COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, April 26, 2006 10:25 a.m. - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN J. O'NEILL COUNCILMAN JUAN RAMOS COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO RESOLUTION 060070 - Resolution authorizing the Council Committee of the Whole to hold hearings regarding campaign finance reform and public financing of municipal elections. - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2
Good morning, everyone. This is the public hearing of the Committee of the Whole, and I would ask Mr. McPherson to please read the title of Resolution No. 060070. MR. McPHERSON: Resolution 8 authorizing the Council Committee of the Whole to hold hearings regarding campaign finance reform and public financing of municipal elections.
Thank you. The Chair recognizes Councilwoman Tasco.
Good morning. Thank you very much, Madam President. We thank you for calling the hearing today so we can begin to discuss the whole possibility of public financing for campaigns in the City of Philadelphia, and I do have an opening statement, if that's all right.
Thank you. Twenty-five million dollars, that's the amount of money that was raised and spent in the 2003 Mayor's race by candidates from the primary to the general election. Twenty-five million dollars, a record not only for Philadelphia but at that time for any municipal election in American history. Twenty-five million dollars, a huge amount of money that is expected to be topped in the 2007 Mayor's race. A principal reason why candidates must raise these sums of money is the high cost of media. More and more the media focus less and less attention on elections. To the extent that campaigns are covered, the story is the horse race and not the issues that the candidates are debating. Consequently, candidates talk in sound bites and strive to stay on message while raising huge sums of money. Due to this focus on fundraising, the public has become disillusioned with government and has 4 4/26/06 - WHOLE - RES. 060070 stated the need for campaign finance reform and possibly public financing. In a recent national survey conducted for a public campaign by the Melman Group, more than two-thirds of the public favors comprehensive reform of our campaign finance systems. This call for reform is proportional to the number of people that participate in our elections. More and more people demanding for reform and less and less people voting. Locally, this trend has also emerged in our last election when less than 15 percent of registered voters voted. There are other reasons for that also, I can attest to that. The public's call for reform is also fueled by the path that money and fundraising can lead to fraud and corruption. The current and ongoing federal corruption investigations and pay-to-play trials and convictions have served to further erode the public's 5 4/26/06 - WHOLE - RES. 060070 confidence in City government. Accordingly, this call for reform provides an opportunity to restore the public's faith in City elections. However, the public must decide if they want their tax dollars spent on political campaigns as opposed to City services. That is why we need an open debate and dialogue among citizens, City officials free from partisanship and special interests, so that we can develop public financing legislation that can achieve this goal. As we learned with the anti-predatory lending ordinance and tax reform, this initiative will require time to review and analyze the complexities of this issue and time to craft possibly a bill that works for the City. As we move forward, I would like to thank Representative Dwight Evans and you, Council President Verna, for your support and leadership as we come together to address the issue of public financing of 6 4/26/06 - WHOLE - RES. 060070 City elections. I also would like to thank those individuals and organizations that have joined us today, and we invite others to join us in our quest to change and eliminate the pay-to-play culture in Philadelphia and provide a new standard for civic and political leadership in our City. Thank you very much, Madam President.
You're welcome. Thank you very much, Councilwoman. I would ask Mr. McPherson to please call our first witness. MR. McPHERSON: The first witnesses are a panel, Angel Ortiz and Sue Ellen Dodell.
Good morning. Welcome. Who is going to testify first?
Please identify yourself for the record and proceed with your testimony.
Thank you. I'm Sue Ellen Dodell and I'm the General Counsel of the New York City Campaign Finance Board, and thank you for inviting me to speak today about New York City's Campaign Finance Program, which has been called the model for the nation. I'll tell you a bit about the history of the program and give you an overview of what the program is and, of course, have time for questions. info, which has a lot of publications on it and it has a lot of candidate information on it. The Campaign Finance Act was 8 4/26/06 - WHOLE - RES. 060070 adopted in 1988 after a number of corruption scandals in New York City that had nothing to do with campaign financing. They involved an elected official who was alleged to have solicited bribes to influence City contracts, but because of those scandals, a series of ethics reforms were adopted to strengthen the integrity of New York City government, and among those were the Campaign Finance Act, which was signed in 1988, and later that year in a City-wide referendum, the voters approved inclusion of the independent and non-partisan Campaign Finance Board in the City Charter and added to its mandate the publishing and distribution of a non-partisan Voter Guide. The program is designed to limit the role and influence of private money in the political process. Candidates who participate in the program can qualify to have their private contributions matched with public money. 9 4/26/06 - WHOLE - RES. 060070 In exchange, these candidates agree to full disclosure of their campaign finances, as well as to strict contribution and spending limits. The program is voluntary, and candidates who participate agree to a full audit of their finances. There have been a number of changes, of course, since 1988, a number of very significant changes. As a result of law signed in December of 1996, candidates who join the program and run for City-wide office are required to participate in a series of public debates as a condition for receiving matching funds for their campaigns. Other significant changes are a number of reductions in the contribution limits, a ban on corporate contributions, a requirement that contributions from PACs be accepted only from those PACs that have registered with the Board and a change in the public matching rate. Prior to 1998, contributions had been 10 4/26/06 - WHOLE - RES. 060070 matched at a rate of one-to-one, up to a maximum of $1,000 in public funds per individual New York City contributor. That rate is now four-to-one, up to $250 per contributor, also for a maximum of $1,000 in public funds per individual contributor. And in December 2004, the New York City Council passed legislation which expanded the jurisdiction of the Board to all candidates running for City office. So all candidates, whether they are program participants or non-participants, are required to file 16 disclosure statements with the Board, and they have to adhere to contribution limits and a ban on corporate contributions. But the non-participants, of course, are not eligible to get public funds and they're not subject to the Board's expenditure limits. I want to briefly tell you about all of the mandates of the Board. The Debate Program: There are 11 4/26/06 - WHOLE - RES. 060070 two sets of debates held for both the primary and general elections. The Voter Guide: The Board publishes a Voter Guide and distributes it to all registered voters in New York City, and the guide contains a picture and a statement from all candidates and it's on the Board's website so that people can view it there. The Campaign Finance Program, as I said, is completely voluntary. Candidates agree to maintain complete and accurate records. They abide by the strict contribution and spending limits, and they have to provide full disclosure. Candidates have to certify to join the program. There's a strict deadline to certify in the program of June 1st in the year of the election.
And once the candidate certifies, they become legally bound to adhere to the program's requirements. The Board gives candidates software, which we call C-SMART, 12 4/26/06 - WHOLE - RES. 060070 Candidates' Software for Managing and Reporting Transactions. We provide free software to candidates, and they use that software to report their contributions and their expenditures. The key aspects of the program, of course, are the contribution limits, the spending limits, the public matching funds, record-keeping, disclosure, but really as the General Counsel, I really emphasize also enforcement, enforcement by the audit unit, the legal unit to make sure that taxpayer money is being used appropriately. You can see from the brochures that I distributed what the contribution limits are, and going forward, the Board has some recommendations for even reducing them further. The candidates can receive monetary contributions of cash, although cash cannot be more than $100. They can get checks, money orders, credit cards, but in order for contributions to be 13 4/26/06 - WHOLE - RES. 060070 matched, they have to be from individual residents of New York City. And candidates can also get in-kind contributions, but those, of course, are not matched. Spending limits: Again, you can look at those spending limits in the brochure that I gave you. And candidates have to show that they've made qualified expenditures. Those are expenditures that are used for the purpose of nomination or election to office, and they have to be incurred in the election year and paid for by the committee. Things like rent for the office, campaign literature, advertisements, fundraisers, mailings, these are the things that are qualified for reimbursement with public funds. But other things are not qualified for reimbursement: Payments above the fair market value of goods or services, spending that's not reported in disclosure statements, payments to family members, expenses paid through advances. 14 4/26/06 - WHOLE - RES. 060070 We give candidates a handbook. I'll just hold it up to show you how extensive it is. This is the 2005 handbook that explains all of the different record-keeping requirements. Candidates have to keep deposit slips, copies of checks, money orders, signed cash money order and credit card contribution cards. For their expenditures, they have to keep copies of bills, invoices, receipts, salary payment records, bank statements, the front and back of cancelled checks. They have to have a checkbook register and credit card billing statements. They have to keep a petty cash journal. So all of these things are really critical to make sure that candidates are spending money, public money, appropriately. So in order to qualify for public funds -- and, again, it's not an entitlement program. You have to qualify for the funds -- candidates have to comply with all the 15 4/26/06 - WHOLE - RES. 060070 program requirements. They have to be on the ballot and they have to face an opponent on the ballot. And they have to meet a two-part threshold of a dollar amount raised from a certain number of contributors. And those thresholds differ for different offices. So for a City Council member, candidates have to raise $5,000 in total, at least $5,000, and they have to raise it from at least 75 contributors in their district. And, again, only the first $250 of the contribution counts towards meeting the threshold. And these 75 people in the district have to contribute at least $10 each. The contributions are then matched at a rate of four-to-one, up to $250 per individual New York City resident, and the public funds are not distributed until after ballot status is determined by the City Board of Elections, which is a different City agency. 16 4/26/06 - WHOLE - RES. 060070 We do have provisions for a bonus situation.
If a program participant is running against a non-participant and the non-participant spends or raises more than 50 percent of the applicable spending limit, the participant may qualify for bonus money, which would be either a five-to-one or a six-to-one matching rate and an increased expenditure limit and an increase in the maximum public funds. We found that there are a number of violations that can result in financial penalty to candidates; for example, if they fail to file or they file their disclosure statements late, if they accept prohibited contributions or they exceed the contribution or expenditure limits. And all of the candidate information is made available to the public within hours of being submitted to us. Candidates file disclosure statements every several weeks and they 17 4/26/06 - WHOLE - RES. 060070 file it on the C-SMART software. It's uploaded to our website, and the members of the public, members of the press have access to that information almost immediately. So one of our most important mandates is public disclosure, and we take that very seriously. We have a searchable campaign finance database. And so I encourage you as you're considering legislation in Philadelphia to look at the website. We do what I consider a lot of hand-holding of candidates. We have a Candidate Services Unit that deals directly with candidates. We do seminars for them. We provide the handbook. We send them reminder e-mails. We telephone them before disclosure statements are due. But nevertheless, some campaigns do accept prohibited contributions, exceed the expenditure limit or they may use money inappropriately, and that's where enforcement is critical. In order for the public to have 18 4/26/06 - WHOLE - RES. 060070 faith in the program, we have to enforce the law and rules to protect these taxpayer funds and to ensure that the public gets what they bargained for. They bargained for low contribution limits so that more members of the public could have an influence on their government so that big contributors won't control government, and to some extent, they bargained for a leveling of the playing field, enabling small campaigns to go to their neighbors, get the 75 contributors and then qualify for matching funds. And I'd like to just talk briefly about challenges for a campaign finance program like New York. The New York City Act provides that after every election the Board is mandated to do a post election report, and the report on the 2005 elections -- we had our mayoral elections last year as well as City Council elections. The report is due this September, and so I 19 4/26/06 - WHOLE - RES. 060070 can't talk about what conclusions we'll draw from the elections, but there were a number of issues raised in the 2003 election. We had just a City Council election in 2003, and I just want to raise for you some of the concerns that the Board put in its post election report for 2003, because it may give you some ideas of things to watch out for as you enact your own legislation. One thing the Board expressed concern about was that significant public fund payments were going to candidates who won or lost by large margins. And so there were newspaper articles saying, Well, why is the public giving so much public funds when the races are so lopsided. That's a difficult area to deal with, because if you have some opposition, you do qualify for public funds. But we've proposed legislative changes to try to deal with that, perhaps to limit the amount of matching funds that a candidate gets, unless his or her 20 4/26/06 - WHOLE - RES. 060070 opponent raises or spends a certain amount of money.
We've also found that apart from the 2001 elections, which were elections for the first time when term limits were in effect, so that virtually all the City Council was term-limited out and we had a mayoral election, we had Borough President elections, Controller elections, a lot of very new faces, apart from 2001, where there was an incredible amount of competition. The Campaign Finance Program has not been as successful at the Council level as it has been at other levels of office. And at the higher levels of office, the program's goals of promoting competition while leveling the playing field among candidates of different means and creating access to financing has been realized for many candidates, and although the four-to-one match has had a positive impact on Council candidates by engaging contributors, by encouraging 21 4/26/06 - WHOLE - RES. 060070 competition, the large amount of public funds available combined with relatively high spending limits have created an uneven playing field in many cases on the Council level. And we found in 2003 that there were not that many open seats at the Council level and there were not significant competitive races, notwithstanding the availability of large sums of public matching funds. And this appeared to be consistent with our data from past City Council elections, which had not seen very much, meaning full competition, except for open seats, that incumbency is, unfortunately or fortunately, a great predictor of success in an election. The Board also remains somewhat concerned about the availability of substantial public funds through the program somehow itself driving up the cost of campaigns to a level that's not necessary in order to fulfill the 22 4/26/06 - WHOLE - RES. 060070 program's goals. So I would caution you to be sensitive to what is the amount of public funds that really is necessary to ensure competition, to ensure that the public is getting the access to government that they deserve. We found that incumbents or experienced candidates who have run before are very well equipped to take advantage of the program's generous matching funds and to spend the maximum even if the candidate they face is not a serious threat. So it's something to think about. And also being on guard -- and, again, this is part of enforcement -- to make sure that campaigns are not just springing up to be in the business of collecting matching funds. We have our staff conduct site visits to every campaign to determine whether they're really legitimate, and we go out, we look before we give out any matching funds to make sure that they're 23 4/26/06 - WHOLE - RES. 060070 really running a campaign. But, of course, with any amount of public money, there is an incentive to try to get that money to even engage in fraud. So, again, enforcement is really critical. The Board has also suggested a number of changes to City Council. I'll just briefly say what they are going forward. We really want lower contribution limits. Right now for City Council it's $2,750. We're recommending that it go down to $250. And 250 is really the most commonly received amount of money for City Council races anyway and it is the amount that's matched, and we think that it makes more sense to lower the contribution limits even more. We are also on record for proposing banning any organizational contributions. I mentioned that corporate contributions have been banned since 1998, but other organizations, unions, LLCs, partnerships, can make 24 4/26/06 - WHOLE - RES. 060070 contributions, although they're not matched, and the Board believes the intent of the voters would be better achieved if only individual contributions were permitted. We also think that only contributions made during the election year should be matched, because that, again, encourages perhaps insurgents to run during that period and may lessen the impact of incumbents who raise war chests during the few years before the election.
And in addition, we're suggesting reducing the public fund's maximum, reducing spending limits, and we also are dealing with the whole pay-to-play issue. In the 1998 Charter revisions, the voters asked the Board to look at the possibility of doing rules on contributions from those doing business with the City, but the Board found that it was very hard to define who was doing business with the City and that the City Administration did not have a good 25 4/26/06 - WHOLE - RES. 060070 database on that. But we have been trying to work with City government to create a better database so that we know exactly who is doing business with the City, and right now our New York City Council is considering legislation to ban matching funds from being given for lobbyist contributions. That's pending right now, and that would be another change to our law, so that anyone who is a registered lobbyist could not have their contribution matched. Thank you, and I'd be happy to answer any questions about our program.
Thank you very much. We have several members that want to be recognized. Does anybody want to ask questions of this particular witness? The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam President, and good morning. Do you have a written statement 4/26/06 - WHOLE - RES. 060070 of your testimony?
I don't. I gave a CD of sort of the bulk of it, but, no, I didn't -- I was asked rather recently to testify, so I threw something together. COUNCILMAN DiCICCO: Because you had a lot of information. I was trying to follow you, but maybe I'm just having a bad day. I was not able to keep up. We'll get the transcripts.
It will be on record, and I would encourage you to look at our website, because actually a lot of the information that I covered is actually right on the website. We have the history of the program. We have description of the program, all the limits. It's a very easy-to-follow website, and I encourage you to take a look at it. COUNCILMAN DiCICCO: You mention the Board, I believe, looks at the viability, I guess is the best way I could describe it, of potential 27 4/26/06 - WHOLE - RES. 060070 candidates so that people just don't get in for the sake of getting in, maybe getting some name recognition but using the system as a way of raising money for some campaign that really is not ever going to amount to anything. What's the criteria? How do you determine who is a serious candidate versus a non-serious candidate?
No. I don't want to give the impression that we determine whether someone is serious or non-serious. What we try to determine is whether they're running a campaign. And so we go out and look in, let's say, a Council district. Are there posters up there? We go to their headquarters. We see their financial records. Have they spent money already on literature, for example? What we're concerned about is people who pretend to run a campaign but really potentially could be just taking the money and not running a campaign at 28 4/26/06 - WHOLE - RES. 060070 all. COUNCILMAN DiCICCO: I understand what your concern is. That's what I'm trying to figure out, how do you make that decision. I mean, if someone who is serious about running for office but may not have the financial wherewithal, may not have enough money to open up a campaign headquarters and purchase literature because they do not have any means and the only way they're going to get the money to do that is to go out and raise money, there has to be some --
That's why under our program you have to have raised some money. You have to have raised the $5,000 from 75 people. So you have some money already. COUNCILMAN DiCICCO: That's part of the criteria, then.
Yes. Right. You can't get public funds unless you've raised some money from individuals. And 29 4/26/06 - WHOLE - RES. 060070 that contrasts to programs in other states, which are entirely publicly financed. Here, you have to meet a threshold before any public money is given out. But we are -- yeah. We do take the job of making sure that the public is not giving out money mistakenly very seriously and we do audit even before any public money is given out. COUNCILMAN DiCICCO: Is there any limit to the amount an individual can put into his or her campaign personally?
Yes, there is. It's three times the contribution limit for that particular office. So that for City Council, it's approximately $9,000, I guess. But, again, it's listed on our website and it's provided in our statute, so if that's something that's of concern to you, it's something you may want to put in your statute, that an individual candidate can only contribute a certain amount to their own campaign. That's if 30 4/26/06 - WHOLE - RES. 060070 they want to run in the program. Obviously if they're self-funded, they can contribute as much as they want to their campaign. COUNCILMAN DiCICCO: Because your current Mayor --
Yes, but he didn't participate -- COUNCILMAN DiCICCO: -- and no 11 disrespect to him, he put about $80 million or something.
Yes, he did. Right. He didn't participate in the program. He didn't ask the public to contribute to his campaign. So although he reported those contributions to us, because under a new City Council law, even non-participants had to disclose, he would disclose these multi-million dollar contributions right on forms that we had and it would be reported on our website. COUNCILMAN DiCICCO: I guess the concern for me is, and I think we're all trying to get to that place as best 31 4/26/06 - WHOLE - RES. 060070 we can, although people individually will make decisions whether or not their vote will be influenced by either campaign contribution or for some other reason regardless of whether there are limits or not, it takes a lot of money to run a campaign. There's no question about it. And I think even for those who have the best intentions, if a limit is imposed -- and we're going to be probably faced with a similar situation in our next mayoral election as New York did. We have an individual who is a very wealthy person, who has already committed $5 million of his own personal money towards that campaign. He can probably put another 5 million in of his own money and not blink an eye. How do you compete with that? And I'm not suggesting that -- again, the objective here is to minimize any money that may or may not be considered to be used as some way of influencing an individual's vote. Again, my personal 32 4/26/06 - WHOLE - RES. 060070 feeling is, if someone gives me 10,000 or gave me a thousand, it's going to be my decision whether I think I'm influenced by that money or not. I mean, people will make the decision. But how do you compete with someone who can, as Mayor Bloomberg, put in $80 million of his own money? Elections today are pretty much won through the media, how much air time you can get on TV and radio and print. It's not the old days that I grew up with. Door-to-door campaigning really is almost a thing of the past in most neighborhoods in the City of Philadelphia. So how do you control that from becoming a situation where it's only the have's have the ability to run for office and get elected?
Well, I guess I have a couple of answers. One is, I don't think you can ever give as much public money as $80 million, because I 33 4/26/06 - WHOLE - RES. 060070 don't think the public would stand for it. But what we have seen in New York is that the people running for Mayor who did run against Mayor Bloomberg certainly ran very competitive races. The first one, which was in 2001, was extremely close. I think it was only 50,000 votes separated the two candidates. And even the most recent one in 2005 where, as you said, the Mayor spent about $80 million, certainly voters knew who was running. We have the Voter Guide. We have the Debate Program, which I think is a nice addition. So that anyone participating in our program had to be in debates. And we had something new added in 2005 where Mayor Bloomberg, even though he wasn't participating in the program, was invited to one of the debates, and he did not come, and the media really made an extremely big issue out of it. It was really days and days of it. COUNCILMAN DiCICCO: But he was successful in getting reelected. 34 4/26/06 - WHOLE - RES. 060070
He was successful, but it's hard to also -- COUNCILMAN DiCICCO: I assume he bought about $60 million worth of air time to cover up for that debate. And I'm not being critical, by the way. This is very serious.
It is a very serious issue, but I guess what I would say is, the candidate who ran against him who got the public money certainly benefited from getting that public money, getting the air time on TV, got his name out. You're never going to solve the problem, if you perceive it as a problem, of self-financed candidates who have unlimited money and under current law are permitted to spend unlimited money, but all you can do is perhaps ask the media to have debates. You can have a voter guide so that people know who is running. And I guess the other thing I would say is, incumbency is a big issue. 35 4/26/06 - WHOLE - RES. 060070 So it's hard to tell whether it is the $80 million or is it the four years that the citizens of the City saw the Mayor in action. And if they thought he was doing a bad job, I think -- COUNCILMAN DiCICCO: I understand, but you're not born as an incumbent. You have to start somewhere, and my concern is that a guy like Bloomberg and the guy who may be running for Mayor in this City, who has untold amounts of money, could miss a debate, which is a one-night event or two-night event, but have enough money to be on TV seven days a week, hours a day for as 17 long as the campaign is going on. So 18 they can make up for that debate, and no 19 matter how much the media tries to make 20 that an issue, they basically could buy 21 their way through that. 22
Although recently 23 your question has come up a lot more, 24 we've seen candidates with a lot of money in New York City run and not succeed. So 36 4/26/06 - WHOLE - RES. 060070 I think the history of self-financed candidates, if you look throughout the country, has not been uniform. I think that sometimes they win, sometimes they lose. COUNCILMAN DiCICCO: I understand that and I'll agree with you there.
But I certainly understand and appreciate your point, and it's something that we've had to -- COUNCILMAN DiCICCO: I'm just trying to figure out what you all were doing about that, because we're going to have that same problem here.
Yeah. We listen to a lot of different points of view about what possibly could be done, and I think -- I don't want to pre-judge what the Board will conclude, but there are ways to try to deal with it, either give more public funds, either trying to get more air time for candidates, and we are trying to explore different options. 37 4/26/06 - WHOLE - RES. 060070 COUNCILMAN DiCICCO: Thank you. Thank you.
You actually answered in part one of the questions I had written down about the incumbency rate within City Council, but I'd like some other numbers. How many Council members do you have? In the last election, how many new Council members were elected?
Well, we have 51 Council members. In the 2003 election, I mean, all of them were up for --
My recollection is that only one was defeated, one incumbent, and there were a few open 38 4/26/06 - WHOLE - RES. 060070 seats, which obviously didn't have an incumbent. But I believe every incumbent, except for one, was reelected.
Virtually all candidates participated. The numbers were a bit down in 2003, and, again --
How many of the new members participated in your program?
You know, if you want, you can take my card and I'll be happy to get back to you, but offhand, I don't know. Let me think. I think that probably all of 39 4/26/06 - WHOLE - RES. 060070 them did, but, again, in an abundance of caution, I'd be happy to let you know.
How many mayoral candidates participated in your program since the program has been initiated?
I think every candidate, except for Bloomberg, has participated.
Actually, we found that participating in the program has helped people win or at least come very close to winning.
My question was, how many mayoral candidates that participated in your program and how many have won?
How many have won that participated in your program? 40 4/26/06 - WHOLE - RES. 060070
I think everyone except for that year, because in other years --
That's not my question. My question is, how many mayoral candidates have participated in your program and how many of them won?
I know what you're saying, but that's not the question I'm asking you. Has anyone who was not an incumbent participated in your program and actually won the Mayor's seat?
And was not an incumbent but was well known? 41 4/26/06 - WHOLE - RES. 060070
How many political parties do you have in New York City?
And how many different parties have won political office?
Yes; working families, democrat and republican. And in New York state, I don't know how it is in your City, but in New York candidates can run on more than one line, so it's very common to have cross endorsement. So people run on the republican and conservative line and the democrat and liberal line frequently in the past or, more recently, in the democrat and working family party line. So they get multiple endorsements. 42 4/26/06 - WHOLE - RES. 060070
Is the City preempted in any way from making its own laws by the state?
Some people have argued that, but last year the City Council did adopt the law that requires non-participants to file with us and be subject to contribution limits. Some people had argued that that was preempted by state law, but no one challenged that.
Lastly, exactly how do you measure success in your program?
Well, that's a very difficult question. I guess success could be measured by candidates running a competitive race, either winning that race or coming close to winning. Success is candidates getting a lot of small contributions. We think that it's 43 4/26/06 - WHOLE - RES. 060070 successful when candidates run campaigns where they get, let's say, thousands of contributions as opposed to hundreds of contributions.
Let me backtrack and ask you a question. What role do you think Giuliani participating in your program helped his election?
Oh, it definitely helped his election. I think participating in our program, I think most of the people who participate think that it helps their election because --
The question was in what way do you think it helped Giuliani?
Well, it helped Giuliani just like it helped any other candidate, because they don't have to go out and do as much fundraising.
I'm about finished. Really what I was looking for was whether there were newcomers and challengers that participated in your 44 4/26/06 - WHOLE - RES. 060070 program that have actually won in terms of mayoral races or City Council races --
Yes. The answer is yes. And I'd be happy to provide further information about that.
My question was centered around how successful newcomers and challengers have been overcoming not just incumbency but whatever you measure in terms of the impact of your program, how effective it has been, and really some solid examples of how the program has actually worked, not so much anecdotally or how you believe it may have worked but hardcore, how has it changed the political culture in New York City. I didn't necessarily find that in your response. I actually do like the program, but I have been and remain skeptical about public financing. I'm not against 45 4/26/06 - WHOLE - RES. 060070 it, but skeptical as to whether in the end it overcomes things like incumbency and all the other flaws within the political system and why I think this is an effective program that's been set up, be it voluntary, which I think it, to a certain extent, would have to be. I'm not sure that we can conclude from what you've told us that basically it has helped newcomers or challengers basically come into the system in an effective way. Thank you.
Well, you certainly raise concerns that the Board and commentators in New York have raised for a number of years. The Board is very self-critical and tries to see whether the program is working. One thing that inhibits newcomers in New York City is ballot access. It's very, very difficult to get on the ballot in New York state, and that's been something that we've heard from insurgents, from challengers, that 46 4/26/06 - WHOLE - RES. 060070 they can't even get on the ballot. That's incredibly difficult. In fact, New York state has half of the election litigation of the country. That's how strongly litigated ballot access is. But I'd be happy to provide you with reports. You can actually look on our website where we have our post election reports after every election. And we do do very detailed analyses. In fact, I have the 2003 report with me. In every report, we have appendices that we place on a CD-ROM with all of the statistics that may be helpful to you to show that challengers have found that it's made a difference. Obviously not in every race. Obviously incumbency is very difficult to overcome, but they certainly are better off with a public financing system than without one, because without one, they'd have to spend even more time dialing for dollars. MR. McPHERSON: Councilwoman Tasco. 47 4/26/06 - WHOLE - RES. 060070
Thank you very much. Councilman Goode asked some of the questions I wanted to raise. I know you said you don't have the ability to figure out who is doing business with the City, but has there been any analysis to match the contributions that were given to Mayor Bloomberg and who might be doing business with the City, who contributed to his campaign?
Actually, Mayor Bloomberg did not accept any contributions. He entirely self-funded his campaign.
But the question is, do you have any notion because he is self-campaign -- because one of the issues is that you give money and then the pay-to-play culture comes in. Those persons who give the most money get to access the government. Even though he did not participate in your process, the issue 48 4/26/06 - WHOLE - RES. 060070 is, how do we get rid of pay-to-play. So he used his own money to get elected. So can you calculate who or identify some of the contributors who gave to his campaign who are still doing business with the City?
Right. Well, more generally, we can calculate based on -- our database is all computerized. So any member of the public, any member of the press can compare people who are doing business with the City with people who have contributed. It's extremely easy to do that. What we found, though, is, the City Administration has been kind of slow in creating a database of everyone doing business with the City. Right now there's a database of virtually every contractor with the City and the amount of the contract, and you could compare the owners of that company who are listed on a City public database, compare those owners and put those names into our 49 4/26/06 - WHOLE - RES. 060070 database. And so it's pretty easy to tell whether someone contributed and also is doing business with the City.
I'll forego my questions to Councilwoman Miller and maybe we'll let Councilman Ortiz speak and we'll come back to Ms. Dodell.
Thank you. I just have one short question, because actually Councilman Goode and Councilman DiCicco asked some of those same questions I originally had. How much money is put aside in New York? How much is available for public campaign financing?
Well, the unique thing about New York City is, in the City Charter, it provides that whatever money is needed will be spent, that the City Treasury will pay for the Campaign Finance Program's public fund's disbursements. So that although we estimate every year for purposes of the 50 4/26/06 - WHOLE - RES. 060070 City budget and for purposes of planning how much money we think we're going to need, there is no limit as to how much will go out. It depends on who qualifies for the matching funds and who has shown that they qualify for the funds. So that the money is --
The most that we spent was in 2001. I think it was about $42,000 and -- $42 million, excuse me, and in 2003, I think it was around $23 million.
Oh, gosh. You got me there, but what our former Chair of the Campaign Finance Program, Father O'Hare, said was that the amount for public financing is like a tenth of a tenth of a tenth of a percent. It's so tiny compared to the City budget that 51 4/26/06 - WHOLE - RES. 060070 it's really minuscule. The City budget is billions of dollars, I think.
Thank you. My name is Angel Ortiz, former City Councilman. In 1982, Sam Grillo was in a meeting in the City Committee and Walter Mondale was speaking to City Committee at that time, and Vice-President Mondale spoke about nuclear disarmament, Middle East peace, the fact that nuclear weapons had to be contained, and somebody from the back kept raising their hands, and it was Ward Leader Sam Grillo, may he rest in peace. And finally Walt Mondale asked who is the man and why is he raising his hand, and finally he called on him. And this is a great story of folklore that we have. Mr. Grillo said, Nuclear disarmament, whatever you're talking about, I just want to know how much street money are we going to have. 52 4/26/06 - WHOLE - RES. 060070 And I think part of the situation in terms of what we label as reform in terms of the ethics and campaign finance and public financing of campaigns comes down to how do we limit the amount of money that can come in from outside other sources to influence certain campaigns. In the mayoral campaign in this City, Councilwoman Tasco said the last time we spent over $25 million, and that's an obscene amount of money at that point in Philadelphia. However, it is at the lower levels, because City Council, the Register of Wills, commissioners, state rep, judges hold races and run races at the same time, and they have to raise an inordinate amount of money to just be able to compete, and it is that cost that is rising in an exorbitant manner. In 1981-'82 when I first ran, I think I spent $15,000. Of course, I didn't have to pay the money to City 53 4/26/06 - WHOLE - RES. 060070 Committee. I didn't have to pay the outside consultants that crop up during election time in the City of Philadelphia and which we have refined in this City, in terms of pay-to-play in the City takes different connotations at different times, and candidates have to look at and plan to spend money and raise money to meet all of those contingencies. One of the things that public financing might do is eliminate some of those contingencies, bring the transparency that is needed in terms of auditing, reporting, being able to have access to who and why and when and what for candidates, one, receive money and, two, pay out money to whom and for what. And I think if the methodology is reform and brought into the 21st century, that campaigns for City Council, judges may become much more transparent and less expensive. I think Jim Kenney was talking about the other day that he may have to 54 4/26/06 - WHOLE - RES. 060070 spend over $750,000 to be able to run for City Council in the next primary. Can you imagine that? Can you imagine that? Seven hundred and fifty thousand dollars for a City Council seat? Not too long ago, Julie Walker and Darrell Clarke spent each over $300,000 to run in a district. And in order to be able to raise that money and probably in the poorest district in the City of Philadelphia, that's an inordinate amount of money to be needed to be able to raise to run a competitive race in the City of Philadelphia. And who gives those monies? Obviously the people who give the monies are not the residents of those districts. When you had to raise some money, you went to individuals that could give you $5,000, $10,000 contributions. And there are many people out there who are willing to give you that in order to have access and be able to exert some influence. We have given the name and 55 4/26/06 - WHOLE - RES. 060070 defined the term "pay-to-play" in the City of Philadelphia. I think we have taken a step with some of the ethic reforms that we have approved in this Council during this term.
I think the campaign finance bill that we approved the last term was a step forward, and I think the next step that we have to take in order to have the transparency, the ability to be able to run races in this City that leave no shadow of doubt, that every candidate is receiving money and spending money in a manner that is conducive to running a political campaign and able to run a race directed at the issue of his own agenda and being able to inter-spit (ph) that agenda through the money that is raised and perhaps also the money that is complimented by the public. Media is an issue. Obviously it is very expensive. But you don't have Council people, you don't have judges, you don't have a lot of individuals raising money to buy media in the City of 56 4/26/06 - WHOLE - RES. 060070 Philadelphia, although that is becoming more and more prevalent in the last few years. We need to be able to structure a system -- and, Councilman Goode, I know two people in New York who ran and won, and they were newcomers, but they could not have run if there had not been any public financing of campaigns. So I am here to be able to say to my former colleagues, I think we've taken a step with the campaign contribution bill that we passed. I think the next step forward is to get a bill, one that I introduced eight years ago, very similar to the New York and actually modeled after the New York bill, and pass that and be able to put it before the voters of the City of Philadelphia so that we can change the Charter and we can have public financing of campaigns in the City of Philadelphia. I hope that this hearing leads directly to that. Thank you. 57 4/26/06 - WHOLE - RES. 060070 MR. McPHERSON: Councilman Goode.
Thank you. I am not against public financing for several reasons, for the same reason that I did the campaign contribution limit bill, that I believe it will help in terms of voter participation. I believe that it will increase competition. I believe that it will increase debate particularly structured the way it is in New York. I'm still not convinced that it helps people win. So I still think that there is a purpose that is served by it. But I want to go back to a few different points just to get to what I think the real problem here is and how campaign public financing may or may not help. We cite the fact that $25 million was spent on the Mayor's race. I'm not sure why $25 million was spent. There was no primary opposition, and the 58 4/26/06 - WHOLE - RES. 060070 general election generally did not focus on issues. It was not, in the end, a competitive race, and so I'm not sure what the $25 million was spent on. When we talk about City Council races and who wins and who loses and how much money people spend, I still don't see a direct correlation between the money and the victory.
I'm sorry. I want to direct my comment to what you just said.
I'm still -- in the end, my ultimate point and/or question is mostly based upon Councilman Ortiz's experience. In reality, in terms of Council races, what is the money actually spent on?
In Council races, one of the problems that we have 59 4/26/06 - WHOLE - RES. 060070 is that an inordinate amount of money that a candidate raises does not go to literature or otherwise. It goes, in essence, to disburse funds to a great number of groupings that get together during election time. And candidates have to go before those groups that are outside of City Committee or that are separate groups and you have to give some money to or hire those groups to do certain political tasks.
I think the reporting, the transparency that would be instituted in terms of the ordering process, in terms of who gives money, how 60 4/26/06 - WHOLE - RES. 060070 you spend money, I think the more transparent that the process becomes --
That isn't my question. My question is, if the bulk of the money in Council races goes toward paying people off, how will public financing change that?
Because you will not be able to -- I hope you will not be able to use those monies to pay people off and that there will be transparent mechanisms put into place so that those type of activities will no 15 longer be feasible within the context of an election process; that there be a reporting mechanism; that there be expenditure limit; that there be a whole auditing process that is instituted and put into place.
Is that to suggest that if there was a public financing system in place for 2007, that I wouldn't buy the support that I need?
I'm officially recorded and say, I gave money to whoever I want to give money to in order to get the political support that I need?
Well, it's how you get the public support and what is established as political expenditures that need to be made.
What I said is, I can support public financing in order to increase voter participation, in order to increase competition, in order to try to increase debate, but don't necessarily see it as a vehicle toward winning. And even when people talk about the issue of the cost of the elections and cite the Mayor's election, the last Mayor's election or City Council races, I mean, I've already concluded that the $25 million was poorly spent in the Mayor's race, because I don't think it made a difference one way or the other. In terms of Council races, I 62 4/26/06 - WHOLE - RES. 060070 pose the question, how do people win and what do they spend their money on to win and how does public financing impact that? And if the bulk of the money does go toward, quote/unquote, buying the requisite political support, how does public financing change that?
I think if you put it in and you have challenges that are made and I think the arguments and the debates that will take place under the system will be very different, because you will have to be openly engaged in that and you will have to be openly reporting and you will have to be openly saying who it is, how and when and why. It depends on the mechanisms.
I'm not trying to debate with you. I'm just trying to have a discussion go where it needs to go. In the last primary election, I spent roughly $50,000. Forty-three thousand dollars of it went to ward 63 4/26/06 - WHOLE - RES. 060070 leaders. I don't have a problem with that because I won. How does public financing change that?
Councilman, you begin in any race with an advantage. Your father is still one of the persons that I admire most in this City, and his name has great value, and you begin with that advantage. If you were not Wilson Goode, you would have to spend more than $43,000.
Well, that's not necessarily true, because my question really is, to be perfectly honest about it, is that if I can pay $15,000 to City Committee, which is what is required as an assessment, if I can then gain additional support from roughly to 30 20 ward leaders in this City, how is public 21 financing going to beat that? 22
I don't 23 think public -- I think your challenger 24 or the individuals that may be able to 25 challenge may -- 64 4/26/06 - WHOLE - RES. 060070
One final point before you fully respond. Because to 30 ward leaders are not necessarily 5 going to take everybody's money. So it's 6 not just whether you have the money to 7 give them. It's whether they want to 8 support you. 9
The 10 experiences of ward leaders is something 11 that needs to be explored and talked 12 about, but -- 13
But I am 16 quite sure that with public financing, 17 challengers will be able to mount 18 campaigns to challenge the established 19 structure. I actually believe that that 20 can happen. And I think it would allow a 21 more competitive process to begin to 22 emerge in the City of Philadelphia. 23
I definitely 24 believe it leads to a more competitive 25 process. I believe it leads to more 65 4/26/06 - WHOLE - RES. 060070 debate. I believe it leads to increased voter participation. I'm not sure it leads to victory.
You know, if you can buy it. Victory can never be assured, but I believe a system that can begin to establish a way in which candidates --
-- and people can come into the process and challenge the status quo is beneficial to the system and the City.
Councilmember Goode, I wanted to mention another race, which was the 1989 mayoral race in New York City. As you may recall, the incumbent, Ed Koch, was defeated by David Dinkins. They both participated in the 66 4/26/06 - WHOLE - RES. 060070 Campaign Finance Program. There was some thought at the time that if Mayor Koch had not participated in the program and not limited himself to the expenditure limits, he might have gotten reelected. But he did choose to participate and David Dinkins did defeat him, and that may be another example of where someone who was not an incumbent, someone who really benefited from participation in the program.
I understand the young people that are walking through the room are on tour and there are students from Canada. We certainly want to welcome you and certainly hope that you have a very nice visit. Enjoy. (Applause.)
The Chair recognizes Councilwoman Tasco. 67 4/26/06 - WHOLE - RES. 060070
Dodell. Susan. Has voter participation increased in New York as a result of this campaign finance?
I don't know if you can really say that, honestly. The participation has not been that great throughout the country and even in New York. So I'm afraid I can't say that it's increased.
Do the candidates have a difficult time raising the match, the money from their district, particularly the Council members? Do they generally get more than the required participants?
They generally do get more. Up until the 2003 race; in other words, in 2001 and before, they had to get 50 contributors, and usually 68 4/26/06 - WHOLE - RES. 060070 people could get 50 people. And, honestly, if you can't get 50 people to contribute --
Yeah, at $10. If you can't get 50 people to give $10, you may want to wonder about whether you should be running. So I think the answer is, generally people can get the contributors.
Who audits the candidates, all of the candidates? Is that part of your department?
It is. The Campaign Finance Board has auditors on staff, and these auditors either go out and visit campaigns or frequently get documents from campaigns. Before the election, I described how they go out and do site visits. After the election, we ask candidates to submit all documentation of their expenditures, and we review that documentation to make sure 69 4/26/06 - WHOLE - RES. 060070 that they've spent public money on things for the campaign. And then what the auditors do is send out a draft audit to campaigns. Campaigns get a chance to respond to it and show perhaps that they made other expenditures that they, for whatever reason, didn't report before. So they get a chance to respond. And then we do a final audit, and that is publicly disclosed. All of our final audits are on the Board's website so you can see what kinds of issues campaigns may have had. And then if the audit concludes that money is due back to the City, the candidate must return that money or we sue them to get the money back.
One other question. What is your administrative costs for this program?
It's fairly low, and, again, I don't have that with me. Since I'm a lawyer, I tend not to be that great at the other side of the office, 70 4/26/06 - WHOLE - RES. 060070 but I'd be happy to send that to you, because it's all public, obviously. But the cost is fairly low. Perhaps a couple of million dollars a year, but it's pretty small.
You talked about the Council races and not having a lot of challenges in the Council race. What other municipal offices run at that time and what is the rate of challenge?
Well, there are races for Mayor, for Controller, Public Advocate and Borough Presidents. We have five boroughs or counties in New York City. And then we have the Council districts. So we found that the mayoral races do tend to be the most competitive and the ones where I think we can see the effects of public matching funds very clearly. The City Council level, as I said, unless there are open seats, incumbency does tend to predict success generally. But on, let's see, the 71 4/26/06 - WHOLE - RES. 060070 Borough President and Controller and Public Advocate races, again, not a lot of competition there unless it's an open seat.
Let me ask you, you talked to me on the side earlier and you talked about the program failing in Suffolk County.
I think the problem there was lack of funding, and so it shows how important it is to put something in the statute that provides for funding and doesn't depend on an appropriation by the legislature. So it's better to have something in there that says that money will come out, that whatever campaign finance agency automatically gets funding for its functions. And, similarly, speaking of our administrative functions, not only does the Charter provide that public funds have to be given when the Board determines that they should be given, but 72 4/26/06 - WHOLE - RES. 060070 it also provides that our administrative costs must be included in the City's budget and can't be challenged by the mayoral side. So that's another good protection for the program, that our administrative costs are also -- I mean, they can be changed by the City Council as part of the budget process, but the Mayor can't change our proposed budget for administration.
Okay. Thank you, Madam President. Thank you for coming down. You'll probably come back with someone else.
Good 73 4/26/06 - WHOLE - RES. 060070 morning. I have a follow-up question to Councilwoman Tasco's question that goes purely to the definition of "reform" that you put on your brochure here, which it says, "A movement that attempts to institute improved social and political conditions." So to her question and to your stated goal on , which says "increase opportunities for citizen participation," as of yet you have not been able to determine if there has been an increase of citizen participation. Is that what I heard you to say?
When you say "citizen participation," do you mean voting or do you mean --
I don't think we can show that there's an increase in voting. What we can show is that more and more people are contributing to campaigns, which is a goal of the program and certainly part of participation, that 74 4/26/06 - WHOLE - RES. 060070 the program because it matches small contributions encourages voters to contribute to campaigns. And we've heard over and over from candidates, particularly on the City Council level, how energized people have felt in their districts when they've been able to tell a particular citizen, If you give me $25, it will be matched by $100 in public funds. And, similarly, if it's even $10, it will be matched. For that matter, even a dollar will be matched. So we found that citizens are contributing. And you'll see if you take a look at our website that there are a lot of campaigns where people get very small contributions.
Is there any interest in looking to see if campaign finance reform, as outlined in New York, makes a difference with regards to more voters showing up at the polls? Is that a goal going forward?
That's certainly a 75 4/26/06 - WHOLE - RES. 060070 very interesting question. The Board also, as I mentioned, administers the Voter Guide, and we think that that has certainly informed voters and has probably increased their interest in elections. But, unfortunately, I don't know if you can really show a direct correlation, or even how you would do that, to show whether the Voter Guide or whether public financing actually gets people out to the polls, but I personally don't know of any real correlation in New York. I can go back and see if we have any data on that, but it's hard to show, I think.
Okay. Thank you for your testimony. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilman Ramos.
Thank you, Madam President. 76 4/26/06 - WHOLE - RES. 060070 Ma'am, in Philadelphia, we have a person in our neighborhood that is a highly regarded person and sometimes underappreciated. This person is called the committee person. Do you have someone called the committee person in your neighborhood, in New York City?
A precinct worker? This is our person that is elected by the people in the neighborhood to represent his or her respective party. We call them committee person. Do you have someone in your neighborhood --
I don't know if we have something like that. Some parties have district leaders, but I don't think we have something equivalent to that.
Okay. In Philadelphia, we have this underappreciated person out there, and this is the person that goes to an election -- we're having an election here 77 4/26/06 - WHOLE - RES. 060070 on May the 16th, and these people are running in our neighborhoods to be elected as their representative of their party in their respective neighborhood. Once they get elected, everyone in their neighborhood is knocking on their door. There's a pothole here, there's noise at 1 o'clock in the morning, my kid wants to go to college. And this is the person that everyone in the neighborhood runs for. This is the person that we depend on to help us win an election, because this is my local leader in my party, this is the person that the people in the neighborhood know very well. That person is 99 percent of the time a very sacrificing person. This person has to take off on Election Day to get the faithful of his or her party, in my case the democratic party, to come out and vote on that day and vote for their candidate in their party. A lot of these good committee people in our City have to take off from work on that day, and a lot 78 4/26/06 - WHOLE - RES. 060070 of them don't get compensated for taking off. In other words, their employers are not going to pay for them to take off on Election Day to do a civic thing but, nevertheless, a very partisan thing. Would a person that is a candidate that is getting public financing money, would that person be able to compensate in your system this committee person on Election Day? If I got public financing dollars, could I compensate these committee people, in my case as an at-large member, all over this City? And I do it through the ward leader, because the ward leader is elected by these committee people to be their leader of the whole broader neighborhood. Would these financed public dollars be or would we be able to use these public financed dollars to compensate this type of person?
It would depend on what exactly they were doing. 79 4/26/06 - WHOLE - RES. 060070
They're getting people out to vote of their political persuasion, whether democrat or republican in most cases in Philadelphia. Could we use those public financed dollars to help compensate them for taking a day off of work to work in an election?
Well, you couldn't compensate them for taking a day off from work, but --
Can I give them some money of the money I get from public financing?
I mean, in general, in order for public funds to be used, it has to be in furtherance of your election, and under our system, we would require that detailed records be kept. A written agreement would have to be made with the person. Details in writing would have to say exactly what he or she was doing. Time sheets would have to be kept. So there would have to be a lot of 80 4/26/06 - WHOLE - RES. 060070 detail.
Would I need to do a record of every single individual committee person that in my case it's well over, I don't know, 2,000 or more, more than that? 3,000. I mean, it's a lot of them.
Yes. You'd have to have records for every expenditure that you make.
For every single individual, all 3,000, or whatever the number may be?
I could not with good accounting give that the total amount of committee people to the ward 19 leader so he can then give back to me 20 receipts on -- 21
That would 24 not be acceptable? So how do you do it 25 then? I know a little bit about, just a 81 4/26/06 - WHOLE - RES. 060070 little bit, about New York, not much. So who is the person in your neighborhood that knocks on your door and reminds you that there's an election and is pushing for their political party? And who contracts that person? I mean, I'm quite sure that people --
Some of them are volunteers and some are paid by campaigns, campaign workers, who may go around with literature in a traditional way of campaigning.
Now, those are campaign workers. These are people that are working for a candidate who has now received public dollars, right?
If they receive public dollars, then that person would need to have all these receipts?
Okay. So there is no party organization, the Green 82 4/26/06 - WHOLE - RES. 060070 Party in New York, the liberal party in New York, the republican party?
There is, but if they coordinate with -- that's a whole other issue of -- if they act completely independently of a campaign, then they may be able to support who they want, but if they coordinate in any way, if they coordinate with the campaign, then all of those expenditures would be deemed expenditures of the campaign and it could raise issues of the expenditure limit.
Okay. I mean, I would think that to do it your way in the City of Philadelphia would probably require a total overhaul and restructuring of the political structure of particularly our two major parties. You would probably eliminate the whole concept of having a person elected in your neighborhood to represent your party. What's the worth then of a person that wants to represent his or her 83 4/26/06 - WHOLE - RES. 060070 party, wants to assure citizen participation in an election if they become unimportant and almost useless?
I can't answer that, but only to say that part of the purpose of campaign financing is to change the political culture, and in New York City, it has changed things. And perhaps if you adopt it in Philadelphia, it will change things as well.
You're welcome. The Chair recognizes Councilman Goode.
Thank you, Madam President. A couple more follow-up questions. Of your 51 Council members, what's the political breakdown? How many democrats, republican or others?
Most of them are democrats. I think at most -- let me 84 4/26/06 - WHOLE - RES. 060070 think. Probably four or five are republicans and one is working family party.
Has that changed at all since your program went into effect?
Well, working families party person was elected in 2003 and the number of republicans perhaps has increased slightly, but probably not that much of a difference.
So you have more republicans on City Council and you've had a republican Mayor for most of the time that public financing has been in place?
No. That's not actually the case. We had a democratic Mayor from '89 --
I said a republican Mayor most of the time since the program went into place.
Let's see. I guess that's true, yes. 85 4/26/06 - WHOLE - RES. 060070
Are there any other questions of this witness? (No response.)
Seeing none, I really thank you for coming in to testify. It was very informative.
Thank you. MR. McPHERSON: Our next panel consists of William Miller, Zach Stalberg, Chris Sheridan and Kevin Williams.
Bill 20 Miller, my heavens, I had to look three times. You look wonderful. How are you feeling?
Great. You look great. 86 4/26/06 - WHOLE - RES. 060070
Really? Well, it's good seeing you and it's good having you here. Mr. Miller, are you going to be the first to testify?
Okay. It's almost afternoon. Good afternoon, Madam Chair, members of City Council, distinguished guests, and I thank you for the opportunity to testify on this issue in terms of public financing. I have submitted a letter that I had written as an op-ed last year. That was in the heat of the moment, but the gist of the letter I'd like to discuss or at least share with you and the Council members today. I think that public finance 87 4/26/06 - WHOLE - RES. 060070 reform, as well as the ethics issue and all of those issues, are critical issues of our time. I think they're also a natural by-product of a time that is changing more dramatically than we have an opportunity to adequately analyze and to prepare ourselves and our institutions for. Simply put, I think technology as it exists today is changing so rapidly that it is changing the way we do our business. What is unfortunate, people tend to be in a comfort zone and are unlikely to change as quickly as the demand for change is there. As a result, we hear terms of corruption. We hear a lot of things that provide the impetus, I feel, for quick solutions, particularly for yourselves who are in the public business, and your constituency, in many instances, will dictate your behavior. I've been around this business for a long time in many capacities, and I have known many, many, many elected 88 4/26/06 - WHOLE - RES. 060070 officials. I don't know one of them that wakes up in the morning and decides, Whatever I do today, I got to get my share of corruption in. I don't believe that anyone stands up in the morning and has an intention of doing anything but the right thing. And generally what you do in this legislative body, unfortunately, the bulk of your work is constituent service. I say it's unfortunate because that drives election, because the time that you need for a great forethought and intellectual exchange and the appreciation of technology, the demands on you on a daily basis, it doesn't afford you that kind of time. However, what my major concern has been is how this whole issue has been characterized and depicted. I don't see throngs of the public going into the street screaming and demanding that we have election reform, campaign reform or any other kind of reform. I don't know 89 4/26/06 - WHOLE - RES. 060070 that there's a complacency or whether there's just a general attitude where the public has been anesthetized to believing that their direct input is not going to make a difference. But I don't see the demand coming from there. But where I do see it is from the media, and I'm inclined to believe if one looks at this situation, they will find that the media has control, an inordinate amount of control, over our electoral process. The media will ultimately determine who is considered a legitimate candidate. The media will determine through their endorsements who they feel are most worthy. They determine what issues are relevant, and in the end, they coincidentally, the media overall, garners a healthy profit in their endeavors. I tend to say that they wear at least two, many times three hats. By setting the agenda for public debate in the political process, the most important 90 4/26/06 - WHOLE - RES. 060070 thing as I heard many Council people talk to the previous person here about committee people and ward leaders and all the other things. In the end, it's all about communicating, and for you, it's about communicating a message that will resonate with the people whom you hope will vote for you. Now, people vote for different reasons, and I guess doing a study on voter behavior would probably be, if not interesting, certainly amusing, but the fact of the matter is, people will vote on familiarity and other things. Your issue is, how do I let them know I'm running. And that's generally the issue for most people who run. Money is intrinsically linked to that.
In a study I did, I think it was about the last decade in all elections in the United States, an average of 93 percent of those elections at all levels were won by the person who spent the most money. There is an 91 4/26/06 - WHOLE - RES. 060070 absolute correlation between dollars available and dollars expended. When we have legislation that puts a limitation on what can be spent, I think the intent is noble. Maybe the unintended effect does not necessarily level the playing field. I think it, plus public finance and other things, moves us in the direction toward a cleaner society, a better society and maybe a process that is more representative of a democracy that we live in. However, I'm going to suggest that everyone has a role in that, and it's not just having elected officials police themselves. I think there are a lot of people who feed on this process in very significant ways. So today I chose the media, and I did because I am the CEO of a strategic communications firm, and in my more naive days, I did that in politics. I now realize I can't earn a living that way, so we do strategic communications for larger organizations. 92 4/26/06 - WHOLE - RES. 060070 But the essence was developing a message and developing a message that would resonate in terms of that constituency out there. And we were intrinsically locked into the media itself. Free media is where you try to get a message across. Hopefully it will be one of the issues they've chosen, but invariably it's paid media at all levels, whether it's ads in your local newspapers or whether in the larger campaigns it's TV. It is estimated that the mayoral race in 2007 for creditable candidates as defined by the media could very well cost around $5 million to run the race. There are those who give modest estimates that 60 to 80 percent of an electoral budget in a campaign goes to the media in some form. So that could very roughly be $3 to $4 million that is spent in the media, which is the same media that will determine your legitimacy, that will set your issues, that will create the forum and endorse 93 4/26/06 - WHOLE - RES. 060070 whom they think should win. My concerns with all of that is, obviously they're a very powerful entity, and I'm quite sure as they set the moral tone for what they think is ethical, if a movement started to demand public access for elections at all levels, public access to air time on TV, public access to radio time through cable TV, through newspapers to give candidates, after the criteria is established, an opportunity to articulate issues -- and, unfortunately, today that's a novel thing, because the matter of fact, if you got money and name recognition and they have deemed you legitimate, rarely do they care about the issues, or the voters who see your face more times than not or read your name won't tell you by all of you in this room 22 what issue drove them to vote for you. And if they aren't agrounded in issues, if we aren't defining what we think is important or you as leaders, how do we 94 4/26/06 - WHOLE - RES. 060070 create a better City? Upon what basis do we say, I cast my vote and I predict on past behavior and requisite skills and abilities that that individual will move this City in the direction that I want? What we'll generally say, We saw them on TV, if they can afford it, or we read it in the newspaper based on how they write it to make a decision, which to me is no 11 doubt that John Street, who I think won his last election with 223,000 votes, had he been running in the previous five elections, he probably would have come in by those numbers about fourth, and because the number of voters and participation in itself is dwindling. I'm not saying and predicting or even suggesting that you have the ability or the power to determine that these mega, mega, mega billionaires who make the money on this are going to simply kneel to you, but if you have the will, it's a start. It's a start. Their profits are insane.
And 95 4/26/06 - WHOLE - RES. 060070 I understand many newspapers are going out of business because of the Internet, which shows one thing, there's a demand for information. There's a demand for information at all levels. I think you clean the process up by meeting that demand, and you can meet that demand by creating a process and making business, as well as you as public officials and the electorate, to share the cost. And I simply say not that I think it's the panacea, but I do believe in terms of the media that they need to be held accountable for this. I was incensed with the articles that I read about ethical reforms, incensed. I don't believe any one of you, regardless of how much money you spent -- and I know the mayoral and presidential campaigns would have had the motive to just raise that money, if they didn't have to spend it. Any of you who sat in the war rooms of a major campaign within the last 30 days and you watch 96 4/26/06 - WHOLE - RES. 060070 polling numbers, you see polling numbers, public opinion polls, move more dramatically with television. Television drives polling numbers. And within the last three weeks of a campaign, if you're not moving chunks of $50,000 to $100,000 in the mayoral race at a bite with meaningful gross rating points, then whether you had the best message at all, your opposition is defining you. And there's not a winning candidate yet that didn't garner the resources to answer in-kind. You know, if they say you're a bad person on TV, you're not going to say, "I'm a good person" in the newspaper. " Because the impact of mass media has maybe in our business an unintended effect, but it defines your ability. So when we look at articles 97 4/26/06 - WHOLE - RES. 060070 that are written, this guy is a frontrunner, not because that guy has or gal has the best ideas in terms of moving it forward, but they have the potential, and this was actually written, of raising the money. That's the same media that indicated to you that money corrupts. I don't know how you have it both ways. I just don't understand it. I don't understand why other people don't understand that or see it crystal clear. But if this is simply a start, I just wanted you to think about that. When fingers are being pointed at you for why did you take the money, let's take a look at where you had to spend it. And you had to spend it to be creditable, you had to spend it to get the endorsements, you had to spend it to satisfy them of your worthiness to be the candidate, the least of which you put forth your credentials and your ideas. You had to spend the money. So, Madam Chair, I won't 98 4/26/06 - WHOLE - RES. 060070 belabor the issue to you and your colleagues. I just wanted to introduce another perspective.
Thank you very much. The Chair recognizes Councilman Goode.
Thank you, Madam Chair. I could not agree with you more. The issue of public access to media is the actual issue. I'm glad you brought it up, and I think that it should remain probably the center of our discussions as we move forward. I want to ask you a few questions related to some things in your comments and just in terms of prior experience. You noted that 85 percent of the candidates that win have more money. What percentage of the candidates that win do you think are incumbents?
That's a good 99 4/26/06 - WHOLE - RES. 060070 question. I don't have the correlation between that, but I probably would say overwhelming numbers of candidates are incumbents, and that's also directly related to their ability to raise money, too.
Absolutely. In your experience in terms of mayoral campaigns, can you talk about what races you were involved in in the past?
Can you talk about what races you were involved in in the past in terms of mayoral campaigns?
I mean, I was involved in the Bill Green campaign. I was a Regional Field Coordinator in that. I was a Lead Consultant in the election of someone you met a couple times, Mayor W. Wilson Goode, and I was his consultant, but I was the Field Director and the Political Director in that campaign. I've had involvement in many of your colleagues in City Council. I've 100 4/26/06 - WHOLE - RES. 060070 done --
Well, I had involvement in the Burrell campaign in '91 as his Co-Media Consultant and Senior Advisor, and I've had involvement in the 1999 campaign of Marty Weinberg when he ran in 1999. And I would say that pretty much in terms of mayoral campaigns, I did some out of the City, but that was pretty much it. I'm glad you asked me that, because two of those campaigns, the Burrell campaign and the Weinberg campaign, were clearly indications of what I talk about in terms of media. When we designed the Burrell campaign, we understood he had a very impressive background as a pro football player, an all-American collegiate football player, a lawyer who was a graduate from the ivy league, University of Pennsylvania, and what we did was, we created commercials 101 4/26/06 - WHOLE - RES. 060070 and all of those things around George with some of his other accomplishments, and we marketed that as he is a campaign. Now, the truth is, we knew from the start -- George is a friend, so I certainly don't mean to in any way be disparaging, but from a consultant's perspective, we knew that George had a mile-wide profile, but it was about a quarter of an inch deep when one looked at the probe of his legitimacy. And then, lastly, the Marty Weinberg campaign was clearly a media campaign. We raised more money than everybody and we basically put him on TV. And had Marty been a better candidate personally -- I had dinner with him the other night -- the results would have been different. We couldn't image away.
This leads to my question. There's no question that it takes money to buy media, and that's particularly why I think that your point about gaining more public access and 102 4/26/06 - WHOLE - RES. 060070 equitable access to media for candidates, whether it's running commercials on City stations, whether it's opening up the newspapers and electronic media to advertise and whether it's having the media write more articles, whether it's forcing debate and coverage of debates, is one thing. So I'm not going to dispute whether it now takes money to buy media. My question is, what impact does media really have in the end? Not that people just don't use media to be competitive. And, first, I'll highlight the points you made about polling numbers. There's no doubt that media can drive polling numbers throughout an election, which helps people raise more money, which helps them buy more media, which doesn't necessarily in the end help them win the election. So while media drives polling numbers, I don't think it can be said that media wins elections. So I want to go back to those mayoral campaigns that you were involved 103 4/26/06 - WHOLE - RES. 060070 in and just say, did Bill Green win because of media? Did Wilson Goode win because of media? Did Ed Rendell win because of media? Did John Street win because of media? Not just a question of whether it takes money to buy media, but did any of those candidates actually win the office of Mayor through their media?
I would say this: Particularly Wilson Goode won because he's had an unprecedented that's never been done before field operation, and he had a record that he was running on and connected directly at the community level with people. And the superior field operation that he had -- I keep saying that because I organized it -- that, along with his own public persona, was things that the media ended up writing about. So I would say to you, if he did no media, whether it was the thing that put him in office or not, it certainly contributed. They wrote about 104 4/26/06 - WHOLE - RES. 060070 the field army. They wrote about the little ladies who came out and did our fundraising, dollars in an envelope, that had never been done before. Those were measures of support and popularity that to that date had never been done. That was written about. Because those people out there, other than communicating with us, had no way of understanding or connecting with all of the components that went in to getting him elected. So, yes, media by some form had a lot to do with it. And really answering your question, I would say to you that I don't think there's a Mayor that's run in contemporary times that could win without it.
That's not my question. My question is, did any of those people who were elected win because of the media? It's understood that they had the money to buy the media. It's understood that both campaigns ran the media. The question in the end is, did 105 4/26/06 - WHOLE - RES. 060070 any of those Mayors win because of the media, media advantage in terms of this candidate versus that candidate?
I would say you all as members of this Council can sit and reflect on your elections and you can probably get ten people in a room with ten different answers about what thing put you over.
But I'm asking about your involvement in mayoral campaigns.
The terms of involvement in those campaigns, media made the difference.
Bill Green, Wilson Goode, Ed Rendell, John Street won because of the media campaigns?
Wait a minute. Can I give you one caveat? Their effective media campaigns.
The 106 4/26/06 - WHOLE - RES. 060070 Chair recognizes Councilwoman Tasco.
That's what I was going to say. That was a point of information, is that it certainly helps in terms of you can have all the things that will help you win, the little old lady with the dollar and all that, because we've seen other candidates run, but without having the ability to get their message out to the broader public, none of that mattered. It was the effectiveness of the message and getting it in the media that helped them. Certainly whether it's the TV or whether it's the print, when I ran in '87, the ability to get my message out was the key. When I ran in the race, nobody knew either of us. There were three of us running. And so the ability to reach -- I couldn't do TV, didn't have the money, but I did have the money and the availability to mail and posters and literature. But without the money to buy 107 4/26/06 - WHOLE - RES. 060070 that, it wouldn't have been effective. But it was as a form of media, is getting the print media out to my voters, because they didn't know me.
Excuse me. I believe Councilwoman Blackwell would like to be recognized.
Thank you, Madam President. Assuming that one has professionals who can prepare one's media to follow up on what has been said and who can prepare effective media, would you agree then that those who -- and I think you have already -- those who have the money to buy media are those who can be most successful? You've admitted that.
Therefore, then, would you also agree that the public expects people, major candidates, to have public media no 6 matter what quality of candidate they are? If you run for Mayor on up, that you're expected in this country to be on TV or you're not viewed as a legitimate candidate?
I agree with that. Then do you also agree that given, let's say, for example, the current election where we have a millionaire who said that he would put in millions of dollars, he started off saying, I will put in 6 million -- I don't know that he's put in that much, but it's been said that he would put in from $6 to $15 million. That obviously gives him an advantage on people who are born without those means.
Then it seems to me, and I suppose you agree with this too, having the discussion about campaign financing is great, but in the final analysis, in the real world, nothing changes, because people who are born wealthy know more people who can even pay $5,000 and $10,000 than generally people who are born poor, and as long as people are able to use their own private wealth versus that which you can raise, we're still discussing the issue, but we still haven't come up with any way to make it a more fair playing ball field. Do you agree?
I agree, Councilwoman, and I was also taught very young this adage, and it was called the golden rule. Those who have the gold, rule. And what I talked about today in terms of the media itself, I was talking about the inordinate amount of money that, particularly TV, radio media, takes away from the campaign process, and I 110 4/26/06 - WHOLE - RES. 060070 just think that we ought to force them to give free access.
And to say it another way, on the other end, then those who have to raise money have more complications that we have with all these rules to raise money than those who don't have it. So it's easier for those who have -- those who have, gets, as the saying goes, and those who don't have, have to work on like the devil. It's become such that everybody -- the joke around the hall is about some leaders in our City going out to lunch and everybody paying for their own meal, because people are afraid when they're breaking the law and nobody wants to go downtown. So I accept the fact that that happens in the beginning of discussions, but I note that we do question whether or not in the final analysis it becomes helpful or just another complication that we somehow have to live through and wait until this time has passed as well. 111 4/26/06 - WHOLE - RES. 060070
I agree with you. I do think that it's helpful now to at least have a dialogue simply because of what you just said. I think a lot more thought has to be put in before corrective measures are adopted, because you got to take a look based on what you said also as good intentions. But you have to look at the impact that those good intentions have across a broad spectrum of people. I would only say as far as back to the media and other races, I thought names that many of you don't even know, but Neil Oxman and the Steve Murphy and the David Axelrod and people of that nature have run campaigns. If you look at the campaign finance report, those guys took the bulk of the dollars that were spent for themselves, and each one of them are media consultants. I mean, whether you're successful or not, you had to first go get them, and that's where you're 112 4/26/06 - WHOLE - RES. 060070 spending your money.
Absolutely. I, for one, feel that having discussions are fine, but forcing a vote makes life much more difficult for many people who run for office. We make the adjustment because we have to. We're elected officials, but for posterity and others who may want to enter into the race, I've looked through some of the testimony, and people who come from the people, come from the neighborhoods, it's going to be a lot harder for them because they can't hire the Oxmans and they don't know what the rules are. It's become such that you're afraid you may violate a law and just not know it. So I'm for discussion, but I'm not for more legislation until the discussion leads itself to that point. Thank you, Madam President.
Councilwoman, I appreciate that. I think from where I come from, I believe grassroots politics, 113 4/26/06 - WHOLE - RES. 060070 door to door engaging people is the way to go. It's also the way to increase participation. It's also the way to garner the true will of the people, so to speak. However, we live in an age of expedience, and politics have expedience, and as a result of it, we're paying $4 a gallon for gas, you know. And somewhere it's got to stop.
The Chair recognizes Councilman Rizzo for a point of information.
I think for our record, in all fairness, we need to report the fact that -- and I'm confident that you're aware, and if you already mentioned it, forgive me. But during election time when we go to the 114 4/26/06 - WHOLE - RES. 060070 electronic media or the written media, there's a different rate for political, and the media has bought in to trying to make available. And matter of fact, the Federal Communication Commission has all kinds of rules to make sure that there is time available on the major market, radio and TV stations. So I think it's important to make note that the media does try to be cooperative. Quite a rate that most businesses would love to get to advertise a 30 or a minute spot. So I just wanted that to get in the record there, that there is some consideration and help to make the airways and also the print media available to people that would like to seek office at a reduced rate.
I think -- not think. I know that you're absolutely right, that there are different, during the election cycle, there are different rates for candidates. However, for a 115 4/26/06 - WHOLE - RES. 060070 candidate who has lots of money and is unknown, they're going to pay the regular rate, because they're going to go on the air earlier. And the fact that we have the FCC and others who regulate the media, there's an acknowledgment in this country about the impact that that media has on the lives of everyone else, and as a result of that acknowledgment itself, I say that there's an additional obligation for it to provide better access to individuals who aspire to run for office.
You're welcome. Are there any other questions of Mr. Miller? The Chair recognizes Councilman Kenney.
Thank you, Madam President. I don't have any questions, but I just want to publicly say, I'm so glad to see you looking so 116 4/26/06 - WHOLE - RES. 060070 good and robust.
There was some difficult time, but you look really terrific sitting there. So I just wanted to -- what's really important is your health, and I wanted to compliment you on it.
I thank all of you, quite frankly, for your prayers and your support of my family. It meant a great deal. The issue is, I'm blessed. I won't go much further than this. Some doctors gathered around, and I had a hoard of them, and said, You are a medical phenomenon. And they said, Bill, if people have nine lives, you've used eight of them, because you're very lucky. And I said without equivocation to them, I'm blessed. It wasn't luck. I know that because there's no other reason why I'm here.
Well, we're blessed having you here. 117 4/26/06 - WHOLE - RES. 060070
Thank you. Any other questions or comments of our witness? (No response.)
Good afternoon. Kindly identify yourself for the record and proceed with your testimony.
Thank you. Good afternoon, and thanks for giving me the opportunity to testify in favor of campaign finance reform, including expenditure limits and public financing, for Philadelphia municipal election campaigns. My name is Kevin Jon Williams. I work in Philadelphia and I'm a past Board member of Common Cause/PA, which is a citizens group working for clean and open government. We have 118 4/26/06 - WHOLE - RES. 060070 nearly 10,000 members statewide, with a thousand members residing in Philadelphia. We all know why we are here today, the current system for financing election campaigns in Philadelphia is broken, and public financing of elections is the most prominent and effective way to return ownership of elections and ultimately local government to the people. Wealthy special interests are paying for our election campaigns, and they expect, and often get, financial rewards in return that come at the public's expense. It's the pay-to-play system that we have endured for years, and it's a drain on City business, City life and the City's image. It has come to wider attention because of the recent federal corruption investigations and convictions. In 2003, this Council enacted an ordinance imposing campaign contribution limits that, according to a 119 4/26/06 - WHOLE - RES. 060070 recent front-page story in the Philadelphia Inquirer, quote, Now lies in tatters, widely ignored by most potential candidates for Mayor and subject to a growing tangle of court challenges, end quote. The lesson is that halfway measures do not work. We are not the first place to face the problem of special interest money, and we have the advantage of drawing on the experience of numerous state and municipal governments that have cleaned house. Arizona, Massachusetts, New York City, Los Angeles each enacted campaign finance reform legislation, including expenditure limits and public financing, in the wake of their own money scandals. Now I hope it is our turn. Public financing of election campaigns can take several forms. The most extensive, and hence the cleanest, is full public financing. Qualified candidates receive all the money needed to run a campaign. To qualify, a 120 4/26/06 - WHOLE - RES. 060070 candidate must raise a specific number of small, say $5, contributions from individual donors. This step ensures that there is a broad base of support for the candidate, and the dollar amount is low enough that nearly all voters can participate on an equal footing. Once qualified, the candidate receives a grant equal to the expenditure limit and then must stop all fundraising activity and may not use personal wealth. The most widely used form of public financing is partial public financing, usually through matching funds. As we heard, New York City provides $4 of public funds for every $1 of contributions of $250 or less from City residents. In return, the candidate accepts expenditure limits and other restrictions. By having a high matching rate, small contributions are amplified. By limiting the matching funds per donor, large contributions become less important. As the Brennan Center for 121 4/26/06 - WHOLE - RES. 060070 Justice described, quote, The lower the matched amount of each contribution and the more generous the match ratio, then the greater incentive to collect relatively small contributions from more people, and the more the subsidy reflects popular support rather than access to wealthy donors. To aid media access, municipalities also have several non-cash options. As we heard, it is the federal government that owns and regulates the airwaves, and they could mandate free or further discounted air time. Municipalities, however, could offer vouchers for television ads, mandated free time on cable TV and a voter information guide, which offers each candidate a full free page of material. In Oregon, a voter information guide is mailed to each household and the voters use them, and we just heard about New York City's voter information guide.
These things really help. 122 4/26/06 - WHOLE - RES. 060070 As we already heard, public financing systems are not expensive. Former New York City Mayor Rudy Giuliani summed it up. Quote, The amount of money given to candidates by the City's public financing program is, in the budget of New York, infinitesimal. Put another way, the New York City program has cost City residents about 57 cents per year since its inception in 1988. In Los Angeles, the public financing program has cost less than five one-hundredths of a percent -- that's a percentage of a percentage -- of its budget from 1992 to 2001. Their zoo costs them about four times as much. In the end, public financing returns important dividends, saving taxpayer money and elevating the reputation of the municipality by eliminating pay-to-play and other types of undue influence that benefit large contributors but cost regular taxpayers. Public financing allows 123 4/26/06 - WHOLE - RES. 060070 increased diversity of candidates to participate in elections and encourage candidates to interact with low and moderate-income communities instead of focusing their time dialing for dollars with political fatcats, and it decreases or eliminates real or apparent conflicts of interest in government. Public financing is also used to encourage helpful behavior by candidates who accept it, most often campaign expenditure limits, including limits on the use of personal wealth, as well as participation in public debates. Despite its advantages, public financing has faced a number of issues. The most important is what mechanism to use to ensure adequate funding. Candidates are not going to sign on to a system that is underfunded. The Center for Governmental Studies in Los Angeles has concluded that, quote, The more discretion given to elected officials, the less secure the funding. Many 124 4/26/06 - WHOLE - RES. 060070 elected officials view public financing as a threat, because publicly financed challengers are more likely to mount competitive campaigns, end quote. One successful approach we heard about is New York City's. The Campaign Finance Board there has what's called draw-down power, meaning that it can finance the program directly from the City's general fund if the Mayor and Council fail to appropriate sufficient dollars. This draw-down provision has never been used because New York City has always adequately funded its program. Unsuccessful approaches include Suffolk County, New York, which we just heard a question about. It has consistently underfunded its program, rendering it essentially inoperable. The Massachusetts legislature refused to fund their public financing program, which had been enacted by referendum. In response, the state supreme court allowed state property to 125 4/26/06 - WHOLE - RES. 060070 be auctioned off and the proceeds given to qualifying candidates. Another issue is that public financing systems are voluntary, owing to court decisions. A wealthy candidate, or one with access to wealthy donors, can opt out. New York City uses a tier system to increase matching funds and expenditure limits for candidates who participate in public financing but face high-spending opponents. Over many years, Tucson, Arizona has developed a local political culture which the voters expect candidates to participate. Essentially all do, because it is rare for a non-participating candidate to be elected there. Independent expenditures and issue ads can be handled similarly. For Philadelphia, the issue of local authority has been raised because the state regulates elections. Common Cause agrees with the City Solicitor's opinion from the late 1990s that 126 4/26/06 - WHOLE - RES. 060070 Philadelphia as a home rule municipality has the authority to regulate its political campaigns, and we understand that there's efforts in the state legislature to make this even -- remove any ambiguity there.
In summary, enacting public financing and expenditure limits in Philadelphia is feasible, realistic and necessary. We also strongly encourage you to take action to close the many loopholes in the City's contribution limits ordinance and institute meaningful penalties for non-compliance. These reforms would send a strong message to voters, public officials, businesses, contractors, tourists and others that Philadelphia is a clean place to do business. Some members of this City Council have been leaders in this area and we hope that you will continue your efforts and that we can assist you. Thank you for your attention.
Thank 127 4/26/06 - WHOLE - RES. 060070 you very much. Councilman Goode.
Good afternoon. In your testimony, you said you work in Philadelphia and you're a past Board member of Common Cause. Are you actually representing Common Cause today?
I'll ask you a couple of questions about statements you made. Were you trying to infer in your statements that if public financing had been part of the campaign finance law that was done in 2003, that there would not be lawsuits?
Were you 128 4/26/06 - WHOLE - RES. 060070 trying to infer that if public financing had been part of the campaign finance law done in 2003, there would not be lawsuits?
Well, you made a statement. Let me just read the statement, then. "In 2003, this Council enacted an ordinance imposing campaign contribution limits that, according to a front-page story last week in the Philadelphia Inquirer, 'Now lies in tatters, widely ignored by most potential candidates for Mayor and subject to a growing tangle of court challenges.' The lesson is that halfway measures don't work." What did you mean by that?
Well, so in order to have an effective system, it's best to do it --
So you're saying there would not have been lawsuits 129 4/26/06 - WHOLE - RES. 060070 if what?
Oh, I understand your question. Okay. So for a system to regulate public financing to be effective, there have to be attention to loopholes, enforcement provisions, supervision of it for it to be effective.
Let me ask the question a different way. Why do we have lawsuits?
There's no 16 guarantee that any system will not be subject to lawsuit. In fact, many of the public financing systems have been subject to lawsuits, but, fortunately, since those have already been through the courts, we have a pretty good idea of what the courts will allow and what they won't allow. But if you're asking me to guarantee that if Philadelphia enacts a public financing system, that it won't be 130 4/26/06 - WHOLE - RES. 060070 subject to lawsuits, I certainly cannot make that promise.
What I'm suggesting is that your statement, while it read well for you, it's just not accurate. We were going to have potential lawsuits regardless of what we did.
And, of course, in cases that have already been tested, it would pretty much tell us how we're going to turn out in those lawsuits. But you have lawsuits because people want to sue because people don't like the law. People want to interpret the law and make the law whatever they want the law to be.
Yes, sir. You're certainly correct. But instead of focusing on the lawsuits here, I would focus on the loopholes, the non-compliance, the absence of 131 4/26/06 - WHOLE - RES. 060070 enforcement provisions. That's actually what I was driving at in my statement. The piece about the lawsuits, that was from the newspaper.
And all of that is actually contained within the State Election Code. In other words, the same loopholes exist in the State Election Code.
So to be honest about it and direct about it, if the City tried to close the loopholes in the State Election Code, it would actually be preempted by those loopholes; is that not correct?
It's an issue of dispute. I mean, the issue is how much authority does -- the question you're asking, I believe, is how much authority does Philadelphia have to regulate its election campaigns.
Let me ask 132 4/26/06 - WHOLE - RES. 060070 it a different way. If the City tried to make laws that change the State Election Code and the loopholes that exist within the State Election Code, they would be preempted; is that correct?
Well, I think we can draw a distinction between state rules that apply to election procedures, like when an election is held and what sort of voting machines are used, versus issues that have to do with the electoral campaign. I think a good argument has been made that Philadelphia does have the authority right now to regulate its electoral campaigns. The whole issue may become moot if Philadelphia explicitly granted this authority through the state legislature. But you're certainly correct that when there's a direct conflict, the state would rule, yes.
That was leading to the fundamental question I want to ask you. Do you actually believe the New York City model is working, and, 133 4/26/06 - WHOLE - RES. 060070 if so, why do you believe it's working and how do you measure that?
That's a great question, how do you measure success in this. There are several ways to look at it. One is, certainly there are testimonials from candidates who freely state that they would not have won if they didn't have the matching funds. There's also the measure of how many people are contributing to campaigns; in other words, the breadth of participation at that level of campaign. That looks like it's working. Another measure which has been applied to several areas is what's the difference in expenditure between an incumbent and a challenger.
I think all of those things are reasonable benchmarks. I think another important --
If one 134 4/26/06 - WHOLE - RES. 060070 candidate wins and says they won because of public financing, then it's a success?
I'm saying, what is the benchmark? If you examine the New York City model and you say the New York City model is what we should be implementing in Philadelphia, how has New York been successful? What are you using as a benchmark for success? I'm asking for specifics, not anecdotally.
Participation of donors, which is broader, and the difference in budgets between incumbents and challengers, elimination of larger donors and it makes for a cleaner system.
So not increased voter participation, not 135 4/26/06 - WHOLE - RES. 060070 challengers actually winning elections, not any direct measurement in terms of how public financing has actually impacted a campaign in the context of changing political culture?
Well, in terms of challengers winning, you've mentioned that several times today, and what I think is important here is not necessarily the challengers win, it's that the challengers get their message out and that they have an equal footing. If the challenger loses from that, it's fair. I'm fine with that. What's a problem is if one side, number one, takes a lot of money from large contributors, who then exert undue influence down the road, and that's something that's --
How do you think challengers are spending the public funds?
How do you think the challengers are spending the 136 4/26/06 - WHOLE - RES. 060070 public funds?
Pretty much the way everybody does, through media, through grassroots organizations. I mean, all this is known too because --
I'm asking specifically, do you know how the challengers are spending their funds? You say to get their message out. How are they getting their message out through the public funds?
Again, all of this is available from the expenditures, which are a counting, which is available through New York, but it's the usual mix of media and grassroots stuff. I mean, it's nothing surprising.
I'm sort of asking for more specifics. Like, for instance, the challengers in City Council campaigns and mayoral campaigns, much in New York, how much are they spending and, more specifically, what are they spending it on? 137 4/26/06 - WHOLE - RES. 060070
If you'd like a specific breakdown, that can be gotten, because all this information is publicly available.
To be honest, I'm asking you as a witness whether you are familiar with specifically how the challengers are spending public money.
I don't have those figures in front of me, but I can get them to you.
Thank you very much. Are there further questions for Mr. Williams? (No response.)
Thank you. Good afternoon, Mr. Stalberg. Good afternoon to both of you. Please 138 4/26/06 - WHOLE - RES. 060070 identify yourself to the record and begin.
Councilwoman Blackwell, thank you very much and thanks to the members of City Council. I'm Zach Stalberg. I'm the President of the Committee of 70, and I am one of the media villains, or I was for a very long time one of the media villains, that Witness Miller testified about a little while ago. I'm accompanied by Chris Sheridan, who is the Policy Director of the Committee of 70. We have submitted a statement to the stenographer and to the members of Council, and in the interest of time, I'd pass on a long reading of that and just ask you to take a look at it at some point. Let me just make a few key points. The Committee of 70 looks forward to working with the members of this Council and other groups and engaged citizens, and the one thing we do have is 139 4/26/06 - WHOLE - RES. 060070 lawyers for that purpose, to ensure that any campaign finance reforms that are adopted will provide the maximum public benefit for the minimum public cost. I hope that this Council is beginning to confront the national problem of campaigns that are too costly and too long. I would agree with many of the points that Bill Miller raised and that have been raised by Councilman Goode and others in question that the cost of advertising is a large part of this problem. And as somebody who spent a long time in the media, I would say that there's obviously a contradiction at times between the editorial point of view about the cost of campaigns and the amount of money that goes to support the business side of these news organizations from political campaigns. It seems like contradiction to the political candidates and often to the public. That said, it's going to be 140 4/26/06 - WHOLE - RES. 060070 very difficult to -- one of the witnesses used the term force access. At this stage of the game and given the First Amendment, it is going to be very difficult to force the media, which is clearly not a monolith anyway, to behave in a widely different way, and that's one of the things that encourages me to want to see this body take a look at public finance for campaigns. Two other small points and then one large one. Obviously any changes that you're talking about now will not affect the 2007 cycle. There is an opportunity, however, to affect the tone and the way money is spent a bit in that campaign and there's an opportunity to begin to build public support for a different kind of campaign financing system. The Committee of 70 does not have a preferred campaign finance model, but we are very supportive of the broad public debate initiated by Councilwoman 141 4/26/06 - WHOLE - RES. 060070 Tasco and Council President Verna. Secondly -- and this really goes, I think, to some of the questions that were raised by Councilman Ramos and Councilman Goode -- the kind of system that we eventually adopt here will have to be very local in nature. We may be able to learn some things from New York and from other cities, but the whole concept of street money, consultants, payments to committeemen, all of that is peculiar in some ways to Philadelphia and we have to build a system that works here. The one larger point I'd just like to make is about inclusiveness. Public campaign financing systems can offer many benefits, but require a significant investment of public dollars to be effective. In addition to reducing opportunities for corruption, favoritism and the appearance of impropriety, the chief benefits of public financing relate to an increased competition, a more 142 4/26/06 - WHOLE - RES. 060070 inclusive political system and a more diverse roster of candidates to draw voters to the polls. Although campaign costs vary widely by office and district, the fundraising threshold for fielding a competitive campaign for municipal office, especially Mayor or City Council, has increased dramatically during the last two decades.
This continuing escalation of campaign costs threatens to reverse the progress we have made as a City toward a set of officeholders, which is truly representative of the City of Philadelphia. As a matter of constitutional law, we cannot restrict wealthy individuals from spending their own money. We cannot restrict campaign spending unless it's by participation in a voluntary program. What we might be able to do is level the playing field for all candidates by moving to a well-designed system of public campaign 143 4/26/06 - WHOLE - RES. 060070 financing, which will keep our working-class and middle-class neighborhoods well represented in public office. What we shouldn't do is just stand by as the hurdles get higher, since it's well within your power to build a campaign finance system which promotes inclusion and integrity. Thanks very much.
With regard to one statement, if I can just -- Mr. Sheridan, are you testifying?
You say you believe that public campaign financing causes a more inclusive political system. How do you see it being more inclusive or that there is any change at all between those who would be involved in politics and those who wouldn't?
The Committee of 70, like City Council, is at the very beginning of this process, and we have 144 4/26/06 - WHOLE - RES. 060070 yet to embrace really the idea of public financing or a specific system for that. That said, in our investigation of this so far, it would appear that it would draw down the cost of campaigns, with the exception of the issue that you care about so much, the individual who can afford to buy the office, in a sense. It would draw down the cost of campaigns, force a certain amount of public debate, because it's public money that's going into it, and continue to make sure that offices like these are within the grasp of average individuals. The more expensive the campaign gets, the less likely that is to happen.
Do you believe that as long as the wealthy, as you say, quote/unquote, as a matter of constitutional law, as long as the wealthy can spend their own money, that we will never have equity in this area?
I'll let Chris take a shot at that because Chris is a 145 4/26/06 - WHOLE - RES. 060070 lawyer.
Good morning. Please identify yourself for the record.
Christopher Sheridan, Policy Director for the Committee of 70. Councilwoman, no one is ever going to be able to make up the advantage that Mr. Bloomberg has in New York, but in most cases, by changing the matching rate when someone is facing a wealthy self-funding candidate, a lot of the ground can be made up for the challenger who doesn't have millions of dollars of their own at his disposal. So there are mechanisms in most of these programs that if you're running against somebody who is independently wealthy, spending their money on the campaign, the rate of match for the contributions you get from 146 4/26/06 - WHOLE - RES. 060070 regular people goes up from maybe three to one to maybe five or six-to-one. So that's something that can be built into a well-designed system to eliminate most of that advantage.
Good afternoon. Mr. Stalberg, I'd like to ask for the official position of the Committee of 70 on two issues. The first, do you believe the 2003 law passed by City Council is preempted by State Election Code?
We're obviously very supportive of the 2003 law. We believe that -- as you know, we've gone to court to seek clarity and hopefully a clarification of this law by a court which makes it clear that this body had the ability to pass this law. So the bottom line is, no, we do not believe that that law is vulnerable. 147 4/26/06 - WHOLE - RES. 060070
Second question, I guess you know what it is going to be. The State Election Code defines "candidate" as any individual who seeks nomination or election to public office, other than a judge of elections on speculative elections, whether or not such individual is nominated or elected. The purpose: An individual shall be deemed to be seeking nomination or election to such office if he has, one, received a contribution or made an expenditure or has given his consent for any other person or committee to receive a contribution or make an expenditure for the purpose of influencing his nomination or election to such office, whether or not the individual has made known the specific office for which he or she will seek nomination or election at the time the contribution is received or the expenditure is made, or, two, take any action necessary under the laws of the Commonwealth to qualify himself for 148 4/26/06 - WHOLE - RES. 060070 nomination or election to such office. Do you believe we have any current candidates for Mayor in the City of Philadelphia?
I believe that there are several candidates for Mayor in the City of Philadelphia and that they have, under the 2003 law, both a moral and a literal obligation to adhere to those campaign points.
Under that definition in the State Election Code, can you tell me how many candidates you can name?
You believe that all six are candidates for Mayor currently?
Do you believe that there are more than six candidates for Mayor? 149 4/26/06 - WHOLE - RES. 060070
I believe that there may be more people interested in the job, but --
-- I think that the six that the Committee of 70 named in its lawsuit are the six that would clearly adhere -- that would clearly fit this definition.
What distinguishes those six people from anyone else who may be interested in running for Mayor in terms of whether they are a candidate or not a candidate?
Chris is an election lawyer, so let me ask him to take a shot at that.
I think that when you look at the totality of the circumstances, you have a scenario where people are actively campaigning, actively raising money, and in some cases, there may be some ambiguity as to which office 150 4/26/06 - WHOLE - RES. 060070 they're ultimately going to seek, one they have, the City office, or some other office, but to the extent that they have an intent to run for City office, they can follow the limits set forth in the bill that you authored in 2003 by having a municipal account dedicated to their City office. They can always set up an additional account or multiple other accounts in the event they're going to actually seek another opportunity.
Under the ordinance, they cannot. Under the ordinance, they can only have one bank account and one committee.
Right, but if they're running for reelection for another office or if they were considering a run for Mayor or Governor, for instance, they could establish an additional state account for those 151 4/26/06 - WHOLE - RES. 060070 purposes and fully comply with the Philadelphia law by following the limits with regard to their City account.
Actually, my question was, what distinguishes anyone else who is interested in running for Mayor from the six that are named in the lawsuit? And what makes those six candidates and anyone else who is interested in becoming Mayor and thinking about becoming Mayor take any actions they may or may not be taking to become Mayor, what makes them not a candidate in those six candidates?
Well, the basis for the suit was an assessment of the annual reports filed for 2005. So individuals who are raising money in 2005 who are viewed as mayoral candidates by basically everyone -- there may be others that --
How are they viewed as mayoral candidates by everyone? I don't understand that comment. I mean, 152 4/26/06 - WHOLE - RES. 060070 they've been cited in the media as being potential candidates, but what actually makes them a candidate? Am I a candidate for Mayor?
Because there's been no public statement on your part to indicate that you're holding yourself available for that office or you're actively seeking it.
Which among these six made a public statement that they were running for Mayor?
I think that all six candidates have indicated a willingness to serve as Mayor of Philadelphia, which is --
In all due respect, Councilman, I think you may be 153 4/26/06 - WHOLE - RES. 060070 getting into territory --
So if you want to go deeply on this topic, I guess we will have to have the attorney handling our suit to appear to respond to your questions. But, clearly, in the public minds, certain people have indicated more strongly an interest in running for the office. If you want to say today that you're running, we can add you to the suit as well.
But that's exactly my point. My point is, maybe I am planning on running and maybe, as Bill 20 Miller noted, media profiling image as it is constructed actually benefits some candidates more than others. You have actually identified six candidates for Mayor, who may or may not be candidates, that may not be the total field. There 154 4/26/06 - WHOLE - RES. 060070 may be candidates for Mayor, for all we know.
Councilman, in 5 the absence of a clear definition of 6 "candidate" in the ordinance itself or 7 the amendments -- 8
Right. But in 11 the absence of a definition in that 12 ordinance, we're left with a choice of 13 interpretations between Charter -- 14
We both 15 agree that we should use the State 16 Election Code, and I asked the question 17 based upon the State Election Code, how 18 many candidates for Mayor do we have in 19 the City of Philadelphia right now. 20
I would say six that we know of pursuant to the State Election Code.
How do we know that you have six candidates? How do we know we have six candidates? 155 4/26/06 - WHOLE - RES. 060070
I think that it's one of those things that we have to look at the totality of the circumstances and also the intent of your bill, which was past in '03 and was effective on January 1, 2004. Clearly, there was an intent to regulate fundraising conduct of mayoral candidates, mayoral contenders prior to declaration or resigning to run --
I don't disagree with the lawsuit. I don't disagree with the purpose of the lawsuit. That's not where I'm going. Where I'm going with this is actually trying to get down to what is the definition of "candidate." I believe that it's defined by the State Election Code and that you can't change what is in the State Election Code. If we wanted to, we couldn't change what's in the State Election Code. We could not define it differently that it is defined in the State Election Code. If we wanted to 156 4/26/06 - WHOLE - RES. 060070 locally define it, we'd be preempted by the State Election Code. So my question really is, how do you define how many candidates you have for Mayor based upon the State Election Code? And my only point is, not that the lawsuit is wrong, not that the lawsuit won't help, but you clearly could have one candidate for Mayor, ten candidates for Mayor, candidates for 12 Mayor. I'm not sure you have six, and 13 that's my only point. 14
Councilman, 15 those individuals are representative of 16 individuals believed to be seeking 17 office. I mean, what we have to point 18 out, too, about the relief being sought, 19 we're seeking a declaratory judgment that 20 would bind all municipal candidates, not just those six individuals, so that every candidate for election in 2007 would be playing by exactly the same rules. You're always going to have difficulty drawing lines as far as who is a 157 4/26/06 - WHOLE - RES. 060070 candidate and who isn't under the law, given some of these ambiguities, but what we're trying to do with the system we have is, we're trying to get the best resolution possible for Philadelphia.
I understand, but let me help you along in that. I'm not sure about what Tom Knox has in the form of a committee or not. I may be the only municipal candidate at this point for 2007, because I actually dissolved a committee, formed a new committee and authorized a committee, and did it after the law took effect. If someone had a committee for City Controller or for Council or for some other office, I don't think we can say that if that person is raising money because they're thinking about running for Mayor or wish to become Mayor, that they are more of a candidate than someone else who may be thinking about it. I understand what you're trying to achieve, but I think by defining those 158 4/26/06 - WHOLE - RES. 060070 six candidates as candidates, without clear reasons as to why, it muddies the whole election process as much as it's muddied by any of the other issues. And that's the only point, is that you can -- I understand you have to file suit against someone and you want to be fair in filing a suit, but by declaring that there are six candidates for Mayor right now does not clean up the election process.
Well, I think in the long term, that's really not for us to decide. That's why we've asked the court to try to decide that.
And that's -- but I believe we share much of the same point of view on all this.
Thank you, Councilman Goode. 159 4/26/06 - WHOLE - RES. 060070 Councilman Nutter.
Thank you, Madam Chair. Mr. Stalberg, Mr. Sheridan, I will not be venturing into that oh-so-dangerous territory where my colleague last left us.
Thank you. Thank you. A couple of quick questions, though. First, could you as an independent organization take a look at two of the more prominent models around, of course, that people talk about. And I've been in and out of the hearing, but I think we had some people from either New York and Los Angeles have public finance models. I think that as a part of what we're trying to get done here, public financing of campaigns, is more than something we should explore and eventually should come into place, but 160 4/26/06 - WHOLE - RES. 060070 the issue of what kind of number are we looking at. And it may be difficult to recapture some of this data. I know Councilwoman Tasco started with her statement with regard to the 2003 election --
I'm glad you said that, because I thought the 11 was a little high on 2003 in an incumbent 12 race. 13 But if we could look at either 14 the New York model or the Los Angeles 15 model in the context of a highly 16 contested Mayor's race, City Council 17 races and then, of course, all the other 18 offices where at least in the mayoral 19 context there is no incumbent, which 20 always gets more candidates in the race, 21 and try to calculate -- forget about 22 inflation. Just try to calculate if you 23 took the New York or LA system and 24 applied it to 1999, the Mayor's race, 25 Council races, someone should be able to 161 4/26/06 - WHOLE - RES. 060070 come up with what those numbers would look like. I mean, I think data may be a problem. I don't know how long those records are kept, but you know what everyone raised. Therefore, you could apply the three-to-one, four-to-one, whatever the formula is, and then figure out what would be the cost, what would be the estimated cost, of trying to do public financing, assuming '07 may look like '99. So that's the one. The second is, obviously from your previous background, you're a distinguished newspaper person, journalist. There is, unnamed, another distinguished journalist here that has graced us with his presence in the room. And so the question is, what can the news media do in what's always characterized as the fourth largest, possibly most expensive media market in the country, television, radio, print? What kinds of things should the news media be doing to play an appropriate role in helping to 162 4/26/06 - WHOLE - RES. 060070 lower the cost of elections, which is why people raise, to some extent, what they raise in the first place, it's driven by that, and then give to the kind of media conglomerate, which then often writes articles criticizing people for doing what they're doing? And, secondly, I think more importantly, the public information benefit of the kind of work that the media could do in either sharing information, providing more opportunities through any of those different media outlets, and are there any examples of small, medium, large cities where the news media has played a significant role in the electoral process from an information standpoint and lowering the cost?
Well, there is definitely a great deal more that the local media could do to give exposure to candidates and their positions, especially when you get below the level 163 4/26/06 - WHOLE - RES. 060070 of the Mayor's race, which tends to get a good bit of attention. I confess that I see this differently now that I'm on the outside than I did when I was running the newspaper, and I would do things differently if I had seen it as clearly. My view is that both print and electronic media have a greater responsibility than we're currently seeing them fulfill in terms of providing coverage, especially for Council races and judicial races and so forth --
-- for the things that are a bit below the surface. I've used this example a bit before and it might be slightly off point, but when I covered this Chamber as a reporter 30-some years ago, there were roughly 40 reporters from print and electronic media assigned to this building. Today that number is far smaller. And so to me, that is one kind 164 4/26/06 - WHOLE - RES. 060070 of indicator of how the media has moved away from coverage of municipal issues and coverage of municipal elections. All that said, I don't think that a jawboning will necessarily convince any particular news organization, my jawboning or yours, will convince them to behave a lot differently. They're commercial organizations and they're going to act like commercial organizations, and at the moment, they see a district councilmanic race, for instance, as not being worth a great deal of time or space. So I feel as if we should all, as Bill Miller said earlier, all work to alter that somewhat, but in the meantime, I'm looking for a bit of a shortcut toward a more level playing field, and my gut instinct is that public financing will help get us there. Now, a closer look at that by the Committee of 70 and down some of the routes that you suggest may take me in a 165 4/26/06 - WHOLE - RES. 060070 different direction, but right now, that's my gut instinct.
Thank you. Councilwoman Tasco, you're next anyway.
Oh, okay. Let me just go back to that, because, see, what happens, the media -- go back to a district race, and you think it's unimportant, but then the people get elected and you spend all the time as to why they got elected, and the media never paid any attention to the race, gave it any interest, any coverage in terms of 166 4/26/06 - WHOLE - RES. 060070 the issues in the district, what's going on in the district, what do people think about the person that's running, none of that, but then we get here, of us, 6 however we got here, and nobody paid any 7 attention to it. And then public finance 8 is going to level the playing field? The 9 thing is going to stay the same. Because 10 in the district, my opponent may have the 11 same amount of money, but what goes on in 12 the district is between us, the local 13 debate, the local discussion, the 14 outreach to the community. And we get 15 elected, or whoever gets elected, we come 16 here and then we say, Well, they were 17 influenced by money, but you all never paid any attention to the race. I hear you saying you would look at it differently now that you're out, but we still have those people sitting up on Broad Street with the same mindset. And the question I have is, I seem to feel that the media has a need to influence the outcome of the races. I 167 4/26/06 - WHOLE - RES. 060070 mean, if you look at Ed Rendell, the election is not until November the 7th. He is on television, and he's going to spend an inordinate amount of money to stay on television so that people will see all the good works he's done and so that he can win that election in November. He's going to spend an obscene amount of money, because there's no 11 public coverage. There's no public -- he's got to do that, because, really, the media has set the stage that if you're not on television, you're not important. You're not important. So he didn't have enough money to buy the TV time, so why should I vote for him? He may be the best candidate, but he couldn't get on television. He wasn't in the newspaper and I didn't see the ads in the local paper, but he may be the better candidate. And then, of course, you get the guys like Bloomberg and others in Philadelphia with their own money. There 168 4/26/06 - WHOLE - RES. 060070 are no controls. And those of us who are struggling to try to raise that little $2,500 that none of us ever raised, the most we've ever gotten was a thousand, if that much, is just -- the reason I put this resolution in so we could have this discussion, because it appears that everybody in the Council, everybody in government is corrupt, and that's why I asked the lady from New York had they done an analysis of who is doing business in New York even though the guy didn't take public dollars. We're going to look at that. So the next step you might want to do is run for office and then you'll really see what it's like.
If I could just zone in on one -- you raised a number of issues here, but I'm particularly 169 4/26/06 - WHOLE - RES. 060070 concerned or I would particularly react to the issue of lack of coverage of races for seats like these. If you're running for Governor and you're a credible candidate, you can raise a great deal of money and there's a greater chance that you can take care of yourself there. But here I am very concerned about the -- especially its races for Council tend not to be on the radar screen of the print media much and of the electronic media not at all, and so that is particularly obvious to me now that I view it from the outside.
I guess the one question about all of this, because we're looking at the ability or some way to change the culture, the political culture, how do you counter greed? How do you deal with greed? Because you have to look at some of this stuff around pay-to-play to basically reduce the greed. No matter what you do in terms of trying to clean up the 170 4/26/06 - WHOLE - RES. 060070 process -- and maybe we should. I'm not saying we shouldn't -- there's always going to be somebody out there who is greedy.
Yes, but a lot of what you've done, the campaign finance law, assuming it holds the changes in the contract-awarding process and so forth, and now this new public discussion on public financing, I think can begin to create a different culture.
I don't want to cut you off, but there will always be a way or some effort made to go around the law. When the SEC changed the rules and said investment bankers can't give money to politicians, they gave to their favorite charity.
Yes. I don't think we can outlaw greed, but I think culture change can sometimes come quicker than we imagine. I believe one of the next witnesses, Marc Stier of Neighborhood Networks, raised a public 171 4/26/06 - WHOLE - RES. 060070 finance issue with me on election night last November, and I thought, Hey, it's going to be a very, very long time before the City of Philadelphia gets around to talking about that. Now, I still think we're a long distance from deciding is there a good plan and getting some public support from that, but if someone said to me that within that short a period of time, last November to April, that we would be having a hearing on public finance, I'd be shocked. So given the right kind of leadership and the right kind of discussion, I think that culture change can come more quickly than we can imagine.
Well, you have to give the spark to this hearing to my friend, Dwight Evans, who pushed me to do it.
Through 172 4/26/06 - WHOLE - RES. 060070 his leadership and who raised it with me months ago in terms of having the discussion. Thank you.
Thank you, Councilwoman. I note that you mentioned that years ago many more -- you didn't say how many, but maybe we have half the number of reporters assigned to this building as many years ago. Whatever the number is, it brought to mind, do you agree that we have many more local newspapers, neighborhood papers than before?
Yes, and they're doing a much better job than they did before.
How do you think they influence this whole issue?
The whole issue of publicity, campaign 173 4/26/06 - WHOLE - RES. 060070 finance reform and -- maybe I'll go, as Wilson Goode says, where I'm going. Where I'm going is that we do have a lot of neighborhood papers, but you also have in many instances the neighborhood official gets the money, who can get the most ads for the papers. So it's not always -- sometimes and ofttimes you have objective printing, but ofttimes people get advertising who can pay the freight as well.
Right. Some of those neighborhood papers are credible and honest and some are not, but, again, I'm not sure that we can legislate changes in that, but we might be able to create a system, or at least it's the Committee of 70's hope that we can help recommend the system that would bring down the cost of campaigns and make them more equitable.
And I will note in that regard that now, as you know, in the state, both the state reps 174 4/26/06 - WHOLE - RES. 060070 and the state senators, have their own newspapers. We do the best we can here locally, but obviously we can't afford to -- we're just the poor City Council. We can't afford to pay for the kind of -- I do the best I can. I think we try to do a fair job, but you can't keep up with the demand or what you would like to get out about what happens here and your goals and the program you're involved in. We just can't finance them. Councilman Rizzo.
Good afternoon. Thanks for taking the time to do this for us today. One of the things that's always interested me is the fact that our City Charter positions many of us here locally that the playing field isn't really level. If a state rep wants to run for 175 4/26/06 - WHOLE - RES. 060070 higher office, they can do it and retain their position as a representative or a state senator. We here in this City based on the Charter are not permitted to run for higher office without resigning the position. Do you have any thoughts on possibly the effect that that alone could have on what we're discussing today, if any?
Well, of course, it's a somewhat different issue, but I hope that in addition to looking hard at the issue of campaign finance reform, the Committee of 70 is also able to look hard at the Charter, which is now more than a half century old and I think some of the ideas that may have made sense in 1951 now have -- the downsides are more obvious. In a personal sense, and I can't speak for the organization on this because we haven't had an opportunity to really think about it or talk about it, 176 4/26/06 - WHOLE - RES. 060070 but in a personal sense, I'd say that I happen to see more downside in the resign-to-run rule or, for that matter, the two-term limit, which is often paired in the public mind, the two-term limit, on Mayors. I see more downside today than I do upside. So that's a comment as a long-term observer, not as the President of the Committee of 70.
I agree with you totally, that there's an unfair advantage right from the beginning wherein people that you've talked about today, the six, maybe there's seven, maybe there's eight, who knows, but --
That there's an unfair advantage if a state rep can come in here, run for Mayor and retain the job that they have, because after -- 177 4/26/06 - WHOLE - RES. 060070 if you don't understand what we do, during a campaign, we're probably more active here than we are off the election cycle. So I don't see it being anything that can be damaging or that nobody is earning their money by being able to keep their job. I think it's antiquated and I think it really needs your organization to look at it, and we need to do what we need to do to possibly change that unfair situation, as I refer to it.
At the end of the day, one thing we really want to do is generate more and better candidates, and, again, in my personal view, the resign-to-run rule discourages that, and it's just that simple.
You're welcome. Are there more questions or comments? (No response.) 178 4/26/06 - WHOLE - RES. 060070
Panel 3, Mr. Brett Mandel, Philadelphia Forward. Is David Corbett, Democracy Matters, here? And is Marc Stier, Dr. Marc Stier from Temple University, here? Is there anyone else after this panel who would like to testify who is not on our list? (No response.)
Thank you very much. Thank you for your patience. Good afternoon, gentlemen. Please identify yourself for the record and begin your testimony.
Thank you. My name is Marc Stier. I'm the Secretary of Neighborhood Networks, but today I'm actually going to be testifying mostly as a political scientist who studied 179 4/26/06 - WHOLE - RES. 060070 democracy and theory in practice for about 30 years.
That's all right. I answer to both. So I'm really testifying as an academic. I've submitted my testimony. Unfortunately, because I'm testifying as an academic, not a political activist, it's a little longer than it otherwise would be, but I'm just going to quickly summarize a couple of points. Before I do, I want to thank Councilmembers Verna and Tasco for introducing this resolution to hold these important hearings, and also before I forget, I want to answer a question that Councilwoman Tasco raised earlier. She asked the woman from New York what their budget was and how much of that budget was spent on public campaign financing. I looked it up as I was sitting here. 180 4/26/06 - WHOLE - RES. 060070 The budget Mayor Bloomberg has proposed for New York starting in 2007 is $52.2 billion. So the money that they spend in New York on public campaign financing is less than 0.1 percent of the total budget. I just wanted to say that.
Say that again. The percentage? What was your last statement?
Less than 0.1 percent of the New York City budget is spent on their public campaign financing system.
Now, I have two observations about politics and then I want to give three reasons why public financing is a good idea. The first observation has already been talked about. It's pretty obvious. Political campaigns are expensive. As a number of people have mentioned today, they're getting more expensive, and the main 181 4/26/06 - WHOLE - RES. 060070 reason they're getting more expensive is because the media is becoming more important, and paid media is becoming more important, because free media is spending less time covering our elections, covering our candidates, giving our candidates an opportunity to reach out and tell the voters what they believe in and what they stand for. I think that's a serious problem, but I don't think there's an easy solution to getting our media to pay more attention to politics. The second point, in making the second observation, I'm actually going to disagree with some of the previous witnesses. A number of people have said isn't it terrible how much money we spend on politics. Frankly, I don't think it's that terrible. It may be obscene how much money we're going to spend in the gubernatorial elections, but I really don't know that it's that bad that we spend a lot of money in local elections. 182 4/26/06 - WHOLE - RES. 060070 If you think about it, American business spends tens of billions of dollars every year to advertise soap and toothpaste. They spent in the City of Philadelphia probably a billion dollars on advertising. Is it so wrong for us to spend a significant amount of money on political advertising and political communications so that our candidates can get out their message, very important message to the public? Perhaps if we spent more money on politics rather than less, voters would know as much about what politician they like as about what toothpaste, and I'm not really sure that they know more about the politicians than they know about the toothpaste. The real problem seems to me is not how much money we spend, but where the money comes from. And I think there's three good reasons why we should be trying to change the system from a system of private financing to a system of public financing. 183 4/26/06 - WHOLE - RES. 060070 The first one has been talked about in the City quite extensively, and that's the pay-to-play problem, the problem of people giving campaign contributions and then seeking contract subsidies, tax breaks, below market value properties and other benefits from the City. Democracies undermine, and the costs of government are increased when public decisions are influenced by individuals who spend large sums of money, contribute large sums of money to our politicians. Now, I should point out, Council the last few years has really gone a long way towards reducing this problem. We know there's Councilmember Goode's campaign limitation law. They have the laws that were enacted last November that limit campaign contributions from people who do business with the City. I think all those laws are great steps forward. However, I 184 4/26/06 - WHOLE - RES. 060070 think they would be complemented by public financing of campaigns. We all know, and I think Councilwoman Tasco was pointing out, greed is a part of human nature and it's very hard to create a system of campaign limitations, limitations on expenditures or blockages on people who do business with the City contributing money that's totally effective. There are ways in which these limitations and expenditures can be gotten around legally and, in some cases, even illegally without detection. I think the best way to strengthen the limitations we've already put in place is to have public financing of campaigns with extensive public support for and reduction in the role for private finance. So that's the first reason to deal with the pay-to-play problem, although I don't think it's the most important. I think the second one is even more important. I think you see in this 185 4/26/06 - WHOLE - RES.
060070 country there's a real ideological tilt in our politics in favor of the wealthy and against the poor and the working people. Only a very small proportion of Philadelphians can give $100 to a political campaign, let alone $2,500 for an individual or $10,000 for a capital business. When campaigns are financed by private contributions, the well-off have an enormous advantage in our system, and they are much more likely to get the year of politicians than poor and working people. I want to just mention on a national level how important this is. We've heard a lot of people talking about the greater inequality in our economy in the whole country today, and that's, to my mind, a very serious problem. 5 percent. The family income of middle fifth of all incomes went up 15 percent. The family income of those in 186 4/26/06 - WHOLE - RES. 060070 the top one percent of incomes in this country has gone up 201 percent. Now, economists have put forward a number of explanations of that. Some say it's the event of new technology that's changed the job structure. Some say it's globalization. But I think there's one telling reason to think that none of those explanations are the fundamental ones. If you look at European countries, you will see that inequality has not increased anywhere near the extent it has increased in the United States today. Government in many European countries is publicly financed. Elections are publicly financed. There's strict limits on campaign expenditures. It seems to me governments in Europe have taken steps to reduce inequality and we have not taken those steps in this country as a whole in large part because our system of government is financed by private individuals who are mostly very wealthy people. 187 4/26/06 - WHOLE - RES. 060070 Now, do campaign contributions play the same role in Philadelphia? I'm not sure anyone really knows for sure. We live in a Democratic, with a big D, City in which our representatives are really more inclined to care about the poor, to care about working people than, say, the people who serve us in Harrisburg or the people who serve us in Washington. Tip O'Neill's famous saying that all politics is local is certainly true in Philadelphia, where the gap between our Councilpeople and their constituents is fairly small. Yet, if you look at some of the problems that afflict the working people in the City today, one might reasonably wonder whether our political system is tilted towards wealthy contributors. Do we give an equal education to everyone in the City or do poor neighborhoods have poorer schools than rich neighborhoods? Are the playgrounds and recreation centers in poor neighborhoods as good as they are in 188 4/26/06 - WHOLE - RES. 060070 rich neighborhoods? Does L&I enforce rules and regulations as quickly or as stringently in poor neighborhoods as they do in rich ones? Have we been concerned about the impact of taxation on poor people as we have on the rich? Have we done enough to ensure that working people have the same access to capital to start buildings as rich people do in our City? Different people might answer these questions differently, but it seems to me that Philadelphia benefits sometimes the have's more often than they benefit the have nots, and one possible explanation of that is politicians, even well-meaning politicians, hear a lot more from people like me, who have some money, who give a lot of contributions, than they do from poor people who don't have the money and don't make the contributions and often don't know where to find their politicians. Not their own fault, but because of the nature of the system in which we live. 189 4/26/06 - WHOLE - RES. 060070 So that's the second concern, the inequality in our political system. The third is the quality of opportunity for candidates, and I think this is something, Councilwoman Blackwell, you've pointed to a couple of times today.
As I point out at the beginning of my testimony, political campaigns cost a lot of money. The more money they cost, the more difficult it is for candidates who don't have a lot of money themselves or don't know people with a lot of money to run for office, and I think that's a serious problem. One of the wonderful things about local politics is that it is in fact more diverse than state and national politics. Council is a wonderful institution that in many ways it's very representative of the people of Philadelphia. That's true in terms of ethnic and racial diversity and, to some extent, even in terms of diversity of a class. 190 4/26/06 - WHOLE - RES. 060070 Most of the people I know involved in politics, no matter where they are now, are at most one or two generations removed from the working class. So I don't think we've lost touch with our roots. The question, however, is, can we maintain this diversity in the future when political campaigns are becoming ever more expensive. And I really fear that's going to be more and more difficult and that the only way to correct this imbalance is to create a system of public financing of campaigns that magnifies the role of very small donations. When you have a system of the way they do in New York where someone can give $5 and that's matched five-to-one by the City, that is really magnifying the impact of poor people and diminishing the impact of rich people. We could even go further than that. We could match small contributions ten-to-one and match larger contributions 191 4/26/06 - WHOLE - RES. 060070 only three-to-one and go even further in maximizing the power of people with less money in the City. So I conclude that if we want to keep our local democracy intact, we need to move sooner rather than later to replace our system of private finance of political campaigns with public finance. We need to do that to create a level playing field for those who seek contracts and other benefits for the City. We need it to reduce the pay-to-play problem. We need it to guarantee that the voice of the poor is always heard in this building, and we need to do it so that qualified people from all walks of life, from all ethnic and racial groups and from every social class has an opportunity to serve the people of Philadelphia. Thank you.
Thank you, Dr. Stier. Any comments or questions? 192 4/26/06 - WHOLE - RES. 060070 (No response.)
Hi. I'm sorry I had to go out during your testimony. I just want to ask a question. Has there ever been a time in this Council that we did not pay attention to the voice of the poor?
No. I think I made clear that we do better in Philadelphia than they do in Harrisburg and we do certainly better than they do in Washington, particularly under the current control of Congress. I think there are a lot of people in Council who are seriously concerned with the problems of the poor. They deal with them all the time. My fear, however, is that when I go to fundraisers, as I do for a number 193 4/26/06 - WHOLE - RES. 060070 of people sitting in this body, most of the people I see are not people who are in dire straits. They're often in a pretty good situation.
But that's who we're talking about. You're talking about public finance and you're talking about the grassroots people, the people in neighborhoods giving you money. Now, I think Ed Goppelt in his Hall Watch said I had one of the most democratic reports because I do $25 campaigns. I don't make any money. You can't make money with $25. You got to spend to have the 16 event. 17 So part of this, you all are 18 not being realistic in terms -- and we 19 appreciate dollars from everyone, but 20 when I need to raise money, I have got to go to people who can give me a hundred, and there are not too many of those. I'm a District Councilperson.
So you 194 4/26/06 - WHOLE - RES. 060070 come to a party for the people, right? A party for the people cost me $25. I don't make any money because it costs me $20 to give the event, but it's an event to include the people in my district to come to an event, be with the elected officials and have a nice time. But if I counted on that to get my message out to the public, I would not get anything. But it's part of what I do. So being realistic, there are people who do give, and you need to have a broad spectrum of contributors, those who are grassroots, those who are middle income, and then you need the money also from the high donors. Because when I get ready to do that literature, the printer says it's $1,500 or $15,000. And the other thing you will find when you get here, just like the state's reps, you get all those slit brochures four or five times a year. How many have you gotten from your Councilperson? None. 195 4/26/06 - WHOLE - RES. 060070
Because we don't have the money for it. And if I had to pay for it, it will cost me $50,000 to mail to 154,000 people. Where am I going to get the money from?
Let me give one example. As you say, I go to the party for the people every year. Suppose that $25 were matched by the City four-to-one. All the sudden, an event in which --
-- people who can afford to come to an event and only pay $25, that's magnified, and someone like you who does reach out to everyone in your district and tries to have events that includes everyone, your campaign finance situation would be much improved, and that means there's less need for you to go to people with a hundred or $500,000.
I like the 196 4/26/06 - WHOLE - RES. 060070 $500,000 people. I do have a few rich friends. I do want them to give me some money. I do have people, because I think everybody ought to contribute to the public trough. But this is for discussion, so where I am on this is not reflected in my comments.
Thank you for coming down to testify. I appreciate it. 197 4/26/06 - WHOLE - RES. 060070
Thank you. Mr. David Corbett, are you next, Democracy Matters?
Yes. My name is David Corbett. I represent students at Temple University. We have an organization called Democracy Matters. It's a national organization with over 88 campuses on a national scale, and here in Pennsylvania we have campuses at Temple, Bryn Mawr and Bloomsberg. I've written a testimony here and I'd like to read through it, and then I'd also like to address some of the questions I've heard. I think what we're talking about here is an investment in democracy. I think that's very important, and we have a broad base of --
We like your title. We agree, democracy does matter.
When the United 198 4/26/06 - WHOLE - RES. 060070 States Constitution was signed in 1787, government representation then was limited to white males. Later in 1868, the 14th Amendment to the Constitution allowed other races the right to vote. Later still in 1920, the 19th Amendment to the Constitution allowed females the right to vote. The United States has come far in fulfilling its ideals, but we have a long ways to go, a lot of progress. In this democracy, there are essentially two means by which citizens are able to hold elected representatives accountable: The vote, and the second mode of influence, the reason we're here today, is through contributions to candidates' electoral campaigns. The high cost and vital influence of advertising have led to an escalation of competitive fundraising and fundamentally changed the way politicians must run their campaigns. It is this change that deeply concerns both myself and my fellow 199 4/26/06 - WHOLE - RES. 060070 Temple University students. Candidates have to spend too much time raising money. No one has an infinite amount of time to give. When a representative is forced to raise campaign funds, they end up spending most of their time talking to people who have more. Otherwise, they would never raise a competitive amount. The five to one hundred dollars that most citizens can afford is just not going to get the job done. Yes, there are representatives that have name recognition. Yes, there are representatives that are wealthy and, yes, there are some who have friends with lots of money. However, most people don't have name recognition and most people in this City of Philadelphia are not rich. Once in office and aware that they will need funds for reelection, elected officials must take the needs of their donors into consideration. It's 200 4/26/06 - WHOLE - RES. 060070 not that we're saying elected officials ignore the needs of those with less money. It's just if they are to be reelected, they have to spend most of their time working on legislation that benefits those that are donors. As Representative Peter Kostmayer asserted, You get invited to a dinner somewhere and someone gives you some money. And then when you get a call a month later, are you going to say no? You're not going to say no. So it does buy access. The public is aware of the role of money in politics today. Continually, we're seeing the national media expose the Jack Abramoff scandal, and before that, the DeLay scandal and, of course, recently with contractors and Councilman Rick Mariano. The deplorably low level of voter participation in recent elections is what we are counting here at Temple University that's devaluing and overshadowing campaign contributions. In talking to Temple University students, 201 4/26/06 - WHOLE - RES. 060070 their biggest concern was that, I don't have a say in government because I don't have money to give, where our representatives coming to Temple University talk to us and they said, We don't have money to give, that's why we don't have a voice in government. If we are to restore the public trust, if representatives are to remain accountable and responsive to every member of the public and if we truly believe that each and every voter is entitled to an equal share of both power and responsibility, then the only option is to remove private contributions from the equation and commence the full public funding of elections. Other cities have progressed before we have, Albuquerque, New Mexico and Portland, Oregon and, yes, some cities have a matching system, New York, Los Angeles. And in these systems, candidates who prove a broad constituent support can receive public funds for running for office. 202 4/26/06 - WHOLE - RES. 060070 Democracy is only healthy with active participation of all its citizens, and the financing of elections through private money is an obstacle to this.
Temple students care about this issue because, as I said, we feel our voice is overlooked by the sizable contributions. Now, I will agree that New York's matching system and Los Angeles's matching system is a step in the right direction. However, there is still that influence of that one for every four or one for every two, and that's the concern that us as students are concerned with. We don't want that influence there. We want a full financing of elections. Now, in terms of -- I think we mentioned about -- I think someone mentioned about Massachusetts. I think the problem there that was denied by the Supreme Court was that it was actually forced. Under Supreme Court law, we cannot force people into this clean election system, that it must be open for 203 4/26/06 - WHOLE - RES. 060070 people to opt into. However, as we've discussed, the Supreme Court has decided that it does look extremely bad that people can give money to campaigns and the people know it as corruption. And so they've put limits, but they haven't said completely no to the influence of money. 1 percent. It is an investment in democracy that we are talking about. In terms of success, as I mentioned, Portland, Oregon and Albuquerque, New Mexico just passed this legislation. So no one has run under it, but they will in the next election cycle. In the State of Arizona as comparison, ten out of the 11 state-wide offices were run on complete full public 204 4/26/06 - WHOLE - RES. 060070 funding of election. That includes the Attorney Governor, Lieutenant Governor. And in Maine, people who won and ran, in the Senate 83 percent and 77 percent of the House. Of course, that's a state-wide, but it shows that it is working in other states and other cities. I would like to end with a quote from -- this is a republican from the Arizona Corporation Committee, and here's what they said: "I am not a novice campaigner. Having run for office successfully four times under traditional campaign financing and in 2000 under Arizona's clean election law, the comparison is stark. Clean elections empower the constituency, gives voice to thousands of voters, expands opportunities and enhances democracy. Clean elections is about grassroots one-to-one politics, the way it used to be, instead of high dollar media campaigns financed by huge contributions from the world's well-healed clean 205 4/26/06 - WHOLE - RES. " And I have heard that we are coming a long ways. Maybe this won't happen tomorrow, but I think the clean election system is a very needed system, especially at a time with all the scandals to restore voter faith, confidence in the system and make it able for anyone to run for Mayor, Council, Controller. And that's why I'm here today, and I represent students at Temple University.
Thank you very much. Are there any questions from members of the Committee? (No response.)
How many of your students at Temple University are registered to vote in Philadelphia?
I don't know the exact number. I think we've done voter registration drives and most people say 206 4/26/06 - WHOLE - RES. 060070 they are registered to vote. I will agree, at Temple University we do have a lot of people coming from Lancaster and outside the City, but most of them, and more so in the future years, are expected to live on campus and in here in Philadelphia.
But most of them are not here during the primary, in our primary election?
Any of them. Our primary is usually around the third Tuesday in May and most of them are gone by that time. It doesn't mean they shouldn't have a voice. They're all here in November, but to interact with the local elections, they're not here.
I would argue that. A lot of students do stay here and work in the City for the summer, and many, like myself, from other states have decided to stay here in Philadelphia for what they have found. 207 4/26/06 - WHOLE - RES. 060070
Okay. I'd like to ask Marc a question. I know Brett has to testify. I'm looking at this book, and I haven't read it. Just glancing at it. And they have the maximum public funds for Mayor in New York is $3 million. Now, I think the election costs in Philadelphia would be still similar to New York because New York is even smaller in terms of land. They have more people, but the cost is the same in terms of the media, what you have to do. I mean, what impact -- because in my earlier statement, I talked about the public having to decide if they want to fund candidates or fund services. I mean, that may be a part of the discussion and whether or not we could afford $3 million to give to a Mayor's race, plus all the Councilmembers who are running, plus all the other offices running, what the cost would be, and I think Michael did ask Zach to look at a model and what the cost 208 4/26/06 - WHOLE - RES. 060070 might be for the City of Philadelphia.
I have to agree with you. If there's one really good argument against public financing is that the City has so many needs, should we be spending the money on elections. I think there are two answers to that. One is, preserving our democracy, making it stronger is something worth paying for and something everyone in the City would benefit from. And I think, second of all, to some extent, at least in the past when pay-to-play has been so important, we've been financing our campaigns publicly anyway. We've just been doing it in a hidden way. If a government contractor makes a campaign contribution and then bills the City more, we're paying for it. And if there's a system that's a well-known system that the only way you get, say, bond work as a lawyer is that you make campaign contributions, then all the bond lawyers are going to be billing 209 4/26/06 - WHOLE - RES. 060070 the City more to get that work, and which means there's more expenditures.
They'll also get billed more on those contractors in the Procurement Department, because it costs more money to do business with the City.
We ought to be trying to figure out how to reduce that cost. To the extent we reduce the impact of pay-to-play, the City, I think, will save money and probably as much money as it's going to cost to run a public financing system.
Thank 210 4/26/06 - WHOLE - RES. 060070 you. Are there any other questions from members of the Committee? (No response.)
Seeing none, our next witness will be Brett Mandel.
Madam President and members of City Council, thank you for providing this forum to discuss public financing of municipal elections in Philadelphia. I am Brett Mandel, Executive Director of Philadelphia Forward, and I come to speak in favor of this concept. Unless we restore integrity in our government, Philadelphians will continue to question for whom is our City run. I'll cite two polling numbers for you that have been taken in the last year. In May 2000, the issue PA asked, 211 4/26/06 - WHOLE - RES. 060070 whether you trust local government to do what is right, in Philadelphia, 76 percent answered "only some of the time" or "never." That was 50 percent higher than anyplace else in the state, the state-wide average. Temple University and the Philadelphia Inquirer asked Philadelphians, How much political corruption would you say there is in Philadelphia. Forty-six percent answered "a lot." In a very real sense, it can be said that we already have a form of public funding of municipal elections. As Marc suggested, funders use political involvement to access government contracts, then recycle some of the public's money from those contracts as political contributions. The citizenry will either pay up front through some form of public financing of municipal elections or it will continue to pay in the end through the inflated cost of government, made more costly by funders 212 4/26/06 - WHOLE - RES. 060070 who count on governmental largesse to pay for their political activities. As this discussion continues, you can count on Philadelphia Forward to help inform our constituency for change about this issue and any specific mechanisms for public financing of municipal elections that emerge as proposals through the legislative process. Philadelphia Forward will be pleased to provide any additional input in the development of specific proposals, and I pledge our organizational resources and my personal time to help this legislative body in any way to move this issue forward. Thank you.
Thank you. Any questions or comments from members of the Committee? (No response.)
Do we have anyone else that would like to 213 4/26/06 - WHOLE - RES. 060070 testify on this resolution? (No response.)
Do we have anyone else that would like to testify on this resolution? (No response.)
Seeing no one, this Committee will stand in recess until June the 5th at 10:00 a.m. Thank you all very much. Thank you. (Committee of the Whole adjourned at 2:00 p.m.) - - - 214 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on April 26, 2006, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)