Testimony: Watchdog Calls on Council Charter Commission to Strengthen NYC Oversight Agencies

Good evening, members and staff of the Charter Commission. My name is Rachael Fauss, the Senior Policy Advisor for Reinvent Albany. We advocate for transparent and accountable government in New York. 

We thank the Commission and its staff for its Preliminary Report, and in particular its focus on strengthening oversight agencies. Our testimony today will dig deeper into ethics oversight, drawing from research we conducted regarding other municipalities, and supporting recommendations from the Department of Investigation.  

We understand that the Commission has limited time and resources, and that staff recommended against proposing voting reforms at this time – largely due to pre-clearance and pre-emption concerns. We do not believe that the same issues apply to campaign finance, however, and ask the Commission to propose Independent Expenditure (IE) reforms. 

The 2025 New York City Mayoral election is seeing the largest ever amount of spending by IEs. The Fix the City PAC has raised a whopping $8.7 million as of the writing of this testimony, blowing all past IEs out of the water. This level of spending threatens the city’s robust public matching system, because IE disclosures and penalties are not keeping up with the scale of spending. Without meaningful penalties, fines are simply a cost of doing business. 

In both areas – independent ethics oversight and IE reforms – we ask the Commission to propose the best reforms possible to prepare for the worst. Democratic norms, the rule of law, and the institutions that work to promote these ideals are being eroded everyday, and it is crucial that New York City make its oversight agencies as strong as possible.

We urge this Commission to do the following five things:

1. Advance a ballot proposal creating a New York City independent ethics commission, learning from best practices in other municipalities
2. Protect the Conflicts of Interest Board and Department of Investigation with independent budgeting
3. Increase independence of the Department of Investigation Commissioner
4. Propose a two-step removal mechanism for the mayor, with voter approval
5. Expand penalties to 15x the amount of illegal spending for improper coordination, and improve disclosure for Independent Expenditure (IE) Committees

1. Create a New York City Independent Ethics Commission

We continue to support the Commission advancing a ballot proposal to create a New York City independent ethics commission that: (1) puts the functions of the Conflicts of Interest Board (COIB) and Lobbying Bureau under one roof; (2) is funded via independent budgeting; and (3) is governed by an independently-appointed board. The basic idea is to create an ethics agency with roughly the same responsibilities as the state’s Commission on Ethics and Lobbying in Government (COELIG), but with a more independent appointment process. 

At the last hearing, commissioners asked about other municipal ethics models. We have since conducted some research about other major cities with robust ethics oversight organizations, which is summarized below. As you can see, all of the major municipal ethics boards we examined also oversee lobbying and campaign finance. Additionally, many are not controlled by the mayor, or have additional vetting procedures for candidates.

Other interesting findings include:

• Los Angeles and San Francisco’s five-member ethics commissions have appointments from a total of five different separately elected city officials.
• Seattle’s Ethics and Elections Commission’s appointments are split between the Mayor and Council (three each), with the seventh member appointed by the six commissioners.  
• Denver has a Nominating Commission that provides lists of nominees; this commission has one appointment from the mayor, council, and presiding judge of the county court. 
• Los Angeles has an independent budgeting provision that guarantees it receives at least $7 million, and provides the commission authority to make expenditures and hiring decisions on its own.

We appreciate that the Preliminary staff report included discussion about increasing independence of the COIB, such as through independent budgeting. We urge you to go further by amending the Charter to provide for an independent appointment process for commissioners, while putting lobbying and ethics under one roof – as is done in other major U.S. cities. 

2. Propose Independent Budgeting for the COIB and Department of Investigation

As we discussed in our testimony in March, the Conflicts of Interest Board would greatly benefit from an independent budgeting mechanism. The Mayor’s Executive Budget released in May 2025 would bring their staff count up to 22 – an increase of only one staff member and still short of the 26 staff COIB had in FY 2017. 

The New York Times reports that because of successive budget cuts, the Department of Investigation is operating with a skeleton crew. Reinvent Albany found that DOI will have lost 30% of its staff from Fiscal Year 2017 to Fiscal Year 2026 if the current budget is approved.  

The FY 2026 budget proposed by the Adams administration funds DOI at $50 million, with a full-time staff of 293. In FY 2017, DOI received $47 million and had a full-time staff of 422 (see chart below).

We ask that the Charter Revision Commission protect the Department of Investigation’s budget through independent budgeting, setting DOI’s funding as a percentage of the net budget, similar to what was previously proposed for the Conflicts of Interest Board. 

A table of DOI’s and COIB’s funding history is at the end of this testimony. 

3. Propose More Independence for the DOI Commissioner

We thank the Commission for providing a discussion about how to increase independence of the DOI Commissioner in its Preliminary report. Reinvent Albany supports DOI’s recommendations that were provided to the City Council at its March 2025 budget hearing:

1. Establishing a tenure of five or seven years for the DOI Commissioner. We agree that it would be beneficial for the Commissioner’s term to span administrations, providing increased independence from the administration.
2. Expanding and strengthening the controls around removal of the DOI Commissioner. We also agree that it would be beneficial to amend the Charter to add a requirement that removal of the DOI Commissioner be for cause only, and with approval of the City Council, which can hold a public hearing to further explore the Mayor’s statement of reasons and the Commissioner’s response. 

 As stated previously, we also support the DOI’s proposal for independent budgeting. 

4. Propose a Removal Mechanism for the Mayor

We also appreciate that the Commission’s Preliminary report noted that it would further study removal mechanisms for the mayor. Since our last testimony, Citizens Union released a framework of a two-step process to remove the mayor: the City Council initiates a hearing process before voting to bring a “Special Removal Election” before the voters. We believe that this process will address concerns raised by the Commission at your February hearing about well-funded interests gaming the recall process, and concerns that voters would not have a say in a removal conducted solely by the City Council and/or other city officials. 

Citizens Union’s proposal would require a 70% vote of the Council to initiate the hearing process, and an 80% threshold to recommend removal to the voters, triggering the Special Removal Election. Reinvent Albany supports a lower threshold with a 2/3 vote for the initial hearing, and a 3/4 vote of the Council to recommend removal to the voters. Following voter approval during a “Special Removal Elections,” the mayor would be removed, triggering a special election to select a new mayor.  

5. Increase Independent Expenditure Disclosures and Fines

In March, we recommended that the Commission close loopholes in IE reporting to provide more timely public transparency of fundraising by IEs. Because the current rules are primarily triggered by spending and IEs typically spend very close to the election, voters have little time to determine who is behind these ads. We recommended the following:

1. Earlier disclosure triggers for IEs that are based on when an Independent Spender encumbers or spends on a communication, rather than when the public sees a communication.
2. Disclosure of contributors of $1,000 or more to entities giving to the Major Contributors of Independent Spenders (addressing the dark money nesting doll problem). 
3. Disclosure of contributors to Independent Expenditures and entities contributing to them further back than twelve months before an election. Contributors to political committees for candidates for office are disclosed when the contribution is made.
4. Allowing imposition of penalties on an Independent Spender of up to three times the amount of a contribution or expense that was misrepresented in a Verification Report. Currently, the maximum penalty is $10,000 (14-02(e)), which is absurdly low given known contributions to IEs of half a million to a million dollars. This level of penalty would create parity with some of the current penalties for campaign finance violations, such as going over expenditure limits.

Since then, we have seen unprecedented fundraising and enforcement activity regarding IEs. However, despite our support for the New York City Campaign Finance Board’s (CFB) decision to withhold more than $600,000 in matching funds from the Cuomo campaign due to improper coordination, it is clear that more must be done regarding fines for IEs. The public matching system provides a powerful incentive to play by the rules, but non-participating candidates do not have the same incentives. 

Specifically, regarding IE penalties for non-independent/coordinated activities, we recommend that the CFB be authorized to issue fines up to 15x the amount of IE spending determined to be non-independent/coordinated. IEs have no contribution limits, including from Doing Business contributors, whereas regular contributions to participating or non-participating candidates are fairly modest and Doing Business only $400.

Currently, the penalty for violations involving regular contributions is up to 3x the contribution or expense that is not properly reported or otherwise in violation. It seems reasonable that IEs could be fined 15x, since on average IE contributions are so much larger, and potentially infinite.

• Contributions to Fix the City are on average 107x  contributions to the Cuomo campaign. The average contribution to Fix the City is $61,000, while the average size of Cuomo’s regular contributions is $568.
  
• Contributions to Fix the City are on average 16.5x the contribution limit to citywide non-participants. The average contribution to Fix the City is $61,000, while the contribution limit to citywide non-participants is $3,700.

Thank you for your consideration.

Appendix A: 10-Year Analysis of Budget of NYC Conflicts of Interest Board

Appendix B: 10-Year Analysis of Budget of NYC Department of Investigation

Click here to view the testimony as a PDF.