NYC Candidates No Longer Personally Liable for “Wasted” Matching Funds

Last week, an Appellate Division panel ruled that under New York City law, candidates who participate in the city’s campaign finance program (which provides matching funds to candidates under certain circumstances) cannot be compelled to re-pay funds out of their own pocket.

The case arose out of former Manhattan Borough President C. Virginia Fields’ unsuccessful campaign for the Democratic nomination in the 2005 mayor’s race.  The Campaign Finance Board (CFB) found that Fields spent $61,000 on improper post-election expenses.

CFB sued Fields, who argued that her expenses were not improper, and that she was not personally liable for repayment of the allegedly improper post-election expenditures. She won in State Supreme Court, and the CFB appealed the ruling.

At the Appellate Division, the court found that:

The express language of § 3-710(2)(c) requires that in the case of unspent funds, the “candidate and committee shall use such excess funds to reimburse the fund” (emphasis added). This language clearly and unambiguously requires the candidate and all the committees to return funds left over after the election, up to an amount equal to the total public funds received, regardless of whether the left-over dollars came from private contributions made directly to the candidate or from public funds sent to the committee. However, it does not does not obligate the candidate to reach into other funds, such as personal assets, to repay CFB.

The ruling may open the door to candidates using public funds for post-election staff bonuses, parties or on other things that the CFB currently prohibits.

The CFB voted to appeal the ruling to the Court of Appeals at its February 10th meeting, but it is not clear whether the Court will grant leave to appeal.