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1993-10: Guidelines for Determining Whether Candidate Made an In-Kind Contribution to Another Candidate

Thursday, September 23, 1993

Various questions have been raised about the circumstances in which expenditures made by one candidate in connection with the election of a second candidate will be in-kind contributions to the second candidate. The Board has determined to issue this advisory opinion to clarify the standards applicable to such questions under the New York City Campaign Finance Act, Campaign Finance Board rules, and relevant advisory opinions the Board has issued previously.

A payment "made in connection with the nomination for election, or election," of a candidate is a contribution to that candidate unless the candidate, his or her agent, or authorized committee did not "authorize, request, suggest, foster or cooperate in any such activity". New York City Administrative Code §3-702(8); see also Campaign Finance Board Rules 1-02, defining "in-kind contribution"; 1-04(g)(1); Rule 1-08(f)(3). The Act does not restrict candidates from authorizing joint expenditures for joint materials or activities, provided that the benefit each candidate derives from the joint material or activity is "proportionally equivalent to the expenditures authorized by such candidate." Administrative Code §3-715, codifying Advisory Opinion No. 1989-35 (July 19, 1989).

Thus, to determine whether the candidate making an expenditure has thereby made an in-kind contribution to a second candidate1, the following questions must be answered:

1) Is the expenditure "made in connection with" the second candidate's nomination or election?

2) If the answer to the first question is yes, is the expenditure "independent of" the second candidate or is it a joint expenditure among the two candidates?

3) If it is a joint expenditure, has the second candidate fully compensated the first candidate for the benefit the second candidate derives from the joint material or activity?

"In Connection With" the Second Candidate's Election

A candidate's payment for an advertisement, literature, material, campaign event, or other activity is "made in connection with" the second candidate's nomination or election if it includes:

1) solicitation of contributions on behalf of the second candidate; or

2) express advocacy of the election of the second candidate or the defeat of his or her opponent.

See Advisory Opinions Nos. 1993-9 (September 9, 1993); 1989-36 (July 19, 1989). Other factors, while not conclusive, may also evidence that the payment was "made in connection with" the second candidate's election:

1) the purpose of the material or activity, including evidence that a purpose was to promote or facilitate the election of the second candidate;

2) the use and prominence of the second candidate or his or her name or likeness in the material or activity;

3) whether the material or activity includes an expression by the second candidate of his or her views on issues brought up during the election campaign;

4) the timing of the material or activity in relation to the election of the second candidate;

5) whether the distribution of the material or the activity is targeted to the second candidate's electorate; and

6) the amount of control the second candidate has over the material or activity.

Advisory Opinion No. 1993-9, noted above.

At the same time, the Board has found that advertisements paid for by a political party to promote the success of that party, which did not identify any particular candidate and were not targeted solely to a single candidate's electorate, were not "made in connection with" the election of that party's nominee. Advisory Opinion No. 1991-5 (August 8, 1991)2.

Independent or Joint Expenditure

The question whether the first candidate's expenditure is independent of, and thus not an in-kind contribution to, the second candidate entails a factual inquiry into whether the second candidate has authorized, requested, suggested, fostered, or cooperated in the activity of the first candidate. Rule 1-08(f) (1) sets forth some of the factors relevant to this inquiry, including whether the person making the expenditure is an agent of both candidates, whether both candidates have authorized the same person or entity to make expenditures on their behalf, and whether one candidate has cooperated in the second candidate's operation.

In this factual inquiry, the Board will be guided by the presumptions it has previously set forth. Thus, for example, a political party's spending on behalf of a particular candidate it has nominated is presumed not to be independent of that candidate. Advisory Opinion No. 1991-5 (August 8, 1993) 3. In the event of a presumption against independence, the candidate has the burden of demonstrating that he or she did not authorize, suggest, request, foster, or cooperate in the activity.

Candidates may relate to each other in a number of ways. The fact that candidates have endorsed one another or have been nominated by the same party suggests a potential for cooperation, but is not, in itself, evidence thereof. These facts alone are not sufficient to give rise to a presumption against independence.

The relationship of candidates who announce they are voluntarily running together as a "ticket", for which they have chosen to join together in a broad spectrum of activities to promote each other's election, however, is different. This symbiotic relationship – whether within or across party lines – makes cooperation among the candidates essential for achieving their stated intent. In these circumstances, the candidates have the burden of demonstrating that expenditures the first candidate makes "in connection with" the second candidate's election are independent4.

The following evidence may be relevant to this demonstration:

1) the "ticket" is no more than an agreement to promote a common theme or philosophy and no other coordination exists between the candidates' campaign staffs and consultants;

2) even if some cooperation between the candidates has taken place, they have devised and maintained operating procedures that keep their campaign staffs and consultants separate and assure that the particular activity was not based on information about the plans, projects, strategy, or needs of the second candidate.

In some circumstances the cooperation between candidates may be sufficiently extensive to make the presumption against independence conclusive. Any sharing of campaign staffs, consultants, offices, telephones, or making of in-kind contributions, expenditure refunds, advances, or joint expenditures between the candidates will reduce the possibility that the presumption can be overcome. See Federal Election Commission Advisory Opinions Nos. 1984-30 (August 6, 1984); 1982-20 (April 26, 1982); 1979-80 (March 12, 1980).

Apportioning the Joint Expenditure

As noted above, each candidate must pay the portion of the cost that is "proportionally equivalent" to the benefit the candidate derives from the joint expenditure. A candidate who pays more than his or her proportionate share has made an in-kind contribution to the other candidate. Moreover, until the second candidate reimburses the first according to his or her proportionate share, the full amount paid by the first candidate continues to be an expenditure by that candidate subject to the spending limit applicable to that candidate, unless the expenditure is otherwise exempt. Rule 1-08(h).

The candidates have the burden of demonstrating that the portion of costs each assumes is proportionally equivalent to the benefit each derives. Advisory Opinion No. 1989-35, noted above. Among the factors to be considered are the focus of the material or activity and the geographic distribution or location of the material or activity. Rule 1-08(h); Advisory Opinion No. 1989-35, noted above. In some circumstances, a full allocation of cost to one candidate may not be unreasonable if the benefit the second candidate derives from the material or activity is shown to be negligible.


1 For purposes of the discussion whether an expenditure is "independent", references to "candidate" should be read to encompass that candidate's agents and authorized committees.

2 Cf. Federal Election Commission Advisory Opinion No. 1982-56 (October 29, 1982) (a candidate's payments for a television commercial in which a second candidate appears in order to endorse the first candidate is not an in-kind contribution to the second candidate because its content did not reflect an intent to influence the election of the second candidate, did not mention the second candidate's candidacy, did not advocate his election or the defeat of his opponent, and did not contain a solicitation of funds for the second candidate's campaign).

3 Other presumptions are:

  1. an appearance by a candidate at a campaign event conclusively shows that the candidate has cooperated in that particular activity, such that the cost of the activity would be an in-kind contribution to the candidate. Advisory Opinion No. 1989-26 (June 12, 1989). But see Advisory Opinion No. 1989-36 (July 19, 1989) (a single appearance at an event, without more, may not be dispositive whether the candidate has cooperated in other expenditures that were or will be made by the event's sponsor; thus, a factual inquiry about the relationship between the candidate and the sponsor may be necessary).
  2. the dissemination, distribution, or republication of materials forwarded by a candidate is presumed not to be independent of that candidate. Rule 1-08(f)(2); Advisory Opinions Nos. 1989-26, noted above; 1989-37 (July 24, 1989); 1991-5, noted above.

4 Once the presumption against independence arises, it is not necessary to show that the candidate specifically authorized or cooperated in a particular expenditure to reach the conclusion that it is a joint, rather than an independent, expenditure.