Source: http://nyccfb.com/law/advisory-opinions/1990-3-restrictions-candidate-loans-own-campaign-penalties-outstanding-loan/
Timestamp: 2019-04-24 17:55:53+00:00

Document:
1. Is the candidate allowed to advance his own campaign funds during the last week in anticipation of matching funds? Is there a limit to such advances? By when must they be repaid?
2. Can the candidate lend his campaign amounts of monies regularly throughout the campaign? Is there a limit to such loans? By when must they be repaid?
3. In the event the candidate or other parties advance the campaign funds in excess of the $2,200 limit and such funds cannot be repaid, what is the penalty? This question assumes the transactions were made in good faith and that repayment was expected to be made, but insufficient funds were raised.
For purposes of this opinion, the Board assumes that the loans described in the questions presented are not made in the regular course of the lender's business. Thus, the balance of the loan outstanding on the date of the election is deemed to be a contribution by the lender and subject to applicable contribution limits. New York City Administrative Code §3-702(8); §3-703(1) (f). See also Campaign Finance Board Rule 102(j) and Advisory Opinion No. 1989-42, dated September 5, 19891.
A participating candidate may make contributions to his own campaign to the same extent as other persons and entities, that is, as long as those contributions do not exceed the applicable contribution limit. Administrative Code §3-703(1) (h). Participating candidates may likewise make loans to their authorized committees to the same extent as other persons and entities. The amount of a loan may exceed the applicable contribution limit, but a loan will be deemed a contribution by the lender to the extent the loan is not repaid by the date of the election. If the amount of a loan outstanding on the date of the election exceeds the applicable contribution limit, the candidate's campaign will have thereby accepted a contribution in excess of the applicable limit and in violation of the Act. Administrative Code §3-702(8).
a loan used for qualified campaign expenditures is not a contribution under Administrative Code §3-702(8), to the extent that the candidate receiving the loan has earned public funds prior to the date of the election, which, upon receipt after the election, are applied to the repayment of the loan.
That opinion did not expressly refer to loans made by a participating candidate to his authorized committee, but the same result obtains2.
The Board notes that the purpose of Advisory Opinion No. 1989-42 is to account for the administrative delay necessary in making public fund payments for matchable contributions already received. A candidate's reliance upon continuing fundraising efforts to become qualified for additional matching funds is not a basis to offset loan balances outstanding as of election day under the terms of that opinion.
The acceptance of contributions, including outstanding loan balances deemed to be contributions, in excess of the applicable contribution limit is a violation of the Act. Participating candidates committing a violation of the Act are subject to civil penalties of up to $10,000. Administrative Code §3-711(1). In addition, a knowing violation of the Act is punishable as a class A misdemeanor. Administrative Code §3-711(3). In the case of a loan not made in the regular course of the lender's business, the Board presumes that an authorized committee accepting a loan in excess of the applicable contribution limit has committed a knowing violation of the Act if its failure to repay the loan by election day results in the committee having accepted contributions from the lender in excess of the applicable contribution limit. Campaign Finance Board Rule 102(c). In each case, the Board will consider the specific facts giving rise to a violation of the Act, so that it may determine which, if any, penalties are appropriate.
1 The outstanding balance of loans made in the regular course of a lender's business, such as a bank loan, are deemed to be contributions by guarantors or other parties providing security for the loan. Administrative Code §3-702(8).
2 The issue might be raised whether public funds may be used to repay a loan made by a candidate even if that loan is used to pay qualified campaign expenditures, in light of the prohibition of the use of public funds for "payments made to the candidate." Administrative Code §3-704(2) (b). The purpose of that prohibition, however, is to prevent candidates from converting public matching funds to their private benefit. The use of public funds merely to repay the amount a candidate has lent his authorized committee for qualified campaign expenditures does not confer any private benefit upon the candidate. Public funds may therefore be used to repay a candidate the amount he has lent, if that loan was used to pay qualified campaign expenditures. Administrative Code §3-705(1).

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