Establishes state board of elections enforcement counsel and state board of elections enforcement unit; campaign finances; repealer

Summary of specific provisions

This bill would codify an enforcement unit within the State Board of Elections (SBOE) with a mandate that at least 35 percent of the SBOE's annual budget be dedicated to the unit to promote increased enforcement of campaign finance laws. It would expand the jurisdiction of the enforcement unit and promote the independence of the enforcement counsel by making the office a 4 year term. It also makes the office of special counsel, the other legal unit at the SBOE, a 4 year term and codifies the requirement that the deputy in each unit be a member of the opposite political party than the counsel.

The bill would codify the other existing unit heads and deputies at the State Board of Elections (a director of election operations, a deputy director of election operations, a director of public information and a deputy director of public information) in addition to the enforcement counsel and deputy and the special counsel and deputy; it would also provide that the deputy in each unit shall be a member of a different major political party than the unit head and that unit heads and depu- ties will be appointed by the commissioners of the same major political party.

The bill would change the way that campaign finance enforcement matters are processed at the SBOE by requiring three of the four SBOE commis- sioners to vote to stop an investigation by the enforcement counsel, rather than requiring, as current law does, 3 votes to begin an investi- gation.

It would also mandate that all votes to stop an investigation, or to act on the recommendation of the enforcement counsel after an investigation, occur in public. Currently, all discussion and all determinations made regarding campaign finance enforcement matters occur in executive session and not in public.

The bill would promote compliance with campaign finance laws by:

* increasing the penalty for failure to file from $500 to $1,000;

* creating a substantial new penalty of up to $10,000 for the failure to file required statements three or more times in an election cycle; and

* creating a new penalty for accepting an excess contribution. In addi- tion to returning the excess, a candidate or committee could be fined an amount equal to 2 times the excess plus face a civil penalty up to $10,000.

The bill would promote the legal and appropriate use of campaign funds by requiring the State Board of Elections to issue formal opinions on the use of such funds. Such opinions would be published without identi- fying the person making the request, would be binding on the board in any subsequent proceeding and could be used as a defense in any civil or criminal action alleging personal use of campaign funds.

The bill would require greater disclosure and transparency of campaign finance information. Specifically, it would:

* define the term "independent expenditures" and require political communications paid for with independent expenditures identify the source of such funds. Violators would be penalized by a civil fine of up to $1,000 or the cost of the independent expenditure, whichever is greater;

* mandate that independent expenditures on communications opposing or supporting a candidate or ballot initiative in excess of $1,000 be subject to the same filing requirements currently in place for candi- dates and political committees;

* prohibit a person, campaign committee or political party from falsely identifying the source of a political communication;

* require itemization of candidate and political committee credit card payments and other like payments.

The bill would require business entities to obtain shareholder/member consent to make political contributions, independent expenditures or expenditures for political issue communications and would require the reporting of such political contributions, independent expenditures and expenditures for political issue communications to the Secretary of State for posting on the Department of State website.

Justification

The New York State Constitution mandates that all boards of elections be bipartisan. Pursuant to the constitution, the Election Law established the State Board of Elections and requires that it be comprised of two commissioners from each of the two major political parties. The Election Law further provides that any act of the board be taken only upon a vote of at least 3 of the 4 commissioners. As a result, some issues come before the board and result in a tie vote, rendering the board unable to act. The enforcement of campaign violations has been limited due to this

structure, resulting in flagrant campaign finance abuses that are not prosecuted. This bill would empower the enforcement unit at the SBOE to allow independent investigations of campaign finance violations. The bill would require the SBOE to vote on campaign finance matters in public for the first time to allow the public to evaluate the effective- ness of campaign finance laws and increase the public's confidence in out electoral system.

The bill would promote compliance with campaign finance laws by increas- ing current penalties and creating new penalties for violations of campaign finance laws and by requiring that the SBOE issue formal opin- ions on the use of campaign funds.

The bill would also promote transparency and accountability by requiring the disclosure of additional information regarding political activities. For the first time, the bill would prohibit the false identification of the source of political communications, require the identification of the source of, and the filing of statements about, independent expendi- tures made in an election, require business entities to obtain share- holder or member approval to spend funds in the context of a political campaign or a public policy debate and require business entities to report all campaign contributions, independent expenditures and expendi- tures for political issue communications to the Secretary of State.

Prior legislative history

None.

Fiscal implication

The State Board of Elections will have additional administrative and enforcement responsibilities. These costs will be offset by the addi- tional revenue they bring in from enforcement proceedings.

Effective date

This bill would take effect immediately.