Council to Vote on Legislation to Regulate Non-Governmental Organizations Controlled by Elected Officials and to Reform Campaign Finance Board Rules and Public Matching Program

Council will also vote on Maintaining a Database of Land Use Commitments and Applications

City Hall – Today, the New York City Council will vote on legislation to regulate, for the first time, contributions to non-governmental organizations controlled by local elected officials. The Council will also vote to establish reforms to the New York City Campaign Finance Board (CFB) and its public matching program. Next, the Council will vote on establishing a public database of commitments made by the City regarding Land Use applications. Finally, the Council will vote on a zoning text amendment and special permit provision to allow for the further redevelopment of Pier 40 in Manhattan.

Regulation of Non-Governmental Organizations Controlled by Elected Officials

In most instances outside of an election year, current law allows unlimited donations to a non-government organization created and run by a local elected official, even if the donations are from people with business before the office of that elected official, and even if the group spends those donations on advertisements promoting the elected official who controls them. The permissive regulatory framework for political non-profits controlled by elected officials stands in stark contrast to New York City’s nation-leading campaign finance system, which effectively limits the undue influence of moneyed interests, and the potential for corruption that money can invite, with strict contribution limits, generous public matching funds, and robust auditing and enforcement. The following legislation seeks to establish a regulatory framework for non-governmental organizations that are controlled by elected officials that limits the possibilities for corruption and pay-to-play politics in New York City.

Introduction 1345-A, sponsored by Speaker Melissa Mark-Viverito and Council Members Dan Garodnick, Elizabeth Crowley, and Brad Lander, would prohibit donations above $400 per year from people who are lobbyists, have City contracts, or who otherwise do business with the City, to non-governmental organizations controlled by a local elected official or their staff, the same strict limit that applies for donations by these individuals to campaigns. It would prohibit donations from any entity (i.e. from any corporation, labor union, political committee, or any other legal form other than a person) to these organizations as well. These restrictions would only apply to organizations that spend 10% or more of their annual budget on public-facing communications that feature the name, picture or voice of the elected official who controls them. This bill would also require donor disclosure for all non-governmental entities controlled by a local elected official or their agents, whether or not they engage in public-facing communications that feature the name or picture of the elected official who controls them. The reported donor information would be available on the website of the Conflicts of Interest Board (COIB), which would be responsible for administering the law.

The result of the law will be that groups – such as the now-defunct Campaign for One New York – will not be able to raise significant sums from entities or individuals who do business with the City, and will be required to disclose their donors.

“The New York City campaign finance system is a model for the nation,” said Speaker Melissa Mark-Viverito. “We cannot allow it to be undermined by the creation of political non-profits that are controlled by elected officials, and can receive unlimited donations from lobbyists and companies that do business with the City. With this legislation, we will close this loophole by turning influence back to the people, and away from the lobbyists and private industries that seek to coopt government to suit their interests. This bill, along with our package of CFB legislation, is a major step toward reforming campaign finance and match funding in city elections, and I thank the Committees on Government Operations and Standards and Ethics for their dedicated work on getting these measures to the table.”

“Elected officials should not control slush funds bankrolled by lobbyists and corporations,” said Council Member Dan Garodnick, Chair of the Committee on Economic Development. “With this legislation, the City Council is closing the book on a dark chapter in New York City’s very strong campaign finance system.”

“This legislation not only requires transparency amongst political contributions but also furthers good government reform, by requiring donor disclosures and limiting monetary contributions from individuals who do business with the city. Thank you to Speaker Melissa Mark-Viverito and my City Council colleagues for their leadership,” said Council Member Elizabeth Crowley.

Establishment of Reforms to the Campaign Finance Board and Public Matching Program

Current contribution limits to transition and inauguration entities (TIEs) are similar but slightly different from the contribution limits to campaigns generally. These amounts were originally equal, but the TIE limits have remained the same since their introduction while campaign contribution limits have been adjusted over the years to reflect changes in the Consumer Price Index. This difference can introduce confusion for campaigns and contributors and lead to inadvertent violations. The following legislation would standardize TIE and campaign contribution limits.

Introduction 980-A, sponsored by Council Member Fernando Cabrera, would require that the contribution limits for transition and inauguration entities be equalized with the contribution limits generally.

“Introduction 980-A imposes the same contribution limits on transition and inauguration entities as on campaign contributions,” said Council Member Fernando Cabrera. “Several years ago campaign contributions were tied to the Consumer Price Index but transition and inaugural contributions were not.   This created confusion, leading to unintended mistakes.  By creating uniform contribution limits, Introduction 980-A corrects this difference and safeguards against error.”

Contributions from persons who are doing business with the City are already regulated. However, those same persons can currently act as an intermediary to collect an unlimited number of contributions for a candidate. Those collected contributions, if otherwise eligible, could be matched with public funds. Concern has been expressed that this undercuts the intent of the current doing business limitations. The following legislation would close this loophole.

Introduction 985-A, sponsored by Council Member Ben Kallos, would require that contributions that are collected by an intermediary who is subject to the doing business limitations are not matchable.

As it stands, public funds are not disbursed to candidates until after the petitioning process, with candidates receiving public funds no earlier than five weeks before the primary. This may leave some participating candidates under-resourced during a critical phase of the campaign. An earlier date for the disbursement of public funds might encourage earlier participation by candidates, as well as provide campaigns with more time to resolve issues preventing payment. The following legislation would alter disbursement dates.


Introduction 986-A
, sponsored by Council Member Ben Kallos, would permit the disbursement of a limited amount of public funds to campaigns earlier, during the petitioning period. Candidates would be required to certify that they plan to actively campaign for election to a covered office and that the public funds would have to be repaid to the CFB if a candidate failed to actively campaign.

Participating and limited participating citywide candidates are currently eligible to participate in pre-election debates if they meet certain requirements. One of these is to have raised and spent 20% of the threshold amount to be eligible for public funding. The following legislation would decrease that threshold amount.

Introduction 987-A, sponsored by Council Member Ben Kallos, would require that to be eligible for debates candidates must instead raise and spend 2.5% of the expenditure limitation for that office. This formulation would result in a higher amount of money being required to have been raised and spent in order to be eligible to participate in the debates.

The CFB prepares and delivers voter guides to every household with a registered voter. These guides are supplied in print, as opposed to electronically. The following legislation would allow for a change in the available media formats of voter guides.

Introduction 988-A, sponsored by Council Member Ben Kallos, would permit a voter to opt out of receiving a printed copy of the voter guide, so that the CFB could then instead send one in another media format. It would also require the CFB to promote awareness of non-City elections, possibly by producing voter guides in a media format of their choosing for those elections as well.

“Matching of small contributions with tax dollars should only amplify the voices of New Yorkers, not lobbyists,” said Council Member Ben Kallos, Chair of the Committee on Governmental Operations. “Special interests who bundle campaign cash will no longer see that multiplied with tax dollars.”

Candidates who participate in the matching funds program are currently prohibited from accepting contributions from political committees that are not registered with the CFB. The following legislation would expand this prohibition to include candidates who do not participate in the program.

Introduction 990-A, sponsored by Council Member Andy King, would prohibit candidates not participating in the matching funds program from accepting contributions from political committees not registered with the CFB.

“There are those who know how to use the system and create an unfair advantage,” said Council Member Andy King. “Candidates backed by special interest groups and lobbyists can raise and spend unlimited funds. This legislation is a step to level the playing field. It will require candidates with extensive resources to play by the same rules as hopefuls with lesser resources who must participate in the public-finance system. By eliminating non-registered political committee funding, we, in the City Council, are prepared to champion a transparent electoral process.”

It is not uncommon for business entities to be owned by other business entities, which may obscure the identity of a firm’s actual owner and decision-maker. This might lead to a situation where an individual uses a shell company to control a firm doing business with the City, thus obscuring that individual from being covered by the limitations on contributions from persons doing business with the City. The following legislation would work to uncover these false front organizations, and to prevent them exceeding contribution limits.

Introduction 1001-A, sponsored by Council Member Jumaane Williams, would require that organizations with an interest of more than 10% in an entity that does business with the City be disclosed in the doing business database.

COIB provides candidate participating in the matching funds program with a receipt indicating proof of compliance with the conflicts of interest law, which the candidate must then provide to the CFB. This process, which requires the transmitting of a receipt by a third party, is inefficient. The following legislation would eliminate the involvement of the third party.

Introduction 1002-A, sponsored by Council Member Jumaane Williams, would require that COIB maintain a record of all the candidates in compliance with the conflicts of interest law and to provide that record to the CFB upon request. The receipt would no longer be required, as COIB and the CFB would interact directly.

“The rules and systems that regulate the Conflicts of Interest Board are complicated and structured in a way that leave too many opportunities for unintended violations,” said Council Member Jumaane Williams. “My bills, Introductions 1001-A and 1002-A allow for a more streamlined and organized method of tracking who is in compliance with the board’s rules and who is conducting business with the City. Both of these measures will help elected officials remain in good standing with the Conflicts of Interest Board.”

The law currently requires the disclosure software provided by the CFB and used by candidates, to also enable users to meet their disclosure obligations under State law. However, when the CFB disclosure software falls out of synch, and is then relied upon by a candidate, that candidate is forced to either correct their State filing manually or receive an enforcement letter from the State. The following legislation would transition that responsibility to the CFB.

Introduction 1349-A, sponsored by Council Member Dan Garodnick, would require that if the disclosure software is unable to allow users to meet their State disclosure obligations, then, upon the request of a user, the CFB shall prepare an individual electronic file for that user that can meet that obligation. Additionally, the bill requires the CFB to report to the Mayor, Council and users on every disclosure filing deadline if the software cannot meet the obligation, and, if so, the date upon which it is expected to have such functionality.

If a candidate elects to have alleged violations adjudicated formally, the CFB will docket that issue with the Office of Administrative Trials and Hearings (OATH). The following legislation would codify the ability to select an adjudication before OATH into law.

Introduction 1350-A, sponsored by Council Member Dan Garodnick, would codify that candidates may select to adjudicate alleged violations and proposed penalties at a proceeding before an OATH tribunal. The bill would also establish timelines for all adjudications, requiring that they either be calendared before the board or a petition to appear before OATH be served within 90 days of a candidate’s response to a notice of alleged violations. Once the OATH proceeding concludes, the bill requires there be a 20-day period during which the parties could submit written comments to the CFB, followed by a final determination by the CFB within the next 30 days.

Campaign contributions must be deposited within 10 business days of receipt, except for contributions by check to a Council Member made more than one year before the first covered election, which must be deposited within 20 business days of receipt. The availability of treasurers or the occurrence of multiple fundraising events in a short period of time may make complying with the 10-day requirement difficult. The following legislation would provide time allowances for deposits made under such circumstances.

Introduction 1351-A, sponsored by Council Member David Greenfield, would require that all deposits of contributions be made within 20 business days of receipt, except for cash contributions which would be required to be made within 10 business days of receipt.

The law currently requires that candidates ‘inquire’ of contributors, through a form, if that contributor is doing business with the City, and thus would be subject to the limits on contributions from such persons. Yet, the CFB does not check if such inquiries occur and do not consider it determinative since only a later check against the doing business database establishes if that contribution is subject to the doing business limitation, regardless of the initial response from the contributor. The following legislation would standardize the information provided to contributors, as opposed to gathering the information from each contributor individually.

Introduction 1352, sponsored by Council Member David Greenfield, would remove the requirement to inquire and replace it with a requirement that campaigns provide contributors with notice of the doing business limits.

Campaigns sometimes receive contributions from persons who they later learn they would not wish to be associated with because of the contributor’s reputation. In such instances, they may wish to return the contribution associated with that person, but a rule proposed by the CFB, which was not adopted, would have prevented such returns after the receipt of matching funds. The following legislation would allow for the return of such funds.

Introduction 1353-A, sponsored by Council Member David Greenfield, would require that at any time before or after receiving matching funds, a participating candidate may return a contribution because of the particular source involved, provided that if matching funds were received for that contribution then those funds must also be returned to the CFB.

The CFB is required to provide statement reviews responding to disclosure filings by candidates, but there have been concerns that if the statement reviews are returned too close to the due date of the next filing then candidates would not have sufficient time to respond or correct their next filing. The following legislation would grant time considerations to candidates under such circumstances.

Introduction 1354-A, sponsored by Council Member David Greenfield, would require that statement reviews of disclosure filings be returned to candidates within 30 days of being due, although a candidate may agree to an extension. A response from the candidate would be due no earlier than when the next disclosure report is due. Finally, the CFB would be prohibited from invalidating a matchable contribution it had previously approved unless it learns of new information not available at the time of the initial review.

Campaigns may find that compliance and record keeping may be complicated when they are uncertain of what documentation the CFB will require to substantiate a matching claim. Additionally, prior to a recent rule change, contributors were required to sign contribution cards but candidates were not prohibited from completing the card prior to such signature being affixed. The following legislation would standardize rules regarding the completion of contribution cards.

Introduction 1355-A, sponsored by Council Member David Greenfield, would require that for contributions submitted for matching funds, certain specified records should be maintained by the candidate, depending on the payment method. The bill also specifies when a contribution card would be required. Further, candidates or their campaigns would be permitted to fill out contribution cards provided that such card is signed by the contributor after it has been completed.

“After months of work, the Council has developed a package of bills that will make it easier for regular people to run for office,” said Council Member David Greenfield. “I’m very proud of what we have accomplished today, and I want to thank Speaker Melissa Mark-Viverito for her unwavering leadership in making this happen. Together, we have created a path for ordinary citizens to seek city office without getting buried in red tape while also increasing the rigorous safeguards that prevent fraud and abuse of our campaign laws.”

Transfers of funds between a participating committee and another participating committee may be made without additional hurdles, but a transfer from a non-participating committee to a participating committee has additional requirements. Specifically, the permission of previous contributors must be sought before the equivalent amount of funds may be transferred. The following legislation would equalize this practice.

Introduction 1356, sponsored by Council Member Rory Lancman, would require that transfers between all authorized City committees that are timely filing disclosure statements with the CFB be treated the same. Transfers from a non-City committee, such as a Federal or State committee, would retain the additional requirements.

“New York City’s public matching funds system is the best in the country, but needless administrative and bureaucratic hurdles discourage candidates from participating,” said Council Member Rory Lancman. “My bill removes the pointless and burdensome requirement that candidates solicit written confirmation from donors that their contributions should be matchable in future races. The simpler and more straightforward our rules are, the more inviting it will be for New Yorkers to run for office and participate in our campaign finance system.”

State law permits the expenditure of campaign funds to assist public officers in the performance of their duties, but the CFB has interpreted City law as not permitting such expenditures. The following legislation would allow for arguments in opposition to this rule to be made.

Introduction 1358, sponsored by Council Member Brad Lander, would create a rebuttable presumption that expenditures of non-public funds to facilitate, support or otherwise assist in the execution or performance of the duties of public office would be permissible.

“As a long-time champion of efforts to keep money from corrupting our politics, I’m proud to be a co-sponsor of today’s package of legislation, which I am confident will strengthen NYC’s campaign finance system” said Council Member Brad Lander, Chair of the Committee on Rules, Privileges and Elections. “This comprehensive package includes first-of-it-kind legislation to address pay-to-play concerns about not-for-profit organizations controlled by elected officials; adopts recommendations by the CFB and good-government groups like prohibiting matching funds for contributions bundled by lobbyists or those doing-business with the City and expanding the doing-business database; and makes a series of technical fixes to make the laws more straightforward to comply with. My bill, Introduction 1358, will allow elected officials to use campaign funds, under CFB supervision, for public purposes like robocalls to encourage people to attend a town hall, or a public-serving website. Strengthening our campaign finance laws is never easy. I’m proud the New York City Council is making significant, concrete progress today.”

To determine if a contribution is subject to the doing business limits it must be checked against the list of persons in the doing business database. Yet, the date on which a person is considered to be doing business, which may be relevant for recently made contributions, cannot currently be found through searches of the database. The following legislation would update the doing business database to include date information and search functions.

Introduction 1361, sponsored by Council Member Rafael Salamanca, would require the doing business database to provide the date when a person is considered doing business. It would also require the posting of a list of persons removed from that database within the past five years, and their dates of removal.

In a special election, the amount of a contribution that may be matched is halved compared to a regular election cycle, yet the threshold of matchable money that must be raised in order to qualify for public funds remains the same as in a regular election cycle. The following legislation would equalize matchable contributions between election types.

Introduction 1362-A, sponsored by Council Member Rafael Salamanca, would require that contributions in a special election be matchable at the same amount as in a regular election cycle.

Candidates who file a certification that they wish to participate in the matching funds program are allowed to rescind that certification, and thus opt out of participation, until June 10th in a regular election cycle or the seventh day after proclamation for a special election. These dates fall during the petitioning period and before candidates may know if they have opponents or the identity of all opponents. The following legislation would amend participation deadline dates.

Introduction 1363-A, sponsored by Council Member Rafael Salamanca, would require that the date upon which a candidate may rescind their participation certification will be the ninth Monday preceding the primary election in a regular election cycle, or the fourteenth day after proclamation for a special election. Both such dates would fall after the deadline for the filing of petitions.

“The goal of this package of legislation was to maintain the stringent oversight that we expect from the CFB while making pragmatic updates that are needed for today’s campaigns,” said Council Member Rafael Salamanca. “Coming off of two elections in eight months, I felt I could contribute to the conversation of making CFB updates, and am proud of the legislation I’ve sponsored.”

When the CFB adjudicates alleged violations they begin in public session, with both the candidate and the CFB staff discussing the alleged violations and answering questions from members of the board. After this public discussion, the CFB moves to go into executive session to discuss the matter, and is joined there by high-level staff. Once the executive session concludes, they return to a public session and announce their decision. An ex parte communication, where one of the parties speaks privately with the adjudicatory authority, is often forbidden in a court or other adjudicatory settings. The following legislation would allow for a proxy to be in communication with the adjudicatory authority.

Introduction 1364-A, sponsored by Council Member Jimmy Van Bramer, would require that for any meeting or portion of a meeting of the CFB from which the public is excluded and at which an adjudication is discussed, no candidate, representative of a candidate or CFB staff could be present. The CFB could, however, hire or retain a professional counsel, not otherwise supervised by CFB staff, for purposes of such meetings or portions of meetings.

“It is vitally important that our government be transparent and accountable for everyone,” said Council Member and Majority Leader Jimmy Van Bramer. “My bill, Introduction 1364-A, will keep any one side from having undue influence over CFB’s judgment proceedings, keeping its judgments balanced and fair. I’m proud to collaborate with Speaker Mark-Viverito and my colleagues on the City Council to pass this significant package of reforms to our campaign finance laws, which will bring sunlight into the system and lead to a better government for all.”

Creation of a Public Database of City Commitments to ULURP Applications

Introduction 1132-A, sponsored by Speaker Melissa Mark-Viverito, Public Advocate Letitia James, and Council Member Rafael Espinal, would require the Administration to establish and maintain a publicly accessible, searchable online list of written commitments made by the Mayor to the Council, or a Council Member, in connection with most ULURP applications, including applications for neighborhood rezonings, amendments to the zoning resolution, dispositions of real property, and special permits that involve at least four adjacent blocks of real property.

“In the 2016 State of the City, I affirmed our goal of ensuring that communities are informed about the land use decisions that impact them by announcing the Neighborhood Commitment Plan,” said Speaker Melissa Mark-Viverito. “Establishing a publicly accessible, searchable online database for land use applications ensures that we continue building on this commitment. Our focus is always set on increasing government accountability and establishing dialogues with the neighborhoods impacted by these rezoning efforts. We need to make sure that promises made to these neighborhoods are promises kept and this bill helps us to do that.”

“Our word as government officials should be our bond to the New Yorkers we serve, especially when it comes to community benefits,” said Public Advocate Letitia James. “Today, we passed legislation that will ensure our City is held accountable for the commitments we make to our communities, creating the first publicly available tool to track projects. I am proud to partner with Speaker Mark-Viverito and Council Member Espinal on this important legislation to ensure that our neighborhoods can be strong and vibrant places to live.”

“As we look to make long-term investments that will build our city and improve its vibrancy, we must ensure proper follow-through on these promises,” said Council Member Rafael Espinal. “I am proud to be a co-prime sponsor of Intro 1132, which is a much overdue tool in ensuring transparency and public accountability for major projects undertaken by the city. Gone must be the days when commitments are not met, and communities are left wondering why their government has left crucial work unfinished. As the first Council Member to undergo a major rezoning under the de Blasio administration, I look forward to the efficiency this bill will inspire and thank my colleagues, Speaker Mark-Viverito and Public Advocate James, for their partnership on this issue.”

 

The City Council will vote on the following Land Use item…

 

Establishment of Special Hudson River Park District and Zoning Amendment for Pier 40:

Westbrook Partners and Atlas Capital Group seek a zoning text amendment to establish the Special Hudson River Park District (SHRPD) and a special permit provision to allow for the transfer of floor area from Pier 40 to St. John’s Center. The intent of the amendment and provision is to repair and rehabilitate Pier 40 within Hudson River Park, an asset for the entire Westside community.

The redevelopment of the area would result in five new buildings at the former St. John’s Center, containing a total of approximately 1,711,00 square feet of floor area. This would include 1,289,000 square feet of residential floor area, 222,000 square feet of office or hotel floor area, 200,000 square feet of retail and event space, and 425 accessory parking spaces. 25 percent of the total residential floor area, and 30 percent of the total residential units, for a total of approximately 476 units, have been committed as affordable housing once the parcel is fully developed.

Hudson River Park Trust will receive $100 million to be used on structural renovations to reinforce the longevity of the pier. The City of New York will provide an additional $14 million in capital investment funding.

“This is an example of what can happen when diverse stakeholders come together in good faith to negotiate a great plan for the community,” said Council Member Corey Johnson, Representative to the District Housing Pier 40. “Pier 40’s athletic fields are a vital asset to thousands of children and adults each year, and its parking garage is the main revenue generator for Hudson River Park. The critical shortage of affordable housing in Community Board 2 is one of the biggest issues facing our community. Through hard work and a transparent public process, we were able to save Pier 40’s pilings, generate affordable housing and achieve a lot of meaningful additional benefits for West Village residents. I want to thank Speaker Melissa Mark-Viverito, Council Members Donovan Richards and David Greenfield and my colleagues in the Council, as well as Mayor Bill de Blasio, Chair Carl Weisbrod, Hudson River Park Trust President & CEO Madelyn Wils, Borough President Gale Brewer, Community Board 2 and the applicant for their role in this ULURP. I also want to thank Congressman Jerrold Nadler, State Senators Daniel Squadron and Brad Hoylman and Assembly Member Deborah Glick for the important role they played.”

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