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2013-1: Clarification of Independent Activity and In-Kind Contributions

Thursday, January 10, 2013

Re: Administrative Code of the City of New York § 3-702(8); Rules 1-02, 1-04(g)(1), 1-08(f), 4-01(c), 13-01, 13-05; Advisory Opinion Nos. 1989-26 (June 12, 1989), 1989-37 (July 24, 1989), 2009-7 (August 6, 2009), 2012-1 (June 21, 2012); Op No. 2013-1.

The New York City Campaign Finance Board (the "Board") has received a request for an advisory opinion1 from Citizens Union ("CU") and the New York Public Interest Research Group ("NYPIRG") requesting that the Board clarify its analysis of independent activity and in-kind contributions under Advisory Opinion No. 2012-1. The request further seeks that the Board determine whether any of the following types of communications would be considered "coordination" between a "member organization and a candidate, his or her agents, or authorized political committee" for the purpose of determining whether an in-kind contribution has been made pursuant to Rule 1-08(f):2,

  1. A communication to "schedule or discuss logistics";
  2. A request for a photograph of a candidate;
  3. Receipt of information about a candidate's position on policies in response to a questionnaire; or
  4. Republication of "a brief quotation of campaign materials that demonstrate a candidate's position as part of an expression of his or her own views."

Applicable Statutes, Board Rules, and Advisory Opinions

Section 3-702(8) of the Administrative Code of the City of New York (the "Administrative Code") provides that the term "contribution" includes:

any payment, by any person other than a candidate...made in connection with the nomination for election, or election, of any candidate, including but not limited to compensation for the personal services of any individual which are rendered in connection with a candidate's election or nomination without charge; provided however, that none of the foregoing shall be deemed a contribution if it is made, taken or performed by a person or a political committee independent of the candidate or his or her agents or political committees authorized by such candidate pursuant to section 14-112 of the New York state election law.

Rule 1-02 defines "in-kind contribution" as "a gift, subscription, loan, advance of, or payment for, any thing of value (other than money) made to or for any candidate or authorized committee."

Rule 1-04(g)(1) provides that "[a]n in-kind contribution to a candidate is also an expenditure made by the candidate."

Rule 1-08(f)(1) provides that the "[f]actors for determining whether an expenditure is independent [of a candidate] include, but are not limited to:

  1. whether the person, political committee, or other entity making the expenditure is also an agent of a candidate;
  2. whether the treasurer of, or other person authorized to accept receipts or make expenditures for, the person, political committee, or other entity making the expenditure is also an agent of a candidate;
  3. whether a candidate has authorized, requested, suggested, fostered, or otherwise cooperated in any way in the formation or operation of the person, political committee, or other entity making the expenditure;
  4. whether the person, political committee, or other entity making the expenditure has been established, financed, maintained, or controlled by any of the same persons, political committees, or other entities as those which have established, financed, maintained, or controlled a political committee authorized by the candidate;
  5. whether the person, political committee, or other entity making the expenditure and the candidates have each retained, consulted, or otherwise been in communication with the same third party or parties, if the candidate knew or should have known that the candidate's communication or relationship to the third party or parties would inform or result in expenditures to benefit the candidate; and
  6. whether the candidate, any agent of the candidate, or any political committee authorized by the candidate shares or rents space for a campaign-related purpose with or from the person, political committee, or other entity making the expenditure."

Rule 1-08(f)(2) provides that "[f]inancing the dissemination, distribution, or republication of any broadcast or any written, graphic, or other form of campaign materials prepared by a candidate is a contribution to, and an expenditure by, the candidate, unless this activity was not in any way undertaken, authorized, requested, suggested, fostered, or otherwise cooperated in by the candidate."

Rule 1-08(f)(3) provides that "an expenditure for the purpose of promoting or facilitating the nomination or election of a candidate, which is determined not to be an independent expenditure, is a contribution to, and an expenditure by, the campaign."

Rule 4-01(c) provides that "[f]or each in-kind contribution, candidates shall maintain a receipt or other written record that provides the date(s) the in-kind contribution was made, the name and address of the contributor, a detailed description of the goods or services provided, and such further information and/or documentation necessary to show how the value of the contribution was determined."

In Advisory Opinion No. 1989-26, the Board responded to an inquiry "whether [an entity] may request ‘opinion papers' or ‘press releases' from [a] candidate, without having the [entity's] expenditures be considered expenditures by the candidate. The Board stated that "[a] mere request for information...and the forwarding of material by the candidate in response to that request, without any additional communication or exchange of information whatsoever, would not constitute ‘cooperation' by the candidate" in expenditures made by an outside entity. The Board further noted that if the entity later "pays for the dissemination, distribution, or republication of opinion papers or press releases received from the candidate...it is presumed that this activity is ‘cooperated in' by the candidate" and the candidate has the burden of demonstrating otherwise.

In Advisory Opinion No. 1989-37, the Board stated that "[a] request...for photographs, which are routinely distributed to the press or the public upon request, and the forwarding of photographs by the candidate or his staff in response to the request, without any additional communication or exchange of information whatsoever, would not constitute ‘cooperation'" for the purpose of determining whether an in-kind contribution was made. The Board further noted that if the entity that requested the photograph "thereafter pays for the dissemination, distribution, or publication of a photograph received from the...campaign, it is presumed that this activity is ‘cooperated in' by the candidate" and the candidate has the burden of demonstrating otherwise.

Advisory Opinion No. 2009-7 provided the Board's interpretation of the Administrative Code and the Rules with respect to third party expenditures. Regarding the determination whether a particular expenditure is independent or non-independent, the Board stated that "[t]he critical question in every case is whether, in light of the facts and indicia of non-independent activity, the campaign authorized, requested, suggested, fostered or otherwise cooperated in a third party's activity on the campaign's behalf, and if so, whether such activity was properly accounted for." The Board further noted that "[t]he determination of whether a particular expenditure is independent or non-independent is necessarily fact-specific." The Board declined to opine on the particular examples described in the request, "which contain[ed] limited facts and vague descriptions," choosing instead to "provide[] examples of the indicia of non-independent activity which underlay several recent Board determinations."

In Advisory Opinion No. 2012-1, the Board articulated several factors it would consider in determining whether an expenditure by an entity constitutes an in-kind contribution to a candidate. Because the advisory opinion request stated that the entity and candidate had cooperated in the activity in question, the Board's analysis was limited to whether the activity was in furtherance of the candidate's campaign.

Analysis

I. Advisory Opinion No. 2012-1

CU and NYPIRG ask that the Board clarify a footnote in Advisory Opinion 2012-1, which states that "[g]enerally, any communication between an entity and a candidate would suffice to make an expenditure by that entity non-independent and thus a potential in-kind contribution[,]" but acknowledges that in arranging for a candidate's appearance at an event, logistical communication regarding considerations "such as date, time, and location" may be necessary. See Advisory Opinion No. 2012-1, n. 8. The request reflects concerns that the footnote may have indicated a shift in the Board's interpretation of the Act or Rules, as the language was not needed to respond to the request that preceded Advisory Opinion No. 2012-1. It was not the Board's intent to convey a change in its interpretation of the Act or Rules or a shift in its long-standing enforcement standards in this area. To clarify: the Board's standards, practices, and policies have not changed as a result of Advisory Opinion No. 2012-1. Analyses of the specific questions posed by the requestors, stated below, provide further guidance to the Board's practice in this area.

II. Specific Questions

CU and NYPIRG request that the Board determine whether any of the following communications between a membership organization and a candidate, or his or her agents or authorized political committee, would constitute "coordination" for purposes of determining whether an in-kind contribution has been made pursuant to Rule 1-08(f):

  1. A communication to "schedule or discuss logistics";
  2. A request for a photograph of the candidate;
  3. Receipt of information about a candidate's position on policies in response to a questionnaire; or
  4. Republication of "a brief quotation of campaign materials that demonstrate a candidate's position as part of an expression of his or her own views."

Regarding item 1, discussions of logistics between a candidate, or his or her agents or authorized political committee (hereafter, "candidate") and an entity regarding a non-fundraising event, such as date, time, and location, would not result in a finding of coordination. See Admin. Code § 3-716(1); Advisory Opinion No. 2012-1.

Regarding item 3, requesting and/or obtaining responses to a questionnaire would not be considered coordination. Communications directly related to an entity's endorsement process, such as solicitation of responses to questionnaires, interviews with candidates, and notifying candidates of the organization's intention to endorse them are not, in themselves, coordination.

With regard to items 2 and 4, the Board would not consider requesting and/or obtaining photographs, biographies, position papers, press releases, or other similar materials available to the general public, from a candidate to be coordination. Rule 1-08(f)(2) provides that "[f]inancing the dissemination, distribution, or republication of any broadcast or any written, graphic, or other form of campaign materials prepared by a candidate is a contribution to, and an expenditure by, the candidate, unless this activity was not in any way undertaken, authorized, requested, suggested, fostered, or otherwise cooperated in by the candidate." However, an entity's use of photographs, biographies, position papers, press releases, or other similar materials received from a candidate is not considered to be "undertaken, authorized, requested, suggested, fostered, or otherwise cooperated in by the candidate[,]" and therefore such activity would not, absent other indicia of cooperation, constitute coordination.

In 1989, the Board issued two advisory opinions stating that if an entity requested and received a photograph, opinion papers, or press releases from a candidate, that alone would not constitute coordination. However, if the entity thereafter paid for the dissemination, distribution, or publication of those materials, there would be a rebuttable presumption of coordination between the candidate and the entity. See Advisory Opinion Nos. 1989-26, 1989-37. By the issuance of this Advisory Opinion No. 2013-1, the Board overrules those aspects of Advisory Opinion Nos. 1989-26 and 1989-37 that create a presumption of coordination under the circumstances described.

The analysis of what constitutes coordination is highly fact-specific. In that analysis, therefore, the Board must consider factors such as the availability of information brought about by modern technology. Materials such as photographs, biographies, position papers, and press releases are now regularly made available to the general public via the Internet, and transmission of such materials is widespread via social media and other electronic means. Therefore, the republication or redistribution of such materials would not constitute coordination. It should be noted that the Board has never determined that coordination occurred based solely on the distribution of a candidate-supplied photograph, biography, position paper, or press release by a third party.

 

2 The request asks the Board to clarify its approach to "coordination." Section 3-702(8) of the Act defines "independent of the candidate" to mean that the "candidate did not authorize, request, suggest, foster, or cooperate in" the activity in question. This opinion employs the term used by the requestor – "coordination" – to mean interaction between a candidate and an entity that would suffice to make an entity's activity "non-independent," which is the term used in prior opinions by the Board.