Advisory Opinion 2000-1 (March 7, 2000)

SUMMARY

The Council Political Action Committee (“C-PAC”) made various expenditures since the issuance of Advisory Opinion No. 1999-10 on August 5, 1999. City Council Speaker Peter Vallone appears to have “exercised authority” over C-PAC within the meaning of that opinion, which provides guidance for political committees over which a candidate participating in the New York City Campaign Finance Program exercises authority.

This Advisory Opinion’s conclusions are reached on the basis of a unique set of circumstances. Because of C-PAC’s good faith efforts to comply with Advisory Opinion No. 1999-10 during the relatively brief period following its issuance, C-PAC’s long history in relation to the kinds of expenditures at issue, and C-PAC’s imminent dissolution, the Board concluded that the following expenditures described in the opinion request would not be subject to the Campaign Finance Act spending limits applicable to Vallone 2001, should Speaker Vallone join the Campaign Finance Program for the 2001 elections: certain annual Council events and three advertisements urging the defeat of ballot proposals to amend the City Charter. Other expenditures described in the request would be subject to the Campaign Finance Act’s limits.

The Program’s limits and restrictions on contributions, and its reporting requirements, apply to contributions received by C-PAC on and after August 5, 1999, the date of the issuance of Advisory Opinion No. 1999-10. These contributions may be refunded to their contributors to cure any violations that could otherwise arise

FULL TEXT

An advisory opinion has been requested on behalf of Vallone 2001, the political committee authorized by Peter Vallone for a possible race for City-wide office in 2001¹. The request indicates that Mr. Vallone, who is the Speaker of the City Council, has resigned from his position with the Council Political Action Committee (“C-PAC”), C-PAC is being dissolved, and Speaker Vallone will have no involvement in any of C-PAC’s “winding down” activities.

The request asks whether spending by C-PAC for any of the following activities, since August 5, 1999, is attributable to Speaker Vallone’s possible campaign for City-wide office in 2001, should he join the New York City Campaign Finance Program:

Annual Columbus Day party and parade
Annual Puerto Rican Day parade
Annual Dominican Day parade
The Somos Unos Conference held in Puerto Rico
Annual Council outing
Annual Council holiday party
Public campaign opposing the Charter amendments proposed by Mayor Giuliani’s 1999 charter revision commission
State of the City address
Administrative expenses of the Committee².

The request also suggests that the conclusions reached by the Board in Advisory Opinion No. 1999-10, issued by the Board on August 5, 1999, should not apply to C-PAC retroactively³. The request notes that C-PAC was created by the leadership of the City Council in 1988 and states:

C-PAC was not created for the purpose of, nor, as its long history amply demonstrates, are its activities intended to, nor do they, have the effect of promoting Mr. Vallone’s electoral fortunes[.] Rather, C-PAC was created for the purpose of, and its activities are intended to, and do, have the effect of promoting the programs and activites of the entire Council and all of its members.

Prior to his resignation and C-PAC’s impending dissolution, Speaker Vallone appears to have “exercised authority” over C-PAC within the meaning of Advisory Opinion No. 1999-10, which provides guidance for political committees over which a participating candidate exercises authority.

The request seeks guidance on how Advisory Opinion No. 1999-10 will be applied to C-PAC during a relatively brief period following issuance of the Opinion, a period during which C-PAC was apparently making good faith efforts to come into compliance with the requirements of the New York City Campaign Finance Act and New York City Charter Chapter 46. The Board’s consideration of the issues raised in the request is predicated on three central points: 1) C-PAC’s good faith efforts to adjust to the terms of this advisory opinion during the relatively brief period immediately following the opinion’s issuance; 2) C-PAC’s long history; and, most important, 3) C-PAC’s imminent dissolution. This unique context serves as the foundation for the Board’s analysis of the particular transactions at issue.⁴

Under the standards of Advisory Opinion No. 1999-10, the political committee expenditures at issue are in the first instance presumed by the Board to be for the candidate’s next following election⁵. But as previously stated by the Board, this “presumption functions as the starting point for determining which, if any, of the... expenditures... are not subject to the spending limit” of the New York City Campaign Finance Act. Advisory Opinion No. 1997-6 (June 24, 1997) (addressing whether expenditures for an abandoned campaign for mayor would be subject to the spending limit for a borough president race) ⁶.

The remainder of this Opinion addresses the particular activities described in the request⁷.

1) Annual Events

The request provides limited information about these events.⁸ Only invitations were submitted; no copies of other publications, if any, produced for the parties and parades were submitted. The request does not make clear that invitations were, in fact, the only written materials produced for these events. In addition, the request contains no descriptive information on the activities that take place at, or who attends, these events.

(a) Columbus Day party and parade; Puerto Rican Day parade; Council outing; Council holiday party; State of the City address

C-PAC’s impending dissolution signifies that, as the 2001 elections approach, further expenditures for such purposes will not be made by a political committee over which Speaker Vallone exercises authority. In each instance described, Speaker Vallone appears to have been the primary host of the event. C-PAC’s historical involvement in each of these annual institutional events and C-PAC’s dissolution, without any facts before the Board to suggest a contrary conclusion, overcome a presumptive connection between such expenditures and an election to be held in 2001.

Under these circumstances, and in the absence of any information indicating that Vallone campaign activities took place at any such events held after August 5, 1999, the Act’s spending limits would not apply to these expenditures.

(b) Somos Unos Conference held in Puerto Rico

No information is provided by the request on the Somos Unos conference. It appears that many of the candidates and elected officials who attend and participate in this annual conference use their political committees to pay associated expenses¹⁰. Should these candidates join the Program for their next following election, such expenditures would be subject to the Act’s limitations and requirements. Absent additional information supporting a conclusion to the contrary, C-PAC’s expenditures on behalf of Speaker Vallone for this conference would likewise be subject to the Act’s limitations and requirements.

2) Public Campaign Opposing Charter Amendments¹¹

C-PAC made expenditures urging voters to defeat a ballot proposal to amend the City Charter. Had these expenditures been made by a political committee “formed and operating solely for the purpose of advocating a position on a ballot measure”, Advisory Opinion No. 1999-10 would have been inapplicable. Advisory Opinion No. 1999-10 (foonote 2); see also Advisory Opinion No. 1989-53 (October 26, 1989).¹² As its long history and the variety of expenditures described in the request make clear, C-PAC’s activities have never been limited to ballot proposal advocacy.

In the mailing and flyer submitted for the Board’s review, Speaker Vallone’s name appears together with, and in the same font and typeface as, those of several other elected officials in opposition to the Charter proposal. Neither piece includes a photograph of any candidate. The use of the Speaker’s name, among many others, in these publications does not by itself call for application of the spending limit under the Act for the 2001 elections. This is equally so for the incidental (and presumably consensual) use of the name of any other future participating candidate whose name was listed in either of these publications.

In the radio advertisement, Speaker Vallone addresses the radio audience directly and twice identifies himself. Approximately one-half of the advertisement text is read by an unidentified female announcer. The content of the advertisement is limited to substantive issues raised by the Charter revision ballot proposal and to identifying several opponents of the ballot proposal, including Speaker Vallone.

The request states that the purpose of all of C-PAC’s ballot proposal advertisements was solely to oppose Charter revision and not to promote any candidacy. Advisory Opinion No. 1999-10 made clear that prospective participating candidates had the means to engage in ballot proposal advocacy outside the spending limits applicable in the 2001 elections, Advisory Opinion No. 1999-10 (at footnote 2) ¹³.

Taken together, however, the limited content of these two publications and the radio advertisement, and the fact that the Charter proposal was on the ballot two years before the next scheduled City-wide election, again in the unique context of C-PAC’s history and dissolution, are sufficient to overcome an inference with respect to these expenditures that might otherwise be drawn from the fact that Speaker Vallone exercised authority over C-PAC at the time these expenditures were made.

3) Administrative Expenses

Should Speaker Vallone join the Program, C-PAC’s administrative costs since August 5, 1999 must be attributed to the spending limit applicable to Vallone 2001 in the same proportion that non-administrative expenditures subject to this spending limit bear to total non-administrative expenditures made during this time period.

4) Contributions

Regardless whether the Act’s spending limits apply, for the reasons set forth in Advisory Opinion No. 1999-10, the Act’s limitations and restrictions on contributions as well as reporting requirements do apply to contributions received by C-PAC¹⁴. See Advisory Opinions Nos. 1997-9 (September 10, 1997) (footnote 8) and 1997-6, supra (footnote 7). These contributions may be refunded to their contributors in whole or in part so as to cure any violations that could otherwise result under the Act. Rule 1-04(c) (1).

5) Retroactive Application

Board rules have long stated:

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.

Rule 1-08(c) (3); see also Advisory Opinion No. 1993-12 (December 16, 1993). On the other hand, Advisory Opinion No. 1999-10 was the Board’s first statement how the new Charter prohibition against “soft money”, adopted by the voters in 1998 (Charter 1052(a) (11) (b)), would apply to “PACs” or other “non-election” political committees over which a participating candidate exercises authority.

Thus, to the extent participating candidates could have made arguments in good faith that expenditures by such entities are beyond the regulation of the Act (and continued to be, notwithstanding the 1998 Charter revision), only Vallone 2001 has done so to date. Once again, the Board acknowledges and underscores the importance of requesting advisory opinions, as Vallone 2001 correctly did, before proceeding to take actions that could have unintended consequences under the Act.

Arguments are now foreclosed that the Campaign Finance Program does not reach financial activities by political committees over which participating candidates exercise authority. This has been clear since Advisory Opinion No. 1999-10 was issued on August 5, 1999, and all prospective participating candidates have been on notice since that date. In recognition of the good faith arguments Vallone 2001 made in leading up to Advisory Opinion No. 1999-10, however, the Board is persuaded that Advisory Opinion No. 1999-10 should not be given retroactive application to C-PAC or to any other political committee that a participating candidate demonstrates was of a similar nature¹⁵.

NEW YORK CITY CAMPAIGN FINANCE BOARD

¹ This request was made by letter of Henry T. Berger, dated February 18, 2000, supplementing a letter of A. J. Constantinople, dated February 14, 2000. Previously, the question of the New York City Campaign Finance Act’s coverage of the Council Political Action Committee (“C-PAC”) was raised by A. J. Constantinople in a letter dated January 15, 1999, which was addressed in general terms by Advisory Opinion No. 1999-10 (August 5, 1999). In referring to the “request” throughout this Opinion, the Board makes reference to Mr. Berger’s February 18, 2000 letter.

² The request states that “Vallone 2001 determined that a $1,000 contribution to a campaign committee by C-PAC and a $300 newspaper advertisement extending holiday greetings paid for by C-PAC should be charged against any spending limit if Mr. Vallone becomes a participating candidate in 2001.”

³ For the law and Campaign Finance Board rules relevant to the conclusions reached in Advisory Opinion No. 1999-10, see Advisory Opinion No. 1999-10 (August 5, 1999).

⁴ The distinction the request makes between C-PAC’s “Council” or governmental activities and its “political” expenditures is not persuasive. C-PAC is a political committee, not an agency of government, regardless whether it has acted at the behest of elected officials or other government employees. While the Board has long made clear that the proper use of governmental resources is not under its jurisdiction, see, e.g., Advisory Opinions No. 1993-5 (July 7, 1993) and No. 1989-1 (January 3, 1989) (and, indeed, other laws regulate the use of governmental resources by candidates for office, see Local Law No. 40 of 1998, adding Charter §1136), privately funded political committees by contrast are regulated by the Campaign Finance Act when candidates join the voluntary Campaign Finance Program. The Act, the Board’s rules, the Board’s previous advisory opinions, and New York State Election Law do not recognize any distinction between the “political” and the “governmental” purposes of a political committee.

⁵ All political committees, including but not limited to political action committees, authorized by participating candidates are subject to the Board’s presumption that contributions and loans accepted, and expenditures made, are for the “first election in which the participant is a candidate following the day” they are received or made. Campaign Finance Board Rules 1-04(f), 1-05(h), 1-08(c) (1).

⁶ The request cites Advisory Opinion No. 1993-9 (September 9, 1993) and urges the Board to follow the factors considered there in determining whether a privately funded public service campaign would constitute expenditures in connection with the nomination or election of a candidate. This 1993 opinion is inapposite because none of the C-PAC expenditures at issue bear any resemblance to the subject of that opinion: a civic “Youth Respect Campaign” devised in response to “reported incidents of extraordinarily serious sexual molestations on girls and young women at New York City swimming pools”. Furthermore, the spending in that case was not made by a political committee, as is the situation here.

⁷ This Opinion does not apply to expenditures, if any, that were not detailed in the request or the exhibits submitted therewith.

⁸ In connection with these expenditures, the following exhibits have been submitted: invitations for Columbus Day parties held on October 11, 1999, October 13, 1997, and October 14, 1996; invitations for Saint Patrick’s Day parties held on March 17, 1999, March 17, 1998, March 17, 1997, and March 16, 1996; invitations for the City Council Holiday Party held on December 14, 1999 and for the Annual Council outing held on June 18, 1999; an invitation to a celebration in honor of the National Puerto Rican Day Parade held on June 10, 1999; invitations to the State of the City Addresses given by Speaker Vallone on January 11, 2000, January 13, 1999, January 7, 1998, January 6, 1997, January 10, 1996, January 9, 1995, and January 6, 1993; and copies of the State of the City addresses given by Speaker Vallone on January 11, 2000, January 13, 1999, January 13, 1998, January 6, 1997, and January 5, 1994. Because the Council outing and the Puerto Rican Day parade appear to have taken place before August 5, 1999, expenditures for these purposes may have been made before Advisory Opinion No. 1999-10 was issued, in which case the conclusion reached in section 5 of this Opinion would be applicable. See Campaign Finance Board Rule 1-08(b).

⁹ The request did not include any materials pertaining to the Dominican Day parade. The analysis described here, however, would apply in a similar manner assuming the same set of facts as set forth for the other parade events.

¹⁰ See, e.g., Goldberg, “Fun In The Sun! Council business is a pleasure”, New York Newsday, November 5, 1993 at 6.

¹¹ In connection with these expenditures, the following exhibits have been submitted: a copy of a mailing entitled, “Too much to swallow at once,” a copy of a flyer entitled, “Vote No!”, and a script for a radio advertisement. The Board’s analysis is based on the assumption that the request includes a complete copy of each of these publications. No other such materials were submitted, and this Opinion would not cover other materials, if any, produced by C-PAC on the 1999 Charter Revision proposal.

¹² No information is provided as to why a separate political committee was not created for this purpose in 1999. This Opinion does not address issues that might have arisen under the Act and the Charter had such a separate committee been created. Specifically, in addressing expenditures concerning proposals on the ballot in the same election in which the candidate seeks election, Advisory Opinion No. 1989-53 states that the Board would consider all relevant facts, including whether the ballot proposal expenditure identifies the candidate or otherwise promotes or facilitates the candidate’s election.

¹³ The argument that the ballot proposal advocacy purpose served by these particiular expenditures is conclusive would have been made more effectively had a separate committee been created. Because no separate committee was created, however, the Board is being asked, after the fact, to evaluate and draw distinctions among many purposes one political committee had in making various expenditures. Indeed, the well-established presumptions in the Board’s rules are intended precisely to avoid the need for making such vexing distinctions. See Advisory Opinion No. 1989-28 (June 27, 1989).

¹⁴ Based on the conclusion reached in section 5 of this Opinion, the contribution limits and disclosure requirements would not apply to C-PAC’s financial transactions before August 5, 1999.

¹⁵ See Advisory Opinion No. 1997-9, supra. Had Advisory Opinion No. 1999-10 been applied retroactively to C-PAC, there would have been no basis for extending the retroactive application to a time earlier than January 12, 1999. See Advisory Opinion No. 1999-5 (February 23, 1999).

Return to Advisory Opinions by Year

 

To get copies of Advisory Opinions or to be placed on a mailing list for all Advisory Opinions issued by the Campaign Finance Board, please contact the Board’s Candidate Services Unit at (212) 306-7128/31.