The Price of Bloomberg's Big-Bucks Campaign Spending

Next week, when city candidates file their updated campaign finance reports, we'll learn if Mayor Michael Bloomberg's re-election effort is still on pace to spend a whopping $140 million on this year's race. In a few months, we'll see if that money matters in the November election.

But it might be years before we understand the full impact of Bloomberg's self-financed candidacies on the city's campaign finance system.

Twenty years ago, New York decided to try to reduce the influence of money on politics after a lopsided 1985 election and a slew of municipal scandals. The Campaign Finance Board was set up to track donations and spending, restrict who gave and how much and run a voluntary public financing program: Candidates who opted to abide by spending limits could get taxpayer money for their campaign. The idea was to offset the advantage of wealthy donors and well-heeled candidates.

While the system certainly has not totally leveled the playing field (the candidates with the most private money almost always win and incumbents almost never lose) it has helped New York avoid major money-in-politics scandals and has allowed hundreds of insurgent campaigns to mount more credible races.

Bloomberg has never participated in this system. In 2001, he spent $73 million to become mayor. In 2005, despite having the advantage of incumbency, he laid out $84.6 million getting re-elected. Through mid-May in the 2009 cycle, the mayor reported $18.6 million in spending—66 percent more than for the same period in 2005, and more than 10 times what his leading opponent, Comptroller William Thompson, had spent.

In defense of his spending, the mayor told a Working Families Party forum last week: "You can't buy an election. The public's much too smart for that. You can use it to get a message out."

Of course, the mayor has a lot of ways to get his message out. In the month of June alone, Bloomberg had more than 50 official, non-campaign public appearances of one kind or another, including four weekly radio messages, four call-in radio shows and press events with agency commissioners, a borough president, the governor, the Assembly speaker, the Council speaker, U.S. senators and representatives, district attorneys, labor leaders and even the UN Secretary-General. His press office was budgeted for 20 staffers and $1.7 million in funding in fiscal year 2009. According to the Nexis media database, Bloomberg had 555 media mentions in the past month.

That evidently was not enough to get the word out: By mid-May his campaign had already laid out $6.9 million on TV, radio, Internet and print advertisements.

That must be some message.

Plenty of rich guys have run for office and lost. Ron Lauder spent $14 million trying to become New York City's mayor in 1989, failing spectacularly. Tom Golisano wasted $93 million on three unsuccessful runs for governor. In 1994, Michael Huffington spent $28 million losing a U.S. Senate race in California. There's a school of thought that Bloomberg's wealth wasn't what mattered in 2001. "Despite the money, without 9-11, he wouldn't have won," is how former CFB chief Rev. Joseph O'Hare put it last year, referring to the power that Rudy Giuliani's endorsement of Bloomberg had in the race eight years ago.

That's a little like arguing over whether it's the spire or the 47th floor that makes the Empire State Building as tall as it is. Whether Bloomberg's money won the day or merely got him into the contest, he still isn't mayor without it. He's a famously shrewd businessman, right? ("There's nobody that understands the private sector, I think, more than I do," he's said.) He wouldn't have spent $175 million so far over the past eight years on his elections if he didn't think he needed to in order to win.

Whatever the impact of the mayor's spending on his own fortunes, the longer-term question is, what effect will it have on the system that tried to limit the importance of money in city politics?

There's no question that the mayor has blazed a path that other wealthy people might follow. Why else was supermarket mogul John Catsimatidis considered a serious candidate last year, before Bloomberg went for a third term? Why was Dick Parsons, the Time Warner chief, also touted as a possible runner? Because Bloomberg discovered that you could spend a lot of money, run a fusillade of ads, hire all the consultants you want, pay big bonuses and not face any backlash over it from the public or good government types. His defenders say that's because he's a great mayor. Campaign finance purists argue that's not the point. "For two elections in a row, the system's paramount goal of leveling the playing field to neutralize the advantage of big moneyed candidates has been destroyed," said election attorney John Siegal in testimony to the CFB after the 2005 race.

So far, the CFB system is holding up. The vast majority of candidates this year are participating. After all, it's hard to resist the lure of taxpayer-provided matching funds. But for candidates who join the public system, participating in the CFB program is not easy. There are a lot of rules to follow, and those who don't follow them to the letter are personally liable for fines, some of them substantial. More than one candidate has remarked on the irony of the CFB fining people for improperly accounting for a few thousand dollars when Bloomberg spends millions checked by far fewer rules.

Larry Laufer, a top election lawyer, told City Limits last fall that the problem with Bloomberg's spending is that, "if you have a process that's not seen by the public as applying fairly across the board, it undermines people's faith in that process." In other words, if the Bloomberg model catches on and more elites mount runs for office on their own dime, will the rabble still play by the rules?

As Rachel Leon, then of the government integrity watchdog group Common Cause, said in her post-2005 testimony to the CFB: "The phenomenon of wealthy, self-funded candidates opting out of the public financing program represents perhaps the greatest challenge that this program has faced to date."

Everyone thought we'd see in 2009 what campaign finance would look like after Mike Bloomberg. The extension of term limits has postponed that day—but it has only raised the stakes, by $18 million and counting.

Comments

[seanparnell]

Oh, one question, you say that "...for candidates who join the public system, participating in the CFB program is not easy. There are a lot of rules to follow, and those who don't follow them to the letter are personally liable for fines, some of them substantial. More than one candidate has remarked on the irony of the CFB fining people for improperly accounting for a few thousand dollars when Bloomberg spends millions unchecked by any rules."

Can you provide any links or citations? There's a federal "matching" program that's been proposed, billions of taxpayer dollars for politicians, that seems designed to benefit incumbents specifically through the rules. Knowing a little more about how the NYC program is tough to participate in would help me with some of the research I'm doing on this. Thanks.

Sean Parnell
President
Center for Competitive Politics
http://www.campaignfreedom.org

[BronxRobb]

Google the New York City Campaign Finance Board. I went to a training meeting early in its inception. It is not hard.

[seanparnell]

You've identified a lot of the problems with New York's system, I'd like to propose a solution. I call it the First Amendment Solution.

Lift all the caps. Let candidates raise all the money they can from whomever they can. Require public disclosure of truly large contributions, but not the rest (too easy to enable retribution against those backing the "wrong" candidates.

That's it. It significantly reduces the advantage self-funding candidates have (and cannot be constitutionally limited), and prevents incumbents from rigging the system to favor themselves. Challengers just need a handful of wealthy backers to compete, instead of having to scour the city for small contributions that might allow them, when combined, to spend a small fraction of what a self-funding candidate can.

Hopefully Obama will continue to ignore the demands of the so-called "reformers" who seem intent on putting the government in charge of all political speech, determining which perspectives can and cannot be heard. These laws are an obvious infringement on the First Amendment - what part of "Congress shall make no law..." is so hard to understand? Telling people how much they can spend, when and where, and what words they can and cannot use is not consistent with free political speech.

Sean Parnell
President
Center for Competitive Politics
http://www.campaignfreedom.org