Proposed NYC Independent Expenditure Rules: Disclosure

10.21.2011

The NYC Campaign Finance Board has scheduled an October 27th public hearing on proposed rules on independent expenditure (IE) disclosure.  This is our third installment commenting on the proposed rules. Disclosure, of course, is at the heart of the proposed rules.  What must Independent Spenders disclose? Contributions.  The NYC Charter directs that entities making IEs must report contributions they receive from individuals and entities above specified threshold amounts.  The proposed rule establishes a four year period to be covered by disclosure statements.  If the entity reaches the IE reporting threshold late in this four year period, its first disclosure statement would nonetheless “look back” and cover contributions from other entities dating back to the beginning of the four year period and contributions of $1,000 or more from received individuals in the 12 months preceding the covered election.  No allowance is made for excluding contributions that precede the effective date of the proposed rules. Contributions must be disclosed regardless of their relationship to the covered election or independent expenditure.  Thus, the total amount of contributions required to be reported may far exceed the amount of IEs to be reported.   The rationale for such an extensive contribution disclosure is unclear. Public Communications. The proposed rules draw a distinction between reporting public communications and reporting expenditures.  It is not clear whether the Independent Spender must report all public communications it makes, regardless whether these public communications are reportable as independent expenditures. Expenditures.  Only expenditures that are “directly related” to the “design, production, and distribution” of a public communication must be reported.  What does “directly related” cover?  For example, are expenditures for general strategy meetings and consulting, polling and research, equipment purchases, and salaries for personnel categorically excluded from disclosure? Apportionment.  The proposed rules require Independent Spenders to apportion the cost of IEs in support or opposition to more than one candidate (or ballot proposal).  This requirement derives from apportionment requirements for joint candidate expenditures that pertain to the enforcement of contribution and spending limits.  What purpose does apportionment serve in the case of IEs for which contribution and spending limits are not applicable?  Why not allow an Independent Spender to report the full amount of an expenditure as being in relation to all the candidates and ballot proposals referenced – without apportionment?

Tag: New York City