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Published on May 9, 2017, by in Advocacy Day.

Background:

Jewish tradition has long recognized not only the importance of government, but also the positive role that governments can play in establishing a society of tzedek v’shalom, justice and peace. The growing influence of money in politics, though, makes achieving this goal more difficult, as it fosters a society where a person’s wealth can determine their political power. There is clear need for further reforms to campaign financing to ensure that citizens do not have their voices drowned out in determining who represents them.

Campaign finance reform is an issue across the United States. Altogether, in the 2016 election, $6.92 billion was spent, with $2.65 billion of the total attributed to the presidential race. This is a conservative estimate that includes only spending disclosed to the Federal Election Commission. The bottom line: money plays a major role in our electoral system.

New York State is not immune from the growing challenges posed by our campaign finance system. In 2016, state-level candidates in New York raised a total of nearly 65 million dollars. According to the League of Women Voters, one-third of all campaign contributions in 2011 came from only 127 major donors. These staggering numbers illustrate how heavy spending and the outsized influence of major donors can dilute the voices of average citizens.

Campaign finance reforms that will reduce opportunities for corruption and aim to give all citizens a voice in our political discourse include stricter financial disclosure requirements, donation limits and public campaign financing options. Disclosure requirements show which individuals are giving to candidates, and help regulators monitor compliance with the election law. Donation caps ensure that wealthy donors cannot give significantly more than average citizens. Public financing would limit the need for outside expenditures and the pressure candidates feel to raise campaign funds. While these proposals would not completely address the challenge of money in politics, they would each make a significant impact.

The LLC Loophole and Party Housekeeping Accounts:

One of the campaign finance law issues that was discussed during the Silver and Skelos trials was the LLC loophole. The loophole exists because Limited Liability Corporations do not necessarily function as standard corporations for tax purposes. In the 1990s, as LLCs proliferated across the country, both the Federal Elections Commission (FEC) and the New York State Board of Elections treated them like partnerships or individuals, with much less stringent requirements than corporations. Though the FEC has since updated its regulations, choosing to oversee LLCs that file with the IRS as corporations according to the same regulations as standard corporations, New York has yet to do so. This means that LLCs can give as much as $60,800 to a state candidate, whereas corporations can only give up to $5,000. Also, LLCs do not have to disclose their owners when they donate to campaigns. As a result, donors have set up many LLCs to evade both donation limits and disclosure requirements. As long as the LLC loophole remains open, donors with the means to do so can set up multiple LLCs to give much more than they could individually, and mask their identity while doing so. This opens the door to outsized electoral influence and corruption for a select few.

Legislative Update:

The New York Board of Elections is split 2-2 over closing the loophole, which means that the regulatory process on this issue is deadlocked. In his 2017-2018 Executive Budget, Governor Cuomo called upon the legislature to close the LLC loophole, implement campaign finance reform and public financing of campaigns, require financial disclosure by local elected officials, and require legislators to get an advisory opinion for outside income. The LLC Loophole was not included in the final enacted budget.

The Assembly and Senate passed a joint resolution in January 2017 requiring any member of the Legislature earning more than $5,000 income through outside employment to submit a written request for an advisory opinion to the Legislative Ethics Commission to ensure the employment is consistent with the NYS Public Officers Law.

Reform Jewish Values:

Deuteronomy 16:19 says, “You shall not judge unfairly: you shall know no partiality; you shall not take gifts, for gifts blind the eyes of the discerning and upset the pleas of the just.” The Talmud Tractate Kethuboth further notes, “What is the reason [for the prohibition against taking] a gift? Because as soon as a man receives a gift from another he becomes so well disposed towards him that he becomes like his own person, and no man sees himself in the wrong.”

Jewish tradition also stresses the need for public accountability in a system of governance. Rabbi Yitzhak taught, “A ruler is not to be appointed until the community is first consulted” (Babylonian Talmud Berachot 55a). Rabbi Yitzhak argued that in the Torah, Bezalel could be chosen to build the Tabernacle only with the community’s approval.  In a modern democracy, it is still necessary for elected officials to be accountable to all their constituents, and part of demonstrating accountability is full disclosure of those individuals, corporations and groups that a candidate or public official depends upon for financial support.

The Reform Movement has long called for campaign finance reform and other efforts to reduce the influence of money in politics. On the federal level, we were instrumental in leading religious support for the Bipartisan Campaign Reform Act (BCRA) of 2002.  The Movement has also supported “clean money” election initiatives on the state and national levels, and affirmed its support for BCRA. RJV has also been an active supporter of ethics and campaign finance reform, advocating for public financing in the past and submitting comments to the Moreland Commission on public corruption.

During this legislative session, State Senator Daniel Squadron and Assembly Member Brian P. Kavanagh introduced two pieces of legislation to address the growing concerns around campaign finance reform. S496/A1926 would close the LLC loophole by amending New York State election law to prevent limited liability companies from contributing more than $5,000 to campaigns each year. In addition, S4803/A2266 would reduce the amount contributors can donate to all campaigns for public office, making it harder for individuals to “buy” their way into an elected position.