In pivotal year, Democracy Fund fights ‘pay to play’ politics

Democracy Fund

Diana Li, a staff reporter for the News, traveled to Arizona over spring break to look at how Arizona’s public finance system, one of the first of its kind in the nation, sheds light on the issues faced by New Haven’s Democracy Fund. This is part one of a three-part series. (Read part 2 and part 3.)

Carl Goldfield had a problem.

In his attempts to obtain state permission to establish a public financing program in the Elm City in 2003, Goldfield — then-president of the New Haven Board of Aldermen — was struggling to find broad support in Hartford and drive the issue to the top of legislators’ agendas. He resorted to including Hanukkah gelt in letters to legislators in an attempt to stand out from the pack.

Finally, after two years of lobbying the legislature, Goldfield heard the good news. With the state’s permission, the city established in 2006 a program advocates hoped would support clean elections in New Haven: the Democracy Fund, the only such program in the state.

Now a decade after Goldfield’s efforts in the state legislature, the city is facing what may prove to be the most competitive mayoral race in two decades. Ten-term Mayor John DeStefano Jr., who was first elected in 1994, will step down after his term ends this year, and at least four candidates —with likely more to come — have jumped into the race to replace him. The Elm City’s public campaign finance system, which most of these candidates have agreed to use, has become an election issue in and of itself as the campaign progresses.

As the first election in the post-DeStefano era, this fall’s mayoral race will be a pivotal point in determining the success and future of the Democracy Fund.

“In my opinion, the jury is still out. We need to allow [the Fund] to take its course for the first time in a competitive race,” Board of Aldermen president Jorge Perez said. “We’ll have to see: Did it keep elections clean? Did everybody get a chance to put out their story and platform? Did it keep lobbying dollars out?”

ESTABLISHING THE FUND

The “pay to play” idea behind politics – the concept that interested candidates have to raise a significant amount of money to stand a chance of reaching office, increasing the likelihood that successful candidates would be beholden to contributors — led Goldfield to begin his clean elections push in 2003. He partnered with aldermen Joe Jolly and Elizabeth Addonizio, along with city officials such as DeStefano, to change a system he felt rewarded those with money and connections.

“There was a climate of mistrust in terms of the public and state government,” said Kim Hynes, senior organizer of Common Cause in Connecticut, a group that advocates for good governance. “It really just felt like Connecticut had corruption left and right and so I think that created an atmosphere where the climate was right to pass the reform.”

Hynes cited a 2004 scandal involving Gov. John Rowland — who pled guilty to using public money for personal uses, such as trips to Vermont and Las Vegas — as one example of the state’s culture of corruption. Closer to home, Jolly also pointed to the 2001 mayoral election between Sen. Martin Looney and DeStefano, in which over a million dollars were spent by the two candidates in total.

With New Haven as the pilot city in Connecticut attempting to finance mayoral elections with public funds, drafters of the ordinance looked to existing systems in places like Los Angeles and Arizona when creating New Haven’s program. They ultimately chose a “hybrid” system that takes advantage of both a flat grant and matching funds.

Candidates who intend to take part in the Democracy Fund are limited to donations of no more than $370. To qualify, they must first receive 200 contributions of over $10. Once they do, they are eligible for a flat $19,000 grant as well as matching funds — of up to $125,000 — which double the first $25 of each contribution.  Under the program, a $10 donation turns into a $30 donation, $25 becomes $75 and $50 becomes $100.

While city officials believed in the value of such a program, convincing the state legislature took more time — establishing the Democracy Fund lasted over three years, with state permission received in 2005 and the Board of Aldermen finally approving the Democracy Fund ordinance in June 2006.

“I was disturbed by the notion that we were a pay to play town,” said Goldfield, explaining that while he felt public campaign finance was essential, the legislature did not always see it as a top priority. “The state legislature’s got a million things on their plate up there and this was just one. … They were taking up what they absolutely had to take up, and there was a feeling of opposition by people who just have a philosophical problem with public money being spent on campaigns.”

The guiding theme through the process was the idea that money should not be the deciding factor in a candidate’s campaign — anyone who had significant support should be able to run a respectable campaign, removing the need to be a part of established politics or bankrolled by special interests.

“The main way the system works is this idea that the quantity of donations is the driving factor rather than the quality of your donations,” Jolly said.

PROMOTING ‘MERITORIOUS’ CANDIDATES

Both current Fund administrator Ken Krayeske and previous administrator Robert Wechsler explained that in deciding who is a suitable, or “meritorious,” candidate, the threshold for qualifying for public finance should be high enough that the state is not frivolously handing out money, but low enough to make a difference in opening up the playing field.

After helping to create the system, DeStefano used the Democracy Fund in the 2007 and 2009 mayoral elections, riding to easy successes in relatively uncompetitive elections. But DeStefano opted out in 2011 when he faced Jeffrey Kerekes, who received $25,202 from the Democracy Fund. Former alderman Tony Dawson, who also ran in 2011, received $23,420 from the Fund and placed fourth in the primary. Though DeStefano outspent Kerekes by a margin of 14-1, DeStefano won by a margin of less than 10 percent, eking out a victory in his closest election yet.

To Kerekes, the Democracy Fund accomplished its goal of helping new candidates join the fray.

“I ran a campaign with the Democracy Fund that almost unseated a 20-year incumbent with little name recognition, and I lost by 1,600 votes,” Kerekes said. “If I had some more time and put in additional effort, I might have been able to convince just 800 of those people to change their mind.”

While many criticized DeStefano’s choice not to use the Democracy Fund as hypocritical and antithetical to the spirit of democracy, DeStefano has countered that he felt the Supreme Court’s Citizens United decision “neutered” the Democracy Fund, as after the decision, outside groups like SuperPACs could contribute unlimited amounts of money, according to City Hall spokeswoman Anna Mariotti. Mariotti added that DeStefano “felt the rules were complicated and inconsistent,” but she declined to elaborate on what the mayor’s specific concerns were. When recontacted to ask for more details, Mariotti said that the mayor felt he had said enough about his decision and did not want to comment further.

“[DeStefano opting out] was an unfortunate decision, and I do feel that he as someone who had been committed to removing big donors out of politics should have stuck with the program during a tough election season,” said State Rep. Roland Lemar, a former alderman who helped establish the program. “The rules are somewhat onerous and he had a difficult time with the Democracy Fund, but he had the institutional capacity to work with them and make the rules more relevant. Instead, [DeStefano] disengaged from the process and I think he hurt himself by not having that commitment to the program that he himself had lobbied so hard for.”

Kerekes said DeStefano’s 2011 campaign exhibited exactly what the Democracy Fund was trying to prevent: mayoral candidates receiving political contributions and then turning around to give them political favors. Some of DeStefano’s biggest contributors in 2011 included business leaders, government contractors and city employees.

“A problem in New Haven is that the current mayor has been largely dependent on developers who he’s been very generous with, and it’s become such a self-reinforcing process that a lot of people didn’t even bother challenging him,” Kerekes said.

Jolly said that Democracy Fund advocates wanted to create a system that incumbents, such as DeStefano in 2011, would still choose to opt into. During the drafting process,  the creators consisdered three scenarios in which candidates might choose to participate in the Fund: In the first scenario, Jolly said, a “well-financed incumbent” would opt into the Democracy Fund, which occurred in both 2007 and 2009 with DeStefano. The second scenario envisioned a candidate who was a “grassroots activist” who was not necessarily well-established with large donors in the city but could take advantage of the Fund to finance a run for office. Jolly said Ward 10 Alderman Justin Elicker FES ’10 SOM ’10 might fit that mold in this November’s race.

The final scenario was that of an established challenger, which Jolly said was modeled after someone like Looney, who ran in the 2001 election. This person, in founders’ minds, would also choose to opt into the system despite the individual’s existing connections. Today, that candidate might be someone like State Rep. Gary Holder-Winfield with his connections through the state legislature.

Hoping to support different types of candidacies, the Democracy Fund was challenged with devising fair requirements that would be identical for all participating candidates. When the Democracy Fund was originally established, the minimum contribution amount was $25. But as the Democracy Fund board evaluated the Fund’s performance, amendments were made to lower that amount to $10.

“In a city like New Haven, $25 is a reasonably large amount of money, and dropping it to $10 makes it much easier to get more people involved with the contribution phase of the process,” Wechsler said. “The main thing was really to get the program started, and the goal was to improve it after getting experience and seeing how things worked.”

Lemar said that his experiences running for alderman have shown him that getting 200 contributions can be difficult. For Lemar, the current threshold is high enough to establish a candidate as legitimate and deserving of public financing. The threshold guarantees that every candidate must have a “minimum strong grassroots support” in order to qualify for the Fund, he said.

This year, Elicker made the job look easy, qualifying in just five days after announcing his candidacy and becoming the first candidate in this year’s mayoral race to qualify for public financing. In a press release at the end of January, Elicker’s campaign announced that it had received 235 contributions totaling $15,285 — together with the $19,000 grant and matching funds, he netted a total of $43,685. As of the end of March, the Elicker campaign published on its Facebook page that it had passed the $50,000 mark.

While the amount of funds may seem high, Holder-Winfield said that he thinks it is more likely that people will choose to opt into the system if the overall level of money given by the Fund is even higher.

Ward 7 Alderman Doug Hausladen ’04, however, cautioned against the role of money in politics.

“This is a value statement about what we want our government to be doing,” he said. “Do we want them to be cajoling people to give them $1,000 for a mayoral race, or do we want people to focus on meeting more folks and engaging the public?”

‘THE FUND IS READY’

Probate Judge Jack Keyes, who has told the News that he is seriously considering a run for mayor, said that he was unsure whether he would use the Democracy Fund if he were to run. Similar to DeStefano’s concerns in 2011, Keyes said the Citizens United case makes him skeptical that the Democracy Fund will be effective.

“You have to see if everyone else [running for mayor] is using [the Democracy Fund], and you have to see if the rules are still effective,” Keyes said. “It’s a great idea, but the question is, is it real?”

In March, former city economic development director and mayoral candidate Henry Fernandez announced that he will not use the Democracy Fund, arguing that he entered the race too late to consider the program a viable way to finance his campaign.

“I’m a big supporter of the Democracy Fund: I think it allows for more candidates to participate and for candidates who otherwise couldn’t raise funds,” Fernandez said. “Public financing generally is structured in a way, however, that doesn’t allow for a candidate to get into an election late, and I’m getting in late. There are basically five months until Election Day, and so the ability to raise funds in a short period of time is significantly hampered by the restrictions that exist.”

Fernandez said that had he declared his candidacy a year before the election, the Democracy Fund would have been a viable option. He added that he still thinks the program is a good idea, as he is “not sure whether the [current candidates in the race] would have been able to run without the Democracy Fund.”

Holder-Winfield, however, argued that Fernandez had the choice of declaring earlier and participating in the Fund.

“We’ve known about this race for a while. You don’t just wake up one day and decide you want to run for mayor,” he said. “It’s not easy for any of us to get to 200 contributions. I don’t have a ton of time on my hands either. It was his decision to wait.”

While Elicker declined to comment on Fernandez’s campaign in particular, he noted the short amount of time it took him to reach the 200 qualifying donations.

Plumber Sundiata Keitazulu, who has also declared his mayoral candidacy, has pledged to use the Democracy Fund.

Patricia Kane, who currently serves on the Democracy Fund, said Fund administrators aim to create enough “peer pressure” to push all candidates to participate in the program. Goldfield said he hopes there is eventually a strong stigma against not participating.

With a current majority of the mayoral candidates pledging to use the Democracy Fund — but at least one candidate declining to do so — the upcoming mayoral election will prove a potent test of the Fund’s efficacy.

“Last election turned out to be more competitive, but the [2007 and 2009 races] weren’t that competitive. It was a good time to test the program without running into trouble,” said Wechsler, the previous Fund administrator. “But now, it’s the most competitive election yet and the Fund is ready.”

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