Guest Blogger Series: Five Ideas for Campaign Finance Reform (IV)

The following is our final post from our Guest Blogger Series on Campaign Finance Reform in NY.  Heather C. Briccetti is the President & CEO of The Business Council of New York State, Inc. Elections determine elected officials, elected officials decide state budgets and legislation, and budgets and legislation can have a significant impact – good and bad - on private sector business.  So the business community is compelled to participate in the political, as well as legislative process. Given the wide range of legislative issues impacting the private sector – taxes, labor regulations, corporate governance, environmental and energy policy among others – it is fair to say that my organization has not developed a specific, comprehensive position on campaign finance reforms.  However, we have looked at, and responded to, a number of proposals before the New York State legislature, as well as a few at the federal level.  From that experience to date, I would like to share five personal thoughts on the private sector’s interest in campaign finance reform – informed by business input, but not (at least not yet) formal Business Council positions. Be Honest – Before acting on any campaign financing reform legislation, we need to have an honest discussion about what problems we are trying to fix, and whether proposed reforms actually implement a real fix.  Some reformers cite New York’s dysfunction and corruption, and say, “campaign finance reform” is the remedy.  True, New York has had more than its share of legislative corruption cases in recent years, but few if any were related to campaign contributions.  Most were cases involving long-standing legislators who were able to divert public money for private gain.  Proposals need to be subject to careful evaluation of both the direct and intended impacts, and unintended consequences, with a special focus on whether we making real improvements. Equal Treatment –Call me cynical, but we see a number of campaign finance reforms as deeply self-serving, including proposals that tilt the law to the advantage of organized labor and the disadvantage of business.   New York State campaign financing law is already lopsided, with corporations subject to a $5,000 annual limitation in total “hard” campaign contributions, whereas unions are subject to no such aggregate limits and are limited only by the individual candidate or committee’s limit which can be as high as $102,300.  Likewise, by statute, union dues – from which most of union PAC funds are derived – can be withheld from workers’ paychecks, but voluntary withholdings to support employee PACs are categorically prohibited (a prohibition we have not found in most other states.)   We have seen proposals before the New York State legislature that would prohibit businesses bidding on state contracts from making political contributions – but impose no comparable restrictions on labor unions that receive state grants, or negotiate collective bargaining agreements with the government.  Other proposals would mandate corporations to get majority shareholder approval of individual campaign contributions, an administrative hurdle we have not seen proposed for other types of organizations such as unions.  Any reforms – such as lower limits on contributions - should apply equal standards regardless of the source or form of financial or in-kind contributions. Election Reform versus Finance Reform – Changing the way in which campaigns are financed is not the only way to promote better elections, and in many districts, may have absolutely no real effect on the political process.  New York should consider ways to improve elections, not just the process by which they are financed.  Many “reformers” decry an insufficient number of competitive districts and competitive races.  However, in a number of districts in New York, enrollment heavily skewed to one party leaves many voters with no real say as to who runs for office.  New York should look to election reforms in other states for ideas that go beyond financing.  As example, under California’s Proposition 14, adopted in 2010, elected officials (except president and certain county positions) are decided by an open primary, and the top two vote-getters move on to the general election, regardless of party. Public Funding? – Most “reformers” support some form of public financing of elections.  The Business Council has not taken a formal position on public campaign funding in general, but we question whether it is the reform panacea that some suggest.  Since you can never fully divorce government from politics, the key details of any public financing legislation will be largely influenced by who holds political power at the time of its adoption.  In other words, any public financing plan will be shaped by politicians and – if the reform crowd has accurately described the impact of our current financing mechanisms – by the special interests that fund them.  Likewise, the impact of public financing laws like that adopted in New York City, with a 6 to 1 public funding match for certain contributions, is amplified by statutory authorizations for and restrictions on private contributions.  We need to make sure that public financing – if it is to be considered at all – isn’t designed to benefit one party or one set of interests over others. Do No Harm – We need to avoid imposing other harmful or misdirected mandates as part of any “reform” legislation. As example, several legislative proposals before the New York State legislature would use increased penalties under the Martin Act, the state’s notoriously open-ended securities fraud law, and use this new civil penalty income to fund public campaign expenditures. We have several real problems here. Due to its inappropriate, unfair standards, The Business Council opposes any expansion of the Martin Act, including an expansion of its financial penalties or settlement provisions, regardless of the use of funds. More broadly, we believe it is inappropriate to make the funding of governmental program dependent upon the level of enforcement income generated by the state. Civil and criminal penalties should be based on the nature and degree of a violation, and not influenced by a perverse incentive to meet budget needs. The views, opinions and positions expressed within this guest post are those of the author alone and do not represent those of Genova Burns.  This post has been published as provided by the author, without any substantive edits; Genova Burns makes no representations of any kind as to the content of this post.