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2003-2: Guidelines for Program Participants Who Raise and Spend Funds to Publicize Their Positions on Ballot Proposals

July 14, 2003

Re: Administrative Code §3-702(10), 3-703(1)(d), 3-703(1)(e), 3-704(1), 3-716; Campaign Finance Board Rules 1-03(a), 1-04(f), 1-08(c)(1), 1-08(c)(3), 1-08(g), 3-02(f)(5), 3-02(f)(7), 4-01(a); Advisory Opinions Nos. 1989-53, 1999-10, 2000-1, 2000-7, 2001-4, 2003-1; Op. No. 2003-2.

The New York City Campaign Finance Board (the "Board") has received an Advisory Opinion request concerning the effect of Campaign Finance Program (the "Program") requirements on Program participants who raise and spend funds to publicize their positions on proposals that may be placed on the ballot in November of 2003 by the Charter Revision Commission appointed by the Mayor. The request essentially raises the following questions1:

  1. Will a separate political committee established by a Program participant to raise and spend money solely to publicize a position on a ballot proposal be subject to the contribution and expenditure limits of the Campaign Finance Act (Administrative Code § 3-701, et seq.) (the "Act"))? Does it make a difference whether the candidate's name is referred to in the publicity?

  2. May a participant expend funds raised through his or her principal committee (and subject to the contribution and expenditure limits of the Act) to publicize a position on a ballot proposal? Does it make a difference whether the candidate's name is referred to in the publicity?

  3. May a participant expend public matching funds to publicize a position on a ballot proposal? Does it make a difference whether the candidate's name is referred to in the publicity?

Activity unconnected to a campaign for elective office is not governed by the Program, and the Program therefore would not implicate expenditures that are solely a part of the public discourse regarding ballot initiatives. See Advisory Opinions Nos. 1999-10, n. 2 (August 5, 1999), 1989-53 (October 26, 1989). The Act governs only campaign finance activity undertaken in connection with a "covered election," defined as a primary, runoff primary, special, runoff special, or general election for nomination for election, or election, to the office of mayor, public advocate, comptroller, borough president, or member of the city council. Administrative Code §3-702(10). Referenda are not included in this definition. Thus, whether contributions received or expenditures made by a political committee authorized by a Program participant in connection with a ballot referendum are subject to the provisions of the Act depends upon whether the contributions are received or the expenditures are made in connection with or have an impact on the participant's campaign for elective office2.

Any committees authorized by a participant are subject to the presumption that contributions accepted and expenditures made are for the "first election in which the participant is a candidate following the day" the contributions are received or the expenditures are made. Rules 1-04(f), 1-08(c)(1); Advisory Opinions Nos. 2000-7 (November 16, 2000), 2000-1 (March 7, 2000), 1999-10. Cf. Administrative Code § 3-703(1)(e). Further, Rule 1-08(c)(3) provides that:

participants have the burden of demonstrating that expenditures made by committees reported not to be involved in the election in which the candidate is currently a participant were not made in connection with such election. Failure to meet this burden will result in the application of all Program requirements to these committees for such election.

Where a participant establishes a separate political committee to raise and spend money solely to publicize a position on a ballot proposal, and the candidate's name and likeness do not appear in the publicity, and the candidate is not otherwise referred to in the publicity, the Board will presume that the candidate's campaign for elective office is not furthered by such publicity3. Thus, ordinarily, the presumptions in Rules 1-04(f) and 1-08(c)(1) would be overcome, the burden imposed in Rule 1-08(c)(3) would be satisfied, and the provisions of the Act would not apply to contributions raised and expenditures made by such a political committee, assuming that all activities of the ballot referendum committee remained separate from the participant's principal committee. See Advisory Opinions Nos. 2003-1 (February 11, 2003), 2000-7.

The Board will also presume, however, that any material issued by the ballot referendum committee that does mention the candidate's name or contains his or her photograph will in fact further the candidate's campaign. Issues the Board would examine in determining whether this presumption is overcome would include, but are not limited to, the focus and subject matter of the communication, including whether the references, either explicitly or by implication, promote the candidate's candidacy; the geographical distribution or location of the publicity; the size, location, and the relative prominence of the candidate's references or appearances in the publicity, including the presence of any photographs; whether the candidate's name is one among many others; and the timing of the publicity. Cf. Administrative Code §3-716, Advisory Opinion No. 2000-1.

In contrast, participants may not use their principal committees to make expenditures in connection with a position on any ballot proposal, nor may public funds be used for this purpose, unless that activity is in the context of and incidental to promoting the candidate's candidacy. See Rule 1-03(a), providing that a principal committee may use receipts only to pay expenses incurred in that election. See also Administrative Code §3-704(1); Rule 1-08(g) (limiting use of public funds to expenditures that further a candidate's election). For example, if support of or opposition to a ballot proposal is listed in campaign literature among other positions of the candidate, this could be permissible.

Political committees established to raise and spend funds in connection with a referendum which are not subject to the provisions of the Act are not generally required to file statements with the Board disclosing their campaign finance activity. The Board will, however, require these committees, if authorized by a participant, to do so to ensure that neither the ballot referendum political committee nor the candidate's principal committee is engaged in activities inconsistent with this opinion and so that the Board can assess the role, if any, of these political committees in candidates' election campaigns. See Administrative Code §3-703(1)(d), Rules 3-02(f)(5), 3-02(f)(7), 4-01(a).


1 Herman D. Farrell, Jr., State Chair of the New York State Democratic Committee, made the request by letter dated June 24, 2003, and received by the Board on June 30, 2003. This Opinion addresses the questions raised below and does not address situations in which one participant has authorized a ballot referendum committee and another participating candidate's name or likeness is featured in the committee's materials, potentially raising a question whether the committee thereby makes an in-kind contribution to the latter participant's campaign.

2 The discussion here applies only when the political committee's activities are restricted to expenditures made in connection with ballot proposals. It does not apply if the political committee makes expenditures for other purposes, including contributions to other campaigns. Advisory Opinion No. 1999-10, n. 2. See also Advisory Opinion No. 2001-4 (May 17, 2001).

3 An overlap between contributors solicited by the candidate for his or her campaign and contributors solicited by the candidate for a ballot referendum political committee could raise concerns about undue influence by contributors. These concerns are somewhat mitigated, however, where the contributions are raised for expenditures that are not directly related to the candidate's campaign for elective office. Nonetheless, the level of overlap will be monitored by the Board so that the Board may make appropriate recommendations for changes in the Program's requirements if a pattern emerges that suggests that the goals of the Act to limit the size of contributions and contributors' influence are being undermined.

*  In response to a letter received by the Board, the Board has issued a letter regarding this Advisory Opinion.  Both letters are available in Adobe Acrobat (.pdf) format.  For more information, see downloading instructions for the Acrobat Reader.