Public Matching Funds and the Payment of Posting Fines

November 27, 2012

Some say it’s wrong and some say it’s right.  But either way, when does the law allow a New York City candidate to use a NYC Campaign Finance Board (CFB) public matching funds payment to pay fines assessed for violations of the NYC sign posting prohibition? The NYC Campaign Finance Act states that public funds may not be used for “payment of any penalty or fine imposed pursuant to federal, state or local law.”  Yet, the CFB agrees that public funds may be used to pay posting fines.  So what turns this clear prohibition into express permission? The answer lies in the distinction between “campaign expenditures” and “qualified campaign expenditures.”  Public funds may only be used for qualified campaign expenditures.  After an election, the CFB looks at each campaign’s valid matching claims and total qualified campaign expenditures to determine the amount of public funds that it is eligible to receive.  Liabilities for posting fines are excluded from that calculation. But that’s not the end of the story.  If the campaign has outstanding liabilities and a margin of qualified campaign expenditures in excess of prior public funds payments, it may receive a final public funds payment equal to the lesser of those two amounts.  The CFB permits that final public funds payment to be used to pay outstanding liabilities for campaign expenses, such as the “payment of non-criminal penalties or fines arising out of a political campaign”, such as posting fines.  The legal fiction here is that use of these public funds has been fully accounted for by the prior qualified campaign expenditures. Indeed, it’s the flip side of this reasoning that also allows the CFB to recover hundreds of thousands of dollars leftover in other campaigns as unspent public funds.  And what editorial board would want to argue against that result? Disclaimer: Genova Burns represented William Thompson’s 2009 campaign committee in obtaining a final public funds payment of $444,029; we were not retained in the defense of the posting violations.

Tag: New York City