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1997-9: Contribution Limit for Candidates Who Run as a Ticket, Make Joint Expenditures, and Engage in Joint Fund Raising

September 10, 1997

Re: Administrative Code §3-702(9); 3-703(1) (f), (9); 3-704(1), (2) (f); 3-705(1); 3-715; Campaign Finance Board Rules 1-04(g) (4), (h); 1-07(c); 1-08(f) (5), (g) (1), (h); Op. No. 1997-9

The Board has determined to issue an advisory opinion to address how the contribution limits of the New York City Campaign Finance Act apply in the following situation:

Two candidates, "A" and "B," are running together as a "ticket."1 Candidate A assists candidate B in raising contributions, such as by directly soliciting contributors to give to B or by providing contributor lists to B. Among the contributors giving to B are contributors from whom A has already accepted the maximum amount permitted under the Act. New York City Administrative Code §3-703(1) (f). A also makes joint expenditures with B, for which each candidate pays his or her proportionate share pursuant to Campaign Finance Board Rule 1-08(h)2. The candidates are participating in the Campaign Finance Program.

In this opinion, the Board considers for the first time the impact of joint fund raising efforts and joint spending among candidates running as a ticket. Cf. Advisory Opinion No. 1996-2 (July 18, 1996) (apportionment of shared expenses between two committees authorized by a candidate simultaneously running for two different offices). This opinion outlines standards to ensure that joint fund raising efforts when coupled with joint expenditures do not serve to undermine either candidate's compliance with the Act's contribution limits3.

In previous advisory opinions, the Board has outlined "fair share" requirements for expenditures for joint campaign materials and activities that benefit a candidate other than the candidate making the expenditures. Advisory Opinion No. 1989-35 (July 19, 1989), codified in Administrative Code §3-715 and Rule 1-08(h), and Advisory Opinion No. 1993-10, supra, codified in Rule 1-08(f) (5) 4. The fair share requirement does not by itself, however, address or control the potential for one candidate to be the object of influence-seeking by contributors who have made the maximum allowable contribution to that candidate and then seek to make additional contributions to that candidate's running mate, whose joint expenditures may benefit the first candidate.

The Act prohibits multi-candidate committees for participating candidates. See Administrative Code §3-703(9) . Without this prohibition, multi-candidate committees could accept and spend contributions from a single contributor equal to the sum of the contribution limits separately applicable to the authorizing candidates under the Act or even, in the case of a non-participating candidate on the ticket, under New York State Election Law. See Election Law §14-114(4).

A and B may not therefore use their separate committees in the manner of a multi-candidate committee to raise and spend jointly total contributions that exceed their separate contribution limits5. This would defeat the general remedial purposes of the Act's contribution limits6, which clearly apply both to direct and indirect contributions. See Administrative Code §3-703(1) (f) 7.

Candidates who agree to make joint expenditures have made a conscious judgment that the expenditures will be for their mutual benefit. The Act expressly supports the right of participating candidates to make this choice by providing that once candidate B pays for his or her "fair share," whether directly or by reimbursement to A, the portion paid by B is no longer subject to A's spending limit even though the entire expenditure had an intended mutual benefit for both candidates. But this is as far as the Act extends. The Act does not permit the allocation of joint expenditures between A and B to serve as a means for giving excessive monetary contributions to A8.

To avoid a result that allows candidates running as a ticket effectively to receive excessive contributions, each candidate must demonstrate that, as of the date the candidate pays his or her fair share of a joint expenditure, the total contributions previously received from sources9 that would not exceed the other candidate's contribution limit (when aggregated with contributions received by the other candidate as of that same date) are sufficient to account fully for these payments or reimbursements. No payment or reimbursement for joint expenditures may be made in excess of this total, until the candidate has raised new contributions from sources that, when aggregated, would not exceed the other candidate's contribution limit.

The remedial benefits of this opinion are illustrated by the following simple scenario:

Mayoral candidate A's fund raising consists of a single $7,700 maximum contribution from contributor X. A then conducts a joint fund raising effort (a form of joint spending) that succeeds in netting a single maximum $5,900 contribution to running mate B, a candidate for Borough President. B cannot use funds consisting of X's contribution to reimburse A for his share of the joint fund raising costs incurred by A because A's expenditures would then be funded in part by X's contribution to B, resulting in effect in an excess contribution from X to A.

Payments and reimbursements in violation of the foregoing will be considered violations of the Act. Because the Board has not previously provided direct guidance on this subject, such payments and reimbursements made prior to the date of this opinion will not be considered violations by reason alone of the conclusions reached above.

Several other Campaign Finance Program requirements are relevant for the reimbursement of joint expenditures. The following requirements apply regardless whether the reimbursement is made before or after the date of this opinion:

  • If B fails to reimburse A within 30 days of the expenditure, a corresponding deduction will be made from public funds payments otherwise due to A. Rule 5-01(n) (3).
  • If B fails to reimburse A within 90 days of the expenditure, the expenditure will be considered an in-kind contribution from A to B, subject to B's contribution limit. Rule 1-04(g) (4) 10.
  • Until the reimbursement is made, the full expenditure is subject to A's spending limit, unless otherwise exempt. Advisory Opinion No. 1993-10, supra.
  • B may not use public funds for the reimbursement because public funds may be used only for expenditures made by B's own authorized committee. Administrative Code §3-704(1); 3-705(1); Rule 1-08(g) (1).
  • A may not use public funds for the portion of joint expenditures that will be reimbursed by B because this portion is initially a contribution to B. Administrative Code §3-704(2) (f).



1See Campaign Finance Board Rule 1-08(f) (5) and Advisory Opinion No. 1993-10 (September 23, 1993), regarding whether candidates are running as a ticket. For purposes of this opinion, references to "candidate" should be read to encompass that candidate's agents and authorized committees.

2 Joint expenditures may be made through each candidate's direct payments to the vendor or by reimbursement by one candidate for his or her share of joint expenditures made by the other candidate. The standards outlined in this opinion are applicable regardless of the manner in which the joint expenditure is made. See also Advisory Opinion No. 1993-10, supra.

3 This advisory opinion is expressly limited to situations in which the candidates are running as a ticket, for which both joint fund raising and joint spending is taking place.

4See, generally, Report of the Campaign Finance Board, Friends in Need: Joint and Independent Spending by Candidates (January 1997).

5Cf. Advisory Opinion No. 1993-2 (February 17, 1993) ("to provide equal treatment for similar financial transactions occurring within a single committee," participating candidate may not use single authorized committee to make expenditures that would be prohibited if two authorized committees were used).

6 As stated by the City Council in its declaration of legislative intent in amending the Campaign Finnace Act in 1990, the Act is intended to "reduce the possibility and the appearance that wealthy special interests exercise corrupt or undue influence over local elected officials..." Local Law No. 69 of 1990 §1. See also Local Law No. 8 of 1988 §1.

7 Under Administrative Code §3-703(1) (f), a participating candidate must:

not accept, either directly or by transfer, any contribution or contributions from any one contributor... for all covered elections in the same calendar year in which he or she is a participating candidate which in the aggregate exceed amounts specified pursuant to the Act.

(Emphasis added.) While a reimbursement from candidate B to candidate A is technically not a transfer within the meaning of Administrative Code §3-702(9), A may not similarly use the ticket's cooperative efforts as a means for indirectly obtaining contributions that exceed the contribution limit applicable to that candidate.

8 The fact that A's spending limit is not applicable to the portion of joint expenditures paid or reimbursed by B has no direct bearing on, and is not contrary to, the scrutiny required to ensure that B has not used contributions in excess of A's contribution limit for B's share of the joint expenditures. The standards for determining the applicability of contribution and spending limits are not precisely the same under the Act. See, e.g., Advisory Opinion No. 1997-6 (June 24, 1997) (footnote 7); Advisory Opinion No. 1997-2 (May 15, 1997) (footnote 3). Indeed, the different legislative purposes served by contribution and spending limits demonstrate why joint fund raising efforts among candidates require close scrutiny under the Act. Whereas spending limits are intended to promote fair competition among opposing candidates, contribution limits were created specifically to curtail the risk of undue influence by large contributors. The risk of undue influence posed by direct contributions is similarly posed when a candidate can direct a contributor to give funds to a surrogate, who will later use these funds for expenditures that benefit both candidates.

9 For a description of when contributors are considered to be a "single source," see Rule 1-04(h).

10 To obtain this 90 days "grace," B must report the amount owed to A as an outstanding liability on disclosure statements filed with the Board. Otherwise the amount to be reimbursed must be considered an in-kind contribution from the time A makes the expenditure.