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2001-2: Clarification on Actions Constituting In-Kind Contributions

Thursday, May 17, 2001

Re: Charter § 1052(a)(11)(b); N.Y.C. Admin. Code §§ 3-702(11), 3-716; Campaign Finance Board Rules 1-02, 1-04(p)(1); Op. No. 2001-2.

An advisory opinion has been requested1 seeking guidance on the following questions:

1. Whether a candidate who attends another candidate's fundraising event, is introduced at the event, and speaks at the event "otherwise cooperates in raising contributions for any other candidate or political committee2" within the meaning of Rule 1-04(p)(1)?3

2. Whether a candidate who signs a solicitation letter for a political committee's fundraising event "otherwise cooperates in raising contributions for any other candidate or political committee" within the meaning of Rule 1-04(p)(1)?

3. Whether a candidate who contributes $250 to a political committee's fundraising efforts in connection with a fundraising event, and in consideration for such contribution, is listed on the event invitation with others who have likewise contributed the same prescribed amount, "otherwise cooperates in raising contributions for any other candidate or political committee" within the meaning of Rule 1-04(p)(1)?

Section 1052(a)(11)(b) of the Charter provides that the Board shall regulate "expenditures that indirectly assist or benefit a candidate participating in the voluntary system of campaign finance reform as in-kind contributions to such candidate." This Charter provision was intended to curb "soft money." Rule 1-04(p)(1) was adopted by the Board to implement this provision. Under the rule, there is a rebuttable presumption that a participant4 who has "cooperated" in raising contributions for another candidate or a political committee has also received a benefit from that candidate or committee. If the participant cannot rebut the presumption, the participant is deemed to have accepted an in-kind contribution from the other candidate or political committee, valued at the full cost of the fund-raising. The rule is intended to prevent participants from receiving valuable exposure to potential voters and other direct and indirect benefits at no cost, simply by promoting other candidates and committees.

Attendance and participation at another candidate's event

Section 3-716 of the Act provides that candidates or their agents may make:

"appearances at events sponsored or paid for by persons, political committees, or other entities that are not in any way affiliated with such candidate or any agent of such candidate. The costs of such events shall not be considered contributions to or expenditures by such a candidate pursuant to this chapter solely because such an appearance is made; provided that this section shall not apply to any event in relation to which contributions are solicited on behalf of such candidate." N.Y.C. Admin. Code § 3-716.

Thus, if (a) the participant is merely introduced at an event and makes remarks; (b) contributions are not solicited on behalf of the participant at or in conjunction with the event; and (c) the participant is not otherwise "cooperating" in raising money for the other candidate (e.g., planning, staging, or promoting the event), the provisions of Rule 1-04(p)(1) will not be triggered, and no in-kind contribution will have been made to the participant.

Signing a fundraising solicitation

In this scenario, a political committee asks a participant to sign a fundraising letter the committee plans to distribute to potential donors in connection with an upcoming fundraising event. If the participant signs the letter, she contributes to the committee's efforts to raise funds in connection with the event by endorsing those efforts and encouraging potential donors to contribute to the committee. This is clearly "cooperation" with the political committee's fund-raising within the meaning of Rule 1–04(p)(1). Consequently, the full cost of this fundraising5 will be considered an in-kind contribution to the participant unless she demonstrates that the committee has not made expenditures that benefit her.

Contributing to a political committee and being listed on the political committee's fundraising event invitation

In this scenario, a political committee asks the participant to contribute $250 to the committee's upcoming fundraising event. In exchange for the contribution, the participant will be listed on the event invitation along with others who have likewise been solicited and contributed this amount. Through this transaction, meaningful payment is made for value, equally available to others. These circumstances would therefore not trigger the provisions of Rule 1-04(p)(1). The expense made by the participant to purchase the event listing must be reported as a campaign expenditure.


1Council Member Eva Moskowitz posed these questions in two letters addressed to the Campaign Finance Board (the "Board"), each dated March 6, 2001. This opinion is based on the facts presented in the candidate's letters, and is limited to those facts.

2A political committee is defined as "any corporation aiding or promoting and any committee, political club or combination of one or more persons operating or cooperating to aid or to promote the success or defeat of a political party or principle, or to aid or take part in the election or defeat or a candidate for public office or to aid or take part in the election or defeat of a candidate for nomination at a primary election or convention, including all proceedings prior to such primary election, or of a candidate for any party position voted for at a primary election, or to aid or defeat the nomination by petition of an independent candidate for public office; but nothing in this chapter seven of the New York City Campaign Finance Act shall apply to any committee or organization for the discussion or advancement of political questions or principles without connection with any vote. ‘Political committee' shall include any party committee or constituted committee, as such committees are defined in article fourteen of the election law." N.Y.C. Admin. Code § 3-702(11).

3Rule 1-04(p)(1) provides, in pertinent part, that: "On and after January 1, 2000, if a participant makes expenditures in connection with, or otherwise cooperates in, raising contributions for any other candidate or political committee:

(i) pursuant to §1052(a)(11)(b) of the Charter, the participant shall be deemed to have accepted an in-kind contribution equal to the full cost of the fundraising that was not paid for by the participant, unless the participant demonstrates that the recipient of the contributions has not made expenditures that directly or indirectly benefit the participant..."

4Participant is defined in Rule 1-02 to include "the candidate and every political committee authorized by the candidate, the treasurer of each such committee, and any other agent of the candidate." Additionally, for the purposes of this advisory opinion, the term ‘participant' shall include "a candidate or prospective candidate for the office of mayor, public advocate, comptroller, borough president, or member of the City Council during the time before he or she files a certification for an election and before the applicable deadline for filing a certification for that election has passed." Rule 1-02.

5The "full cost of this fundraising" would not include any contributions received by the political committee as a result of the fundraising.