For Immediate Release:
Contact: Susan Lerner
April 18, 2012
Common Cause Releases Analysis of Hedge Fund Influence in NYS Politics
3,552 campaign contributions to state and local candidates, totaling $23.4 million dollars
Today Common Cause NY released a comprehensive analysis (www.commoncause.org/ny/hedgefunds) of the impact of the hedge fund industry on political giving in New York State: Playing the Influence Market. Common Cause NY reviewed campaign finance filings from January, 2005-February, 2012 and identified 173 hedge funds and their executives as political contributors.
"The Citizens United decision has opened the door to the outsized influence of high dollar donors. Hedge fund managers are unique from average New Yorkers, and even within the financial industry, for their exponential resources. This means that individuals, let alone PACs, can significantly determine the outcome of a political campaign, or policy debate. We need a public financing system to ensure fair elections, and make sure that average voters remain relevant" said Susan Lerner, Executive Director of Common Cause NY.
With sky-high contribution limits in which individuals are free to give up to $60,800 in a single year to a statewide candidate and unlimited cash to state party soft money accounts, New York's campaign finance system clearly advantages large dollar donors over ordinary New Yorkers and calls into question the role of money in influencing public policy.
The report reveals that hedge funds, hedge fund executives, and their immediate family members made 3,552 campaign contributions to state and local candidates in New York. These contributions amount to $23.4 million dollars. Only $500,000 of this money came directly from hedge funds as corporate donors. The rest came from the fund managers, executives, and immediate family members donating as individuals. Hedge funds have emerged in the last ten years and developed into major political donors as a result of their outsized compensation rates. However, unlike most other politically active industries, like real estate or healthcare, the vast majority of hedge fund industry contributions come from individual executives and their spouses rather than corporate PACs or trade organizations.
Of the Top 20 recipients of hedge fund dollars Governor Andrew Cuomo ($3,486,162.90) and former Governor Eliot Spitzer ($1,947,192.44) lead the list. 14 of the Top 20 recipients are statewide candidates, reflecting the sky-high contribution limits for these offices.
Only one New York City candidate, Council Speaker and 2013 Mayoral candidate Christine Quinn, appears on the Top 20 list. This is clearly an effect of New York City's Public Financing program. In addition to matching the first $175 of any individual donation 6 to 1 with public money, New York City enforces an individual contribution limit of $4,950 - much lower than the state level.
The high level of donations to seven of the Top 10 Senate candidates is clearly linked to advocacy of two policy issues -- the legalization of same-sex marriage and the expansion of charter schools.
Democrats vs. Republicans
In the 2006 and 2008 cycles, hedge fund donors at the state and local level in New York gave to Democratic candidates and committees over Republicans at a rate of greater than 4 to 1.
In the 2010 cycle the overall Democratic Party advantage narrowed to closer to 2 to 1 and in the 2012 cycle thus far, Republican candidates and committees have received more donations than Democrats, $1.4 million to $1.1 million.
Office: Common Cause New York
Common Cause is a nonpartisan grassroots organization dedicated to upholding the core values of American democracy. We work to create open, honest, and accountable government that serves the public interest; promote equal rights, opportunity, and representation for all; and empower all people to make their voices heard in the political process.