Councilmembers Seek to Limit Corporate Money in City Elections

By Kristen Meriwether
Kristen Meriwether
Kristen Meriwether
August 28, 2013 Updated: August 29, 2013

NEW YORK—With the campaign season in high gear many New Yorkers are seeing a huge uptick in campaign mailers. Those on the receiving end of the glossy print ads often assume they come from the candidates themselves, but in some cases they are actually paid for by Super PACs.

With so much money being poured in from independent groups this election cycle, Council member Brad Lander wants to see changes so New Yorkers won’t need to wade through confusing messages next election season.

“Voters do not know where those [mailers] come from,” Lander said from the steps of City Hall Tuesday. “They are unable to therefore evaluate and understand what those claims are.”

Lander is seeking to bring more transparency to independent expenditures in hopes of keeping big money out of the races by limiting company contributions by LLCs to $5,000.

He suggests a three-pronged approach.

The Brooklyn-based council member wants to see the “LLC loophole” closed. Under current regulations, a company listed as an LLC can contribute up to $150,000—the same limit as an individual—rather than the $5,000 corporate limit set for other companies under the State Election Law. The majority of LLC companies are privately owned.

Lander’s law would require LLC’s to be treated as corporations at the city level.

Article Continues after the discussion. Vote and comment

[tok id=4cf5d7c18bc257630a76c705d531fb81 partner=1966]

The city’s campaign finance laws prevent LLC’s from directly contributing to campaigns, but the law does not prevent LLCs from contributing to PACs.

PACs choose to support or oppose candidates, typically via advertising campaigns paid for with independent expenditures (IE).

LLC Loophole

The LLC loophole has let a lot of real estate money into this year’s City Council elections, primarily from the Jobs for New York PAC, which is supported by the Real Estate Board of New York (REBNY).

This PAC raised over $6 million, mainly from large contributions ($50,000–$150,000), which have primarily come from developers looking to support candidates with favorable policies.

In Council District 1, Jobs for NY has spent $122,327 on incumbent Margaret Chin, according to an Aug. 9 filing with the Campaign Finance Board (CFB).

Additionally, Chin’s campaign spent $75,025.

By comparison, Chin’s opponent, Jenifer Rajkumar’s campaign has spent $56,676. Rajkumar does not have PAC support.

For Chin, the PAC support came without consent from the candidate, who has rallied against IEs for several years, and supports Lander’s legislation.

“The problem with independent expenditures is there is not much we can do about it,” Chin said by phone Tuesday.

City Council members are limited to spending $168,000 per primary election, and with large influxes of cash from outside resources, the PAC money has the power to change the outcome of the race.

Chin, who calls herself a model of the city’s campaign finance system, said 82 percent of her donors were small contributors from inside the city. She worries the added monetary support could backfire on her campaign.

“One of the things that bothers me is I have a very strong track record,” Chin said. “In some ways [IE] allows my opponent to destroy my record.”

Phil Singer, spokesman for Jobs for NY, said the organization is complying with all the campaign finance laws.

“Considering that much of what Mr. Lander is proposing does not appear to be legal—based on what the Campaign Finance Board itself has said—it is clear that this proposal is a political document that has no chance of withstanding legal scrutiny,” Singer said in an emailed statement.

Written Notice

In addition to closing the LLC loophole, Lander wants to see all mailers identify the top five donors and the political committee so voters will know who is behind the money supporting the candidates.

Chin agrees the change would help voters to differentiate welcomed support from unsolicited support.

“For me, it is very frustrating when I have to explain to people those are not my literature and I have no control over what they do,” Chin said.

REBNY, and Jobs for New York for that matter, are protected by the landmark 2010 Citizens United Supreme Court ruling, which allows for outside spending. Lander said he is not looking to take on the “law of the land” but bring more transparency.

While Lander singled out Jobs for New York during the press conference, he said his law would apply to all groups and for all campaigns.

Lander expects the law to be officially introduced later this year.

Kristen Meriwether
Kristen Meriwether