Once Again, Be Careful What You Wish For

The NYC Campaign Finance Board (CFB) is strongly attacking proposed legislation just introduced in the City Council.  The bill (now Intro. 978) creates a limited exemption from the contribution definition for labor union, trade association, and corporate communications to a restricted class of recipients (members, executive and administrative personnel, and shareholders).  This dispute follows a recent CFB advisory opinion that broadly suggested that any communication between a candidate’s campaign and a spending entity could undermine the independence of an expenditure it makes in connection with that candidate, resulting in its treatment as an in-kind contribution. Rather than recount here the long history leading to the current kerfuffle, which even encompasses events prior to the 1988 enactment of the NYC Campaign Finance Act, let’s skip to 2010.  That year a Charter Revision Commission proposed an amendment to require public disclosure by individuals, companies, and labor unions making independent expenditures in NYC elections.  Those Charter changes were advocated by the CFB, in part as an aid to enforcing preexisting limitations on coordinated communications.  The amendment was adopted by the electorate.  The City Council had no formal participation in the Charter revision. The CFB issued implementing rules earlier this year.  Those rules did not pull back on the coverage of member organization communications to the extent advocated by Council Speaker Quinn, among many others. We also testified on the CFB rules as originally proposed.  We pointed out that the CFB’s acquisition of new powers could have unintended consequences.  That certainly appears to be the case.