Exploring the Potential Impact of Eliminating Matching Funds for Contributions Bundled by Those Who Do Business with NYC
As the City Council prepares to consider improvements to the Campaign Finance Program next week, campaign disclosures make a strong case for one of those changes.
The CFB’s 2013 Post-Election Report (PER) called for changes to “reduce the impact of bundling by people doing business with the city.” The City’s Campaign Finance Act strictly limits contributions from people who are identified as doing business with city government. Lobbyists, contractors, grantees, and others who do business with city government may give no more than $400 to a mayoral candidate, $320 to a borough president candidate, or $250 to a City Council candidate.
The law applies to executives at entities with these business relationships; candidates are barred from taking any contributions from corporations, LLC’s, or LLP’s. Yet those same individuals may bundle contributions to those same candidates, a loophole that undermines the law’s intent to prevent or limit the appearance of “pay-to-play” corruption.
Campaign disclosures reveal that some of the city’s top lobbyists and real estate developers routinely exploit this loophole. In 2013, contributions bundled by individuals in the city’s Doing Business Database accounted for 24 percent of the total collected by intermediaries. Of the ten intermediaries who raised the most campaign cash in 2013, six had business ties to the city.
As John Kaehny noted in the Daily News, the City cannot stop lobbyists and others who do business with the city from funneling contributions to the city, “the Council and the mayor can send an immediate signal that such corrosive behavior is unwanted.”
Council legislation (Int. 985) would eliminate public matching funds for contributions bundled by those insiders. As the CFB has long argued, this step will help limit the impact and decrease the potential for quid pro quo corruption that may arise from these contributions.
How would this legislation affect public matching funds payments? We can estimate what the potential impact on the 2013 elections would have been based on bundled contributions for which the campaigns sought matching funds.
In the 2013 elections, more than $1.2 million in public matching funds might not have been paid to campaigns if Int. 985 had been in place. This estimate of the potential impact is based on the more than $203,000 in contributions campaigns claimed for matching funds that were bundled by someone in the Doing Business Database.
The potential impact on matching funds payments so far in the 2017 elections? More than $176,000, based on more than $29,000 in contributions bundled by someone with government business for which campaigns are seeking matching funds.
Passing Int. 985 now would have a big impact on fundraising for the 2017 elections, even at this stage of the cycle. Compared to 2013, most of the bundling activity we expect to see in 2017 is yet to occur. The CFB calls on the Council to strengthen the City’s nationally-recognized “doing business” regulations.