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Oil lobby launches Super Bowl ad blitz

A stadium of cheering fans with planes flying in a darkened sky overhead.
Superbowl XLIII. (Photo credit: U.S. Air Force/Wikimedia Commons)

Millions will be glued to their TV sets this Sunday to see the epic clash between NFL powerhouses the New England Patriots and the Seattle Seahawks in Super Bowl XLIX. And in between commercial breaks, they might even see some football.

The American Petroleum Institute, the trade association for the oil and natural gas industry, spent at least $73.5 million on advertising in 2012. This year, they’ll be dropping $100,000 for a 30-second D.C. spot during halftime according to an ad contract from local NBC affiliate WRC. The ad was picked up by Political Ad Sleuth, the Sunlight Foundation’s political ad tracker.

That six-figure buy includes the single biggest spot in a recent advertising campaign by the trade group. Since Jan. 6, the group has been running pro-pipeline ads in the D.C. market touting Keystone’s bipartisan support and potential for job growth. The project has been stalled for years lacking the congressional go-ahead.

The oil lobby also agreed to spend just under $80,000 on a separate ad buy on WRC. Transcanada — the pipeline company — has also bought up large chunks of air space in the Washington market in recent weeks.

Incoming Senate Majority Leader Mitch McConnell, R-Ky., announced last December that approval of the long-stalled pipeline, connecting Canadian tar sands to Houston refineries, would be one of his first priorities in the Republican-controlled Congress.

Like most industry trade groups, however, the oil association has a laundry list of items on their legislative to-do list. In addition to Keystone approval, recent ad campaigns have touted fracking, while recent White House mandates protecting stretches of land and sea from oil and gas exploration is sure to ruffle some feathers.

Regardless of the content, the Super Bowl offers an unparalleled advocacy opportunity. Last year’s Super Bowl broke records for the most watched program in sports history, averaging a 112 million viewers.

Sunlight’s calls to WCR and the American Petroleum Institute were not immediately returned. This post will be updated if and when we receive a reply.


Snap Shot Germany: Gold dealings, but no gold standard

Photo of author and anti-corruption consultant, Anne-Christine Wegener
Anne-Christine Wegener, anti-corruption consultant and former program manager for Transparency International UK.

There are a number of ways in which political parties and candidates can raise money. The traditional paths would be through donations – corporate or individual – and public funding. In Germany, the federal government spends around 130 million euros (around USD $150 million) every year on political parties. For most national-level parties, this makes up around one-third of their income. According to political finance laws, parties rely on public funding to pad a significant portion of their budgets. Germany’s AfD party (short for “Alternative fuer Deutschland” — “Alternative for German”) found a novel way to make this system work for them. Established in 2013, it narrowly missed the 5 percent hurdle and thus did not make it into the German Parliament (Bundestag), but got elected in the 2014 European Parliament elections while campaigning on an anti-euro ticket.

While its national bid has been unsuccessful so far, its fundraising has been anything but: The party sells gold bars and gold coins to its members on an online platform, and makes lots of money this way. 1.6 million euros have been raised so far. In addition, the party leadership is hoping that these efforts might make the party eligible for more public funding. This is possible because of a twist in German public party finance regulations. Parties are eligible for public funding, the amount of which is calculated on the basis of the parties’ importance. This, in turn, is measured by the amount of votes they received: Funding is available for parties who have won over 0.5 percent of votes during the previous European or federal election, or over 1 percent in the previous state election. But it also depends on how much money the party itself manages to raise. Roughly speaking, the amount of public funding cannot exceed the amount of money the party manages to raise through members’ fees and donations. And this is where the gold comes in. The AfD is a relatively new party with – compared to the mainstream parties such as the Christian Democrats (CDU) or the Social Democrats (SPD) – a small member base and comparatively less donor contributions. To make up for this, the selling of gold is meant to bring revenue into the party’s coffers, revenue that would then be used to increase the amount of public funding they would be eligible for.

The AfD’s fundraising technique has raised eyebrows in Berlin, but has been found to be within party finance regulations. If anything, it shows the limits of good faith intentions and the unreasonable reliance on them in Germany’s political finance system. It is symptomatic of a more deeply-rooted problem: a system of slow transparency, non-existence of caps of donations and no upper limits for campaign spending. A few aspects of the political party funding systems are particularly worrying:

  • Only donations exceeding 10,000 euros (USD $11,600) must be published in a party’s annual account. As these annual accounts are only published months after the end of the financial year, the time gap between the donation being made and it being published can be up to 16 months, making it virtually impossible for the public to track how a donation relates to a political cause in a timely manner.
  • Only donations exceeding 50,000 euros (USD $58,000) are published within days of the donation being made. There have been reports of donors splitting donations to stay under this threshold, or spreading large donations over a number of donors to get around publishing guidelines.
  • There is no limit or cap on the amount of contributions that can be made by any one person or company. Recent developments in the U.S. have shown the problem with this, as political finance and campaign spending spirals – arguably – out of control.
Image of gold bars stacked into a pyramid.
Photo credit: Alamy

There is also a neat way to get around the already low hurdle of party finance transparency altogether through so-called “sponsoring” of a political party’s activities. In Germany, this happens, for example, at party conventions, where companies can buy exhibition space and the opportunity to talk to (read: lobby) party members. This is, in itself, not a problematic arrangement. What is problematic is that the sponsoring agreements between parties and corporates are not required to be published. There is now increasing pressure on parties to voluntarily publish this information and some parties are starting to proactively list the revenue from these arrangements (e.g. the Green Party). However, there is an urgent need for the legislative to make this a legal requirement.

The sponsoring nonregulation touches upon a broader question, which a lot of countries struggle with: The legislature that is generally in charge of regulating political party finance is made up of political parties, which will generally not be tempted to act against their own interests.

In the case of Germany, one may argue that the lack of caps on donations has not led to major problems as of yet. Unlike the U.S. and other countries, there have been no major campaign finance scandals in the last years. Constructs to channel additional money into politics, such as PACs and super PACs, are completely unknown in Germany. In general, donations by companies and individuals are nowhere near the amounts that we are seeing in the U.S. In the same vein, campaign spending is generally quite low, although figures for each party – let alone each candidate – are hard to come by. But estimates suggest that in the last parliamentary election year, 2013, the SPD spent 23 million euros (USD $30 million), the CDU spent 20 million euros (USD $26 million) and the Green Party spent 5.5 million euros (USD $7.5 million) for advertising agencies. When compared with the estimated USD $6.3 billion from the 2012 U.S. elections, this is not a lot. Expressed differently, the major parties in Germany spent USD $0.80 per German resident, while in the U.S. this number was USD $19.93.

Whereas the amounts spent may not be that high (yet), it is important to keep in mind that we are talking about millions of taxpayers’ money that is spent on political parties. While parties very clearly fulfill an important function in the political system and political education, this should not come with a carte blanche. Transparency and timely disclosure should be what the citizens can expect in exchange for this funding.

If nothing else, uncertainty around party finance fosters mistrust in political parties at a time when distrust of political parties is on the rise virtually everywhere, Germany included. Moreover, it should not be hard to put in place stricter provisions if not many in practice — as is often argued — would be hurt by new regulations. So, why not fix the disclosure loopholes now and aspire to become not a gold dealer but a gold standard?

Interested in writing a guest blog for Sunlight? Email us at guestblog@sunlightfoundation.com


HUD Uses Design Competitions to Achieve Policy Goals

In the wake of Hurricane Sandy, “HUD didn’t want to move at the speed of government” in its effort to finance more resilient coastal designs in New York and New Jersey, said Marion McFadden, deputy assistant secretary at HUD, at an event at the American Institute of Architects (AIA). To avoid this, HUD decided to […] […]

NYC’s Mean Streets Get Sweeter

“New York City’s mean streets are getting a little sweeter,” said Janette Sadik-Khan, the NYC Transportation Commissioner for Mayor Mike Bloomberg, at the Transforming Transportation conference in Washington, D.C. That sweetness takes the form of a “new ecosystem of pedestrian plazas and bike lanes.” In a wide-ranging talk, Sadik-Khan talked about what NYC accomplished over […] […]

Public swamps FEC with post-McCutcheon rulemaking comments

Someone at a demonstration holding up a sign that says follow the money.

When the Federal Election Commission asks for public comment on a new rule, lawyers and activist groups specializing in election law leave a handful of responses. But after another campaign season that featured an onslaught of spending by super PACs and dark money groups, a court decision that lifted limits on big donors and a “public listening tour” by one of the agency’s Democratic commissioners, the FEC’s latest rulemaking drew 32,000 public comments.

At issue is how the FEC should respond to the Supreme Court decision in McCutcheon v. FEC. The court’s ruling struck down the biennial aggregate limits on political giving, which capped the total amount of direct contributions an individual could make to parties, political action committees and candidates in an election cycle.

The decision eliminated one more provision of the Federal Election Campaign Act, enacted in response to fundraising scandals by President Richard Nixon’s re-election effort; rather than being capped at less than $150,000, a single wealthy donor can now give a more than $3.5 million directly political campaigns. The decision in McCutcheon led to a new twist in an old kind of money-raising vehicle, as joint fundraising committees — which normally would be formed to benefit two candidates, or a candidate and a party committee — took on ten or more beneficiaries while soliciting six-figure checks from donors.

Commissioner Ann M. Ravel, a Democratic appointee and currently the FEC’s chair, encouraged citizens to weigh in on the question of how the joint fundraising committees should be regulated. Ravel noted, for example, that even though such committees may take in six figure checks, campaign laws bar candidates from asking for checks so large.

Ravel and the other Democratic commissioners put broader questions to the public as well, including how to increase political transparency and curb corruption, pointing to the $4 billion spent in the 2014 elections, of which $700 million came from dark money groups that don’t disclose their donors. Republican Commissioner Lee Goodman, the previous chair, also supported public feedback, while underlining the First Amendment’s protection of campaign spending.

Though not the most-commented FEC document of all time (FEC staff thinks that distinction likely belongs to a 2003 rulemaking on political committee status, which drew over 100,000 comments), the new regulatory proposals drew comments from across the political spectrum. Among those who shared their views were former presidential candidate Ron Paul, James Bopp (who argued for the winning side in the Supreme Court’s 2010 Citizens United case), many campaign finance lawyers and ordinary citizens like Eric Albert, who wrote in favor of increased transparency:

If the wealthy, people, corporations, labor unions, etc. want to influence my vote, I demand that they be identified clearly to me so I may make a fully informed decision in whom I wish to vote for. Please require that all funding for ads and electioneering material on behalf of candidates be clearly identified by who paid for it. Money has no role in politics despite the Supreme Court’s contrary misguided interpretation, as this gives an unfair advantage to those who have money to spend.

Pro-reform groups like the League of Women Voters and Common Cause each organized letter writing campaigns that drew thousands and hundreds of comments respectively.

Commissioner Ellen Weintraub, a Democrat who has pushed for more disclosure from politically active groups during her time as the FEC’s chair, wrote on Twitter that three quarters of all the comments were in support of increased regulation of money in politics.

Sunlight could not immediately verify that figure, though clearly not all of the commenters favor more regulation of the current system.

Norman Roberts wrote:

Please stop trying to stifle free speech. There is no difference in an opinion piece, whether in a newspaper, magazine, or on line as either a blog or YouTube short. By passing this REG you would be putting this country on a slippery slope of political repression of divergent opinion. This is clearly an attempt to surreptitiously encroach upon our First Amendment rights. Leave media alone! and keep the internet free.

Many of the anti-regulatory comments also reference the regulation of internet media by the agency.


Your senators’ campaign disclosures are due soon. Will they reveal them instantly online, or push paper?

This Saturday, Jan. 31, is the deadline for all U.S. senators to file their mandatory campaign finance reports, making details about campaign contributions and expenditures available to the public. Due to a loophole in the law that a handful of senators have been unwilling to close, senators are permitted to file reports on paper, rather than electronically with the Federal Election Commission. Here at Sunlight, we believe all senators should be using the ‘Net to upload their reports, rather than printing them out on reams and reams of paper. And that’s why, today, we’re embarking on a campaign to urge all senators to do just that ahead of Saturday’s deadline. And we need your help to do it.

We’re asking voters across the U.S. to call or tweet their senators and ask them to file their campaign finance reports electronically this Friday. Click here to take action!

Small photos of Virgnia's U.S. Senators with buttons to click so that you can call or tweet them and ask them to e-file.
Click here to send your U.S. senators a message ahead of Saturday’s disclosure deadline: It’s time to #USETHENET!

Your senators have all the technology they need to disclose their campaign donors online. Still, using e-filing technology is voluntary. Whether a senator clicks “upload” or “print” is entirely up to them. That’s why we need to send a message before this deadline on Saturday. Our call or tweet tool makes it simple for you to find your senators and take action. So go ahead and take just the minute or two needed: Tell them to #USETHENET!

A bipartisan group of senators representing states across the country have already shown leadership and initiative by electronically filing their campaign finance reports in the past. We want to encourage them to do so again this weekend, while putting additional pressure on those senators still pushing paper to e-file, as well.

Campaign finance data is public information and even if the law doesn’t require it, there is no excuse for any sitting senator to delay disclosure of who is financing his or her campaign.

Eventually, common-sense legislation to require electronic filing by senators will become law. Until then, though, your elected officials need to know that you will not accept being kept in the dark when they have the power to shed a bright and immediate light on their campaign reports.


The Week on Politwoops: A senator takes down a King

Deleted photo via Politwoops. On this week’s roundup of notable deleted tweets archived on Politwoops, we go ringside with a senator, collect dozens of old campaign messages from a new governor and more. Last weekend, Sen. Claire McCaskill… […]

Opening the municipal checkbooks

Image Credit: TaxCredits.net One of government’s most basic functions is collecting and spending money. There’s a reason budgets and spending are often the source of passionate town hall debates and a key aspect of political platforms — p… […]

Opening the municipal checkbooks

Image Credit: TaxCredits.net One of government’s most basic functions is collecting and spending money. There’s a reason budgets and spending are often the source of passionate town hall debates and a key aspect of political platforms — p… […]

OpenGov Voices: A tale of working Eastern European democracy in the Czech Republic

Jiří Skuhrovec, head of the Centre for Applied Economics in the Czech Republic.

Petr Nečas was elected as the prime minister of the Czech Republic in 2010. Having a reputation of “Mr. Clean,” he set the anti-corruption agenda as the main goal of his government. However, as a reformist leader within a party with strong ties to local godfathers, it’s not clear that his squeaky clean reputation holds up. In summer 2013, he was forced to resign due to a major corruption scandal, even though he still hasn’t been proven guilty. His case brought public attention to special interest groups behind the scenes who arguably use the government to control state-owned enterprises and public procurement.

Despite these allegations of corruption and recent debate of the issue, no hard evidence indicating policy capture in the Czech Republic has been published so far. With a new study from the Centre for Applied Economics, we aim to change that — we provide results showing serious conflicts of interest in the financing of all major Czech parties. How did we do that?

Our team gathered an extensive data set on Czech political party financing, cross-referenced donor lists with public procurement, European funds, and several other “red flags.” We originally did not aim to discover policy capture — we merely hoped to find some cases of possible conflict of interest, as the public money recipients would be “giving back” to political parties. The results, however, went beyond our expectations:

  • 29.6 percent of all Czech public procurement winners (roughly 1,200 companies) directly donate money to political parties. Statistically, these donations help firms face lower average competition and get a larger volume of contracts.
  • For 14 percent of all donations, the identity of the true donor is questionable, as these are shell companies, offshore companies or economically inactive subjects. Even non-existent companies and unborn children were listed among donors. (See table below.)
The sums of donations made between 2006 and 2013, divided into categories by their amount. The vertical line represents the limit above which parties must reliably identify the donor and include a copy of the donation contract in the annual report. Source: PolitickeFinance.cz
  • Furthermore, there is an extreme culmination of donations just below the 50,000 CZK ($2,023 USD) limit, where the donor needs not be properly identified. (See table below)
Summary statistics of the value of donations made by red-flag donors for selected parties. In parentheses, we include their share on total donations. Source: PolitickeFinance.cz, Business Register, Ministry of Regional Development.

Why has no one noticed?

We were first to gather such evidence, simply because the data on political donations were available only in paper form in the Czech parliamentary library. Occasionally, journalists revealed some cases of conflict of interest while studying these. We, however, took the effort to manually process all donation lists into own database, where we could combine them with other data that our NGO gathers (public procurement, offshore companies, etc.).

The previous lack of such evidence could also be a consequence of poor control mechanisms: The annual reports are only reviewed by auditors who are chosen by parties themselves and by the parliamentary committee, which performs only formal checks. Even the obvious flaws went through the control mechanisms undetected, such as donations from municipality-owned enterprises or non-existent firms and people.

Put it online?

We are far from claiming that all identified cases are truly problematic. Further investigation of individual cases is needed. It is, unfortunately, not in the capacity of a small NGO to examine all the data. According to our initial analysis, about 2,000 donations came from public procurement winners alone, possibly causing a conflict of interest for politicians deciding on public procurement outcomes. Thus we created PolitickeFinance.cz — a site that serves as a database of donations, enabling users to filter donations using various red flags related to the donors.

While doing so, we faced a ban from Czech Office for Personal Data Protection, which claimed that our activity violates the protection of personal rights and therefore is illegal. After consulting several lawyers, we decided to publish the data anyway — so far without consequences. We believe that public interest in transparency of political party financing should outweigh the need for personal protection and that will be our argument in a potential trial.

Our findings in much greater detail confirm the criticism made by GRECO — that transparency of Czech political party financing is unsatisfactory, and that independent control mechanisms need to be put in place. This year, a new law on political party financing should be passed; it has, however, been already postponed several times. We hope that our analysis will contribute to a fact-based discussion on real issues of party financing. Solving such issues might improve political stability of our country, and help us not to repeat case of Nečas.

We further hope that our study might serve as a good practice case for foreign NGOs aiming for similar goals. The linkage between party donations and procurement (or other public money) is possibly severe in many other young democracies.

Interested in writing a guest blog for Sunlight? Email us at guestblog@sunlightfoundation.com