Empowering small donors: New York City's multiple match public financing as a model for a post-citizens united world.

AuthorLoprest, Amy

Introduction I. Background A. History of the New York City Campaign Finance Act B. Provisions of the New York City Campaign Finance Act II. Evolving Jurisprudence A. Supreme Court B. Judicial Challenges to the New York City Program III. Impact of Supreme Court holdings on Campaign Finance A. High Spending Candidates B. Independent Expenditures IV. Small Donor Democracy Conclusion Introduction

Recent Supreme Court holdings have opened the door to unprecedented levels of campaign spending by both candidates and third parties. (1) Independent spenders are unrestricted in the amount they spend in support of or in opposition to candidates. (2) Public financing systems are not permitted to provide additional financial assistance to publicly financed opponents of highspending, independently financed candidates. To avoid having the entire spectrum of political speech dominated by wealthy individuals and special interest groups, state and local governments must administer public financing programs that maximize the impact of small contributions while avoiding the type of "trigger" system that the Court has deemed an unjustified infringement on First Amendment rights. (3)

The New York City Campaign Finance Program (the "Program") seeks to achieve this end with its low-dollar multiple match system, which awards public funds at a six-to-one ratio for small contributions to participating candidates, who must adhere to an overall expenditure limit. (4) The multiple match element of the Program provides participants with the ability to challenge candidates who are heavily financed by their own personal funds and/or those of independent spenders. Because the spending of an opposing candidate does not trigger an award of additional matching funds, the Program is compliant with the parameters set forth by the Supreme Court.

This Article will address the evolution of the Court's jurisprudence on high spending candidates and outside actors; judicial challenges to the Program; New York City's experience with high spending candidates; the increasing prevalence of independent expenditures in federal and local elections; and how the City's low-dollar multiple match functions as an effective and constitutional offset to these candidates and outside spenders. The Article concludes that, despite the influx of money from independent spenders and wealthy self-funded candidates, low-dollar multiple match public financing systems can ensure that ordinary citizens have a voice in today's elections.

  1. Background

    1. History of the New York City Campaign Finance Act

      In the late 1980s, New York City government was racked by a series of scandals involving city officials soliciting favors from those seeking contracts with municipal government. (5) Several officials went to prison and Donald Manes, Queens Borough President and head of the borough's Democratic County Committee, committed suicide. (6) Gene Russianoff, an attorney for the New York Public Interest Research Group, stated that although the investigations did not actually involve campaign money, "there was a sense at the time that the scandals represented something broader ... it was a concern about the culture." (7)

      The Campaign Finance Act (the "Act"), proposed by then-Mayor Ed Koch, was passed by the New York City Council and signed into law on February 29, 1988. (8) Its stated purpose was to bring greater accountability to the political system. (9) On November 8, 1988, the public overwhelmingly approved a city Charter amendment establishing the independent and nonpartisan Campaign Finance Board (the "CFB" or "Board") as a Charter agency. (10) In passing the Act, the City Council found that:

      [B]oth the possibility of privilege and favoritism and the appearance of impropriety harm the effective functioning of government. The council further finds that whether or not the reliance of candidates on large private campaign contributions actually results in corruption or improper influence, it has a deleterious effect upon government in that it creates the appearance of such abuses and thereby gives rise to citizen apathy and cynicism. The council further finds that it is vitally important to democracy in the city of New York to ensure that citizens, regardless of their personal wealth, access to large contributions or other financial connections, are enabled and encouraged to compete effectively for public office by educating the voters as to their qualifications, positions and aspirations for the city. (11) The 1989 citywide elections were the first test of the Program. The CFB disbursed $4.5 million in public funds to thirty-six candidates. (12) The 1989 elections were also historic in that David Dinkins defeated three-term incumbent Koch in the Democratic primary, going on to become the city's first African-American mayor. (13) 1993 brought another citywide election in which a challenger, Rudolph Giuliani, unseated the incumbent mayor, making Giuliani the first Republican mayor in twenty years. (14) Voters also passed a referendum limiting all city office holders to two four-year terms. (15)

      The term limits first took effect during the 2001 citywide elections, also the first in which the Program employed a multiple match system for disbursing public funds. (16) In October 1998, the City Council passed an amendment to the Act providing that candidates could receive public matching funds at a rate of $4-to-$1 in exchange for agreeing not to accept contributions from corporations. (17) The following month, voters adopted a Charter amendment that prohibited candidates from accepting corporate contributions. The CFB had issued an advisory opinion stating that if the Charter amendment passed, all candidates would be eligible for the $4-to-$1 match. (18) The Giuliani administration disagreed with this interpretation and challenged it in court. (19) Before the court challenge was heard, the City Council amended the Act again, over Giuliani's veto, to confirm the $4-to-$1 match. (20)

      The combination of term limits and the new multiple match system made the 2001 elections the busiest in the CFB's history, with 353 participating candidates and over $41 million in public funds disbursed. (21) In addition, the terrorist attack on the World Trade Center on September 11, 2001 occurred on primary day. The primary election was postponed and the CFB's offices, located several blocks from the World Trade Center, were evacuated. The CFB continued to operate from temporary offices at Fordham University's Lincoln Center campus. (22) The 2001 election also saw the first time in the Board's history that a nonparticipant was elected mayor. Michael Bloomberg spent over $73 million on that election, which raised questions about the continued viability of the matching funds program. Mark Green, Bloomberg's opponent in the general election, received public funds and spent $16 million in total--more than any other mayoral candidate in history aside from Bloomberg himself. (23)

      In 2005, the Act's contribution limitations and prohibitions, as well as its disclosure requirements, were extended to all candidates for municipal office, regardless of whether they chose to participate in the voluntary public fund program. (24) In 2007, the matching rate was increased again to $6-to-$1, with a maximum match of $1,050 (or up to a contribution of $175). (25) That legislation also implemented strict contribution limits on those doing business with the city, in order to curb actual and perceived "pay-to-play" contributions. (26)

      One thing that has kept New York City's matching funds program relevant and effective--unlike the presidential public financing system--is that the Program has adapted to changing circumstances (the increase in the matching rate and the new limitations described above provide two examples). The Board is mandated to review how the Act worked in each election and make recommendations for changes. (27) As a result, the Act has been amended twenty-one times since it first passed. (28)

    2. Provisions of the New York City Campaign Finance Act

      The CFB is a nonpartisan, independent board comprised of five members. (29) The mayor appoints two of the members, not more than one of whom may be enrolled in any one political party. (30) Likewise, the speaker of the City Council appoints two members, not more than one of whom may be enrolled in any one political party. (31) The mayor appoints the chair in consultation with the Council speaker. (32) The Board has a tradition of independence that has served it well. (33) In addition to regulating campaign finance, the CFB oversees several different voter education initiatives. For example, the CFB long has published the voter guide, which is a pamphlet that contains profiles of municipal candidates and voter education material. (34) It is distributed to every household with a registered voter before both the primary and general elections. (35) The voter guide is currently printed in English and Spanish citywide and in Chinese and Korean in Brooklyn, Queens, and Manhattan, pursuant to the Voting Rights Act. (36) Additionally, since the 1997 elections, the CFB has sponsored debates among citywide candidates. (37) All citywide candidates participating in the public matching funds program must appear in the debates. (38) Since January 2011, the CFB has also assumed responsibility for citywide voter engagement initiatives in conjunction with its Voter Assistance Advisory Committee. (39)

      The Act covers five municipal offices: three citywide (mayor, public advocate, and comptroller); borough president, for each of the five boroughs; and City Council, for each of the fifty-one districts. (40) All candidates for those offices, even those who choose not to participate in the Program, must provide comprehensive disclosure to the CFB. (41) This disclosure is filed electronically and posted on the CFB's website in both searchable and summary form. (42)

      All candidates must...

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