Requires the reporting of contributions by business entities and individuals; defines terms; provides that no business entity or individual who contracts with the state for a contract of more than fifteen thousand dollars shall make monetary or in-kind contributions or a pledge of contribution in excess of one thousand dollars to an individual who holds the position of an elected state public office, a candidate for such position, including the candidate's election fund, if such contract must be voted on or approved by such individual; or a state, county or municipal political party, in the preceding twelve month period to the contract being awarded; or to any person for any political purpose or use; or to knowingly solicit any such contribution from any such person for any such purpose during any such period; provides exemptions; makes related provisions.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7212
SPONSOR: McDonald TITLE OF BILL:
An act to amend the state finance law, in relation to the reporting of
contributions by business entities and individuals
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this legislation is to require the reporting of contrib-
utions by business entities and individuals.
SUMMARY OF PROVISIONS:
Section 1. The State Finance Law is amended by adding a new section
139-1 to read as follows: § 139-1. Reporting of contributions by busi-
ness entities and individuals.
1. Defines the following terms and meanings: "business entity",
"contribution", "in-kind contributions", "governmental entity", "article
of procurement", "governmental procurement", "procurement contract",
"business dealing with the state", and "statewide elected official".
2. Provides that no business entity or individual who engages in any
business dealings with the state or any governmental entity or its inde-
pendent authorities (if the transaction exceeds $15,000) shall make any
monetary or in-kind contributions to a statewide elected official, or
legislator, including candidates for such positions or their election
committees or funds, if such contract must be voted on; endorsed,
promoted or approved by such individual or office related thereto; or a
state county, or municipal political party for any political purpose or
use.
3. a. During the governmental procurement process a business entity must
report through a disclosure statement all contributions made to most
statewide elected officials during the preceding twelve months for any
political purpose or use. b. Sets the terms for review by the govern-
mental entity conducting the procurement. If is it determined that such
a review reveals a breach of contract or poses a conflict of interest in
the awarding of the contract, the business entity or individual shall be
disqualified from bidding on or being awarded the contract.
4. a. Determines what is included in a breach of contract. b. Outlines
remedies should a breach of contract be discovered. c. Determines penal-
ties levied when a breach of contract occurs. d. Determines penalties
and repercussions for a false sworn statement is submitted.
e. Contributions made by a business entity or individual prior to the
effective date of this section shall not constitute a violation. f. In
January and July, the Office of General Services shall compile a list of
names, based on such office's records, listing any business entity or
individual doing business with the state, as of those months. The list
shall be made available on such office's website.
Section 2. Provides a severability clause. Section 3. Establishes the
effective date.
JUSTIFICATION:
Pay-to-play is the practice of a business entity or individual who makes
a political contribution to an elected official to gain access and curry
favor with those officials who can influence the awarding of lucrative
public contracts.
As more special interest money pours into our political system in the
wake of the 2010 Supreme Court decision in Citizens United, which over-
turned the ban on corporations to use their treasury funds to influence
elections, transparency in political spending is more important than
ever. If, in accord with the Supreme Court's opinion that prompt disclo-
sure of expenditures "enables the electorate to make informed decisions
and give proper weight to different speakers and messages", so too is
need for sunlight on the business behind government procurement in order
to assuage any American public concerns about serious corruption and
bias. Disclosure of political spending - especially when the spending is
being done by those who are competing for government contracts - paid
for by taxpayer dollars -- promotes accountability for both the business
entity and the elected official, also guaranteeing that the bidding and
awarding process is free of pay-to-play corruption and favoritism.
The Federal Government, the Municipal Securities Rulemaking Board and
the Securities and Exchange Commission, and 15 states and dozens of
localities throughout the country - including New York City and Orange
County, NY - have implemented pay-to-play laws, rules or ordinances that
restrict campaign contributions from government contractors. These
include federal statute 2 U.S.C. 441c, MSRB Rule G37, California,
Connecticut, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Nebraska,
New Jersey, New Mexico, Ohio, South Carolina, Vermont, Virginia, West
Virginia, and several dozen localities ranging from Los. Angeles, San
Francisco, Philadelphia, and Newark.
While many of these reforms were triggered by large campaign contrib-
ution scandals grabbing news headlines, an equal amount were the result
of small contributions given by business entities who were hoping to
acquire "an edge" or an upper hand over the competition. However, it
does not matter if the pay-to-play practices were done through big
corporations or individuals, as large contributions or ones as small as
$100, the resulting damage is all the same: the competitive bidding
process awarding contracts that are intended to be the most advantageous
to the state is undermined, and the public's confidence and trust in
government and its elected officials is further eroded. In order to
prevent any actual, or even the perception of corruption and retaining
the trust of its citizens, New York must adopt a comprehensive pay-to-
play rule that creates an even playing field, safeguarding the integrity
of the state government procurement process.
PRIOR LEGISLATIVE HISTORY:
A.6685 and 5.451 of 2021-2022
A. 5748 and S. 5892 of 2019/2020
A. 9968 of 2017/2018
A. 9260-B of 2015/2016
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
There are no know fiscal implications associated with the passage of
this legislation.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.
