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1997-14: Guidance on Costs Associated with a Post-Election Party and the Repayment of Public Funds

December 09, 1997

Re: Administrative Code § 3-710(2) (c); Campaign Finance Board Rules 1-03; 1-04(c) (2); 1-08(d) (1); 5-03(e) (2); Op. No. 1997-14

An advisory opinion has been requested on behalf of Friends of Margarita Lopez for New York City Council '97, Margarita Lopez's authorized committee for her City Council campaign (the "Committee") 1. Lopez joined the New York City Campaign Finance Program, was victorious in her bid for the City Council seat in the Fifth District, and received $65,984 in public funds. The request seeks a determination whether "reasonable costs associated with a party for the purpose of thanking volunteers, contributors and others who assisted with the recent election are considered eligible campaign expenses and may be paid in advance of any repayment of public funds."

The request further states that the Committee would invite approximately 2,050 contributors and volunteers to the party and expects approximately 500 individuals to attend. The expenses for the party would include printing and mailing invitations, renting space, food and beverages, decorations, janitorial services, and a band and/or disc jockey. The request notes, "because of the grass-roots nature of the campaign we have run throughout, you can be assured that we will keep these expenses to a minimum."

When a candidate has received public funds, post-election expenditures by the candidate's authorized committee are restricted to those that are for the previous election, until unspent campaign funds are repaid. See Administrative Code § 3-710(2) (c) ; Campaign Finance Board Rule 5-03(e) (2). "No such excess funds shall be used for any other purpose, unless the total amount of the payments received from the fund by the authorized committee has been repaid." Administrative Code § 3-710(2) (c). This provision is intended to protect the New York City Election Campaign Finance Fund ("the Public Fund") from being used by authorized committees for expenses other than those made in connection with the election for which the candidate joined the Program and received public funds. See also Rule 1-03.

Thus, the issue is not whether a committee may have a celebration, but whether its celebration may be subsidized by public funds.

In Advisory Opinion No. 1997-13 (November 25, 1997), the Board concluded that a dinner immediately following the date of an election for the purpose of expressing appreciation to campaign staff is a routine activity associated with winding up a campaign. The Board noted, however, that the cost of such a dinner must be reasonable in order for unspent campaign funds to be used to pay for the dinner and the participating candidate has the burden to establish that the cost of such a dinner is, in fact, reasonable. See also Advisory Opinion No. 1989-56 (December 19, 1989) (mailing of holiday cards to campaign volunteers and contributors is a routine activity involving nominal cost associated with winding up a campaign)

The activity described in the request cannot be considered a routine post-election wind-up cost for a number of reasons.

First, unlike holiday cards, the cost of the party described in the request is not nominal. Under Administrative Code §3-710(2) (c), the participating candidate must act in a manner that serves to preserve unspent campaign funds for repayment to the Public Fund. This obligation necessarily limits the manner in which campaigns may thank their supporters after an election. While there is room for nominal expenditures for this purpose, the more elaborate expenditures described in the request would be contrary to the letter and spirit of this provision.

Second, the high cost contemplated appears to be primarily a function of the amount of unspent campaign funds on hand. In contrast, routine wind-up activities are the kind that would be incurred by any campaign, regardless of the funds on hand. After the election, a winning campaign that is in debt or short of funds would be unlikely to incur such costs2.

Finally, the invitation to contributors would circumvent Campaign Finance Board Rule 1-04(c) (2), which generally prohibits returning contributions to contributors after the campaign has received public funds. Because the post-election party is not intended to raise funds or promote the candidate's election, its effect of indirectly returning funds to contributors before repaying the Public Fund takes on a significance that is not subsumed within a larger campaign purpose.

Thus, expenditures for the event described in the request are not permitted before unspent campaign funds are repaid. A less elaborate event to which volunteers, but not contributors, are invited may be permissible under Administrative Code §3-710(2) (c) before unspent campaign funds are repaid. If the campaign wishes to hold such an event, the Board would urge it to submit a new advisory opinion request.



1 The request was made by Lisa Kaplan, treasurer to the Committee, by letter dated November 17, 1997.

2 This opinion does not address expenditures for parties held on election night. The Board notes, however, that, unlike post-election costs, election night expenditures are subject to the expenditures limits of the Act. Campaign Finance Board Rule 1-08(d) (1). Moreover, expenditures for events held on election night or in the days immediately following an election are likely to bear a clearer relationship to the election that has passed, for purposes of Administrative Code §3-710(2) (c), than those held several weeks or more afterward.