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1993-6: Certain Advertisements Paid by a Private Entity Treated as In-Kind Contribution

Wednesday, July 07, 1993

An advisory opinion has been requested whether payments made by Prudential Securities, a private entity, for television, radio, and newspaper advertisements featuring the Mayor and the Comptroller are contributions and expenditures subject to the contribution and spending limits and other requirements of the New York City Campaign Finance Act. Mayor David Dinkins and Comptroller Elizabeth Holtzman are candidates participating in the New York City Campaign Finance Program. The advertisements apparently help market City bonds1.

The Board has previously addressed the subject of the costs incurred by private entities2 in connection with a participating candidate's appearance. If the payment for the candidate's appearance was "made in connection with the nomination for election, or election" of the candidate, Board advisory opinions have concluded that the payment would be an in-kind contribution to and an expenditure by the candidate, subject to the limits and other requirements of the New York City Campaign Finance Act. See New York City Administrative Code §3-702(8), defining contribution; 3-703(1) (f); 3-706; Campaign Finance Board Rules 1-02, defining in-kind contribution; 1-04(g) ; Advisory Opinions Nos. 1989-18 (May 2, 1989); 1989-26 (June 12, 1989); 1989-34 (July 19, 1989); 1989-36 (July 19, 1989) (outlining standards for whether the appearance was at a "campaign event"); and 1989-37 (July 24, 1989).

The Board will follow an analysis consistent with these opinions to determine whether a private entity paying for advertisements in which the candidate appears has done so "in connection with the nomination for election, or election" of the candidate, rather than for a purely legitimate governmental or other purpose. In the instant case, sufficient facts have not been presented to permit this determination, even for the purposes of an advisory opinion. For example, the Board is unaware of the terms of the contract between the City and Prudential Securities and of the history of similar advertising campaigns or of the timing of those campaigns, including their relation to upcoming elections. The Board recommends that the question presented along with such additional information be pursued by a formal complaint. See Rule 7-01.


1 This opinion has been requested by Giuliani for New York. Letter of Peter J. Powers, dated June 29, 1993. The request did not include samples of the advertisements that were printed and broadcast. A letter from Alan G. Hevesi to Nicole Gordon, dated June 29, 1993, enclosing two other letters and a press release, dated June 29, 1993, appears to be related to the same facts. Questions raised by the Hevesi letter concerning the use of government resources to pay for such advertisements are addressed in a separate advisory opinion, No. 1993-5, issued today.

A subsequent request was received from Friends of Badillo '93. Letter of Bruce Bronster, dated July 2, 1993. This request refers solely to the television commercials and includes a videotape of the commercial in question. In addition to asking the Board to find Prudential Securities' payments to be in-kind contributions to and expenditures by the Holtzman campaign, in violation of the Act, the Bronster letter asks the Board to "remedy the impact of this violation by immediately granting our campaign two-for one sic matching funds." The Board has no authority to provide such a remedy under the Act, because public funds payments at a two-for-one matching rate may be made only on the basis of a Board determination about the amount of funds raised or spent on behalf of a non-participating candidate. See Administrative Code §3-706(3).

2 If payments for these advertisements are in performance of contractual obligations to the City of New York and will be duly compensated by the City under that contract, see, e.g., Local Finance Law §54.10, the analysis of this opinion may be inapplicable to the extent that those payments are considered to be made with government resources. See Advisory Opinion No. 1993-5, issued today.