All the talk we keep hearing about campaign-finance reform appears to be nothing more than hype and rhetoric. At least that's the impression we were left with after reading the Appellate Division's decision in New York City Campaign Fin. Bd. v. Ortiz.
According to the City's Campaign Finance law, candidates running for Mayor, Comptroller, Public Advocate, Borough President or City Council may apply for matching funds administered by the New York City Campaign Finance Board (CFB). To qualify for these proceeds, candidates must agree to certain restrictions as to the amounts and sources of contributions, adhere to limits on campaign related expenditures, file certain reports and other documentation, and, submit to audits by the agency.
If funds are found to have been misused, the CFB may seek repayment of such monies and impose a civil penalty of up to $10,000. While the law is pretty clear that candidates and their treasurers are personally liable for the payment of these penalties, a question arose as to whether these same individuals would also be personally responsible for the repayment of any "misused" campaign funds.
Although the CFB was of the opinion that personal liability attached in both instances, several candidates disagreed and challenged the CFB's interpretation of the law by way of an Article 78 proceeding which eventually reached the Appellate Division, First Department. In a decision dated December 19, 2006, the AD1 acknowledged the existence of a "liability loophole." As the Court observed:
When the City Council, a body primarily consisting of former and future participating candidates, wanted to impose personal liability on participating candidates and treasurers of the candidate's principal committees for penalties assessed by the Board against them, it clearly did so .... When it wanted to limit responsibility for repayment of unspent matching funds or disqualified campaign expenditures to the participating committee and not its treasurer or the participating candidate, it did so just as clearly ....
Since the Campaign Finance law is within the City Council's purview, the court was reluctant to "add additional requirements or responsibilities" that it deemed "more beneficial," and deferred to local government to address the gaps in the law. As a result, two candidates who had received over $100,000 in matching funds were allowed to escape liability for "misused" and unaccounted for proceeds.
We are unable to comprehend why the City Council would wish to be perceived as facilitating ethical laxness and fiscal irresponsibility. If candidates (and/or their campaign treasurers) are unwilling to "own up" for the misuse of public funds which were under their campaign's direct control then, we submit, such individuals are undeserving of the public's trust and are unfit for political office.
For a copy of the Appellate Division's decision in New York City Campaign Fin. Bd. v. Ortiz, please click on the following link: http://www.courts.state.ny.us/reporter/3dseries/2006/2006_09532.htm