Posted tagged ‘“pay to Play”’

We Need Public Financing Of Elections

April 17, 2012

Political campaigns are where power and cash meet. Politicians need lot’s of money to run for office. People seeking jobs or government business provide the money politicians need. The current campaign process truly is a “pay to play” system in that the best way to get a politicians attention is by donating money to their campaign.

Less than .5 percent (1/2 of a percent) of New York State residents contribute to political candidates. New York politicians can collect up to $60,800 per donor for a statewide race. That compares with about $5,000 per contributor for most other states. There are no limits on contributions to political parties.

Andrew Cuomo raised $24 million when running for Governor of New York State. Buffalo Mayor Byron Brown in campaign years has amassed a war chest of $1 million, in a city that is the third poorest in the nation with a shrinking population of 270,000. Those campaign dollars represent a lot of IOU’s that have to be addressed one way or another for a politician to continue receiving needed funds.

People donate money to political candidates with an expectation of getting something in return and they are usually not seeking good government. What is typically sought by campaign donors are jobs or government business contracts.

A lack of money prevents many people from seeking public office or from having their ideas heard in any meaningful way if they do run. Public financing is an important way to address the influence obtained by big political donors and the advantages afforded to incumbents.

In 1988 New York City adopted a partial public financing system, which currently provides participating candidates six dollars in public matching funds for each of the first $175 that an individual city resident gives to their campaigns. This formula makes a $175 donor as valuable to participating candidates as a $1,225 donor is to non-participants.

According to a report by the Campaign Finance Institute:

In New York State in 2010, only 6% of candidates’ money came from donors who give $250 or less. In contrast, 78% came from non-party-organizations (such as PACs) and individuals who gave $1,000 or more.

According to the Campaign Finance Institute, New York City’s public financing of campaigns has significantly encouraged more candidates, more small donors and more public interest in elections. A city candidate can get $6 in public money for every $1 raised, up to $175 per donor. As a result, 37 percent of the contributions to participating city candidates are for $250 or less. Only 5 percent of state donors give less than $250.

We need public financing of campaigns to encourage more competition and participation in elections.

Should Government Contractors Be Banned From Making Political Contributions?

February 6, 2012

Legislation banning government contractors from making political contributions to government officials often called “Pay to Play” exists in eleven states.  Three cities in New Jersey: Newark, Jersey City, and Hoboken also have enacted legislation prohibiting Pay to Play.

Companies and individuals that conduct business with cities and counties often provide the lion’s share of campaign contributions in local races. In many ways contractors making political contributions to elected officials looks and smells bad.  Campaign contributions should have no place in how government conducts its business on behalf of citizens. Allowing contractors seeking business from government promotes the perception that one must “pay to play”.

Common Cause Georgia is calling on the City of Atlanta to enact campaign finance reform aimed to limit the money a vendor can contribute to a political campaign. The proposal specifically caps contributions at $250 every four years, for those who have or seek a city contract. If a corporation exceeds the limit, they will forfeit any contracts they currently have, and/or their ability to compete for contracts the upcoming year. The City of Atlanta has not yet adopted the Common Cause proposal.
In Los Angles, legislation restricts contractors holding or seeking City contracts in excess of $100,000 from making campaign contributions to, or fundraising for, City officials (including the Mayor, the City Attorney, the Controller or a member of the City Council) or candidates to those offices.
In 1998 the New York City Charter Revisions Commission proposed, and the City’s voters passed by referendum, a Charter amendment that directed the Board to prohibit corporate contributions for all candidates participating in the city’s optional public financing election program.  In 2006, after several public hearings and studies, the New York City Campaign Finance Board recommended banning all organizational contributions (including corporations, partnerships, LLCs, PACs, and unions) and regulating contributions by individuals and entities doing business with the City
In 2007, the New York City Council passed Local Law 34, requiring disclosure of, and restricting contributions from, individuals and entities who have business dealings with the City. “Doing business” contributors are strictly limited in their contributions as compared to others: they may donate only approximately one twelfth as much to a candidate as those who are deemed not to be “doing business” with the City. Because the “doing business” contribution limits, unlike the regular limits, are not indexed for inflation, moreover, the disparity between these two sets of limits is only likely to increase over time. Individuals who are not “doing business” with the city can contribute $4,950 to a candidate for mayor and the “doing business” contributor, in contrast, is limited to a contribution of $400.
Interestingly Federal law has long included a prohibition on political contributions by federal government contractors.

Do you think contractors doing business with state and local governments should be banned from making political contributions.

Court Allows Economic Development Illusion To Continue

November 21, 2011

Buffalo lawyer James Ostrowski made a tremendous effort to end the insanity of politicians providing taxpayer dollars to corporations under the guise of creating jobs. Ostrowski’s lawsuit made it up to the Court of Appeals, the highest Court in New York State, where we all lost in a 5 to 2 decision.

The New York State Constitution clearly states:

“[t]he money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking;”

Despite this clear language politicians regularly funnel billions of tax dollars in grants and loans to private businesses. These same private businesses in turn provide significant campaign contributions to politicians in a process frequently referred to as “pay to play”. It is a well known fact that any private business looking for tax dollars to subsidize their efforts must play the game of making campaign contributions to politicians. The “pay to play” shell game costs taxpayers billions of dollars and in just about every instance the number of jobs promised at press conferences rarely matches the hype.

As pointed out in the Court opinion politicians desperate to show that they are doing something to create jobs are spending insane amounts of tax dollars to assist private businesses. For example:

  • $140 million in tax dollars is being used to support the construction of a wafer packaging facility and continued research and development efforts to a joint venture of which International Business Machines Corporation is a member.  This expenditure, it is said, will result in the creation of at least 675 jobs and the “retention” of 1400 others.  That works out to roughly $60,000 of State money per job.
  • $300 million in tax dollars is being utilized to help an “international consortium of semiconductor manufacturers” expand a research and development program.  This,we are told, will result in the creation of 450 jobs and the saving of 250 others: more than $400,000 per job.  And the brief of defendant Global Foundries, Inc. discloses that the Legislature has appropriated $650 million to subsidize that company’s semiconductor manufacturing (an appropriation distinct from the $300 million semiconductor subsidy described by the State).  Global Foundries says that its manufacturing facility “is expected to employ more than 1,500 people, with an additional 5,000 jobs created by supplier firms”– implying a cost to the State of roughly $100,000 per job.

The five Judges ruling against Ostrowski’s argument that the New York State Constitution is being violated based their decision on the following:

  • It is against the Constitution for government officials to give or loan tax dollars to private corporations. However, it is not unconstitutional for government officials to provide tax dollars to state created Authority’s such as the Empire State Development Corporation, the Buffalo Urban Renewal Agency and the Erie County Industrial Development Agency and for these agencies in turn to give or loan public dollars to private corporations.

The two dissenting Judges led by Eugene Pigott from Western New York stated:

  • In 1967, state voters rejected a proposed amendment to the state constitution that would have allowed the distribution of funds to private businesses for the purpose of economic development in the same manner the Empire State Development Corporation is distributing funds now.
  • “There seems to me no fundamental difference between the State directly giving monies to such private enterprises and the State creating a public corporation with the express intention of doing so”. “…the majority errs in holding that the Legislature may do indirectly, through a public corporation conduit, what the Constitution forbids it to do directly.” (Justice Pigott).
  • “It is an illusion — one that seems to have the persistence of original sin — that prosperity can be attained by taking money from taxpayers and handing it to favored businesses.” (Justice Smith)
  • “I seem to remember a time when IBM could make money by selling its products for more than it cost to produce them.  I would have thought semiconductor manufacturers could do the same. If they cannot, a bail-out for their shareholders is not a prudent use of more than a billion dollars in taxpayer funds.” (Justice Smith)

I agree completely with the opinions of Justice Pigott and Smith that the State Constitution is in fact being violated by funneling tax dollars to favored politically connected private corporations at the expense of everyone else. This constitutional violation creates a “pay to play” environment of corruption, which impacts the operation of government in many ways.

What do you think about this Court decision?