PROLOGUE
Now that Hoboken's highly contested mayoral race is over, we can see (1) how much special interest money flowed to which Hoboken candidates from (2) what kind of special interest group.
For an apples-to-apples study, we need ELEC reports from all campaigns. So far, only Bhalla and Romano have submitted 20-Day Post Election reports; DeFusco and Giattino's are late.
Until those are in, GA will stick to generalities. Let's look at 3 kinds of special interests which we know contributed to Hoboken candidates.
PAC money
Political Action Committees (PACs) usually represent business, labor or ideological interests, and their contributions are:
(1) subject to ELEC contribution limits and Hoboken's Pay-to-Play ordinance
(2) are filed on the recipient candidate or committee's ELEC reports.
All 4 'top-tier' campaigns took PAC money.
The Bhalla and Giattino campaigns upheld Hoboken's Pay to Play law and returned contributions in excess of P2P limits ($500 per candidate).
Note that ELEC contribution limits exceed Hoboken's Pay-to-Play limits.
527 money
527 PACS can spend unlimited amounts of money on a candidate or committee's election.
527s file their most complete set of reports with the Internal Revenue Service, not with the Federal Election Commission or NJ-ELEC.
The Center for Public Integrity defines the 527 as a non-profit organization formed under Section 527 of the Internal Revenue Code, which grants tax-exempt status to political committees at the national, state and local level. A 527 may be affiliated with a formal, incorporated organization or it may be as simple as a single person and a bank account. The important thing to remember is this: the 527 designation is a tax status."
The IRS requires that 527's have an EIN number, even if the 527 has no employees.
Mike DeFusco's 'late' donor NRCC Non-Partisan Political Education Committee appears to be a 527. It is a registered non-profit corporation with an EIN number, and affiliated with The Northeast Regional Council of Carpenters.
Unfortunately for DeFusco, the 527 donaton violates Hobokens anti-wheeling law, which covers 527 groups. Per Hoboken law, candidates can only accept $500 from any "committee" defined as:
"Any political committee, continuing political committee, political party committee, candidate committee, joint candidate committee or legislative leadership committee, as the terms are defined in N.J.S.A. 19:44A-1 et seq., and any PAC organized under § 527 of the Internal Revenue Code"
Oops!
Pursuant to a number of similar violations, Councilwoman Tiffanie Fisher filed a complaint against DeFusco for violating Hoboken's P2P law.
DeFUSCO $16.5K DONOR
(as of November 1, 2017)
Note, so far GA has only looked at this singular Team DeFusco contributor. When is he going to file his 20-day post election report so we can see...
How much more PAC money has flowed into DeFusco campaign coffers to violate Hoboken's Pay-to-Play law?
IE money
Independent Expenditure committees (IE's) or Super-PACs differ from PACs because they cannot donate directly to candidates.
IEs can spend an unlimited amount, independent of the candidates.
"without cooperating with, consulting with, or obtaining the prior consent of, the candidate, public question committee, or any persons or committees acting on their behalf. "
The IE, Stronger Foundations Inc, famously spent $70K in total on a poll, a television commercial and two mailers for the Bhalla Campaign.
This expenditure was done without consultation with the Bhalla campaign. (Thanks- NOT.)
Well, Stronger Foundations Inc has no ELEC filings prior to 2017.
Interestingly, the Union which funds Stronger Foundations is The International Union of Operating Engineers Local 825; Local 825 endorsed Dawn Zimmer's re-election in 2013. Back then, Roman Brice reported Local 825's mayoral endorsement without a hint of scaremongering about "NJ-Transit TOWERS." Moreover, Local 825's PAC gave Zimmer a legal contribution. Where were the howling "resistance" hyenas then?
RECAP FOR DUMMIES
GA has reviewed (3) vehicles used by at least one each of the 4 aforementioned Hoboken mayoral campaigns- for special interest contributions: PACs, 527s, and IEs. PACs are subject to ELEC contribution limits; 527s are not- both are subject to Hoboken's P2P contribution limits.
IEs are not subject to either, and legal per the U.S. Supreme Court's decision in FEC v Citizens United. No thank you!
IEs are not subject to either, and legal per the U.S. Supreme Court's decision in FEC v Citizens United. No thank you!
GA's TWO CENTS
I would like ALL 527 and IE expenditures to stay OUT of Hoboken elections- period.
PACs can stick to legal contribution limits.
GA can't wait for the DeFusco ELEC; Something tells me the Councilman will regret flapping his gums about Bhalla....
As for Bhalla, IMO the IE did him more harm than good. It handed his enemies a big stick in exchange for a crappy commercial and 2 flyers (comparing DeFusco with Cammarano). The optics were not great, though the media was done without consent.
A lesson for next time; candidates should notify endorsers not to spend IE or 527 money.
So peeps, stay tuned for the next installment of "Special Interest Money in Hoboken for Dummies..."
(Note: campaign finance law is very complex, GA is not a lawyer, hence the above is simplified-- for DUMMIES. Experts, dive in.)
(Note: campaign finance law is very complex, GA is not a lawyer, hence the above is simplified-- for DUMMIES. Experts, dive in.)
You just don't get it, do you?
ReplyDeleteAgain: The purpose of a blog is to establish that Unelectable is the anti-christ and you his followers are ALL propagandists.
Once more, with feeling: The purpose of a blog is to establish that Unelectable is the anti-christ and you his followers are ALL propagandists.
A blog engaged in any other activity whatsoever can be and should be characterized as Bonkers for Bhalla, singing the praises of Bhalla, obsessed with Bhalla, unable to think or speak about anything other than Bhalla.
But no matter how many times we repeat it to you, you FAIL to comprehend. This is why, in the interest of protecting only the right kind of Free Speech, you have been BANNED from commenting on both of our corporate websites and your link is not allowed to be seen there. Our website administrator said it best:
"I am letting my [as many as four] readers know that I put the qualified URL for GA website in the profanity filter because just about every thing on that website is either profane for the thinking person or pure propaganda and vitriol."
Your attempts to inform the reading public about such matters as:
- The actual campaign contribution laws vs the fun and exciting ones we made up
- ELEC reports
- VBM operations
- Our well-loved and not open for discussion Make Our Sidewalks Safe By Endangering Children resolution.
- The status of the transition
- The prospect of run-off elections....
are... EITHER PROFANE FOR THE THINKING PERSON OR PURE PROPAGANDA AND VITRIOL!!!
That is why you will not find A SINGLE WORD about any of the above on either our All the News That's Tiff to Print website or alt-right loonies-only website.
In other words, YOU are the woman that is hated by our He-man Woman Haters Club, including honorary He-men, Indie and forevertiff. Our as many as four readers could easily be corrupted by reading this article. Next thing you know, stirring thought-pieces like The Sign at Church Towers or our Hommage à Beth's Window Treatments will leave them cold and unmoved.
Take the case of Honorary He-man Indie. She mewls that Unelectable refuses to work with US and will only collaborate with the likes of Popeye Doyle (sp?) and Russo. This despite the fact that Unelectable has asked all candidates to lead transition teams and we turned him down. Because the purpose of a blog is most certainly not to inform but to...
establish that Unelectable is the anti-christ and you his followers are ALL propagandists
... no one will step in to correct our Honorary He-man. All is well, all are at peace, resentment flows like wine, unimpeded by fact, perspective, the passing of time or the corrupting influence of disagreement. Think back - when was the last time you saw a disagreement on either of our corporate websites? Answer: NEVER! And you never shall. For disagreement is essentially the same thing as...
PROFANE FOR THE THINKING PERSON OR PURE PROPAGANDA AND VITRIOL!!!
And we can't have that, now can we?
Curious to see refund grand total(s) for P2P violators. Bhalla and Giattino (per last filing) complied. Bhalla returned checks, Giattino refunded the PAC.
ReplyDeleteHoboken was lucky in this election. Ravi was able to level the playing field financially with DeFusco with legal contributions despite DeFusco simply ignoring Hoboken's anti-wheeling law.
ReplyDeleteBut will we be so lucky next time? Especially since our law has had the unfortunate counterproductive effect of making the playing field less fair rather than more since Ravi and Jen actually returned money while DeFusco just gobbled it up without limit.
If the law can't be enforced it should be repealed since it makes the situation worse if only some candidates comply and the ones that don't pay no price.
The real solution is to make an investment in public financing of our local elections.
Voluntary systems are constitutionally. If we model it after the State system, the City could provide matching funds to any mayoral candidate who raised at least $75,000 by the filing of the 29 day pre-election report, provided the candidate agreed to limit expenditures to $250,000.
I wonder if Ravi and Jen would be willing to support something like that. A little taxpayer money could go a long way toward levelling the playing field and making our elections fairer.
The same system could work for Council races with lower theshholds - maybe $20,000 and $50,000.
We could probably fund this with as little as a 2% tax increase. I think that would it would be a good investment.
This is the kind of reform we should be discussing if we were really interested in reform. Not making the $$ problem worse with an expensive low turnout December run-off designed to hand our City back to the big developers.
The problem is if a DeFusco-like candidate with access to double or triple the amount of the $250K threshold doesn't agree to participate. IMO, it's either all-in or it weights the election toward the DeFusco-like candidate.
DeleteOpting out would have real consequences if the voters cared, and ultimately it's up to the voters to decide if they care. It creates a much more clearly defined financing issue easily understood by the voters that focuses voters on the issue of where the money will come from. With Mason it highlights she's a rich woman willing to spend her own money. For DeFusco it highlights his willingness to sell out the City to developers. For Ravi it would highlight his support from the Sikh community. The system would assure that the other candidates had the resources to make sure the voters understand the issue.
DeleteThe law could make our anti-wheeling more effective by making PAC contributions not eligible for matching funds or for calculating the threshold.
If the concern is that $250,000 isn't enough to compete with the next DeFusco, raise the amount to $350,000. Keep in mind that a candidate getting matching funds won't have to spend as much time fundraising - another big advantage.
It's important to remember that Ravi was pretty unique in his ability to fundraise from the Sikh community. Most good government candidates going forward will not be in that position so the matching funds will significantly enhance their ability to compete with the moneyed interests.
Because of constitutional limitations, we really are extremely limited in our ability to keep money out of elections. We cannot legislate financial parity. So effective reform has to rely on creating an easily understood marker for voters to consider and on making sure candidates who don't self fund or sell out have sufficient funds to compete effectively.
While Ravi was lucky enough to have access to more, $250,000. - $350,000 is sufficient to run a fully effective city-wide campaign in Hoboken.
Without the support of the Sikh community, Ravi would have been hard pressed to fundraise enough to compete. Indeed Dawn was forced to make an enormous personal investment back in 2009 to be in a position to run a competitive race.
Without reform, that will be a far more typical scenario than we had this year with Ravi.
We should start by giving the campaign finance laws more teeth especially with respect to late filers, non-filers and people who file "incorrectly". Candidates, campaign managers and treasurers should all be held responsible for these situations. Maybe we do things like withhold payments if they are current officeholders, fine them for every day late, bar them from seeking local office in the future, etc.... Not sure if any of this is allowable under state law, but if it is, we should look in to it.
DeleteThe trouble is that we simply can't do that - only the State of NJ can and that simply won't happen. The reason DeFusco was able to simply ignore our Anti-wheeling law is because despite the best efforts of the drafters, it was simply not possible to give the law real teeth. It describes a sanction but the sanction is pretty much impossible to enforce.
DeletePublic financing is something Hoboken actually could legally do on it's own.
And IMHO it would really help ensure a Cammarano or DeFusco or Mason doesn't just overwhelm the field the $$. Good candidates can win with less money than the bad guys but they can't win without enough money to get their message out.
And introducing a December run-off will make the problem far worse.
What about docking the pay of current elected officials who fail to file or are late? We have 2 on the CC right now thumbing their noses at the law. Their pay should at least be held back until they file and personally, I think it should be forfeit for the period of time they are in noncompliance.
DeleteA few lessons/thoughts here:
ReplyDelete1. Mike is breaking the law, specifically Hoboken’s law that limits PAC contributions to $500 per candidate, and openly flaunting it. Will CM Fisher follow-up on her complaint or is this GiaFusco thing real?;
2. Ravi followed the law to the letter, unlike Michael, but numberscruncher is right, the system we have in place requires a viable reform candidate to either invest a significant amount of personal funds like Dawn, or be a strong fundraiser like Ravi (lost in the shuffle btw is that Ravi likely raised more money from more people in Hoboken than anyone else);
3. Money in politics is a real concern. I also would prefer public financing of elections. Elections should be about issues and public debate about issues and the qualifications of candidates.
I am willing to pay more in municipal taxes for this purpose;
4. That said, a local cap on campaign spending would undoubtedly be considered unconstitutional, so it would need to be voluntary. The voters then can decide whether to punish or reward those who go above it as numberscuncher notes;
5. Another concern: None of this would solve the independent expenditures issue, which can only be solved by the US Supreme Court (see Citizens United), so we probably shouldn’t get too excited about public financing.
I still support public financing of elections and a tax increase to make it happen, but we should be cleared-eyed about its limitations. A mandatory cap on spending would easily be unconstitutional, and until the Supreme Court changes its mind, Citizens United inspired PACs can spend as much as they want independently.
All Hoboken - absolutely an expenditure cap would have to be voluntary to be constitutional. But while you can't impose a penalty for spending you can provide a privilege for agreeing not to spend- hence the link to receipt of matching funds and to compliance with our anti- wheeling law.
ReplyDeleteWe absolutely need to recognize there is no magic ticket and money is like water - whenever you block a direction it tries to find a way to continue flowing. IE's could still spend unlimited amounts but the lack of coordination and the required disclosure tends to make this spending pretty ineffective.
IMHO the $175,000 spent against Dawn in 2009 actually hurt Cammarano, and I don't think the stronger foundations stuff helped Ravi at all this year. I agree with GA that he would have been better off without it.
IMHO public financing is the only step within our power that can make a real difference.
I think DeFusco would have had to think long and hard about declining matching funds if the limit were set at $350,000 and so would Ravi. I think both would have taken the matching funds and accepted the limits. I also think Jen and Romano would have found a way to qualify, we would have had a campaign among 4 equally funded candidates. In my opinion, that would have made for a better process. I think the result - Ravi winning - would likely have been the same but we would have gotten there a better way.
In any event, by trying to cram through the run-off referendum proposal in the last meeting if the year, DeFusco has opened up a conversation about how we can improve our system. If the conversation is to be real it must be broader than just runoffs. It should be about making our whole system as fair and democratic as we can. Bringing back the run-off will impact the financing of campaigns so it makes sense to include making that the playing field fairer as part of the discussion.
Anyone know what the hold up is on Jen Giattino and Mike Defusco's very later post election Elec finance report? I think it's now a couple of weeks late.
ReplyDeleteCooking the books takes time.
DeleteThe longer they wait the more suspicious it seems. Even Romano filed on time something he usually doesn't do.
ReplyDeleteIt's always interesting to see how many Hoboken voters were paid to "work" and who paid them.
I'm really surprised Jen hasn't filed. Imagine the outrage we'd be seeing in certain circles if Ravi hadn't filed on time.
At least Giattino has the good sense to not be attacking anyone who has filed on time unlike DeFusco. Can't wait to see his report.
DeleteWith Jen it may just be pulling a Cartman, ie, just pissed off and going to do it when she feels like it. Not hiding anything just, "screw you guys; home."
ReplyDeleteDefusco has Eduardo's dad sign his ELECs. Touchy situation. Maybe he doesn't want to. Hey they got Patty Waiters to sign the legal papers challenging Romano being on the ballot in two places, maybe they'll let her do it.