New York City has stringent “pay to play” restrictions on contributions from people doing business with the city.
What is meant by "doing business"?
Contributions from people associated with entities that do business with city government are regulated in order to reduce the potential for, and appearance of, “pay-to-play” corruption. These contributors are subject to lower contribution limits and their contributions are not eligible to be matched with public funds. The city’s Doing Business Database (DBDB) lists these people and their associated entities. The DBDB is available to the public, and campaigns can check to see whether their contributors are listed.
Entities that engage in, apply for, or are awarded any of the following have “business dealings” with the city:
- Land use actions
- Real property agreements
- Pension fund investment contracts
- Economic development agreements
The regulations apply to certain individuals associated with those entities:
- Chief Executive Officer (CEO) or its equivalent
- Chief Operating Officer (COO) or its equivalent
- Chief Financial Officer (CFO) or its equivalent
- Anyone who owns or controls more than 10% of the entity
- Senior managers who, whether by title or duties, have substantial discretion and oversight in business transactions with the city
Lobbyists required to register with the City Clerk are also covered. Under a separate law, contributions from the spouses, domestic partners, unemancipated children, and employees of registered lobbyists are not eligible to be matched with public funds but are not subject to the doing business contribution limits.
What sort of restrictions apply to contributions from people in the database?
Contributions from or intermediated by anyone in the DBDB will not be matched with public funds. In addition, people in the database are subject to lower contribution limits, which vary by office:
Doing Business Contribution Limit
Mayor, Public Advocate, Comptroller
How can someone determine if they have business dealings with the city?
The DBDB can be searched by people’s names or their associated entities. Someone may not be aware that an organization with which they are associated does business with the city. They can confirm their status by checking the database before making contributions.
Why might someone think they should be in the DBDB when they are not?
A person will not be considered doing business with the city merely because s/he:
- works for the city
- drives a city taxi
- hires a lobbyist
- seeks permits for his or her 1, 2, or 3 family home
- applies for street permits, including parades or street fairs
- other similar individual activities with the city
What transactions are included in the doing business regulations, and how long are individuals listed in the DBDB?
- Contracts, Concessions and Franchises: proposing on or holding $100,000 in goods or service contracts, $500,000 in construction contracts, or $100,000 in concessions or franchises; or being awarded $100,000 in City Council or borough president discretionary allocations. Contracts of $5,000 or less, publically-advertised competitive sealed bids, and emergency contracts are not covered.
- Contract and concession proposers are covered for one year from the date of the proposal or bid. Awardees are covered for the term of the contract or concession plus one year.
- Franchise proposers are covered for one year from the proposal submission date. If the entity receives the franchise, it is covered for one year from the award date.
- Grants: receiving grants totaling $100,000. Grants of $5,000 or less are not covered.
- Recipients are covered for one year from the award date.
- Economic development agreements: applying for or receiving an economic development agreement. Incentives qualified for by operation of law are excluded.
- Applicants are covered from the application date to when a decision is made. Recipients remain covered until the end of the agreement, plus one year.
- Contracts for the investment of pension funds: proposing on or holding a contract for the investment of pension funds,includingany investment in a private equity firm and any contract with an investment-related consultant.
- Proposers are covered from the earlier of the presentation of investment opportunity or the submission of a proposal, to when a decision is made. Awardees remain covered through the term of the transaction plus one year.
- Real property transactions: the purchase, sale, or lease of real property with or by the city, including office space, or any application or proposal for the same. Transactions awarded by public auction or competitive sealed bid are excluded, as are certain affordable housing transactions.
- Proposers are covered from the proposal date to when a decision is made. Lessors of the city remain covered through the lease term, plus one year. Lessees of the city and entities that buy or sell real property remain covered for one year from the date the agreement is finalized.
- Land use actions: land use applications subject to the Uniform Land Use Review Procedure (ULURP) under City Charter §197c and any application for leases (§195) or zoning changes (§201). Applications for zoning changes involving owner-occupants of 1, 2, or 3familyhomesareexcluded,asare permits.
- Land use action applicants are generally covered from the date of certification (§197c and §201) or application (most §195 actions) to when the City Council files its action with the Mayor, plus 120 days. When the city is leasing office space under §195, coverage runs from application through lease agreement, plus one year.
- Lobbyists: any firm or person required to register as a lobbyist with the Office of the City Clerk, including placement agents. This does not include entities that hire a lobbyist (clients).
- Lobbyists are covered whenever they are listed on a lobbying registration.
The contents of the DBDB are determined by the Doing Business Accountability Project of the Mayor’s Office of Contract Services (MOCS). For questions about whether or for how long an entity should be included in the DBDB, contact MOCS at 212-788-8104 or DoingBusiness@mocs.nyc.gov.
What is a Doing Business Notification?
After you file a disclosure statement, the CFB will review your campaign’s contributions to ensure compliance with the doing business law. The CFB will notify your campaign of over-the-limit contributions within 20 calendar days. In the six weeks preceding an election, the CFB will notify your campaign within four business days.
Following both types of notification, you have 20 days to issue a refund for the overage and provide documentation of the refund to the CFB. The law does not allow extensions of this 20-day response deadline. Any questions about the notification must be asked prior to the deadline, as unresolved questions do not grant campaigns an extension.
The notification lists each contribution over the doing business limit and states the required refund. Sometimes there are multiple small contributions that, together, exceed the limit. Contributions from people on the DBDB are also not matchable, but the notification does not list invalid claims. The campaign’s regular statement review will include these contributions on the Invalid Matching Claims report.
You can avoid receiving notifications by checking each contribution against the Doing Business Database and either not accepting them or refunding the over-the-limit portion before the next disclosure statement.
How will I get the Doing Business Notification?
If you have contributions over the applicable doing business limit, you will receive a notification via C-Access. Once the notification is posted to your account, you will receive an email from firstname.lastname@example.org.
Note: to ensure you get the email, add this address to your list of email contacts.
How Do I Respond?
To resolve the notification, your campaign will need to:
- Provide a refund of the over-the-limit portion to each contributor cited in the notification. Refunds must be issued by bank or certified check.
- If the contribution was claimed for match, withdraw the matching claim in C-SMART.
You must respond to the CFB with a copy of the refund check issued for each over-the-limit contribution, labeled with the transaction ID, within 20 days. To submit your response, you can ether:
- Upload refund documentation directly to C-SMART (For assistance, please see Submit Monetary Contribution Refund Documentation to the CFB in C-SMART Help.)
- Or email refund documentation as attachments to CFBDoingBusiness@nyccfb.info.
If you fail to issue a refund, the CFB may deduct the excess contributions from future public funds payments and may assess penalties to your campaign.
Will this be part of the regular reviews that the CFB sends to each campaign (statement reviews)?
No. Campaigns will receive regular statement reviews separate from the Doing Business Notifications.
How does the CFB match data in the Doing Business Database to contributor information?
The CFB uses an automated system to identify potential matches of contributors to people in the DBDB. Each match is individually assessed, using information reported by the campaign and contained in the DBDB. If a match is unclear, the individual is researched further so that the CFB can be as certain as possible whether the contributor is in the DBDB.
How can a campaign check if a contributor has business dealings with the city?
Campaigns should look up contributors in the DBDB. Campaigns can also ask contributors directly, contributors may not be aware of their doing business status. Since the database is the source for the CFB’s decisions, it is more reliable and should be checked when accepting contributions that exceed the doing business limits, either on their own or aggregated with previous contributions from the same contributor.
The CFB’s contribution card template includes detailed information about doing business regulations. If the campaign designs its own contribution card, it must contain the phrase:
If a contributor has business dealings with the City as defined in the Campaign Finance Act, such contributor may contribute only up to $250 for city council, $320 for borough president, and $400 for mayor, comptroller, or public advocate.
What should a campaign do if it thinks a contributor is not the person who is in the Doing Business Database?
The more complete and accurate the campaign’s reporting of contributor information, the less likely a mismatch is to occur. However, if a campaign believes a contributor is not the person in the DBDB, it must provide the CFB with records or data to demonstrate this. The campaign could also send the CFB a signed statement from the contributor, asserting that s/he is not the person in the DBDB and is not associated with the doing business entity in any capacity.
Because people may be in the DBDB in connection with organizations that do not employ them, simply stating that the contributor works for a different employer than the doing business entity is not sufficient. An example of a possible misidentification is a case where two individuals have the same name but different suffixes (e.g., Jr. and Sr.) and are reported without the suffix in either the DBDB or the campaign’s reporting. Campaigns can contact the CFB at 212-409-1800 or CFBDoingBusiness@nyccfb.info for guidance about what led to the match determination.
What if a contributor is in the Doing Business Database but tells the campaign s/he isn’t doing business with the city?
People may be in the DBDB due to relationships other than paid employment. However, if a contributor is no longer associated with the entity that has listed him/her in the DBDB, he/she should contact the entity to complete and submit a DBA Update Form to the Doing Business Accountability Project at DoingBusiness@mocs.nyc.gov. If this is unsuccessful, s/he should complete and submit a Removal Request Form. The CFB will be notified when a removal occurs. Contact the Doing Business Accountability project at 212-788-8104 for additional information.
What if the CFB says a contributor is in the Doing Business Database but the campaign can't find him/her there?
Contact the CFB prior to the response deadline with any questions. If contributors were in the DBDB at the time of their contributions, but are no longer doing business at the time of notification, they may not appear in the public DBDB when the notification is received. These contributors are still subject to the contribution limits and refunds must be issued by the deadline.
In other cases, the campaign may look for contributors in the DBDB at the time of the contribution and not find them, only to be later notified by the CFB that they were doing business at the time. This may occur because the DBDB is updated once a month, meaning it may take several weeks for new listings to appear. If you have difficulty finding a contributor in the DBDB, you must contact the CFB prior to the response deadline, as you may still be required to issue a refund.
What doing business contribution limit is used by the CFB for a candidate who has not declared what office s/he is seeking?
Until you declare an office, the CFB will notify you of contributions exceeding the lowest doing business limit, which is $250. Although the CFB does not advise it, candidates may accept contributions up to the $400 limit while undeclared. If you do so and subsequently decide to run for an office with a lower doing business limit, you risk non-compliance and must issue refunds of all over-the-limit contributions within 20 days of your office declaration (see Advisory Opinion No. 2010-3).
Any deductions or penalties will be based on the applicable limit for the office you eventually seek.
How should the campaign treat a matching claim that is marked invalid because the contribution’s intermediary is doing business with the city?
The matching claim must be withdrawn for any contributions intermediated by individuals listed in the DBDB. Contributions intermediated by people in the DBDB cannot be matched with public funds.
If the campaign believes the intermediary is not doing business with the city, it may pursue the same actions as if it believes a contributor is not the person in the DBDB or is no longer associated with the entity, as described above. The doing business status of the intermediary is not related to that of the contributor. If the campaign demonstrates that the intermediary is not the person in the DBDB or was not doing business at the time of his/her intermediated contributions, the contributions will be eligible for match if otherwise acceptable to the Board.
What if the contributor who is doing business is the candidate or a close family member of the candidate?
Contributions from the candidate or the candidate’s parent, spouse, domestic partner, sibling, child, grandchild, aunt, uncle, cousin, niece or nephew by blood or marriage are not subject to the doing business regulations.
Does the law apply to in-kind contributions?
Yes. In-kind contributions of goods or services, including discounts not available to the general public, are subject to the same contribution limits and source restrictions as monetary contributions as stated in chapter 2 of the Handbook.
What if someone who is not in the Doing Business Database gives a campaign a contribution up to the regular contribution limit, and then later becomes the officer of a firm that gets a city contract? What happens to that contribution?
The law is not retroactive. If the person was not doing business at the time of the contribution, the campaign may keep the contribution, provided that doing so does not violate any other part of the Campaign Finance Act. However, the campaign may not accept any subsequent funds from that contributor while s/he is on the DBDB. The contributor will be considered already at the Doing Business limit and all further contributions will be required to be refunded.