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“Political Communication”

June 29, 2010

This is called pulling a fast one.

While everyone was focused on the budget, Mr. Silver and Mr. Sampson quietly introduced legislation that restricts the ability of businesses and business associations to engage in “political communication.”

The operative section of the legislation (S.8405/A.1588) is as follows:

The bill amends section 14-116 of the election law to define the term “political communication” as any communication made to general public audience and intended to encourage the public to contact a government official, candidate for public office, or party position or a political party regarding pending legislation, public policy, or a government rule or regulation.  Any business entity must at least annually obtain the prior authorization, by majority vote for expenditures, expenditures for political purposes, or for political issue communications via majority vote.  A number of reporting requirements are required including the amount of such expenditures and contributions, the rationale for the expenditures, the recipient’s identity. This information must be reported to the Secretary of State and posted on the Department of State’s website. The Attorney General is given enforcement authority.

This bill is shocking. If approved, it will mean that any and all business interests would be required to get advance approval from a government panel to advocate or oppose public policy.

And the fact that the bill has been written expressly for business probably means what? You guessed it. This is a favor, a big favor, to the unions.

Maybe it was the pushback business interests offered this year on issues like charter schools, the soda tax, wine in grocery stores, and prevailing wage.

Maybe it is the fact that it is an election year and some business groups are lining up behind the GOP candidates.

Maybe it is an overreaction to the recent Supreme Court ruling on corporate free speech.

Whatever it is, it’s wrong. 

Silver and Sampson are two smart guys, both attorneys, who should know better than to trample First Amendment rights. 

With actions like this, these “leaders” throw away any sympathy they get for having to deal with an extremely difficult political and economic climate and an inconsistent (at best) executive. 

This is backroom politics at its worst, and they should be ashamed of themselves.

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5 Comments leave one →
  1. Bill permalink
    June 30, 2010 9:41 AM

    What part of the bill requires any sort of government pre-approval of any political spending? It simply requires shareholder approval and government notification.

    • June 30, 2010 6:59 PM

      Dear Bill:

      You are right. We thank you for pointing out an error in our reading and representation of the legislation.

      Specifically, this legislation requires companies to get advance approval — not from a government panel — but from their shareholders. In other words, before a company could engage in any “political communication,” it would have to gain approval from a majority of shareholders and then provide notice of such approval to the state. We regret our inaccuracy on this specific point.

      However, we think the larger point still stands. This is an unprecedented restriction on political communication by companies. In this regard, securing shareholder approval is not a quick or easy process. In fact, the requirement could effectively prohibit companies from participating in public dialogue in a timely way. Take this very legislation. It was introduced on Monday and may be voted upon tonight (Wednesday.) If its restrictions were in place, there’d be no way for business interests to express a view on the bill because company officials would not be able to gain shareholder approval in just 48 hours. As a result, they’d be prevented from engaging on the matter, which is wrong.

      More troubling is this: Why does the legislation apply only to corporate interests? Is there an equivalent restriction on organized labor? For example, are unions required to get approval from their members before engaging in political communication?

      The answer is no. Union officials can act on their members’ behalf at any time and engage as they see fit. Why wouldn’t the same rules apply for corporate leaders?

      –NT2

      • Fred permalink
        June 30, 2010 7:57 PM

        If I read the proposed statute, A11588 (not 1158), correctly, it requires an annual approval by shareholders of political expenditures in general at least once a year, and a dollar limit authorized for overall political spending in that year. There is no provision for prior approval of specific expenditures. The proposed statute then requires disclosure at the end of the year, to the Board of Elections and the shareholders, of the specific expenditures which have been made on political communications. Thus, if a corporation does not exceed the dollar limit which has been set by its shareholders on political spending, its officers may make whatever timely expenditures they see fit and later report them to the Board and the shareholders.

      • idunno permalink
        July 1, 2010 1:45 AM

        It’s worth noting that the reporting/disclosure requirements apply to both corporations (and other business entities) AND to unions. So on that front, they are treated equally.

        A separate question about the propriety of the legislation involves the responsiveness of leadership to the individuals involved. The law typically enables corporate leadership to limit shareholder participation in numerous ways and insulate executives from the consequences of their bad work . Do union members have more or less control over their leadership? Does the organizational election cycle make it more or less possible for union members to exercise veto power and remove their leaders?

  2. June 30, 2010 11:39 AM

    One hopes this was introduced with the understanding that it will never pass or if it is passed that it will never be signed into law. On the other hand it’s often to underestimate the arrogance of power.

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