Source: http://nyccfb.com/law/advisory-opinions/1989-57-undeposited-contributions-segregated-monies-transition-and-inaugural/
Timestamp: 2019-04-24 18:34:14+00:00

Document:
An advisory opinion has been requested concerning the return of undeposited contributions, the use of segregated monies, and the operation of a political committee raising and spending funds for transition and inaugural expenses on behalf of Mayor-elect Dinkins. See also Advisory Opinion No. 1989-55, dated December 5, 1989.
the candidate carries a heavy burden in demonstrating that undeposited contributions received by the committee he authorized for his 1989 elections were not in fact received for elections held in 1989, for purposes of the repayment requirement of Administrative Code §3-710(2) (c).
The Board listed five examples of contributions which are presumed not to be subject to the excess fund repayment requirement, including "contributions returned to contributors or deposited in a segregated account in order to comply with the contribution limits of Administrative Code §3-703(1) (f)." See also Campaign Finance Board Rule 102(m). If an undeposited contribution exceeds the amount of the contribution limit, the entire undeposited contribution may be returned to the contributor or placed in a segregated account in order to comply with the contribution limits. In addition, if the deposit of a contribution would result in the acceptance of aggregate contributions from the same contributor in excess of the contribution limit, the entire last received undeposited contribution which causes the excess may be returned to the contributor or placed in a segregated account. These contributions, placed in a segregated account, are presumed not to be subject to the excess funds repayment requirement.
Furthermore, nothing in Advisory Opinion No. 1989-55 requires a campaign to discontinue an ongoing practice of "screening" undeposited contributions and returning those which, in the judgment of the campaign committee, are not politically desirable to accept. Undeposited contributions which are returned to contributors solely on the basis of this ongoing practice and in accordance with previously established criteria are presumed not to be subject to the excess funds repayment requirement. This presumption will not apply if a political committee authorized by the candidate subsequently accepts a donation from a contributor whose contribution was previously returned on this basis.
Advisory Opinion No. 1989-55 noted that "contributions deposited prior to the date of the general election in an account established for an election that is not held in 1989" are presumed not to be subject to the excess funds repayment requirement. The 1989 campaign committee may use these segregated monies for transition and inaugural expenses, prior to repaying the New York City Election Campaign Finance Fund, because these expenses are not "campaign expenditures" in the 1989 elections for purposes of Administrative Code §3-710(2) (c). See Advisory Opinion No. 1989-55. If these segregated monies are transferred to the Inaugural Committee, discussed below, they will be treated as though they had initially been solicited by the Inaugural Committee for transition and inaugural expenses.
Generally, a candidate authorizes a political committee "to aid or take part in an election". Administrative Code §3-702(11). Donations of money, goods, and services to political committees authorized by candidates participating in the Campaign Finance Program are ordinarily considered to be "contributions" within the meaning of Administrative Code §3-702(8), which covers donations "made in connection with the nomination for election, or election, of any candidate". Thus, in Advisory Opinion No. 1989-55, the Board found that contributions accepted by an authorized committee are subject to the presumption that they are raised either for the next election (Rule 102(q)) or for an election for which funds in a separate depository account have been dedicated (Rule 403(a)), regardless whether the contributions are ultimately used for transition and inaugural purposes.
The candidate's decision in this case to authorize an entity ordinarily associated with the raising and spending of funds for elections (a political committee) creates inevitable confusion whether donations received by that committee are campaign contributions. In any case, donations raised solely for inaugural or transition activities do not fall within the jurisdiction of the Campaign Finance Board. If the candidate demonstrates that the funding of inaugural and transition activities has been conducted in a manner that assures that there is no connection with a past or future election, donations solicited and accepted by the Inaugural Committee for these activities will not be considered contributions and the limits of Administrative Code §3-703(1) (f) will therefore be inapplicable to these donations1.
1 The treatment of monies and in-kind donations received by the Inaugural Committee under Article 14 of the New York Election Law is a subject beyond the scope of this advisory opinion.

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