Written Testimony of

Frederick A. O. Schwarz, Jr.

Corporation Counsel, 1982-86; Campaign Finance Board Chair 2003-08

Before the New York Public Campaign Financing Commission

September 10, 2019

Thank you for the opportunity to testify in support of your efforts to design a public financing
system for New York State elections. I have extensive experience with New York City’s
groundbreaking public financing program. As New York City corporation counsel from 1982
through 1986, I advocated for reform of the city’s campaign finance system. I co-chaired the
1988 Citizens Committee for support of the charter amendment establishing the city’s Campaign
Finance Law. And I oversaw the city’s public financing system as the Campaign Finance
Board’s chair between 2003 and 2008.

In the 1980s, New York City was shaken by a major corruption scandal. 1 Some of Mayor
Edward I. Koch’s top political allies had been caught using their office for personal gain in one
of the biggest scandals in city history; officials were convicted of racketeering and mail fraud,
among other offenses. Accompanying the corruption were shockingly large political
contributions made to city officials that were perfectly legal.

Koch was himself completely honest, but nonetheless devastated by the scandal and its impact
on the city. As corporation counsel, I urged Koch to heed Shakespeare’s words: “Sweet are the
uses of adversity.” 2 I recommended taking advantage of the scandal by pressing for reform,
including, most importantly, campaign finance reform.

Thanks to the leadership of the mayor and then-City Council Speaker Peter Vallone, the council
overwhelmingly passed the New York City Campaign Finance Act in 1988. 3 It established a
voluntary public funding program that matched a portion of contributions raised by participating
candidates if they limited their spending, among other conditions. The system worked to prevent
corruption, and by encouraging donors to give, it enriched citizen participation in politics.

A key strength of the system is the ability to evolve. The Campaign Finance Act requires the
Campaign Finance Board to send a report to the mayor and city council every four years that

1
ANGELA MIGALLY & SUSAN LISS, BRENNAN CENTER FOR JUSTICE, SMALL DONOR MATCHING FUNDS: THE NYC
ELECTION EXPERIENCE, BRENNAN CENTER FOR JUSTICE, 3 (2010), https://www.brennancenter.org/publication/small-
donor-matching-funds-nyc-election-experience.
2
Frederic A.O. Schwarz, Jr., Lawyers for Government Have Unique Responsibilities and Opportunities to Influence
Public Policy, 53 N.Y.L. SCH. L. REV. 375, 401 (2008/2009).
3
New York City, N.Y., Local Law No. 8 of 1988, § 1. Shortly thereafter, the New York City Charter Commission
adopted the reforms and placed them on the ballot for voter approval. In November 1988, 79.8% of voters approved
these proposals. NEW YORK CITY CHARTER REVISION COMMISSION, THE REPORT: VOL. 1, 24, 44-45 (1988),
https://www1.nyc.gov/assets/charter/downloads/pdf/1986-1988_final_report.pdf.

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includes, among other things, its recommendations for changes to the program. 4 The vast
majority of candidates participate in the program, which means the city’s elected officials are
familiar with it and invested in making it work as well as possible.

Indeed, the funding mechanism has been strengthened over the years. The city system originally
offered a 1:1 match on the first $1000 of eligible contributions. For the 2001 elections, the match
was increased to a 4:1 match on the first $250. From 2009 through 2017, the match was 6:1 on
the first $175. Most recently, in 2018, the voters approved raising the match to 8:1 on the first
$175 for city council and borough president and the first $250 for mayor and other citywide
offices. 5

The generous matching ratio is important because it empowers ordinary people who can’t afford
to give the high amounts that wealthy special interests and influence seekers do. The city’s
multiple match has transformed political fundraising. The number of overall contributors and the
number of small donors has increased, and the portion of candidates’ funds from small donors
has risen. 6 The program encourages candidates to combine fundraising and voter outreach
efforts, improving the connection between elected official and constituent. And the option of
running without big-donor support has made for a diverse pool of candidates with grassroots
support, improving voter choice.

In a system that distributes public funds, effective enforcement is key to protect the public fisc
and the public trust. The rules for candidates must be strictly upheld. At the same time,
enforcement should be fair, with audits resolved in a speedy manner under transparent rules that
apply equally to all candidates.

New York State has a historic opportunity to benefit from the city’s successful experiment with
transformative reform. 7 Almost 90 years ago, Supreme Court Justice Louis Brandeis explained,
“[I]t is one of the happy incidents of the federal system that a single courageous state may, if its
citizens choose, serve as a laboratory; and try novel social and economic experiments without
risk to the rest of the country.” 8 New York City has acted as a laboratory within the state by
establishing profound campaign finance reforms and improving upon them over the last two
decades.

Today, Albany faces its own issues with corruption and its appearance. A shamefully long list of
state officials have been convicted of corruption in recent years, including long-serving
Assembly Speaker Sheldon Silver and former Senate Majority Leader Dean Skelos. The state’s

4
New York City Campaign Finance Act § 3-713(e), (h).
5
What’s New in the Campaign Finance Program, New York City Campaign Finance Board, accessed September 5,
2019, https://www.nyccfb.info/program/what-s-new-in-the-campaign-finance-program-2/.
6
Michael J. Malbin and Michael Parrott, Small Donor Empowerment Depends on the Details: Comparing Matching
Fund Programs in New York and Los Angeles, 15 THE FORUM 219, 232-33 (2017), available at
https://www.nyccfb.info/pdf/EC2017_Michael_Malbin_Testimony.pdf.
7
Frederick A.O. Jr. Schwarz, States and Cities as Laboratories of Democracy, 54 REC. ASS’N BAR CITY N.Y. 157,
157-165 (1999).
8
New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1930) (Brandeis, J. dissenting).

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“pay to play” culture is fostered by high contribution limits. 9 Fundamental reform in the mold of
the city’s public financing system is the state’s best response.

New York State is in the position to set a national example, leading the way with reforms that
will fundamentally transform political fundraising. It can be a “courageous state,” building on
the city’s experience, that will show the way forward to other states and the national government.

9
See MORELAND COMMISSION TO INVESTIGATE PUBLIC CORRUPTION, STATE OF NEW YORK, PRELIMINARY REPORT,
30-35, (2013), https://publiccorruption.moreland.ny.gov/sites/default/files/moreland_report_final.pdf.