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1993-7: Abandoned Campaign as a Basis for Participating Opponents Receiving Public Funds and for Removing the Spending Limit

July 20, 1993

Several candidates ("participants") seeking nomination for election to the office of public advocate1, who have joined the New York City Campaign Finance Program ("Program"), have requested an advisory opinion regarding whether certain fund raising and spending on behalf of a candidate who has not joined the Program ("non-participant") provides a sufficient basis for the Board to make a determination pursuant to New York City Administrative Code §3-706(3) that: (1) any public matching funds for which the participants qualify in a primary election for public advocate be paid at a two-for-one matching rate, up to the legal maximum; and (2) the spending limit otherwise applicable to participants in that election be removed ("§3-706(3) determination") 2.

Attorneys for City Council President Andrew J. Stein have requested an advisory opinion that reaches the opposite conclusion: that a §3-706(3) determination not be based on Stein's "mayoral expenditures."3

For purposes of this advisory opinion, the relevant circumstances considered by the Board are that on May 28, 1993, Stein announced that he would not be a candidate for mayor. This announcement followed a period in which campaign funds were raised and spent on his behalf. Stein was reported to be planning to run in the mayoral election to be held later this year, although he never formally announced his candidacy for mayor. Stein did not join the New York City Campaign Finance Program by the applicable deadline4.

When he announced he would not be a candidate for mayor, Stein indicated he would instead seek nomination for election to the office of public advocate, the office he currently holds. Subsequently, on June 29, 1993, Stein announced he would not seek nomination or election to the office of public advocate or any other office.

The last Board of Elections filing (January 15, 1993) made before this advisory opinion was requested by the Friends of Andrew Stein, Inc., a political committee authorized by Stein, reported total contributions-to-date of $4,782,359.97 and total campaign costs-to-date of $2,653,325.07. On the cover sheet of this filing, the committee filled in the space for office and district with the phrase "to be determined" and did not enter the date of election in the applicable space5.

Generally, for purposes of issuing an advisory opinion, the Board assumes the facts as presented by the persons who have requested the opinion. In this case, however, it appears that Stein ultimately will not be a candidate in either the mayoral or public advocate election this year. The Board nonetheless will address the facts as presented: a hypothetical situation in which a candidate (in this case, Stein) who makes certain expenditures for a potential mayoral campaign becomes a candidate on the ballot in the primary election for public advocate. While it is apparent that the political circumstances have changed since this opinion was requested, the Board has decided to issue this opinion in order to describe applicable legal requirements should similar circumstances arise in the future.

Administrative Code §3-706(3) provides that public funds payments are made at a two-for-one matching rate, and the spending limit is removed, in an election if the Board determines that a candidate in that election, who is not participating in the Program 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 half the applicable expenditure limit for the... office sought...

The spending limit applicable in a public advocate primary is $2.5 million. Administrative Code §3-706(1). Thus, if the Board determines that fund raising or spending on behalf of a non-participant in the primary election for public advocate exceeds $1.25 million, these additional provisions are mandated for opposing participants in the primary election.

The purpose of the two-for-one matching rate and spending limit removal provided by Administrative Code §3-706(3) is to help safeguard participants against the financial advantage that their opponents may otherwise gain by deciding not to participate in the Program. Non-participants are not subject to the contribution and spending limits, detailed disclosure requirements, and compliance monitoring procedures established under local law.

Campaign Finance Board Rule 7-03 sets forth procedures for §3-706(3) determinations. The Board reaches its decision either (1) based on a facial review of financial disclosure statements the non-participant and any committees he or she has authorized have filed with the Board of Elections; or (2) following a participant's submission of a sworn written petition and an opportunity for the non-participant to respond, including a provision for hearings before the Board. Rule 7-03.

Before proceeding to an analysis of the legal questions raised, the Board emphasizes that the instant requests are for advisory opinions, not for a factual determination required by Administrative Code §3-706(3). Advisory opinions do not resolve questions of fact; rather they show how the Board will apply the legal requirements of the New York City Campaign Finance Act in a given situation. Administrative Code §3-708(7).

The Board first makes §3-706(3) determinations for the primary election only after candidates have filed designating petitions to be on the ballot, in this case, after July 15, 1993. For purposes of this opinion, the Board assumes that Stein would have6 filed sufficient petitions to be on the ballot in a primary election for public advocate. In any case, this opinion should not be construed to be a §3-706(3) determination that fund raising or spending on behalf of Stein would or would not have in fact triggered additional benefits for his prospective opponents.

A §3-706(3) determination is made with respect to the financial activities of a non-participant who is "in any primary or general election for an office for which public funds are available" under the Act. Administrative Code §3-706(3). Although, arguably, the Board need only determine the fact that either fund raising or spending on behalf of a non-participant has exceeded the applicable amount without regard to a particular election, Board rules have limited the time period for non-participant financial activities that the Board will review in making a §3-706(3) determination. The Board presumes "that contributions and loans are accepted, disbursements are made, and liabilities are incurred for the non-participant's next following election." Rule 7-03(c) (emphasis added) 7. For purposes of this opinion, the Board notes that Stein was last a candidate on an election ballot in the 1989 general election. Thus, under Rule 7-03(c) all campaign fund raising and spending by Stein and any committees he has authorized that took place after the 1989 election are presumed to be for his next election following the 1989 election8.

After 1989, Stein's "next following election" would have been, according to the hypothetical circumstances presented, the 1993 election for public advocate, not the 1993 election for mayor9. Because Stein would have been on the ballot only in the election for public advocate, it would be extraordinary for the Board to reach a conclusion that would both overlook this fact and override the Rule 7-03(c) presumption, as though an election for mayor had actually occurred in the interim. In urging the Board to conclude otherwise, Stein's representatives contend that a §3-706(3) determination should not be based on spending they claim was geared to a mayoral effort. They emphasize references to the mayoral election in several items that were purchased by the Stein campaign and in the candidate's public appearances, as described in footnote 4, above. They argue that because Stein made "substantial expenditures" with a view to being elected mayor, the Board should not attribute "any of the expenditures at issue" to the election for public advocate. Letter of Gross and Sigmund (June 14, 1993), noted above, at 4 (emphasis added). Although they do not specifically claim that all of Stein's spending was expressly geared toward a mayoral campaign, their argument nonetheless appears to be that this spending would have been wholly irrelevant to the public advocate election10.

This opinion, as stated above, assumes that a mayoral election with Stein as a candidate would not have taken place in 1993. A conclusion that, because expenditures were made for a mayoral election that would not have occurred, all campaign activities on behalf of Stein before May 28 are somehow rendered entirely irrelevant to the actual public advocate election in which, under the hypothetical circumstances presented, he would have been a candidate on the ballot is undermined by the following considerations:

1) Both offices are citywide, and candidates for these offices must appeal for votes from precisely the same citywide electorate in elections that will be held this year on the same days. Cf. Advisory Opinion No. 1989-2 (January 3, 1989) (distinguishing a participant's expenditures for a poll for a citywide race that was statistically unreliable if the candidate ran for borough president).

2) One of the responsibilities of the office of public advocate is to serve as mayor in the case of a vacancy in that office and in other specified circumstances. This can be an important consideration for voters who, in evaluating a candidate's fitness to serve as public advocate, must consider that candidate's fitness to serve as mayor as well. New York City Charter §10; General City Law §2-a.

3) For the purpose of determining whether the Act's spending limits apply to certain spending by participants, the Act makes no distinction between expenditures made before and after a formal declaration of candidacy for a particular office. Advisory Opinion No. 1989-9 (January 25, 1989).

4) Both offices, mayor and public advocate, are covered by the New York City Campaign Finance Act and subject to the Campaign Finance Board's jurisdiction. Stein has been the occupant of the office at issue, and for which, under the hypothetical circumstances presented, he would have been seeking re-election, for the entire relevant period.

5) The Stein campaign appears to have made expenditures well into the fifth month of the election year, as well as before the election year, a period in which potential opponents have been conducting campaign activities as well.

Candidates and their authorized committees raise and spend funds on the candidates' behalf to further their campaign goals11. The Board need not measure the impact or effectiveness of this campaign activity, nor is it required to do so under the Act, in order to reach a §3-706(3) determination12. Indeed, Administrative Code §3-706(3) provides for determinations if either the amount of a non-participant's spending or the amount of funds he or she has raised has exceeded half the amount of the spending limit. If the amount of funds raised is sufficient, a §3-706(3) determination is required even if the non-participant has not made or committed to make any expenditures.

If Stein were a candidate on the ballot in the 1993 primary election for public advocate, the Rule 7-03(c) presumption that all campaign finance activities on behalf of Andrew Stein since his 1989 election would be for that election would have guided the Board's review of Board of Elections filings made on his behalf.

To rule otherwise would encourage non-participants to make unlimited "exploratory" expenditures for one office that would incidently, or even intentionally, benefit the non-participant in his or her ultimate run for an office covered by the Program to the detriment of participants for whom protection is mandated under Administrative Code §3-706(3). To find the presumption inapplicable in the case of a non-participant would also invite similar claims from participants as well, thus eviscerating existing campaign finance expenditure and contribution limits applicable to participants who say they have changed the office they seek as the election approaches.

Thus, when deciding whether a sufficient basis exists for making a determination under Administrative Code §3-706(3) in the primary election for public advocate in which Stein is a candidate on the ballot, the Board would have performed a facial review, pursuant to Rule 7-03(c), of all Board of Elections filings made on behalf of Stein since his last election in 1989. In conducting this review and applying the presumption of Rule 7-03(c), the Board, based upon the facts as assumed in this opinion and the considerations described above, would not exclude financial transactions on the basis of their arguable relationship to Stein's abandoned campaign for mayor.


1 As of January 1, 1994, when the new term of office begins, the public office "City Council president" will be named "public advocate." Local Law No. 19 of 1993.

2 This request was first made on behalf of Green '93, Mark Green's principal committee for the 1993 public advocate election. (Letter of John Siegal, dated June 8, 1993). The second such request was made on behalf of Donald Halperin (Letter of Stephen Holtz, dated June 8, 1993). Following a Campaign Finance Board invitation for any interested parties to submit written arguments by June 14, 1993, submissions were received on behalf of David Paterson '93 (Letter of Peter Williams, dated June 11, 1993), Roberto Ramirez (Letter of Roberto Ramirez, dated June 14, 1993), the New York Public Interest Research Group (Letter of Gene Russianoff and Neal Rosenstein, dated June 14, 1993), and Lenora B. Fulani (Letter of Lenora B. Fulani, dated June 17, 1993). Supplemental submissions were made on behalf of Green '93 (Letter of John Siegal, dated June 15, 1993) and on behalf of Donald Halperin (Letter of Stephen L. Holtz, dated June 22, 1993).

3 This request was made in a letter from Kenneth A. Gross and Paul Sigmund, dated June 14, 1993. Enclosed with the letter and on file with the Campaign Finance Board are: a "Stein for Mayor" button; two "Stein for Mayor" posters, one in English (20.5" by 16") and one in Spanish (22" by 17") : three "Stein for Mayor" round stickers (2" by 2"); a rectangular sticker (7" by 5") containing Stein's picture and identifying him in Spanish as a candidate for mayor; an invitation to a May 3, 1993 party to "Come meet and talk with Mayoral Candidate Andrew Stein"; a list of 24 "community forums attended by mayoral candidate Andrew Stein" between January 28, 1993 and May 26, 1993 and seven events scheduled for May 27, 1993 that were cancelled; a videotape containing two Stein for Mayor commercials; and a videotape showing the Richmond County mayoral candidates forum on March 16, 1993. A supplemental submission was received on June 17, 1993 (Letter of Kenneth A. Gross and Paul Sigmund, dated June 17, 1993). On July 2, 1993, the Board received another letter on behalf of the Stein campaign, arguing that since Stein will not appear on the ballot for any elective office the original request made on behalf of Green '93 is now moot. Based on that assumption, the Stein campaign has withdrawn its request for an advisory opinion. Letter of Kenneth A. Gross, dated July 2, 1993.

The Board's authority to issue advisory opinions extends to hypothetical questions. Administrative Code §3-708(7). Thus, mootness will not necessarily lead to a decision that an advisory opinion will not be issued.

4 The deadline for candidates named in designating petitions for a primary election was April 30, 1993. Administrative Code §3-703(1) (c).

5 After this advisory opinion was requested, the Friends of Andrew Stein, Inc. made a subsequent Board of Elections filing (July 15, 1993). This filing reported contributions-to-date of $5,483,009.97 and campaign costs-to-date of $6,405,482.75. On the cover sheet, the committee identified "to be determined" in the space for office and did not enter the date of election in the applicable space.

6 In fact, on July 15, 1993 designating petitions were filed that name Stein as a candidate for the Democratic nomination for the office of public advocate. On July 19, 1993, however, Stein declined the designation. Thus, he will not be a candidate on the ballot in the Democratic primary election.

7 Rule 7-03(c) permits the Board to consider "evidence indicating" the Board should not rely on the dates reported in Board of Elections filings. Questions about the transaction dates in Board of Elections filings are not relevant to the instant requests.

8 Similar presumptions apply to fund raising and spending by participants. See Rules 1-04(f), 1-05(h), and 1-08(c).

9 While New York State Election Law makes clear that Stein was a "candidate" during his abandoned campaign for mayor, Election Law §14-100(7), it is also evident that he ultimately will not be in the actual election for mayor this year. State law provides two separate tests for candidacy, either of which triggers a candidate's obligation to file disclosure statements with the Board of Elections. One test is based on efforts at ballot qualification — which presumably would pertain to a particular office and election — and the other is based solely on financial activity "with a view to bringing about... nomination... or election to any office..." Election Law §14-100(7) (emphasis added). Prior to May 28, Stein's financial activities met only the second test. Contrary to suggestions made by Stein's representatives, see Letter of Gross and Sigmund (June 14, 1993), noted above, at 3, neither State law nor the Campaign Finance Act in any way implies that Stein had the status as of May 28 of a candidate in an election for a particular office, mayoral or otherwise, as a matter of law.

The question whether Stein, as a candidate for public advocate, could have legally received additional contributions from contributors who gave the maximum permitted under Election Law §14-114 when he arguably was a candidate for mayor is a matter of State law and beyond the scope of this advisory opinion.

10 As indicated by the language emphasized above, Stein's representatives implicitly concede that not all of Stein's spending was geared to the mayoral race. The Board notes that, for example, fund raising invitations, not included in the submission on behalf of Stein, were distributed for a widely publicized "Birthday Celebration" for Andrew Stein at the Waldorf Astoria on January 21, 1992, expressly soliciting contributions of up to $50,000 for a political committee. Like the Board of Elections filings on behalf of Stein, noted above, these invitations make no reference to a campaign for mayor. Stein's representatives themselves concede the failure of their arguments if "Stein was even ambiguous about the office for which he was running..." Id. at 5. As discussed below, however, the deciding factors for this opinion do not rest on such points.

11 The Board has recognized that fund raising or spending by participants to advocate or oppose a ballot proposal, Advisory Opinion No. 1989-53 (October 26, 1989), and for transition or inauguration into office, Advisory Opinion Nos. 1989-55 (December 5, 1989), 1989-57 (December 19, 1989), and 1992-1 (January 21, 1992), that is unrelated to a campaign for election, will not be limited by the Act in certain circumstances.

12 It has been contended that the spending at issue increased Stein's name recognition and promoted his achievements in the office for which he would have been seeking re-election. Letter of Lenora B. Fulani, noted above. Although the Board has not rested its determination on this factor or considered it, it could well be significant in future comparable situations.

13 Board member Vaughn C. Williams recused himself from consideration of this advisory opinion.