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2000-3: Guidelines for Checks Drawn By a Non-Contributor as "Matchable Contributions"

Thursday, September 14, 2000

Re: New York City Administrative Code §§3-702(3); 3-703(1) (g); Campaign Finance Board Rules 4-01(b) (1), (2), and (3); 5-01(d) (19); Op. No. 2000-3

An advisory opinion has been requested by the Committee for Betsy Gotbaum.1 The committee asks (1) whether contributions which the committee received from "persons whose general practice is to authorize and direct personal affairs managers or accountants to draw checks from their personal funds accounts" will be considered "matchable contributions" by the Campaign Finance Board (the "Board"), and (2) if so, what documentation, if any, other than the contributor's check is required to demonstrate that the contributions are valid. In addition, the same question has been raised informally regarding other similar contributions received by checks drawn on accounts of the contributor, but signed by another individual.2

New York City Administrative Code §3-702(3) states that:

The term "matchable contribution" shall mean (i) a contribution, (ii) contributions or (iii) a portion of a contribution or contributions, not greater than one thousand dollars for all covered elections held in the same calendar year, other than special elections, made by a natural person resident in the city of New York to a participating candidate which has been reported in full to the campaign finance board... (Emphasis added.)

Board Rule 5-01(d) (19) states that one factor in determining whether matchable claims are invalid is whether the check was drawn by a person other than the contributor. The New York City Campaign Finance Act (the "Act") further provides that in order to be eligible to receive public funds, participants, among other requirements, must "maintain such records of receipts and expenditures for a covered election as required by the board." New York City Administrative Code §3-703(1) (g). The Board Rules (the "Rules") require the following back-up documentation for monetary receipts: (1) deposit slips, (2) photocopies of checks and other monetary instruments, and (3) for cash and money order contributions, "a separate written record of the contributor's name, residential address, contribution amount, and date" which is signed by the contributor. Rule 4-01(b) (1), (2), and (3).

Since the Board must have as its first priority the safeguarding of public funds, the Board must ensure that public matching funds are not paid on contributions which are not matchable under the Act. It is the Board's view that the simplest way for a participating candidate to demonstrate that a contribution given in the form of a check is a "matchable contribution" pursuant to Section 3-702(3) is to accept only checks drawn by the actual contributor on an account in the name of the actual contributor.3

The Board, however, recognizes that some contributors may ordinarily conduct their financial affairs in more complex ways, and that, in certain circumstances, participating candidates may be able to demonstrate that contribution checks drawn in these different ways are "matchable contributions." Thus, if a participating candidate can ensure, for each contribution for which matching funds are claimed: (1) that the contributor is an individual New York City resident, and (2) that the funds come from the reported contributor's personal funds and not from some other source (e.g., from a business account or from another individual),4 these contributions may be considered matchable, notwithstanding the invalidation factor contained in Rule 5-01(d) (19). Therefore, for each contribution in the form of a check not drawn by the contributor for which public matching funds are claimed, participating candidates must provide the Board with the following:

• a copy of the check upon which is printed the name of the actual contributor; and

• a document, signed by the contributor, which indicates: (1) that the person signing the check is authorized to do so; (2) the date and amount of the contribution; and (3) the committee's name.

As long as the documentation contains all the above information, it may be provided in any form, e.g., as a letter or a contribution card.

This advisory opinion is limited to the circumstances described here and does not otherwise affect the Board's standards for evaluating claims for public matching funds. Therefore, participating candidates should be aware that the Board may invalidate matching claims based upon other factors as provided in the Act and the Rules even when the above described documentation is provided.

NEW YORK CITY CAMPAIGN FINANCE BOARD

1 The request was made by Sandra Silverman, treasurer to the Committee, by letter dated June 29, 2000.

2The legality of making these contributions to participating candidates by any of the methods described is presumed by the Board. Any interpretation of the applicability of New York State Election Law, federal banking regulations, or laws other than the New York City Campaign Finance Act is beyond the scope of this advisory opinion.

3In Advisory Opinion No. 1989-5 (January 25, 1989), the Board addressed a similar question: whether a participating candidate could accept a single checkrepresenting the maximum contribution allowable for a husband and wife, and their children. Although not addressing the legality of such contributions, the Board stated that "a participating candidate may demonstrate compliance with the contribution limitation of Section 3_703(1) (f) by accepting a contribution in the form of a check drawn by the actual contributor on an account in the name of the actual contributor."

4New York State Election Law §14_120 provides that "no person shall in any name except his own, directly or indirectly, make a payment or a promise of payment to a candidate...nor shall any such...candidate knowingly receive a payment...in any name other than that of the person...by whom it is made." The issue whether a contribution in the form of a check drawn by another person would be in violation of New York State Election Law §14-120 is beyond the scope of this advisory opinion.