Council Member Kallos (photo: William Alatriste/City Council)
A City Council committee is expected on Tuesday to pass a bill aimed at reducing the influence of large donors on New York City candidates and elections by creating the possibility for candidates to essentially raise all smaller donations and earn enough public matching funds to fully reach the spending limit imposed by the city’s campaign finance program. But the bill, which has recently been amended in a significant way, is stirring controversy as it heads to a vote, with accusations against Council Speaker Corey Johnson and Council Member Ben Kallos, the bill's lead sponsor, that they are playing political games.
If adopted, the bill would lift the cap on the amount of public money a campaign can receive as a percentage of the spending limits on candidates who choose to participate in the matching funds system, which is run by the city's Campaign Finance Board (CFB). If passed as expected on Tuesday by the Council’s governmental operations committee, the bill would then move to a Thursday vote of the full Council, where it would be overwhelmingly likely to pass.
The new amendment to the bill, however, poses a potential hiccup in the process. The legislation now requires any political candidate who opts into the new campaign finance system -- with its lower individual donation limits, more generous public matching of small donations, and the potentially higher match threshold that the bill would create -- to return any contributions over the new system's maximum received in 2018. The maximum has dropped from a $5,100 individual contribution to $2,000 for citywide candidates, meaning a $3,100 return on each maximum donation if a candidate decides to opt into the new system.
Comptroller Scott Stringer, a likely mayoral candidate along with Johnson and others, would particularly be impacted by the bill amendment, and his campaign is calling out Johnson and Kallos, as first reported by the Daily News. If Stringer wants to access the new matching system, which is optional for only the current 2021 election cycle, he would have to return many thousands of dollars in contributions he received last year as he built a significant war chest for the upcoming race.
"Speaker Johnson is trying to circumvent the will of the voters and change the rules to benefit himself," a Stringer spokesperson said in a statement. "The Council should reject his brazen power grab.”
With the vote scheduled for Tuesday's noon committee hearing, it appears unlikely the bill will be derailed.
Responding to Stringer's criticism, Jennifer Fermino, a spokesperson for Johnson said, “The changes were made at the strong urging of the CFB. Both because of fairness and administrative efficiency. That said, no contributions made in a prior election cycle will have to be returned. Any candidate who wants to keep their big money donations from the last cycle is free to do so and maintain their edge over the competition.”
If passed by the full Council, the bill would then be at the mercy of Mayor Bill de Blasio, who would be likely to approve it. If it becomes law, the new thresholds would alter the landscape for the already-underway 2021 city election cycle that is set to feature an estimated 500 candidates for a wide variety of city offices. Most current officeholders from the mayor through the borough presidents and City Council members are term-limited from seeking reelection. Many term-limited officials, including Stringer and Johnson, will be seeking election to higher office.
The city’s campaign finance system is among the most robust of its kind and is lauded as a model for regulating campaign spending while promoting competitive elections, regardless of the wealth of candidates. Its signature components include a voluntary public financing program that matches small-dollar contributions; spending limits and restrictions on expenditures for participants; and thorough disclosure requirements and auditing.
“This legislation expands the new campaign finance laws overwhelmingly adopted by 80% of the voters on November 6, 2018, from only matching 75% of contributions to matching all of them at 89.89% so that the voices of everyday working New Yorkers are amplified over that of big money and lobbyists,” Kallos said in an emailed statement to Gotham Gazette, referring to a successful ballot referendum that passed last year to increase matching funds and reduce individual donation limits.
The matching system encourages candidates to seek small-dollar contributions and, as a result, reach out to more constituents, rather than soliciting large contributions from the city’s wealthiest political donors who often have or want city business or favors.
Supporters say it reduces the risk of corruption and contributes to the diversity of candidates. Through a series of public referenda and legislation since it was established in 1988, the public match has been expanded along with limits on the types of contributions participating candidates can receive and the amounts they can spend. The most recent changes to the program came out of the referendum to revise the City Charter last November.
There is currently a cap on the amount of public funds a participant in the city’s program, administered by the Campaign Finance Board, can receive. Caps are set at a percentage of the total spending limit for the different offices, forcing candidates to rely on a mix of public and private dollars, which the CFB believes has important benefits. To the board, striking the right balance with sensitivity to the shifting demands of campaigning in New York is key to the program’s success.
“The Program remains strong because of our work with the Council over the years to ensure that it evolves to meet the challenges of an evolving political landscape,” said Amy Loprest, executive director of the CFB, before the City Council’s Committee on Governmental Operations when she testified on an earlier version of the bill in April.
Kallos’ bill is sponsored by 31 other Council members in the 51-seat chamber and Public Advocate Jumaane Williams. It would tip the balance toward a full match and would also codify into the city Campaign Finance Act relevant pieces of the ballot referendum approved by voters last year.
Supporters of a full public match argue the system still leaves the city’s rich and powerful with outsized influence, especially in citywide races where candidates rely more on large contributions than candidates for City Council do. “In a system where every small dollar is matched, big money, PAC money, and lobbyist money that is not matched is far less valuable,” reads a press release from Kallos’ office.
One concern from the CFB is that increasing the amount of public funds limits the ability of candidates to spend campaign dollars on non-qualified expenditures -- things like childcare, post-election spending, payments in cash, and attorney fees for defending nominating petitions, among others. After an election, candidates must return any unused public funds and have to pay back money used on expenditures if they cannot show they were qualified. (Kallos’ bill, Intro. 732, has been amended since the April hearing to allow expenditures on ballot petition defense to become a qualified use of public funds.)
Candidates also have to return funds if they lack serious opposition or “do not end up running serious campaigns,” according to Loprest. For the candidates with the fewest resources -- the campaigns the program is intended to best support -- these liabilities can be discouraging and ultimately crippling.
Last year’s referendum, placed on the ballot by the 2018 Charter Revision Commission, resulted in the creation of new program parameters including increasing the public match on qualifying smaller donations from 6-to-1 to 8-to-1 and raising the amount of funds available from 55 percent to 75 percent of the spending limit.
The public matching funds program now matches the first $250 of contributions at a ratio of 8:1, meaning an individual contribution of that amount could trigger a disbursement of $2,000 in public funds. It also reduced the amount an individual can contribute from $5,100 to $2,000 for citywide races, from $3,950 to $1,500 for borough president races, and $2,850 to $1,000 for City Council races.
Another change allowed public funds to be disbursed to candidates earlier in the campaign cycle.
For the 2021 elections, participating candidates will have the choice of opting into the new program, known as “Option A,” or sticking with the old rules, “Option B.” After 2021, the new system will become the only option. The choice was created to allow candidates who have already raised money under the old rules to stick with them.
The earlier disbursement of public funds can exacerbate the risks associated with unqualified expenditures for candidates who rely too heavily on them, according to Loprest. While making payments earlier in the election cycle allows candidates to be more competitive from the start and provides more time to deal with compliance issues, it can also lead them to spend more money that may need to be returned later, if they or their opponents drop out.
Kallos, a Democrat representing parts of the Upper East Side, was the prime sponsor of a law passed in 2016, which dealt with the risks of early disbursement by setting a limit on the payments made before the ballot is finalized. The 2018 charter commission also bars early payments to candidates who could not show they were opposed by a serious candidate.
The original version of Kallos’ bill removed that prohibition, raising concerns for the CFB. The new version being considered Tuesday includes a number of changes apparently aimed at addressing those concerns. Financial disclosures would have to be filed prior to early payment dates and candidates would be required to complete a certification of participation in advance of any payment date, Kallos told Gotham Gazette. Candidates receiving funds before the ballot petitioning period would have to be “actively campaigning” in order to make qualified expenditures.
“We were pleased to work with the Council in this most recent version of the legislation to address some of the concerns we raised in April,” Matt Sollars, a CFB spokesperson, told Gotham Gazette by email. Kallos echoed the sentiment, saying that the Council listens to “a lot of testimony” and changed the bill as a result of feedback from the CFB and other experts.
Most controversially and at the last minute, the new version of the bill also has language that would make the new rules for Option A -- both the 8-to-1 match and the lower contribution limits -- retroactive to apply to contributions received before the referendum changes went into effect on January 12, 2019. Candidates seeking to benefit from the new higher match would have to return any contributions above the new limits, even if received prior to the law changing.
For candidates running for citywide posts, that means $3,100 of every maximum contribution would have to be returned.
This could be especially challenging for candidates like Comptroller Scott Stringer, Bronx Borough President Ruben Diaz, Jr., and Brooklyn Borough President Eric Adams, all of whom have been raising money in planned campaigns for mayor. The fourth expected Democratic mayoral candidate at this point is City Council Speaker Corey Johnson, who began raising money for a mayoral run earlier this year with a number of self-imposed rules, including not taking any donations above $250. Johnson stands to benefit, comparatively speaking, from the amended version of Kallos’ bill that would make others return thousands of dollars if they opt into the new system.
The move that particularly stands to hurt Stringer and help Johnson, is being called a "power grab" and using of government position to impact a political campaign.
“If I need to pass a law to get people to do the right thing I'll do it,” Kallos told Gotham Gazette over the phone when asked about the amendment. “If they don't want to participate in the new system, there is nothing saying they have to,” he added.
The bill could also of course help Kallos and many of his other Council colleagues who may be seeking higher office like a borough presidency or the comptroller’s seat.
Kallos was also the author of a law passed this year that allowed candidates running in the February special election to replace former Public Advocate Letitia James to opt in to the new public matching parameters established in the referendum. For Loprest and the CFB, the election showcased the positive effects already unfolding from the increase in the partial match.
“Early data from that special election shows that this new iteration of the Program is working as intended,” she told the committee in April. “The most frequent contribution size across all candidates was just $10, compared to $100 in previous citywide races.”
For the bill on the table Tuesday, supporters in the Council are eager for the cap on public funds to be raised further. “We need these reforms now,” wrote Council Member Fernando Cabrera, a Democrat from the Bronx who chairs the governmental operations committee, in an email to Gotham Gazette.
***
by Ethan Geringer-Sameth, reporter, Gotham Gazette
@GeringerSameth @GothamGazette
Note: this article has been updated, and will continue to be updated as the situation around the bill changes.
Ben Max contributed to this story.
(photo: John McCarten/City Council)
Soon after Mayor Bill de Blasio stepped into office in 2014, he championed Vision Zero, a signature street safety program with the goal of reducing traffic-related fatalities from 297 in 2013 to zero by 2024. About halfway through that ten-year timeline, the program has become a significant de Blasio success, even as some advocates and lawmakers have said the administration could and should be moving ahead faster to protect pedestrians and bikers, and limit deference to cars.
Through increasing the number of protected bike lanes, reducing speed limits, redesigning intersections, increasing penalties for dangerous drivers, and other street safety improvements, the number of traffic fatalities fell to an all-time low of 202 last year. But the first half of this year has seen a dramatic spike.
Through June 2, the number of fatalities due to traffic crashes on city streets has risen to 82, a 26.2% increase over the same time period from the previous year, according to city statistics. Advocates and legislators alike are calling on the de Blasio administration to address the increase as an emergency and do much more to continue and accelerate the trend VIsion Zero had been following.
During a press conference last week, de Blasio said he would not stop until he had “done everything conceivable,” and that is why he “takes a Vision Zero approach.” Yet some view de Blasio as too timid in implementing key elements of Vision Zero. Last year, de Blasio’s administration built 21 miles of new bike lanes, a decrease from 25 in 2017.
“The frustrating thing in light of this epidemic of traffic violence is that under de Blasio, even though many of these tools have been implemented, they simply have not been implemented at the pace that the crisis and the epidemic requires,” Marco Conner, interim executive director of Transportation Alternatives, said during a recent appearance on the Max & Murphy podcast.
Transportation Alternatives is an advocacy group whose mission is “to reclaim New York City’s streets from the automobile and advocate for better bicycling, walking, and public transit for all New Yorkers.”
Conner would like to see a city less dependent on cars, he said, though he acknowledges car transportation will remain a key aspect of city transit and street use. It’s the degree that matters. His comments are in line with Speaker of the City Council Corey Johnson’s recently introduced legislation to mandate a “master plan for city streets” to help accomplish his goal to “break the car culture” in New York. Johnson’s plan would have the city create within five years at least 150 miles of protected bus lanes, at least 1,000 intersections with signal priority for buses, at least 250 miles of protected bicycle lanes, many more pedestrian plazas, and citywide upgrades to bus stops.
Others, including Conner and Transportation Alternatives, have called for narrower vehicle lanes and more pedestrian islands to decrease crossing distance and improve pedestrian safety.
“The extent to which our streets are saturated with cars and trucks is not something that we need,” Conner said. “And so the ideal New York City that I imagine is one where everyone in New York can get around without a car if they have to,” he said.
De Blasio has emphasized a lower speed limit and speed cameras and appeared less enthusiastic about increasing the number of bike lanes (and though he recently took more of an interest, he’s been especially slow to show much interest in speeding up the city’s buses). The mayor recently announced that the city will install speed cameras in all 750 of the city’s school zones by June 2020, the result of his and others’ advocacy and a new state law.
“The central problem still is motor vehicles. The central problem is changing behavior, getting people to actually slow down, getting people to actually follow the laws, stop at the stoplight, stop at the stop signs, yield to pedestrians,” de Blasio said on WNYC’s The Brian Lehrer Show on May 31.
Many of the city's existing bike lanes leave cyclists at high risk to nearby traffic, but some still blame cyclists for creating a traffic hazard. “We also have to overcome the victim-blaming that we see, and that’s something that we actually see in part with the mayor now, who has directed a crackdown against food delivery workers on e-bikes in this city,” Conner said.
Johnson’s proposal to create more protected bike lanes would be a “tremendous step forward,” Conner said.
City Council Member Ydanis Rodriguez, chair of the Council’s transportation committee, sees bike lanes as instrumental in decreasing the number of cars in the city.
“I think that our goal should be to reduce the number of New Yorkers who own vehicles, from 1.4 million car owners that we have today to 1 million by 2030. And by doing that, we have to continue building more protected bike lanes,” Rodriguez said on Max & Murphy. “And I feel that when we look at protected bike lanes and see how we’re building around 20 protected bike lanes last year, we could do better,” he said.
Rodriguez also noted the importance of improving public transportation in “transportation deserts. We need to create jobs besides the Midtown area, Long Island City, and Brooklyn, so that people, they don’t have to travel to go to work,” he said.
However, Rodriguez offered only vague answers to possible costs that would come as a result of the solutions being offered by legislators like Johnson and advocates like Conner. Asked about the reduction of free on-street parking that may come from an increase in bike lanes and other measures to “break the car culture,” Rodriguez said he was focusing on “how drivers are still driving over the speed limit, and how we can redesign our intersections and also how we can redesign our streets.”
Rodriguez’s own legislation, developed with Transportation Alternatives and others, known as the “Vision Zero Street Design Standard bill” just passed through the City Council, and is expected to become law. It mandates the city Department of Transportation “to develop a standard checklist of safety-enhancing street design elements that the department must consider for major transportation projects,” according to a press release from Rodriguez’s office, including things like ADA accessibility, protected bicycle lanes, dedicated unloading zones, narrow vehicle lanes, pedestrian safety islands, and more.
DOT will also “be required to post the standard checklist on its website for public access” and “to complete a checklist stating which street design elements were applied and justify which elements were not applied.”
During the interview, Rodriguez also offered an ambiguous answer about what to do with the city’s taxi medallion crisis, though he acknowledged that the city had failed those to whom the city marketed medallions and pledged a proposal is in the works.
“I think that we need to put together a team of individuals that brings recommendations on how to reorganize the TLC industry and how to be helpful to all sectors that interact with the Taxi & Limousine Commission,” Rodriguez said. He said that he is working with Speaker Johnson and others on a plan, but did not provide specifics.
[LISTEN: Max & Murphy Podcast: Is Vision Zero Stalled?]
***
by Noah Berman
@GothamGazette
Ben Max contributed to this story.
Ruben Diaz Jr., third from the right (photo: Office of Ruben Diaz Jr. )
Just as development has defined the Bronx borough presidency of Ruben Diaz Jr., money from the real estate industry has buttressed his political career. Though he has faced virtually no competition in three campaigns for borough president, the real estate donations have flowed in, helping Diaz Jr. prepare for an already-simmering run for mayor.
Over the course of his three campaigns for Bronx borough president, 37.7% of donations to Diaz Jr.’s campaign accounts at the $1,000-level or higher come from individuals or groups associated with the real estate industry, according to an analysis by Gotham Gazette using data from the New York City Campaign Finance Board.
Diaz Jr. has touted his record of what he's deemed progressive development, releasing celebratory reports of new development in the Bronx each year. Many of the developers listed on these reports have also donated to Diaz Jr.’s campaigns.
“Campaign finance considerations have no influence on the work of the borough president and his office,” said Diaz Jr.’s spokesperson, John DeSio.
During his three borough president campaigns, contributions for the office were limited to as much as $3,850. The average contribution for his first campaign in 2009 was $581; that number jumped in subsequent campaigns to $943 in 2013 and $934 in 2017, according to the city Campaign Finance Board. It’s worth noting that Diaz Jr. has faced little competition in his borough president campaigns, but also that real estate interests are well-known for contributing widely and generously to politicians. Diaz Jr. came to the borough presidency from the state Assembly in a 2009 special election. He is all-but-certain to run for mayor in the upcoming city election cycle, with the all-important Democratic primary in June 2021.
As borough president, Diaz Jr. has few formal responsibilities, but one is to weigh in on significant land use matters, which often include zoning changes related to real estate development, including major residential or commercial projects. Diaz Jr. has prided himself on development that he says he’s significantly helped bring the Bronx over the past decade, including projects of all types, from affordable to luxury housing, a FreshDirect distribution center, and more.
Many of Diaz Jr.’s highest-dollar donors have consistently been from the real estate industry. In more recent campaigns, the number of donations he received, across industries, jumped from 307 in 2009 to 1,758 in 2013 and 1,846 in 2017, according to the city campaign finance board.
Diaz Jr. touts his pro-development stance as key to jumpstarting the Bronx economy, which has taken off in the past ten years coming out of the Great Recession that rocked the nation. Under his borough presidency, there’s been 96.8 million square feet of development in the borough, 65% of which has been for residential use, 18% for commercial use, and 17% for institutional use, according to his office’s most recent annual development report.
Land use is at the crux of the job of a borough president. Input into planning and zoning issues are important, though not binding. “They are in contact with a lot of developers, and a lot of developers are in contact with them for their support,” said Bob Kappstatter, a political and media consultant, and longtime former Bronx bureau chief for the New York Daily News.
Maddd Equities and Joy Construction are a powerful alliance behind much of the city’s development and major financiers of Diaz Jr.’s campaigns. Of donations of $1,000 or more across his three borough president campaigns, individuals affiliated with Maddd Equities and Joy Construction have given Diaz Jr. a total of $88,000. The Hudson Yards builders have worked on at least three major projects in the Bronx.
Few other groups have contributed sums in that range to Diaz Jr., and many who have donated much less to the borough president have developed more projects. Donations at the $1,000 or more level from Touria Weissman from the Jackson Development Group, for example, totaled $11,700 over the course of Diaz Jr.’s three campaigns, while the group has developed seven major projects in the Bronx.
Executives from the Stagg Group’s donations to Diaz Jr. at the $1,000 or more level total $10,700. They’ve developed two major projects. Adolfo Carrión Jr., the former Bronx borough president, is a consultant for the group.
Keith and Inga Rubenstein, the controversial developers from Somerset Partners who recently sold a development on the Harlem River Waterfront in Mott Haven to Brookfield, have donated a total of $9,100 to Diaz Jr.
And high-dollar contributions from Sabino and Martha Fogliano of JF Everlasting Contracting, the Bronx-based construction contractors, total $13,300.
Other groups have given Diaz Jr. little to nothing despite developing several major projects, including L+M Development Partners, an associate of which gave Diaz Jr. $1,000 in 2017, and Signature Urban Properties, which has developed a dozen major projects in the Bronx but is not affiliated with any of his high-dollar contributors.
Meanwhile, Diaz Jr.’s top two high-dollar individual donors are not directly affiliated with the development industry. Andrea Squitieri’s donations at $1,000 or above total $21,980, and Stephen Jerome’s contributions at that level total $13,800.
Jerome is president emeritus and chairman of the board of Monroe College, a Bronx-based university. Squitieri is married to Stephen Squitieri, of Sanitation Salvage––the now defunct garbage disposal group with dismal business practices that have led to some workers deaths, as reported by ProPublica in 2018, and eventually shut down by the city.
Diaz Jr. also receives considerable money from the healthcare and hospital industry, which is the biggest job creator in the borough, according to an economic report from state Comptroller Tom DiNapoli. Many of Diaz Jr.’s high-dollar donors are physicians or hospital executives.
Other contributions to Diaz Jr. span other industries housed in the Bronx. Many high-dollar donors are local business owners, from Bronx-based jewelers to restaurant owners.
Diaz Jr. has made no secret of his plans to run for mayor in 2021, and already has $767,476.50 stored in his war chest from 649 contributions, according to the city campaign finance board. So far, all patterns appear to be carrying over.
[READ: For Diaz Jr., A Booming Bronx and Plan to Run on Development]
***
by Savannah Jacobson
@srjacobson1
@GothamGazette
Note: this article has been corrected to reflect the correct total of donations to Diaz Jr.'s campaigns from those associated with Maddd Equities and Joy Construction: it is $88,000, not $1.86 million as originally stated.