Schwarz: Public Financing of Races: If It Can Make It There …

Posted January 27, 2010 at 3:12pm

The Supreme Court just opened the door to torrents of corporate (and union) money designed to influence elections. What to do? Among the answers now being discussed is public financing for candidates, in particular a version of public funding that would provide matching funds for small contributions. Such a system would encourage candidates to seek small contributions from large numbers of donors rather than dialing for special interest dollars.

Such a system can work. How do we know this? It is the law in New York City, where it has been in effect for two decades. This version of small-donor public funding has boosted competitiveness, spurred grass-roots campaigning and curbed special interest influence.

New York City instituted its system in 1989, after a series of lurid and debilitating scandals involving big money. I administered the system as chairman of the city’s Campaign Finance Board for five years. (A predecessor commissioner on the board was a young lawyer named Sonia Sotomayor.) Under New York’s plan, local donations of up to $175 are matched on a 6-1 basis. This has the added benefit of getting more citizens involved in elections.

Experience taught us that the key to a successful matching-fund system was to use it to supercharge small giving. Originally, the city’s matching-fund system provided a 1-1 match for $1,000, a system similar to the matching funds now used in presidential primary races. Then it was changed to 4-1 for $250. This successful approach pointed to more improvements. Most recently, during my tenure, it became 6-1 for $175.

Higher matches on lower donations have a dramatic effect. More and more citizens who have never thought of giving money to campaigns are drawn into the system. Candidates have an incentive to spend time — precious fundraising time, if you will — with voters. Grass-roots organizing and fundraising converged, as candidates for office focused on living room conversations, coffee klatches and small gatherings. After all, even a $100 gift adds up to $700 — real money for a candidate, even in the most expensive city in the country. And research shows that when people are asked to help, they are more likely to vote.

Candidates greatly prefer this system. When I was in court defending the small donor public funding system from legal challenge, we introduced 24 affidavits from candidates running under the system. The candidates came from both parties and all five boroughs. Invariably, they found that it improved their lives, increased their attention to issues as opposed to dialing for dollars and damped down special interest influence.

Of course, the system has not solved all problems. Even though the vast majority of candidates for citywide office and City Council participate, our most prominent officeholder did not: Mayor Michael Bloomberg (I) has spent a total of about $300 million on his three races. Candidates still must raise funds, and, of course, special interests still are eager to give. But the pace and level of fundraising plainly is less than it would be. And the system, together with voluntary spending limits and term limits, has boosted competitiveness: For example, this past year, five incumbent council members lost their seats.

Such an approach can be combined with other reforms. For example, the Fair Elections Now Act, introduced by Sen. Dick Durbin (D-Ill.) and Rep. John Larson (D-Conn.), combines matching funds with outright government grants to eligible candidates. And other remedies to the Citizens United Supreme Court decision may make sense, including measures to ban companies with government contracts from spending on candidate elections.

When President Barack Obama responded to the Citizens United decision, he pledged to work with Congress to boost the power of small contributions. This is heartening news. Of course, the Obama campaign showed the energizing potential when millions of small donors band together to support a candidate. Multiple matching funds could turbo-charge this heartening trend and spread the small-donor phenomenon to Congress. And we have two decades of experience to show it works. As we sometimes say in New York City, “If it can make it here, it can make it anywhere— — even in Washington, D.C.

Frederick A.O. Schwarz Jr. was chairman of the New York City Campaign Finance Board from 2003 to 2008. He is now chief counsel of the Brennan Center for Justice at the New York University School of Law.