Wednesday, October 28, 2015

Corporate Cash Fuels Incumbent In Mayoral Race. Again.

This is an opinion piece that represents solely the views of its author.
This year’s mayoral campaign is fueled primarily by campaign contributions from outside Middletown, as it has been for at least the past 2 election cycles. In 2011, incumbent Republican Sebastian Giuliano received multiple $1000 checks from the owners of corporations doing business with the city. During that campaign, The Middletown Press reported that Giuliano called contributions from city contractors “pretty normal.” He said, “It's kind of a weird system, but it's the system."

This year, incumbent mayor Dan Drew has put “the system” into hyperdrive, allowing him to completely swamp his challenger, Sandra Russo-Driska. As of October 10th, each candidate had raised about $25,000 from city residents. But while this represents nearly the entirety of what Russo-Driska raised, "the system" has given the incumbent far more money at his disposal, having raised about $60,000 in donations from outside of the city, and often outside of the state
Campaign finance law bars anyone from giving more than $1000 to a candidate, and requires the campaign committee in its regular filings to identify the company that the donor works for, and to answer the question, “... does contributor or business he/she is associated with have a contract with [Middletown] valued at more than $5,000?”

However, corporations can, and often do, generate more than $1000 for a candidate. This happens when multiple individuals associated with the same corporation each make $1000 donations to a candidate. Often the donors and the campaign committee seemingly forget to include information that indicates an association between a donor and a corporation. During the 2011 mayoral election, the Middletown Press reported that the incumbent, Sebastian Giuliano, was the recipient of the following donations:
Jay Jayanathan, from the engineering firm United International Corporation, which lists Middletown as a client, gave $1,000, as did Santhini Jayanathan, who listed "homemaker" as her occupation and who gave the same address as Jay.
A casual reader of the campaign finance reports might not have realized that these were two donations associated with the same corporation. It is unlikely that the Giuliano campaign did not know the connection. Unfortunately, voters cannot know if this influenced the city's decision to award further contracts to United International Corporation (now part of PRIME AE Group, Inc.)

This year, the Drew campaign has taken this approach into hyperdrive as well. Six different corporations with significant city contracts were associated with donations from $2000 to $5000 each. And recent Russo-Driska complaints with the State Elections Enforcement Commission allege 14 apparent campaign finance law violations, linked to $12,500 worth of donations. Some of those complaints allege that donors failed to disclose their own contracts with the city, others refer to situations similar to Giuliano and the Jayanathan donations in 2011.

Drew is using another method to allow the owners of corporations to contribute money to his campaign beyond the $1000 limit for candidate committee. This method, which is more widely used in state and national campaigns, involves a Political Action Committee. Drew established his Political Action Committee, called DrewPAC, after the 2011 election. DrewPAC can collect more money for his campaign, even from people who have already given the maximum amount to his regular campaign committee. For example, in addition to his $1000 contribution to Drew2015, Jay Jayanthan donated an additional $750 to DrewPAC.

When candidates for state-wide or national office accept large donations from partners at Goldman Sachs, many voters are justifiably concerned that when elected they will promote the interests of Wall Street over the interests of Main Street. Many voters are also concerned about the policy implications of large donations from special interests, whether it is NRA, NARAL, or a corporate funded SuperPAC such as an oil industry lobbying group.

We should be equally concerned about the effect of campaign donations on our local government.  

Our mayoral campaign is awash in donations from the largest corporations in the state and beyond that do business with the city. These donations seem to be driven more by business profits than by political ideology, as the major corporate donors who gave to the Republican Giuliano are now giving to the Democrat Drew.

This risks a loss of faith in a democratic process.  How can the mayor assure the voter that his or her interests are being put above those who gave corporate campaign cash?  How can the mayor assure the voter that pursuit of corporate donations is not driving the work of city hall?

If Sandra Russo-Driska's concerns about the corporate financing of her opponent are genuine, she should acknowledge that the last Republican mayor, now on her ticket as a candidate for the Common Council, used "the system" in the same way her opponent is now. 

If Dan Drew is genuinely opposed to the corrupting influence of corporations on democracy, as exemplified in the Supreme Court decision in Citizens United, he should return all donations from the principals and employees of corporations doing business with the city. 

Both candidates should pledge that if elected, in any re-election bid she or he would refuse all campaign contributions from corporations doing business with the city. They have the power to eliminate "the system" and its potential for abuse.

Other candidates and elected officials who express outrage at the creep of corporate influence on our democracy should decry the actions of incumbent mayoral candidates in our city.

More broadly, we should seek a long-term solution that removes the influence of out-of-town and out-of-state corporate contributions. We need to change "the system".

The Supreme Court has ruled against laws that limit the ability of individuals and corporations to make political contributions, so a further restriction on corporate contractors' campaign cash is likely impossible.

I propose an approach from the opposite end. I suggest that the Middletown Common Council enact an ordinance that prohibits the granting of city contracts to any corporation whose principals or employees have contributed more than a certain amount to any candidate for mayor in the last election. The maximum could be a dollar value, for example $100; or it could be a percent, for example, 0.1% of the total spent on the last election.

This approach does not infringe on the free speech of individuals or corporations, it would simply force a choice between political donations and corporate contracts. And importantly, it does not depend on State or Federal legislation. Middletown could be the municipality in the country that pioneers a new approach to removing the potential for corporate corruption of our democracy.

I urge all candidates, but especially the two candidates for mayor, to make clear how they stand on individual campaign contributions that are thinly veiled corporate cash.


Jason C. said...

Great commentary. Big money and small ideas aren't going to get us anywhere.

David Sauer said...

I agree with your concern about the way the game is played, and the influence that money can buy, but I disagree with you on two points. Contributions from the spouse of someone employed by a company with contracts with the city in excess of $5,000.00 do not legally have to check the yes box on the disclosure forms. They need to change the rules, but in the meantime the disclosures that Russo-Driska complains about are legal and the complaint about those contributions is clearly just posturing.
Second, your proposal to refuse to award city contracts to contributors is clever, but it is absolutely an unconstitutional restriction on speech. Could you refuse to award contracts to companies or individuals who donate to the ACLU, Wesleyan, or the Catholic church? It is a great concept but,respectfully, doomed to failure.
If you want to change the system, in my opinion public financing of campaigns is the only way it is going to happen. Unfortunately, given the current climate it is highly unlikely that would be done.
Other than changes to the law, I think your final sentence raises an important point. Ms. Russo-Driska has blasted Mr. Drew for taking these donations, but she hasn't pledged she wouldn't take donations from anyone doing business with city if she became the incumbent. A challenger taking such a pledge would be an important step forward. I am not suggesting the challenger should limit her fundraising in this cycle, but if this were done it could have significant implications on the way future races are run.

Seb Giuliano said...

You are correct that I received campaign contributions from the principals of entities that did business with the City - and/or their spouses - for my 2011 re-election campaign. To imply, however, that my fundraising effort - in terms of the number of such contributors or the dollars contributed - is in any way comparable to Mayor Drew's is absurd.

In 2011 I raised approximately $65,000 in total and spent virtually all of it on the campaign. I stopped when I had enough to cover the anticipated expenses. Mayor Drew - according to his October report - had raised over $105,000 and had $30,000 unexpended. And he has continued to aggressively solicit contributions! For who and for what? He's not spending it on this election! It makes one wonder what the real purpose is.

Just so you're aware, this past summer I proposed a municipal public finance plan that has been supported by Connecticut PIRG. If adopted, this might go a long way to ending the "money merry-go-round" that we now have. The response so far? Crickets.

Seb Giuliano

John Kilian said...

It would be interesting if such an ordinance were enacted if a challenge to the ordinance based on infringement of these business entities' rights under the tenets of the Citizens United case would succeed in court.

Brian Clark said...

I've self funded my campaign. It's been extremely hard, and times have been tough, but goals I wanted to meet, are being met. I've asked for some small donations, which didn't work out; Hey, I get it. I'm the little guy, and why fund the little guy? Well, the little guy is still a Candidate, and the little guy's votes, can throw an entire election one way or the other. I'm proud of me, and maybe I made some mistakes along the way, but I got out to a lot of people. Don't count me out yet....

Concerned Citizen X said...

Excellent reporting as usual. Thank You for that. As Former Mayor Giuliano has mentioned here along with Mr. Sauer Kraut, Public Financing of municipal elections is the real solution to this pickle of a situation. New Haven has created a democracy fund, and Middletown needs to get on that bandwagon. CT PIRG has created model ordinances, and yet, it is to the casual observer, boring and not worthy of stepping away from the television for. The best way to fix our broken system is staring us in the face, yet a recent talk at Wesleyan University on this VERY TOPIC, was so poorly attended that our local state senator made up 20% of the audience, meaning, yes, there were five people there (not counting presenters and organizers).
Do the math.

David Sauer said...

Are you considering proposing something on the municipal level, something like New Haven's democracy fund? I would certainly support that effort and there are clearly others who would too.

Anonymous said...

Who cares about what politicians do? They all do it both Democrats, Republicans and 3rd Party candidates. When one party is in power the challenging party is sore that they don't have the power of the incumbent to attract donors. People have got to learn not to trust politicians. They are all liars. They say one thing to get elected and then they do the exact opposite of what they said once they are in office. This is why people are turned off by politics. To sum up, DO NOT TRUST POLITICIANS AT ALL LEVELS OF GOVERNMENT FROM ALL POLITICAL PARTIES.

Stephen Devoto said...

I rest my case.

Ralph S Devoto said...

In our last California state election. out of state pacs ran adds favoring a candiate but did not disclose the individual contributors to the pac. I believe a bill was passed that now requires pacs to disclose the contributors of the funds. A small step but important. (someone with more knowledge of this proposed requirement please correct me if I am wrong).