Common Cause/NY Unveils Explosive Analysis of Housekeeping Accounts, "The Life of the Party 2013"

ALBANY, NY (05/21/2013)(readMedia)-- Common Cause/NY today unveiled an in-depth analysis of soft money giving to housekeeping accounts in New York State. New York Election Law establishes numerous limitations on campaign contributions which political candidates and parties may receive. No individual may give more than $150,000 in the aggregate in any single year, and no corporation may give more than $5,000 in a single year. Political party committees may accept no more than $102,300 from an individual and $5,000 from a corporation. However, housekeeping accounts represent a much exploited loophole in the campaign finance law which allows any corporation, individual, union, or other interest to circumvent campaign contribution limits and give unlimited sums of cash, aka, "soft money".

Soft money is not supposed to be used to support candidates and their campaigns but that provision is routinely ignored. Common Cause/NY's new report, "The Life of the Party: Hard Facts on Soft Money "Housekeeping" Accounts in New York State", is an in depth analysis of the practice over the last 7 years.

"Housekeeping accounts are a notorious loophole which both contributors and committees exploit to ignore our state's campaign contribution limits and undermine the voters. The system of legal bribery in which Albany operates is largely responsible for the wide scale corruption we've seen in recent months. In order to change the culture of corruption which puts democracy up for auction, we need wholesale campaign finance reform, built around a system of small dollar matching funds, to hold elected accountable to their constituents. As long as big dollar donors wield disproportionate influence over our politics, we will never truly have a government for and by the people," said Susan Lerner, Executive Director of Common Cause/NY.

"New York's scandalously large contribution limits give the wealthiest donors outsized influence on the state's decision makers. Common Cause's analysis of housekeeping accounts shows that even these sky-high limits can be circumvented with the result that the corrosive effect of special-interest money on the state's democracy is amplified," added Bill Mahoney, Research Coordinator for NYPIRG.

Donors

From 1999-2005, donors gave a total of $46.7 million to the soft money committees of the state parties and the state legislature. This figure does not include county and local contributions because the state did not begin tracking them until 2006. From 2006-2012, contributions to the state parties and state legislature increased by 24% to $58 million, however, including county and local contributions, the total soft money dollar amount spikes to $87.1 million for the second seven year period alone. That brings the grand total soft money contributions from 1999-2012 to $133.8 million.

By far the largest category of soft money donors is business, which accounts for $45.4 million (52%) of all soft money contributions from 2006-2012. Individuals comprise the next largest category of donors at $23.3 million (27%). Soft money donations from political committees account for $9.4 million (11%) while labor unions come in a distant fourth at $7.7 million (9%).

• Hedge fund executive Robert Mercer and Mayor Michael Bloomberg wrote the largest single soft money checks: $1 million from Mercer to the Conservative Party in 2010, and $1 million from Bloomberg to the Senate Republican Campaign Committee in 2012.
• 65% of soft money is raised through contributions of $10,000 or higher and over 34% of soft money is raised through contributions of $50,000 or higher.
• 132 donors gave $100,000 or more in aggregate, accounting for $54.7 million or 63% of all soft money contributions since 2006. Among these top donors, businesses and business associations dominate, accounting for 86 of the 132 donors.
• The top twenty donors include: Mayor Michael Bloomberg ($7.2 m), New York State United Teachers ($3.2m), the Greater New York Hospital Association ($3.0m), 1199/SEIU Healthcare Workers East ($2.0m), Cablevision ($1.6m), Verizon ($1.5m), the Pharmaceutical Research and Manufacturers of America ($1.4m), Time Warner Cable ($1.2m), Philip Morris ($1.2m) , the Healthcare Association of New York ($1.1m), Robert Mercer ($1.0m), the Rent Stabilization Association ($941k), Wal-Mart ($929k), the estate of Henry Sanders ($813k), the Red Apple Group and John Catsimatidis ($780k), Coca-Cola ($664k), the Law PAC of New York ($651k), AT&T ($624k), and Diageo Guinness ($566k).

Recipients

Senate Republicans are by far the largest beneficiaries of soft money, handily out-raising their Democratic counterparts in the Assembly nearly three times over. Although the Republican State organization used to be the leading recipient of soft money among party organizations, it is now outpaced by both the state Democratic and Conservative Parties. Another notable shift is the rise in the clout of the NYS Independence Party, which raised only $191,000 in soft money from 1999-2005, but jumped to $4.5 million from 2006-2012. Similarly, the Working Families Party raised only $481,000 from 1999-2005, but jumped to $2.0 million from 2006-2012. At the county level, Monroe Republicans lead the charge, followed by the four major county Democratic organizations in New York City.

• From 2006-2012, the State Legislature party committees were the top recipients of soft money contributions, accounting for a total of $33.8 million (39%).
• County parties across the state raised a total of $25.7 million (30%), state parties raised $24.1 million (28%), and local level parties raised $1.9 million (2%).
• The top ten committees took in a total of $64.3 million (74%) and include the NYS Senate Republican Campaign Committee ($19.9m), the NYS Democratic Committee ($7.0m), the NYS Democratic Assembly Campaign Committee ($7.0m), the Conservative Party NYS ($5.7m), the Democratic Senate Campaign Committee ($5.3m), the New York Republican State Committee ($4.9m), the Independence Party of NYS ($4.5m), the Monroe County Republican Committee ($4.4m), the Queens County Democratic Party ($3.5m), and the Kings County Democratic Party Committee ($2.1m)

Analysis

Without clear guidelines and consistent auditing, it is impossible to rely on accurate self-reporting of expenditures by the parties. The largest single category of soft money expenses is "Other" at a total of $37.3 million. Nearly $3.8 million in expenses have no purpose code or a purpose code not identified by the BOE. Less than 0.2% of expenses are itemized as "Voter Registration Materials or Services" which is often the type of expenditure used to defend the need for soft money

"Non-campaign" soft money housekeeping expenditures regularly peak in the months prior to an election, indicating that much of the spending is campaign related. The election season spikes in housekeeping expenses are correlated to sharp increases in spending on advertising and mass-mailings, as well as hiring of political consultants. The report details several particularly egregious abuses of soft money that have occurred in recent years.

Conclusion

With no limits to the size of donations or enforcement of "non-campaign" spending, soft money accounts have become an integral part of Albany's "show me the money" culture and an important contributor to the power of wealthy special interests at both the state and local levels of New York State government.

If Albany is serious about reform, it must rein in the parties' housekeeping accounts and empower small donors through enacting a Fair Elections system of public matching funds.

The complete report and powerpoint slideshow can be found at www.commoncause.org/ny/Hskpg2013