July 6, 2016
The Campaign Finance Board today voted on two items related to organizations that work in close cooperation with candidates for city office. Following the vote, the Board issued the following statement:
“We have all seen a concerning increase in activity by organizations that face no limits on what they can raise and spend at the city and state level in recent years. The Board will not allow candidates to sidestep contribution and expenditure limits by outsourcing essential campaign activities to these coordinated organizations.
The advisory opinion we issued today provides guidance for candidates about when cooperating with these groups may violate the Campaign Finance Act.
We also issued a determination resolving the complaint by Common Cause New York as well as the Board’s own investigation regarding the activities of the Campaign for One New York.
To be clear, we are not talking today about independent expenditure committees. New York City’s disclosure requirements for independent expenditures are among the most comprehensive anywhere. Today we are talking about groups that are not independent of the candidates they support. In this case, the Campaign for One New York is very clearly not independent of Mr. de Blasio.
The organization was established by the mayor to support and promote his policy agenda. It is run by the mayor’s closest advisors and staffed by personnel and consultants that ran his campaign in 2013.
The issue for this Board was to decide whether expenditures of the Campaign for One New York were made in connection with Mr. de Blasio’s 2017 re-election campaign.
Under the name UPKNYC, the entity now known as the Campaign for One New York, paid for public communications to support the administration’s effort to establish universal pre-kindergarten, a proposal that required action by the state legislature in 2014. CFB staff analysis showed that the organization did not make expenditures for public communications after the pre-K campaign concluded in mid-2014.
Based on this analysis, the Board concludes that the public communications and related spending that occurred in 2014 were not related to the 2017 re-election campaign. This conclusion aligns with the guidance provided in the advisory opinion, which establishes factors for when such spending would be considered an in-kind contribution to a campaign.
One of the factors the Board will consider is whether the timing of such expenditures coincide with the candidate’s campaign. Expenditures after January 1 of an election year will be presumed to be related to a candidate’s campaign, while expenditures made before that date will generally not be considered as related to the candidate’s campaign unless substantial other factors are present.
However, since the beginning of 2015, the Campaign for One New York has raised and spent a considerable amount. Much of that spending has been directed to vendors that ran the 2013 campaign and have already received payments from the 2017 campaign.
To the extent that tangible goods, services, or work product from the Campaign for One New York may be made available to the 2017 campaign, the Board does not consider this matter closed. The Board conducts audit reviews of all campaigns, both before and after the election, to ensure compliance with the law. As a part of that process, the Board will continue to monitor whether goods and services provided to and paid for by the Campaign for One New York end up benefiting the 2017 campaign.
The fundraising conducted by the Campaign for One New York plainly raises serious policy and perception issues and illuminates the ways in which the jurisdiction of the Act is limited. More than 95 percent of the funds it received would have been prohibited under the laws that apply to candidates for office—including contributions from corporations, limited liability companies, and people doing business with the city. Most contributions exceeded the limit applicable to candidates, and at least a dozen were as large as $100,000.
New York City’s campaign finance system allows candidates to run for office without relying on big contributions from special interests. The system depends on reasonable contribution limits that reduce the appearance that influence can be bought or sold through campaign contributions. It defies common sense that limits that work so well during the campaign should be set aside once the candidate has assumed elected office.
The Board calls on the Council to pass legislation to close this loophole and amend the law to more closely regulate fundraising by elected officials and their agents for non-profit organizations, especially 5-01(c)(4) entities. In addition to placing clear limits on fundraising solicitations, any reform should include comprehensive public disclosure, and audits to ensure the disclosure is complete and accurate. The financial reporting we have seen to date does not meet this standard. The Campaign for One New York does not make its contributions or expenditures available for public viewing online. Press reports have identified at least one contributor who was left off of those reports.
The city’s landmark campaign finance program has thrived for nearly 30 years because it has been constantly renewed and fortified to meet the challenges of an evolving political environment. This Council has an opportunity to make its own mark to strengthen and improve ethical standards in New York City once again.”
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