PO WER OF ATTORNEY 2015 Exposing the Influence of the Plaintiffs’ Bar in New York State Politics 19 Dove Street, Suite 201 Albany, NY 12210 518-512-5265 [email protected] www.lrany.org Power of Attorney: Exposing the Influence of the Plaintiffs’ Bar in New York State Politics, April 2015 Author/Lead Researcher: Scott Hobson Research Assistant: Katherine Hobday Cover image: Scott Hobson/Shutterstock Contents About the Lawsuit Reform Alliance of New York ............................................................. 3 Overview ............................................................................................................................ 3 Notes on Political Influence in New York ......................................................................... 4 Summary of Findings ........................................................................................................ 5 Methodology ...................................................................................................................... 6 Findings ............................................................................................................................. 7 Lobbying ..................................................................................................................... 7 Lobbyists .................................................................................................................... 7 Campaign Contributions ............................................................................................ 8 Exploring the Influence ..................................................................................................... 8 Overview ..................................................................................................................... 8 Executive Branch ....................................................................................................... 8 Campaign Committees .............................................................................................. 9 The Legislature ........................................................................................................ 10 Lawyers and Law Firms ........................................................................................... 13 Conclusions ..................................................................................................................... 14 Appendix .......................................................................................................................... 15 About the Lawsuit Reform Alliance of New York The Lawsuit Reform Alliance of New York (LRANY) is a non-partisan 501(c)(4) nonprofit organization which advocates for reform of New York’s legal system in order to foster a better business climate, promote job growth, and address the growing cost of lawsuit abuse. LRANY’s members include local and national businesses, entrepreneurs, healthcare providers, taxpayers, and concerned citizens from across the state. Overview This report analyzes spending by plaintiffs’ lawyers on state-level elected officials between January 1st, 2014 and December 31st, 2014. The report builds upon LRANY’s 2014 Power of Attorney report, which is available at www.lrany.org. This report relies on publicly available information to examine the three main components of monetary influence: 1. Lobbying expenditures 2. Campaign contributions by plaintiffs’ lawyer political action committees (PACs) 3. Independent campaign contributions by law firms and lawyers Lobbying Lawyers PACs and Firms Influence 3 Notes on Political Influence in New York This report expresses influence as a product of a.) lobbying and b.) campaign contributions. While both mechanisms are commonly used to influence elected officials, they differ in several key respects. Lobbying is defined as activities meant to influence the passage or defeat of any legislation by either house of the state legislature or approval or disapproval of any legislation by the governor. Lobbying, in short, involves legislation, orders, and rules. All persons or organizations which spend more than $5,000 on lobbying in any given year must register as a lobbyist with the Joint Commission on Public Ethics (JCOPE) and disclose all lobbying-related spending publicly. There is no monetary limit on lobbying spending in New York. Campaign contributions are expenditures expressly made to impact the outcome of an election of a public official. All campaign contributions are reported to the state Board of Elections. In New York, individuals and limited liability companies (LLCs) may give up to $150,000 in political contributions annually, incorporated businesses and nonprofits may contribute up to $5,000, and partnerships may contribute up to $150,000 per individual partner.1 Campaign contributions by special interest groups are typically made through an associated political action committee (PAC). The New York State Trial Lawyers Association operates the LAWPAC committee, and the New York State Academy of Trial Lawyers operates the ATL PAC committee. These committees and their related organizations are used interchangeably in this report for purposes of convenience and clarity. This report does not analyze elected officials’ outside income, such as serving “of counsel” for a plaintiffs’ firm. It is not possible for us to conclusively distinguish between legitimate outside income and payments intended to influence public officials; this is the responsibility of duly authorized law enforcement officials. Furthermore, it is important to bear in mind that this report analyzes only the monetary inputs into state politics – the report does not attempt to quantify the outputs resulting from or attributable to such activity (for example, the enactment of legislation which is beneficial to plaintiffs’ lawyers). 1 Because most law firms are organized as partnerships rather than corporations, their ability to make campaign contributions is substantially higher than other businesses of comparable size. 4 Summary of Findings Lobbying In 2014, the two plaintiffs’ lawyer special interest groups, the New York State Trial Lawyers Association (NYSTLA) and New York State Academy of Trial Lawyers (NYSATL), spent a record high $1,264,098 lobbying New York elected officials, representing an 11% increase over the previous year and a 51% increase since 2010. Campaign Contributions In 2014, plaintiffs’ lawyers as a whole1 made a record high $1,825,854 in political contributions to state elected officials, an increase of 42% over the previous year, including: - $1,094,693 from NYSTLA and NYSATL political action committees - $731,161 from individual plaintiffs’ lawyers and law firms associated with NYSTLA and NYSATL In 2014, NYSTLA, the dominant plaintiffs’ lawyer special interest group in New York, contributed $1,081,943 to state-level campaigns, including: - 79% of all the members of the legislature - 87% of the Senate - 76% of the Assembly In 2014, NYSTLA contributed $319,600 to campaign committee accounts: - $102,300 to the Democratic Assembly Campaign Committee - $60,000 to the Democratic Senate Campaign Committee - $102,300 to the Senate Republican Campaign Committee - $35,000 to the Republican Assembly Campaign Committee - $20,000 to the Senate Independent Democratic Conference committee In 2014, plaintiffs’ lawyers as a whole contributed $116,400 to statewide office campaigns, including: - $102,300 to the New York State Democratic Committee2 - $8,300 to one Attorney General candidate - $5,800 to one Comptroller candidate 1 Includes LAWPAC, ATL PAC, and contributions by individual plaintiffs’ lawyers associated with these groups. For more information see the “Methodology” section on the following page. 2 NYSTLA and NYSATL did not give directly to gubernatorial candidates. Instead, they contributed the maximum legal amount to the state Democratic Committee, which spent heavily on the election. 5 Methodology Sources Data for this report was aggregated from publicly available reports. Figures for lobbying expenditures were obtained from the Joint Commission on Public Ethics (JCOPE), and totals for campaign contributions were calculated using New York State Board of Elections campaign finance disclosure reports. Total lobbying dollars were calculated as the sum total of all “reportable lobbying expenses” and “reportable lobbying compensation” reported on the JCOPE Client Semi- Annual Reports of NYSTLA and the NYSATL. These two groups overwhelmingly represent plaintiffs’ attorneys and their interests. Total plaintiffs’ lawyer PAC campaign contributions were calculated as the sum total of all campaign contributions to candidates by the two plaintiffs’ lawyer political action committees, NYSTLA’s LAWPAC and NYSATL’s ATL PAC. In terms of total dollar contributions, LAWPAC is the dominant committee by an overwhelming margin. In the cases where ATL PAC did not make political contributions, only contributions by LAWPAC were analyzed. Contributions by law firms and lawyers were calculated by identifying contributions made to candidates by individuals and firms who also contributed to LAWPAC and ATL PAC. This process of reverse engineering contribution data is detailed in the graphic below, with the red arrow representing the contributions identified in this component. Individual Plaintiffs’ or Law Firm Lawyer PACs Candidate Individual or Law Firm 6 Findings Lobbying Aggregate reported lobbying expenditures NYSTLA/NYSATL Combined between January 1, 2014 and December Lobbying Expenditures 31, 2014