BILL NUMBER: S7128

SPONSOR: KAVANAGH
 
TITLE OF BILL:  An act to amend the election law, in relation to
contribution activities by an intermediary

 
PURPOSE OF BILL:

This bill provides for the disclosure of political fundraising interme-
diaries (also known as bundlers or conduits) by candidates, authorized
committees or party committees, as well as the source and amount of the
contributions they deliver, for contributors of $500 or more.

 
SUMMARY OF PROVISIONS:

Section one of the bill provides the short title "campaign finance
intermediary disclosure act."

Section two of the bill amends section 14-100 of the election law by
adding three new subdivisions 1-a, 17, and 17-a. Subdivision 1-a defines
"authorized committee." Subdivision 17 defines "intermediary" to mean an
              

individual or entity that either delivers contributions from another
person or entity to a candidate, authorized committee or party commit-
tee, or solicits contributions to a candidate, authorized committee or
party committee. Subdivision 17-a excludes certain persons or entities
from the definition of "intermediary."

Section three of the bill adds a new section 14-105 to the election law
to regulate intermediary disclosure. Subdivision 1 of the new section
14-105 requires intermediaries to report to a recipient candidate,
authorized committee or party committee the name and mailing address of
each contributor, the amount of the contribution, and the date the
contribution was received by the intermediary.

Subdivision 2 of the new section 14-105 requires recipient candidates,
authorized committees, or party committees to identify and report inter-
mediaries who deliver or solicit contributions that in the aggregate
equal or exceed $500 to the state board of elections. This report must
include any contributions required to be itemized under section 14-102
of the election law that are delivered or solicited by the intermediary
and the total monetary value of contributions delivered or solicited.

Subdivision 3 of the new section 14-105 clarifies that contributions
delivered by intermediaries to such recipients will be deemed to be
contributions from the contributor only, and not deemed to be contrib-
utions from the intermediary.

Section four of the bill sets forth the effective date. The date corre-
sponds with the beginning of the period for disclosure reports set by
the Board of Elections.

 
JUSTIFICATION:

In the wake of Supreme Court decisions like Citizens United v. Federal
Election Commission, 558 U.S. 310 (2010), and its progeny, a sophisti-
cated and robust system of campaign finance disclosure is the most reli-
able method for providing the public with the opportunity to follow the
money that funds political campaigns and committees. Chief Justice
Roberts, writing for the Court in McCutcheon, recognized the great value
of campaign contribution disclosure requirements. The Court endorsed
transparency as a powerful disinfectant, explaining that "disclosure of
contributions minimizes the potential for abuse of the campaign finance
system. Disclosure requirements are in part 'justified based on a
governmental interest in provid(ing) the electorate with information'
about the sources of election-related spending." (McCutcheon v. Federal
Election Comm'n, 572 U.S., Slip.  Op. No. 12-536 at 35-36 (Apr. 2,
2014), citing Citizens United, 558 U.S., at 367, quoting Buckley v.
Valeo, 424 U.S. 1, 66 (1976)).  Reaching back to its landmark decision
in Buckley v Valeo, the Court recognized that disclosure may also "deter
actual corruption and avoid the appearance of corruption by exposing
large contributions and expenditures to the light of publicity."
 (McCutcheon, Slip. Op. No. 12-536 at 35, quoting Buckley, 424 U.S., at
67).

Currently, New York's election law does not require the disclosure of
political fundraising intermediaries or bundlers who deliver or solicit
contributions for candidates, authorized committees or party committees.
While New York law requires the disclosure of anyone who contributes
$500 or more of their own funds, intermediaries may solicit and deliver
much larger sums to candidates, often from many contributors, without
any disclosure of their role. Such intermediaries may include lobbyists
or others with interests in the official actions of the elected offi-
cials who receive the contributions, but their activities may be entire-
ly invisible to the public. This lack of transparency departs from the
intermediary disclosure requirements found in federal law, in New York
City law, and in other states (including California, Massachusetts,
Michigan, Missouri, and Washington).

This legislation incorporates intermediary disclosure into the existing
reporting requirements for candidates, authorized committees, and party
committees by requiring the disclosure of intermediaries who deliver or
solicit contributions that in the aggregate equal or exceed $500 along
with any contribution for which the contributor is already required to
be itemized under existing law. To facilitate this, intermediaries are
required to identify each contributor to the recipient.

 
FISCAL IMPACT ON THE STATE:

Very minor one-time costs associated with adjustments to the campaign
finance disclosure systems administered by the State Board of Elections.

 
FISCAL IMPACT ON LOCALITIES:

None.

 
IMPACT ON REGULATION OF BUSINESSES AND INDIVIDUALS:

Requires intermediaries to report the name, address, amount, and date
received for all individual contributions they are providing to a candi-
date, authorized committee, or party committee; requires recipients of
such contributions to identify and report intermediaries who deliver or
solicit contributions that in aggregate equal or exceed $500.

 
IMPACT ON FINES, IMPRISONMENT, FORFEITURE OF RIGHTS, OR OTHER PENAL
SANCTIONS:

None.
 
LEGISLATIVE HISTORY:

2016: A05278C(Kavanagh)- Election Law
2015: A052788(Kavanagh)- Election Law
2014: A00144A(Kavanagh)- Election Law
2013: A00144(Kavanagh) -Election Law
2012: A05879(Kavanagh)-Election Law
2011: A05879(Kavanagh)-Election Law
2010: A087558(Kavanagh)- Election Law
2009: A08755A(Kavanagh)- Election Law

 
EFFECTIVE DATE:
This act shall take effect January 14, 2019, provided that section three
of this act shall apply to any contribution received on or after January
14, 2019; and; provided further, however, that contributions legally
received prior to the effective date of this act may be retained and
expended for lawful purposes and shall not provide the basis for a
violation of article 14 of the election law, as amended by this act; and
provided, further, that effective immediately the state board of
elections is authorized and directed to promulgate any rules necessary
to implement the provisions of this act and shall notify all candidates
and political committees of the applicable provisions of this act on or
before such effective date.