New York City Campaign Finance Board Independent Expenditure Legislation

This memo is intended to serve as a summary of the recent legislative change to the definition of an “independent expenditure”, as found in the New York City Charter.

The bill was meant to counteract an overly-broad interpretation of the law by the New York City Campaign Finance Board (“CFB”), the entity charged with regulating reporting and disclosure of expenditures in New York City elections. The definition of an independent expenditure is found in Section 1052(15)(a)(i):
A monetary or in-kind expenditure made, or liability incurred, in support of or in opposition to a candidate in a covered election or municipal ballot proposal or referendum, where no candidate, nor any agent or political committee authorized by a candidate, has authorized, requested, suggested, fostered or cooperated in any such activity.

Historically, under the CFB’s rules, expenditures that are non-independent are called coordinated expenditures. Coordinated expenditures count against a candidate’s spending limits, and will be counted as an in-kind contribution to the candidate by the one making the expenditure. The CFB interprets coordination to mean that the “candidate cooperates with the independent spender concerning an independent expenditure.” The CFB’s guide on the issue, a copy of which can be obtained on their website, gives this example: “Discussing the content or distribution of a leaflet with the candidate, or having someone with a connection to the candidate plan an advertisement, are examples of factors that would make an expenditure not independent and therefore not covered by the independent expenditure rules.”
In Advisory Opinion 2009-7, the CFB stated that “the critical question in every case is whether, in light of the facts and indicia of non-independent activity, the campaign authorized, requested, suggested, fostered or otherwise cooperated in a third party’s activity on the campaign’s behalf, and if so, whether such activity was properly accounted for.” A few years later, the CFB released Advisory Opinion 2012-1, which contained a vague footnote that implied that the following communication can be seen as non-independent:

  1. Discussions of logistics such as date, time, and location in arranging for a candidate’s appearance at a non-fundraising event;
  2. Communications directly related to an entity’s endorsement process; or
  3. Requesting, obtaining, and/or republishing a candidate’s photograph, biography, position papers, press releases, or other similar materials available to the general public.

Many labor organizations and good government groups argued that this type of activity was a necessary part of their endorsement process, and that the CFB’s interpretation effectively caught up internal member-to-member communications. Thos groups were able to secure a change in the law through the introduction of INT 0978-2012, a Local Law to amend the New York City Charter in relation to the Campaign Finance Board. This bill was meant to remove member-to-member communications from the independent expenditure reporting requirements, as interpreted by the CFB in Advisory Opinion 2012-1.
The Bill was overwhelmingly approved by the Council (47-1), but then vetoed by Mayor Bloomberg on February 22, 2013. The Council then voted to override the veto on March 13, 2013. In response to the legislation, the CFB released Advisory Opinion 2013-1. There, the CFB clarified that discussions of logistics between a candidate and an entity regarding a non-fundraising event, and obtaining information as part of an entity’s endorsement process, are not automatically considered coordinated activity. The same holds true for photographs, biographies, position papers, press releases, and other similar materials. Thus, absent “indicia of cooperation”, the CFB essentially held that the majority of the actions taken by labor organizations during their endorsement processes will not lead to a finding of coordination.

As a result of this new law, all those involved in this effort were able to push back against the overly-zealous CFB, and with the help of the Speaker and the City Council, were able to ensure the basic freedom of labor unions to communicate with their members without fear of interference or unwanted oversight. As a result, the definition of independent expenditures now does not include any communication by a labor or other membership organization aimed at its members. This includes incidental communication by a labor or other membership organization or corporation with non-members or non-stockholders, as long as the group uses reasonable efforts to restrict the communication to its members.

As always, each organization’s situation and questions related to individual member communications must be viewed in light of its own specific set of facts, and they are encouraged to contact their own principal officers or legal counsel with any questions concerning the matters described above.

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