--even as it has strived
toward a more ambitious goal.
"I think the stated purpose was to lev-
el the playing field to reduce the role of
money in the campaign. I'm not so sure
that we ever succeeded completely in
doing that," O'Hare says. "I was more
persuaded that what we had done was
provide a lot more information to the
voting public." •
FALL 2008 27