New York State Board of Elections 40 North Pearl St.

, Suite 5 Albany, New York 12207-2729 Dear Commissioners: Citizens Union understands the State Board of Elections is considering providing guidance to political clubs to better inform them as to circumstances under which they are required to register as political committees and report their campaign finance receipts and expenditures. Citizens Union in May released a report entitled Hidden from View: The Unreported Activity of Political Clubs. The report concludes that between 2009 and 2013, 224 political clubs that should have registered and disclosed their campaign activity did not do so. The report also raises questions about whether the relationships between certain elected officials and particular clubs results in campaign coordination between the clubs and candidate committees. Should the Board proceed with providing guidance as to the circumstances under which political clubs should register as political committees and disclose their campaign activity, Citizens Union respectfully offers the following recommendations: 1. Most political clubs should register with the State Board as political committees. The definition of political committee in Article 14, section 100 of state election law states that a political committee is, anypolitical club or combination of one or more persons operating or co-operating to aid or promote the success of a political party indicating it is inclusive of political clubs that assist a political party. The definition further states that political clubs that aid or take part in the election or defeat of a candidate for public office or aid or take part in in the election or defeat of a candidate for nomination at a primary election or convention, including all proceedings prior to such primary election, or of any party position voted for at a primary election, or of a candidate for any party position voted for at a primary election are political committees. Citizens Union therefore believes most clubs should register as political committees. Clubs may be exempt from registering if they are solely engaged in discussion and advancement of
Citizens Union of the City of New York 299 Broadway, Suite 700 New York, NY 10007-1976 phone 212-227-0342 fax 212-227-0345 citizens@citizensunion.org www.citizensunion.org Peter J.W. Sherwin, Chair Robert Abrams, CUF President Dick Dadey, Executive Director

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political questions or principles without any connection with any vote and without aiding or promoting the success of a political party. We presume very few if any clubs are discussing issues without seeking to aid or promote the success of a political party or candidates for elected office, primary nomination or party positions as this is at the core of their purpose as clubs. 2. The Board should make clear what type of committees political clubs should register based on their planned activity. Our report revealed that among the 210 committees with club in their name that are registered with the State Board, 90 registered under the committee category of Others, 63 were registered as PACs, 12 as authorized candidate committees, 11 as party county committees, 14 as constituted county committees, and 19 as duly constituted subcommittees of a county committee. Four clubs were registered as housekeeping committees within these types of committees, and one club was a state constituted committee housekeeping committee. It should be made clear to clubs that different committees have different requirements. For example, clubs that register as independent committees are very limited in their ability to coordinate with candidates. 3. Political clubs should be required to register before they engage in any financial transactions. Citizens Union believes this practice is consistent with Article 14-118 of Election Law1 and the Boards own 2012 campaign finance handbook that states in reference to the CF-02 registration form, this form must be filedprior to receiving or expending any funds.2 4. The Board should make clear which activities trigger filing of periodic campaign finance reports. Section 14-102 of state election law states the requirements for political committees to file periodic reports: The treasurer of every political committee which, or any officer, member or agent of any such committee who, in connection with any election, receives or expends any money or other valuable thing or incurs any liability to pay money or its equivalent shall file statements swornat the times prescribed by this article setting forth all the receipts, contributions to and the expenditures by and liabilities of the committee. This provision does not make clear to clubs which activities are considered in connection with an election. Citizens Union believes petitioning, leafleting, phone calls, door knocking and other
Article 14-118 of Election Law states, No officer, member or agent of any political committee shall receive any receipt, transfer or contribution, or make any expenditure or incur any liability until the committee shall have chosen a treasurer and depository and filed their names in accordance with this subdivision. There shall be filed in the office in which the committee is required to file its statements under section 14-110 of this article, within five days after the choice of a treasurer and depository, a statement giving the name and address of the treasurer chosen, the name and address of any person authorized to sign checks by such treasurer, the name and address of the depository chosen and the candidate or candidates or ballot proposal or proposals the success or defeat of which the committee is to aid or take part; 2 Campaign Finance Handbook 2012. New York State Board of Elections. How to Register and Obtain File ID# and Pin, Page 9. Available at: http://www.elections.ny.gov/NYSBOE/download/finance/hndbk2012.pdf
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grassroots activities should be considered expenditures in connection with an election even if conducted by volunteers if a clubs physical headquarters is used as a staging area. If this is the case, we believe the clubs physical headquarters are, at least in part, an expense in connection with an election, which would trigger a filing. Citizens Union also notes that if a club spends any money in connection with an election it must report all of its receipts and expenditures, even those not in connection with an election. 3 If a club only used its headquarters for conducting issue forums, hosting speakers, community events or making endorsements, we do not believe these activities should be considered in connection with an election because they do not cross the line into active campaigning for a party or candidate. Clubs should be informed that election law requires that even if political clubs do not engage in any activity in a given period, as political committees they are still required to file non-activity reports for the reporting period (albeit this is rare, as even interest and bank charges, for example, are considered to be activity even if no expenditures are made or receipts are received). 5. The Board should clarify what constitutes coordination between political clubs and candidate committees, and more generally between political committees and candidate committees. Coordination between a political club and candidate committee occurs when a candidate or his or her agents authorize, request, suggest, foster or cooperate in any such campaign activity. State Election Law Article 14-100(9)(3) alludes to this by stating what independent activity is: For purposes of this article, the term independent of the candidate or his agents or authorized political committees shall mean that the candidate or his agents or authorized political committees did not authorize, request, suggest, foster or cooperate in any such activity. However, it is not known which actions specifically indicate a candidate or his agents authorized, requested, suggested, fostered or cooperated in campaign activity of an independent committee. The Board should provide factors or indicia that may constitute coordinated activity between candidates and third-party actors. The Board should also indicate how those factors will be assessed to determine if coordination occurred (for example, will the factors be triggers denoting coordinated activity or should they be considered in the aggregate given the totality of the circumstances). Likewise the Board should consider whether a rebuttable presumption standard should apply to determining if coordination took place.
NYS Election Law 14-102(1) states, Such statements shall include the dollar amount of any receipt, contribution or transfer, or the fair market value of any receipt, contribution or transfer, which is other than of money, the name and address of the transferor, contributor or person from whom received, and if the transferor, contributor or person is a political committee; the name of and the political unit represented by the committee, the date of its receipt, the dollar amount of every expenditure, the name and address of the person to whom it was made or the name of and the political unit represented by the committee to which it was made and the date thereof, and shall state clearly the purpose of such expenditure.
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Citizens Union believes that the Board should identify triggers that alone or in the aggregate would result in a finding of coordination. We further believe a rebuttable presumption standard should be adopted so that committees would have to prove otherwise should the State Board believe coordination occurred. We thank you for your consideration of our recommendations and welcome continued discussion on this issue. Regards, Dick Dadey Executive Director Alex Camarda Director of Public Policy and Advocacy