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New York Proposed Regulations Move Toward Greater Campaign Finance Disclosure

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Yesterday, New York Attorney General Eric Schneiderman attempted to throw down the gauntlet on campaign finance disclosure regulations for New York state. The prime target? Nonprofit profit organizations, labor unions, political action committees and other entities that engage in election advocacy at the federal, state, and local level.

If approved, Schneiderman's new regulation would require any organization spending $10,000 or more on a New York election to publicly report itemized schedules of expenses and contributions, including the name and address of the recipients of the expenditures, and "a clear description" of the purpose for the expense. For this kind of disclosure to be truly transformative, two outstanding issues from the draft proposal should be addressed.

1. Make that Real Time, Online Disclosure -- Although it proposes that all disclosure reports will be published online on the Attorney General's website, the current text of the proposed regulation only requires annual disclosure of electioneering activities. One filing per year online is an unreasonably low threshold for disclosure of activities that are ongoing, critically related to one of our most vital democratic institutions (our elections!), and in the public interest to be reported in a manner that’s as timely as the activity. When you measure the potential burden of filing more regularly against the public interest in timely disclosure, technology has changed the balance: The best target to shoot for is real-time online disclosure of key influence data.

2. Close the Exemption Loophole -- The proposed legislation exempts those organizations who already publicly disclose information to other government agencies from filing with the state Attorney General. Although it’s appropriate to guard against redundant requirements, more thought should be put into the potential consequences of this provision. Just because organizations are reporting to other government entities does not mean that the reporting and disclosure these agencies already require is as detailed or timely as what the Attorney General’s office plans to disclose. Nor is there any guarantee that this provision will be interpreted as its meant or that the disclosed information will be easily accessible. New regulations should create reliable disclosure requirements that create a meaningful window into political activity regardless of whatever laws already exist.

Schneiderman is authorized as the Attorney General with statutory authority to oversee nonprofit organizations -- many of which played a big role in this year’s elections -- and his regulatory approach is a creative answer to Congress’s failure to act. As Attorney General, Schneiderman is charged with defining the form and manner in which organizations make annual financial reports to the state and to enact rules and regulations to administer the financial reporting system. Just as it is within his purview to address issues of influence in the political system, Schneiderman can make changes that reflect the best practices of online disclosure and to require necessary and appropriate timelines for doing so. At one time, requiring real time, disclosure may have been a burden, but with the bevy of online tools (including the NYOpenGovernment.com website that Schneiderman himself created earlier this summer), closing the gap between electioneering activity and public notice has never been easier.

As our nation’s campaign finance transparency laws continue to be attacked and weakened, it’s refreshing to see a new, viable proposal that has promise to bring new information to bear on elections that are increasingly taking place in the shadows. The proposed regulations will be published in the New York State Register on December 26th and will be subject to public comment until March 6, 2013. We hope the public takes the chance to address these and other issues at that time and supports Schneiderman’s proposal.

You can read the full text of the proposed regulations here.