Tomorrow, the NYC Campaign Finance Board will conduct a hearing on the rules it has proposed for independent expenditure (IE) disclosure. Today we ponder issues that stem from the proposed provision for the verification of IE reports.
The proposed rules require that the Independent Spender verify that IEs were not made in cooperation with any candidate. Conversely, according to the proposed rules, if a candidate cooperated in the expenditure, it would be reported by the candidate as an in-kind contribution. Both the verification and the in-kind provisions erase any distinction between the candidate who is supported by the express advocacy or electioneering communication and the candidate who cooperated in the expenditure. But are these two are necessarily one and the same candidate?
The proposed rules references factors enumerated in the existing CFB candidate rules that address whether an expenditure is independent or non-independent. These factors are primarily concerned with identifying cooperation between the candidate and the spender, and generally presume that the candidate who is the subject of the expenditure is identical to the candidate who potentially cooperated in the expenditure. On the other hand, the existing rules may be read as establishing that an expenditure must be made “for the purpose of promoting or facilitating the nomination or election of a candidate” in order for it to be treated as either an IE or an in-kind contribution. If this reading is correct, it may resolve the multiple candidate problem by offering a basis for distinguishing the candidate whose nomination or election the IE was intended to promote or facilitate from the candidate who cooperated in the IE. Perhaps, in the final rulemaking notice, the CFB will clarify just what it means here.
Consider how the proposed rules would apply to this hypothetical: an entity consults with candidate B for the purpose of making an express advocacy communication in support of candidate A.
- Is the expenditure reportable as an IE? If so, would candidate A be the only candidate named in the disclosure statement?
- Is the expenditure simultaneously reportable as an IE on behalf of candidate A but an in-kind contribution to candidate B?
- Alternatively, is the expenditure reportable only as an in-kind contribution to candidate B?
- In answering these questions, would it be relevant if candidate B was separately in communication with candidate A? Does the spending entity have a duty of inquiry with candidate B before completing the verification?
- If the communication mentions both candidates A and B, may the full (or apportioned) cost be reported as an IE for candidate A and an apportioned share reported as an in-kind to candidate B?
- If candidate B pays for an apportioned share, must the spending entity list candidate B as a contributor or third party payor on the IE report?