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1989-41: Expenditure Limit for Political Party Loans

Wednesday, August 30, 1989

The question has been raised whether loans made by a candidate's authorized committee to a political party are exempt from the expenditure limits of New York City Administrative Code §3-706(1).

A candidate has the burden before the Board of proving that a disbursement is not subject to the expenditure limits. Campaign Finance Board Rule 102(e). Disbursements by a candidate or by a candidate's authorized committee for "the purpose of promoting or facilitating the nomination or election of the candidate" are subject to the expenditure limits. Campaign Finance Board Rule 105(a). Certain expenditures are expressly exempt from the expenditure limits. See Administrative Code §3-706(5) ; 3-712; Campaign Finance Board Rule 105(b) .

A loan to a political party is not covered by any exemption to the expenditure limits enumerated in the Act or the Board's rules. Such a loan may well "promote" or "facilitate" a candidate's election, especially in circumstances in which the candidate is the party's nominee. Thus, the Board will presume that a loan by a candidate to a political party is subject to the expenditure limits1.

If the loan is repaid, in whole or in part, by the political party, the repayments may be characterized as expenditure refunds or contributions to the candidate, depending upon the terms of the loan. In order to determine how repayments on a loan should be characterized, the Board will require information about the terms of the loan, the amounts repaid and to be repaid, and the schedule of repayments.



1 The question whether a loan to a party committee, other than a constituted committee, to the extent not repaid by the date of the election, is a contribution by the candidate's authorized committee under New York Election Law §14-114(6) is an issue beyond the scope of this advisory opinion.