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1989-35: Treatment of Literature Joint Expenditures as In-Kind Contributions or Expenditures

July 19, 1989

An advisory opinion has been requested whether certain joint expenditures for literature by two candidates participating in the Campaign Finance Program are considered to be in-kind contributions to or expenditures by each candidate. The following situations have been described:

1) The Dinkins campaign and candidate A propose to have paid staff members of each campaign design a joint piece of literature featuring Dinkins and candidate A. The literature would indicate the names of the campaign committees of both candidates and the campaign addresses. Half of the literature would be delivered to the Dinkins campaign and the other half to candidate A's campaign. The layout artist and printer would bill the Dinkins campaign directly for half of the costs of creating the layout, printing and delivery which bill would be paid for by the Dinkins campaign. The other half of the costs would be directly billed to candidate A's campaign, which bills would be paid directly by that campaign. No multi candidate committee would be involved.

2) Assume the same facts described in paragraph numbered 1, except all of the literature is actually delivered to the headquarters of candidate A and is distributed by volunteers.

3) Assume the same facts described in paragraph numbered 1, except all of the literature is delivered to candidate A's headquarters and is mailed to prospective voters with volunteers being used to prepare the mailing, and candidate A pays for half of the costs for postage, envelopes and mailing labels and the Dinkins campaign pays for half of those costs.

The term "contribution" includes "any payment, by any person other than a candidate or a political committee authorized by the candidate, made in connection with the nomination for election, or election, of any candidate." New York City Administrative Code §3-702(8) (c) (emphasis added).

In the situations described, the question arises whether Mr. Dinkins and Candidate A have each made a payment in connection with both their own and the other candidate's campaign. No multicandidate committee is involved1. The portion of Dinkins' payment made "in connection with" his campaign is not a contribution. Candidate A's payment "in connection with" candidate A's campaign is likewise not a contribution2. Administrative Code §3-702(8) (c).

If a payment has been made by each candidate "in connection with" the other candidate's campaign that payment is a contribution, unless the latter candidate did not "authorize, request, suggest, foster, or cooperate in" that payment. The hypothetical facts presented manifest cooperation between the candidates in preparing, distributing, and paying for the literature. Clearly, these payments cannot be characterized as independent expenditures. Therefore, if any portion of Dinkins' payment is made in connection with Candidate A's campaign or any portion of Candidate A's payment is made in connection with Dinkins' campaign, that portion is a contribution3.

In the example described, each candidate pays one-half of the joint literature costs. Each payment may be characterized as having been made solely "in connection with" the payor-candidate's campaign (and thus not a contribution to the other candidate's campaign), if:

1) the literature provides a substantially equal forum for both candidates, and does not primarily focus on one or the other; and

2) the literature is distributed solely in areas in which both candidates seek election.

If these circumstances are not present, and one candidate receives a benefit reasonably attributed to a portion of the other candidate's payment, the recipient-candidate must report that portion as a contribution made by the payor-candidate. Even if both candidates have made equal payments, one candidate will have received a contribution if he or she is the primary focus of the literature and/or the literature is distributed in areas where he or she seeks election, but the other candidate does not.

Each candidate has the burden of demonstrating to the Board that no portion of his or her payment for joint literature is a contribution. Candidates likewise have the burden of demonstrating a reasonable basis for calculating any portion of these payments which is a contribution.

In making these demonstrations, candidates must consider the nature of the joint literature, the arrangements made by the two candidates for its preparation and use, and the areas of distribution. In addition, each candidate must be able to show that his or her contribution and expenditure reports filed with the Board covering the joint literature are consistent with the other candidate's filings4.



1 If the expenditures for the joint literature were paid by a committee authorized by both candidates (a "multicandidate committee"), the payments would not be contributions to either Mr. Dinkins or Candidate A. Expenditures by multicandidate committees must, however, be allocated between the candidates supported in accordance with a reasonable formula acceptable to the Board. Administrative Code §3-707; Campaign Finance Board Rule 109.

2 Pursuant to Administrative Code §3-703(1) (h) , candidates participating in the public financing system agree to not use personal funds or property in connection with their campaign in an amount which exceeds the contribution limit applicable under Administrative Code §3-703(1) (f).

3 These payments should be reported both as in-kind contributions to and expenditures by the recipient-candidate. Campaign Finance Board Rule 106.

4 This advisory opinion is limited to the hypothetical fact situation presented. It does not address circumstances in which literature is jointly devised and circulated by candidates any of whom are not participating in the Campaign Finance Program.