Testimony of Amy Loprest, Executive Director of the New York City Campaign Finance Board, on Int. No 1288

12/12/2018

Good morning Chair Cabrera and members of the Committee on Governmental Operations. My name is Amy Loprest and I am the Executive Director of the New York City Campaign Finance Board (CFB). I am joined by Eric Friedman, Assistant Executive Director for Public Affairs. Thank you for the opportunity to testify today.

New York City’s Campaign Finance Program has long been a model for reformers across the United States seeking to limit the influence of money in elections. Our Program remains strong because the CFB and the Council have worked together over the last 30 years to make improvements that further the Program’s goals of lowering the barriers to run for office, amplifying the voices of small contributors, and reducing corruption or the appearance of corruption.

The Charter amendment overwhelmingly approved by New York City voters in November seeks to build on the Program’s success, further limiting the corrupting influence of large contributions and making it possible for more candidates to rely on small-dollar contributors. The approval of Ballot Question #1 was a show of support for the exceptional system that we have built together.

One implementation challenge of the Charter amendment is that it allows candidates to choose which version of the Program they will participate in for the 2021 election cycle. Participating candidates can opt to run under the existing program (“Option B”) with contribution limits up to $5,100 for citywide offices and a matching rate of $6-to-$1 for the first $175 of qualifying contributions, or under the new program (“Option A”) with lower contribution limits—up to $2,000 for citywide offices—and an increased matching rate of $8-to-$1 for the first $250 of qualifying contributions.

Int. No. 1288 would offer this same choice to candidates running in the February 2019 special election for Public Advocate, who would be able to continue fundraising under the existing matching funds program, or opt into the new program. The intent of this bill is to further the policy aims we jointly support: limiting the influence of large donors while increasing the value of small contributions.

Since the Charter Revision Commission issued its proposals in September, CFB staff has been working to determine how we will implement these changes for the 2021 elections, particularly the choice between programs. The parallel sets of contribution limits, matching rates, match amounts, and public funds caps will require significant modifications to all of the CFB’s major information systems, including our internal database (CFIS), the disclosure platforms for candidates (C-SMART), and our online fundraising platform (NYC Votes Contribute). Our staff has already begun the extensive work that is needed, and we have been keeping to an aggressive timeline in order to complete it in time for the 2021 elections. Providing the choice for candidates in the special election compresses our implementation timeline considerably. It is important to be clear about the implications it will have for candidates.

Put simply, it is not feasible to complete the work of redeveloping our systems before a special election is declared in January. While we work as diligently as possible to make the process run as it usually does, there is a real possibility that we may have to operate in two systems. This means for candidates who choose the existing program (Option B), everything will proceed as normal; candidates who choose the new program (Option A) will undergo a more manual and time-intensive process. All candidates will be able to file disclosures electronically through C-SMART; however, many of the regular administrative reviews done systematically by CFIS will need to be done manually. For instance, determinations about whether candidates have met the threshold to qualify for public funds and calculations of their matching funds payments will be done on paper.

This will also affect the manner in which candidates receive public funds. Currently, we conduct payments almost entirely through electronic funds transfer, which is enabled by CFIS. Because payments for Option A candidates will not be calculated in our system, we will have to pay those candidates by paper check. It typically takes payments by check longer to appear in a candidate’s bank account, whereas electronic funds transfers clear a candidate’s bank account in the same day they are sent. Any delay in the availability of funds during a compressed special election period could potentially make a material difference in a race with a crowded field.

Additionally, it is unlikely we will be able to program the regular checks and warnings into C-SMART that help candidates with compliance. While we will provide comprehensive guidance to candidates, we also recognize that errors happen even with the best training. Without these systematic checks in place, heightened vigilance will be required of candidates and their staff to avoid inadvertent violations and penalties.

We also want to be clear that there will be other downstream impacts of manually implementing Option A. Because we will be auditing matching claims, determining threshold, and calculating payments manually rather than systematically, statement reviews for the special election may take longer than they typically would, as will statement reviews for 2021 candidates. This will also take resources away from completing the audits for candidates in the 2017 election cycle.

We have been engaged with the Council and worked together on improvements to the bill that will alleviate some of our administrative concerns, although these will not entirely resolve the issues that I outlined above. For example, the bill requires that candidates in the special election conduct their entire campaign under the system that they choose, eliminating the January 12th cutoff for 2021 candidates and applying the contribution limits, matching rates, and matchable amounts retroactively to the entire cycle. We believe making the system a straightforward choice will significantly reduce the possibility for human error as we perform manual calculations.

Additionally, the bill would lower the threshold to qualify for matching funds in special elections so that candidates for citywide offices will only need to raise half the dollar amount as for regular elections, $62,500 rather than $125,000. This will ensure that candidates can actually get the benefit of public matching funds during a tight special election calendar. Finally, the bill cuts the threshold to qualify for CFB debates in half, which will help ensure that candidates running competitive campaigns will have access to this important opportunity to communicate with voters.

Again, we share the aims of Int. No. 1288. We want to be clear about the challenges we will face during the bill’s implementation. We appreciate the open communication we’ve had with the Council about our administrative concerns. While many issues remain, we want to acknowledge those concerns that were taken into account during the drafting of the bill, which will help simplify the system for candidates running in this special election, and for our staff who will be operating with some administrative limitations on this timeframe. Thank you again for the opportunity to testify today, and I am happy to answer any questions.