Schneiderman Unveils Disclosure Rule, Business Leaders Call on Senate to Pass Public Financing

At a discussion with business leaders and advocacy groups this morning, Attorney General Eric Schneiderman unveiled new regulations, effective today, to help end secret spending in New York State elections.

The event was sponsored by the Brennan Center for Justice and New York Leadership for Accountable Government (NY LEAD), a coalition of business, civic, and philanthropic leaders in favor of campaign finance reform.

These innovative new rules will require all non-profit organizations that engage in political spending in New York State elections to disclose their donors. This would mean 501(c)(4) groups, like those at the heart of the recent IRS controversy, will no longer be able to spend anonymously in state elections.

"There is only one reason to funnel political spending through a 501(c)(4), and that is to hide the identity of the donor. By shining a light on this dark corner of our political system, New York will serve as a model for other states, and for the federal government, to protect the integrity of nonprofits and our democracy," Attorney General Schneiderman said. "By requiring nonprofits to disclose the extent and nature of their electioneering activities, we are protecting prospective donors from misleading solicitations, and giving voters more information about who is behind many of the ads they will see in this year's elections, and elections to come."

Schneiderman's new policy builds on the work of Fair Elections for New York, a broad coalition pushing comprehensive campaign finance reform as a way to curb corruption and change Albany's "show me the money" culture. Both the Brennan Center and NY LEAD are key members of that coalition.

The Assembly passed a campaign finance reform bill in May, which included key elements such as small donor public financing, robust disclosure, and independent oversight. A version of that measure has been introduced in the Senate, and the Independent Democratic Conference (IDC) introduced its own bill. But the IDC says it will not bring reform to a floor vote over the objections of the Republican caucus.

"Attorney General Schneiderman's new disclosure policy offers a concrete solution to the explosive growth in secret non-profit political spending," said NY LEAD member David L. Calone, President & CEO of Long Island-based Jove Equity Partners. "This is the kind of effective leadership that is sorely lacking in Albany. It is time to move beyond the partisan gridlock and legislative inaction that has paralyzed Albany for far too long. The Independent Democratic leadership in the Senate must act now and pass campaign finance reform."

"I've seen firsthand how campaign finance reform, particularly small donor matching funds, has markedly improved New York City government. It will work statewide, too, but only if the IDC acts," said Brennan Center Chief Counsel Frederick A.O. "Fritz" Schwarz, Jr., former Corporation Counsel under Mayor Ed Koch. "Now is the time for real leadership. Now is the time for Senator Klein and his IDC colleagues to do what they promised to do when they took power: bring a reform bill to a vote. And now is the time for Governor Cuomo to pressure the Senate to get real reform done."

A 2012 poll from the Committee for Economic Development found New York business leaders overwhelmingly support campaign finance reform, including 72 percent in favor of small donor matching funds for state elections. A May 2013 poll found 74 percent of New Yorkers overall support comprehensive reform, including more than two-thirds of Republicans, Democrats, and independents.