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ADVISORY OPINION NO. 2009-4 (April 14, 2009)

SUMMARY

Pursuant to the “bonus provisions” of the Campaign Finance Act, in any election in which the receipts or expenditures of the high-spending non-participant exceed three times the applicable expenditure limit, the Board lifts the expenditure limit for participants running in the same election as the high-spending non-participant, matches participants’ contributions at a higher rate, and increases the maximum amount of public funds participants can receive.  Thus, although the Board understands the concerns raised by William Thompson's mayoral campaign regarding the impact of high-spending non-participants on the ability of the Program to promote a level playing field among mayoral candidates, the Board cannot grant Mr. Thompson’s request to lift the primary election expenditure limit based on the expenditures of Michael Bloomberg, a high-spending non-participant who is not running and making expenditures in the same primary election as Mr. Thompson.

FULL TEXT

Re:  New York City Administrative Code §§ 3-702(10), 3-706(1), 3-706(3); New York City Campaign Finance Board Rule 5-01(a)(5)(iv), (v), and (vi); Advisory Opinion No. 2005-1; Op. No. 2009-4.

The New York City Campaign Finance Board (“Board”) has received a request for an advisory opinion from the 2009 mayoral campaign of William Thompson (the “Campaign”).  The request asks the Board to lift the primary election expenditure limit of $6,158,000 for mayoral candidates who choose to participate in the New York City Campaign Finance Program (the “Program”), if the campaign contributions or expenditures of the high-spending candidate who is not participating in the Program (“non-participant”) exceed three times the amount of the primary election expenditure limit for mayoral candidates.1

The Board understands the policy concerns raised in the Campaign’s letter and the challenges of running against a high-spending non-participant.  However, the Board is fundamentally constrained by the relevant statute, the Board’s application of the law, and the current fact of the primary election for which Mr. Thompson seeks to lift the expenditure limit.2  Granting the Campaign’s request would require a departure from the plain meaning of the statute.  Thus, for the reasons set forth below, the Board cannot grant the Campaign’s request.

There Is No Statutory Basis for Granting the Campaign’s Request

A fundamental component of the Program is limiting how much money Program participants can spend on their campaigns.  In exchange for adhering to strict spending limits in each election, Program participants receive public matching funds for campaign contributions from individual New York City residents.  In combination with contribution limits, expenditure limits help more candidates run competitive campaigns and help to reduce the possibility and the perception of corruption associated with large contributions and unlimited campaign spending in New York City elections. 

New York City Administrative Code (“Administrative Code”) § 3-706(1) sets forth separate spending limits for “each primary election, . . . each special election to fill a vacancy, and . . . each general election . . . .”  (Emphasis added).  The spending limits for each election, however, change if a Program participant runs against a high-spending non-participant whose contributions or expenditures exceed certain amounts.  Specifically, Administrative Code § 3-706(3) (“the bonus provisions”) helps Program participants running against high-spending non-participants by matching participants’ contributions at a higher rate, increasing the maximum amount of public funds participants can receive, and raising or lifting their spending limit, depending on the amount that the high-spending non-participant has raised or spent.  Specifically, Section 3-706(3)(b) provides:

If any candidate in any covered election chooses not to file a certification as a participating candidate . . . pursuant to this chapter, and where the campaign finance board has determined that such candidate and his or her authorized committees have spent or contracted or have obligated to spend, or received in loans or contributions, or both, an amount which, in the aggregate, exceeds three times the applicable expenditure limit for such office . . . then:

  1. such expenditure limit shall no longer apply to participating candidates and limited participating candidates in such election for such office; and
  2. (. . .)
  3. . . . the principal committees of such participating candidates shall receive payment for qualified campaign expenditures that will provide the highest allowable matchable contribution to be matched by an amount up to one thousand five hundred dollars in public funds per contributor . . . provided, however, that . . . (B) in no case shall a principal committee receive in public funds an amount exceeding one hundred twenty-five percent of the expenditure limitation provided for such office in subdivision one of this section.

(Emphasis added).  “Covered election” is defined as “any primary, runoff primary, special, runoff special or general election for nomination for election, or election, to the office of mayor . . . .”  See Administrative Code § 3-702(10). 

The Campaign asserts that when there is a non-participating incumbent mayoral candidate running in the general election whose campaign receipts or expenditures prior to the primary election date exceed three times the primary election expenditure limit, the clause “such expenditure limit shall no longer apply” in § 3-706(3)(b)(i) refers to the primary election expenditure limit, regardless whether the non-participating incumbent mayoral candidate is running in the primary election.  The Campaign’s interpretation, however, contradicts the plain meaning of the statutory language.  Section 3-706(3)(b)(i) establishes that in the “covered election” in which the non-participant runs and spends three times the “applicable expenditure limit for such office,” the expenditure limit no longer applies to Program participants “in such election,” not any election.  The term “such election” in § 3-706(3)(b)(i) refers back to the “covered election” described in the beginning of § 3-706(3)(b) – the election in which the non-participant spends three times the expenditure limit.3 

Mr. Bloomberg, however, is not running in the “covered election” or “such election” in which Mr. Thompson is currently a candidate and for which Mr. Thompson requests the expenditure limit to be lifted, nor is Mr. Bloomberg making campaign expenditures in the “covered election” or “such election” in which Mr. Thompson is a candidate (namely, the primary election for the Democratic Party nomination).  Because Mr. Bloomberg is not a candidate in the same primary election as Mr. Thompson and the other Program participants who are seeking the Democratic Party nomination, his campaign spending prior to the primary election date does not trigger the bonus provisions for that election.  Thus, there is no statutory basis for the Board to lift the primary election expenditure limit and provide Mr. Thompson and other participants with additional public matching funds for the primary election based on Mr. Bloomberg’s expenditures or contributions.4 

Granting the Campaign’s Request Would Be Inconsistent with the Board’s Long-Standing Application of the Bonus Provisions

Granting the Campaign’s request would not only be in violation of the plain meaning of § 3-706(3)(b), but it also would be a departure from the Board’s long-standing application of the bonus provisions.  The Board has always applied the bonus provisions to candidates competing in the same election.  In all 63 races since 1989 in which a non-participant’s expenditures or contributions triggered the application of the bonus provisions – including the 2001 and 2005 mayoral contests in which Mr. Bloomberg ran as a high-spending non-participant – the Board reviewed the expenditures and contributions of the high-spending non-participant who was running in the same election as the participants.  Moreover, the Board has previously rejected a similar request that it interpret the Act so as to level the playing field between mayoral candidates in different elections.  See Advisory Opinion No. 2005-1 (April 29, 2005) (explaining that the Board “must take account of the effect of any of its interpretations of the Act on the ‘level playing field’ provided for in the law for primary election opponents who are all Program participants and guard against creating disparities among primary election candidates vis-à-vis each other”).5  Thus, applying the bonus provisions differently only for the primary election in which Mr. Thompson is a candidate would be antithetical to the Board’s consistent and even-handed application of the bonus provisions for all elections. 

Granting the Campaign’s Request Would Vitiate the Purpose of the Program’s Expenditure Limits

Granting the Campaign’s request would be inconsistent with the overriding purpose of the Program’s spending limits.  If the Board changed the bonus provisions in accordance with the Campaign’s request, it could exacerbate disparities among participants in the same election vis-à-vis each other by removing the ceiling on what they can spend to compete in the primary election.  The Campaign focuses on the ability of primary election candidates to potentially compete against a non-participant candidate in the general election; however, the primary election contest must still be completed.  Consequently, lifting the primary election expenditure limit as requested by the Campaign would undermine the Program’s goal of promoting fair competition among candidates competing in the same election.  

Conclusion

Although the Board understands the concerns regarding the impact of high-spending non-participants on the ability of the Program to promote a level playing field among the mayoral candidates, the Board may not disregard the plain meaning of the statute and depart from its long-standing application of the bonus provisions to candidates competing in the same election.  Moreover, granting the Campaign’s request to help Program participants counter, during the primary election race, the competitive advantage of a potential general election opponent would undermine the overriding purpose of the Program’s expenditure limits.  Accordingly, the Board cannot grant the Campaign’s request.    

NEW YORK CITY
CAMPAIGN FINANCE BOARD


ENDNOTES

1 Letter from Laurence D. Laufer to Joseph P. Parkes, S.J., dated March 31, 2009.

2 If there were no primary election contest for the Democratic Party nomination, the Board possibly would have different options in responding to the Campaign’s request.

3 Similarly, Board Rule 5-01(a)(5)(iv) and (v) refer to lifting the expenditure limit in “such election” in which the contributions or expenditures of the non-participant exceed three times the expenditure limit. Rule 5-01(a)(5), implementing § 3-706(3)(b) provides:

  • (iv) Pursuant to §3-706(3)(b) of the Code, where the Board has determined that a non-participating candidate has spent or contracted or has obligated to spend, or received in loans or contributions, or both, an amount which, in the aggregate, exceeds three times the applicable expenditure limit pursuant to §3-706(1)(b) of the Code, then:
  • (v) such expenditure limit shall no longer apply to participating candidates and limited participating candidates in such election for such office; and
  • (vi) the principal committees of such participating candidates shall receive payment for qualified campaign expenditures of approximately eight dollars and fifty-seven cents for each dollar of matchable contributions, up to one thousand five hundred dollars in public funds per contributor . . .  provided, however, that . . .  (B) in no case shall a principal committee receive in public funds an amount exceeding one hundred twenty-five percent of the expenditure limitation provided for such office in §3-706(1)(a) of the Code.

4 The Campaign seeks to lift the primary election expenditure limit if Mr. Bloomberg’s campaign expenditures or contributions prior to the primary election date exceed three times the expenditure limit, but does not specify what it is seeking with respect to the concomitant increase in public matching funds pursuant to § 3-706(3)(b)(iii).  As shown by the first footnote of the Campaign’s letter, however, it appears that the Campaign recognizes that pursuant to § 3-706(3)(b)(iii), the increase in the level of public matching funds is mandatory once the bonus provision is triggered by a well-financed non-participant; the Board cannot simply lift the expenditure limit without also providing participants – even if those participants never ultimately face Mr. Bloomberg in an election – with a substantial amount of additional public matching funds. 

5 This previous Advisory Opinion illustrates that the Board also has taken into account similar concerns about the competitive advantage of high-spending non-participants that are raised in the Campaign’s letter, resulting in the Board’s finding that campaigns may demonstrate with detailed documentation that particular expenditures made before the primary election for concrete items that can be and will be used only in the general election should be attributed to the general election expenditure limit.