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Cause and supporting papers, upon Respondent on or before the ay of

2008, shall be deemed sufficient.

ENTER:

Justice of the Supreme Courtof the State of New York

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SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEW YORK

x

YETTA KURLAND, JO ANNE SIMON, MELGAGARIN AND DAN JACOBY ndex No.

Petitioners,

-against-

NEW YORK CITY CAM PAIGN FINANCE BOARD,

Respondent.

AFFIRMATION INSUPPORT OF ORDER TOSHOW CAUSE

x

LEO GLICKMAN, an attorney a dmitted to practice in the courts of the State of New

York , hereby affirms the following to be true un der the penalties of perjury pursuant to

CPLR 2106:

PRELIMINARY STATEMENT

On Novem ber 3, 2008, Mayor Michael Bloomberg signed Local Law 51 to extend

term limits for all municipal office holders from two to three term s. The Mayor and

supporting Counc il members justified the legislation by stating that given the cha llenging

times ahead, New Yorkers ought to have a choice to stay with their elected leaders or

choose an other if they believed we nee ded new leadership.1

New Y ork City has a campaign finance program w hich, among other things, is

designed to "level the playing field" between those with access to large am ounts of

campa ign funding and those without. By limiting the amount a participating cam paign

can spend on an election, the Program seeks to equalize the impact of m oney on the

campaign, so that elections are decided on the power of ideas and effective community

1 See e.g. CityRoom, New York Times, October 23, 2008.

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service. Dollars and Disclosure: Cam paign Finance R eform in N ew Y ork City,

September, 1990 at p.11.

New Yorkers agree, including the proponents of the Term Limits extension

legislation, that this is an especially critical time to ensure competitive elections? New

York C ity is fortunate to have the Cam paign Finance Ac t. To ensure competitive

elections this time around, the New York City Campaign Finance Board ("CFB") could

have administered the law as it exists. Instead, it issued an advisory opinion that both

runs afoul of the law and will have the effect of mak ing comp etitive elections less likely.

In essence, the CFB's advisory opinion ignores the large am ounts of spending thatsitting elected officials have spent on their 2009 election cam paigns, while forcing

challengers to a bide by the Program 's restrictive expenditure limits. This special

exception is custom tailored for incumbents; it is not available to a non-incumbent who

under the sam e fact pattern initially runs for higher office and then dec ides to run for City

Council.

There were fairer approaches that the CFB could have taken. Indeed, the

Petitioners offered one such idea, attached a s Exhibit "A". Instead, the CFB seeks to

hand certain incum bents a big advan tage over their challengers. In doing so, it is

violating the letter and the spirit of the law it is required to adm inister.

PARTIES

1. Petitioner Yetta Kurland is a candidate for the 3 r d District of the New York C ity

Council in the 2009 m unicipal elections. She intends to join the N ew Y ork City

Campaign Finance Program.

2 Council member Miguel Martinez stated "If my constituents are not

satisfied with the work I've done , on the City Council, they will vote

me out" New York Times CityRoom, October 23, 2008

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11. In addition, if candidates for City Council spend over $43,000 from January 1,

2006 to December 31, 2008, the amount in excess is attributed to the election year

(in this case calendar year 2009) expenditure limit. Ad. Code 3-706(2)(a)

12. A violation of the expenditure limit can result in penalties of up to three times the

amount the candidate has spent in excess of the limit. Ad. Code 3-711(2)(a).

It can also result in a finding of a "breach of certification" which requires

repayment of all public funds to the CFB. Board Rule 2-02.

13. The Respondent abrogates these provisions of the Act by declaring in Advisory

Opinion 2008-7 that expenditures made prior to November 3, 2008 by incumbents

who say they were running for higher municipal office do not count for the 2009

elections if they "freeze" their committees and start new ones.

14. Incredibly, Respondent proposes to make this benefit available only to the

beneficiaries of the term limits extension law (i.e. Council and Borough President

incumbents). Others who had been running for higher office but ultimately

decide to run for city council can not apply for this extra spending benefit.

15. Petitioner Kurland's potential opponent has already spent $288,829 up through

July 11, 2008. Thus, the Act requires that at least $245,829 must be attributed to

her election year expenditure limit if she joins the Program.

16. Petitioner Gagarin's potential opponent has already spent $775,076 up through

July 11, 2008. Thus, at least $732,076 must be attributed to her election year

expenditure limit.

17. Petitioner Simon's potential opponent has already spent $144,661 up through July

11, 2008. Thus, at least $101,661 must be attributed to his election year

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expenditure limit.

18. In addition, all other City Council and Borough Presiden t incumbents wh o run for

re-election may no w claim to have be en running for a higher office and elect to

have all of their expenditures to date erased by Respondent CFB.

19. When c andidates who join the Campaign Finance Program have an opponent who

spends abov e the limit and does not join the Program , the expenditure limit is

lifted for the Program pa rticipant and additional public funds are provided to the

participant. Ad. Code 3-706(3)(a) and (b).

20. The purpose of these provisions is to level the playing field between progra mparticipants who would otherwise be confined to the spending limits of the

program and the higher spende rs the ex act scenario that is presented here.

21. Respondent's advisory opinion, however, allows incumbents to exceed the

Progra m's restrictive expenditure limits while forcing cha llengers to abide by the

limits without the leveling benefits that the Act provides.

22. Rather than working to increase choices for voters in the electoral process and

leveling the playing field between candidates after the rec ent legislative to exten d

term limits (voted into law by many of the incumbent candidates who now benefit

under this CFB opinion) as Responde nt is mandated to do, they issued an advisory

opinion handing an enorm ous advantage to incum bents. The advisory opinion

violates the letter and the spirit of the law, and we respe ctfully submit that it must

be struck down.

DECLARATORY JUDGMENT

23. Petitioners bring this action pursuant to CPLR 3017(b), asking this court to

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declare invalid Responden t's Advisory Opinion 2008-7 (attached as Exhibit "B")

because it violates Ad. Code 3-706(2) and (2)(a).

ARGUMENT

The Campaign Finance Act's Expenditure Limits

24. The New Y ork City Campaign Finance A ct is a voluntary public funding program

for candidates who run for the offices of Mayor, Public Advocate, Comptroller,

Borough President, and Member of the City Council. Ad. Code 3-701 et seq.

25. If a candidate wishes to participate in the Program , she must file a written

certification that she is joining the Program. A d. Code 3 -703(1)(c). She mustagree to abide by,inter alia, the Program's expenditure limits prescribed in Ad.

Code 3-706. Ad. Code 3 -703(1)(i).

26. Each office has different expenditure limits. A participating candidate for C ity

Council may not spend m ore than $161,000 in non-ex empt expenditures during

the election year. Ad. Code 3-7060).

27. In addition, there are ex penditure limits for the first three years of a four yea r

election cycle, again, depending o n the office the participating candidate

ultimately seeks. A participating candidate for City Council in a 2009 election

has an expenditure limit of $43,000 for 2006-2008. Ad. Code 3-706(2).

28. Any am ount of spending in the first three years that exc eeds the limit must be

attributed to the participating candidate's election year spending limit Ad. Code

3-706(2a)(a). For exam ple, if a ca ndidate and her c omm ittee spent $50,000

between 2006 a nd 2008, and the candidate files a certification declaring that she is

running for City Coun cil, the $161,000 election year expen diture limit must be

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reduced to $154,000.

29. Cand idates for municipal office are free to choose to not join the Program.

Candidates who do not participate in the Program have no expenditure limits.

30. However, a non-participating candidate's opponents who do join the Program and

agree to a ll of its proscriptions get additional benefits under the Act.

31. Program participants running against a non-participant who raises or spends half

the expe nditure limit or more are e ligible to receive increased pu blic matching

funds and their ex penditure limit raised by 50% (in the ca se of City Counc il in

2009, the participating candidate w ill be allowed to spe nd an add itional $80,500).

Ad. Code 3-706(3)(a).

32. Program participants running against a non-participant who raises or spends three

times the ex penditure limit or more a re eligible to receive additional public funds

and a total lifting of the expenditure limit. Ad. Code 3-706(3)(6).

33. Ad. Code 3-706(3)(a) and (b) are designed to allow P articipating candidates to

effectively compete with non-participating candidates who can spend unlimited

amounts on their campaign. W ithout these provisions, candidates who join the

Program would operate at a severe disadvantage because they would otherwise be

subject to restrictive expenditure limits while their non-participating oppone nts

would have o nly the sky as their limit.

Respondent's Advisory Opinion

34. Responden t's Advisory Opinion 2008-7 overrules the statute as it pertains to

expenditure limits. It declares that in this election, spending in the nearly three

years of this election cycle prior to November 3, 2008 does not coun t for

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incumbents who say they were running for higher municipal office but ultimately

run for City Council or Boroug h President candidate. All the incumbent m ust do

is choose "option A" by "freezing" her acco unt.

35. Furthermo re, it invites such incumben t to join the Program w ith a clean spending

slate (when in fact, in many cases hund reds of thousands of dollars were spent),

but forces challengers to abide by the Progra m's restrictive spending limits

without the relief of higher expenditure limits and additional matching funds that

Ad. Code 3-706(3) provides to compliant Program participants.

36. Respondent's advisory opinion abrogates an unambiguous statute byadministrative fiat, something that it is clearly not entitled to do.

Respondent Administrative Agency May Not Overrule the Statute itAdministers by Advisory Opinion

37. Petitioners concede tha t Respondent has the authority to issue advisory opinions

and to promulgate rules. New York City Charter 1052.

38. However, it is axiomatic that "administrative agencies can only promulgate rules

to further the implemen tation of the law as it ex ists; they have no authority to

create a rule out of harm ony with the statute." Seittelman v. Sabol, 91 N.Y.2d

618, 626 (1998)citing Ma tter of Jones v. Berman, 37 N.Y.2d 42, 53, 371

N.Y.S.2d 422, 332 N.E.2d 303.

39. Indeed, the Appellate Division has struck rules promulgated by Respon dent CFB

because it lacked a statutory basis. "[F]undamental principles of statutory

interpretation instruct us that where there is a conflict between a statute and an

administrative rule or regulation promulg ated pursuant to that statute, the wording

and the m eaning of the statute prevails." New York City Campaign Finance Bd.

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V. Ortiz, 826 N.Y.S.2d 244 (A.D. 1 2007) at 250, citing Matter of W eil, Gotshal

& M anges v. O'Cleireacain, 83 N.Y.2d 591, 596, 611 N.Y.S.2d 823, 634 N.E.2d

195 [19941

40. Similarly, the court in Ortiz found that Responden t's Advisory Opinions and

"purported common sense interpretations of the Act" can not prevail when

confronted with a contrary and unambiguous statute. Id. at 249.

41. More over, Responde nt can not argue that it is mere oversight that the legislature

did not create a different spe nding limit for participants who run for City Cou ncil

but who ha d a different municipal office in m ind earlier in the election cycle. The

legislature has considered this very issue as applied to non-municipal offices.

42. When a participating candidate had previously made expenditures for a non-

municipal campaign (such as state or federal offices), they do not count towards

the campaign for municipal office. Ad. Code 3-712.

43. Furthermo re, the Act specifically addresses certain expenditures that are in

furtherance of a municipal campaign that are ex empt from the limit. Expenses

related to bringing or responding to proceedings before administrative agencies,

ballot litigation, and the CFB's post election audit are all considered exem pt from

the expenditure limit. Ad. Code 3-706(4). Again, there is no such exemption

for spending m oney to run for one municipal office, then changing your mind and

running for a different one.

44. As evidenced by Ad. Code 3-706 and 3-712, the legislature has clearly

contemplated when expenditures for another office do not count towards the limit

of a participating candidate (non-municipal races), and when they do count

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(municipal races).

45. Also, as evidenced by Ad. Code 3-706(4), the legislature has contemplated

which ex penditures should be exem pt from the limit and which should not be so

exe mpt. Clearly, the legislature has conc luded that all other exp enditures for

municipal races must count towards the Program participant's limit for the

municipal race she ultimately cho oses to run for.

46. Nevertheless, Respondent CFB seeks to impose an advisory opinion on

candidates that is clearly co ntrary to the statute it administers. And in so doing, it

is disadvanta ging the types of candidates that the Act is designed to help;challengers who do not share the advantages of incumbency with their opponents.

47. The CFB m akes no effort in its Advisory Opinion to explain how its new rules are

in harmo ny with the statute it administers. The ruse of requiring candidates to

"freeze" the old committee and establish a new one does not harmonize the

opinion with statute.

48. Respondent CFB is empowered to recomm end needed amendments to the

Cam paign Finance A ct to the City Council with respect to,inter cilia, expenditure

limits. Ad. Code 3-713(1). If it believes that the statute does not properly

acco mm odate the situation that the term limits extension law permits, it should

mak e recom mendations to the Council. But it does not have the authority to

ame nd the statute on its own by advisory opinion or rule.

49. Respondent's Advisory Opinion 2008-7 as applied would violate the statute and

we therefore respe ctfully submit that is should be declared inva lid by this court.

50. This is the parties' first request for such re lief.

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WHEREFORE, Petitioners respectfully request that the court:

(a ) Issue a Judgment Declaring that Advisory Opinion 2008-7 is in violation of

the Campaign Finance Act and therefore invalid;

(b ) Issue a permanent injunction enjoining Respondent from exempting

expenditures made by a candidate in furtherance of a cam paign for any

municipal office from 2006-2008;

Dated: December 2, 2008

Stoll, Glickman & Bellina, LLP

Leo Glic 'an, Esq.71 Nevins St.Brooklyn, NY 11217(718)852-0507Fax: (718)852-3586lglicicman@stollglicicrnan.com

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STOLL, Mr& B E L L I N AP AT L A W71 Nevins Street

Brooklyn, NY 11217

P: (718) 852-3710F: (7 18) 852-3586

www.stellgliekman.coin

New York City Campaign Finance BoardSue Ellen Dodell, General Counsel40 Rector St., 7 m FloorNew York, NY 10006

October 24, 2008

Dear Ms. Dodell:

I write on behalf of candidates for City Council who were planning to run for an

open seat.* Some may run against the incumbent, while others will wait four more years.

Regardless, each is concerned that the proposed guidelines will hand a huge advantage to

current council members who had previously been running for higher municipal office.

The campaign finance program has accomplished many positive reforms for our

democracy in New York City. One reform it has not achieved, however, is addressing

the advantages of incumbency, especially at the City Council level. While the Program

provides resources to help challengers be competitive, the power of incumbency has

proven too powerful. The CFB itself has concluded that this is one of the central

challenges to the Program's effectiveness (see e.g. Public Dollars for Public Good: A

Report on the 2005 Election, Forward of Chainnan Schwarz). We were therefore very

surprised that the CFB s proposed guidelines would heavily favor incumbents and saddle

challengers with huge disadvantages.

Council candidates not currently holding public office have been playing by the

rules set out in the Campaign Finance Act. The Rules say the following:

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The following limitations apply to all expenditures made bya participating or limited participating candidate and his orher principal committee in the three calendar yearspreceding the year of the election for which such candidatechooses to file a certification as a participating or limited

participating candidate ... [S]uch expenditures by aparticipating or limited participating candidate for one ofthe following offices and his or her principal committeeshall not exceed the following amounts:

mayor, public advocate orcomptroller: 290,000borough president: 129,000member of the city council: 43,000

The CFB now proposes to suspend this provision of the law for incumbents,

effectively turning a blind eye to the expenses incurred made by current council members

who have been raising and spending funds in anticipation of running for higher elective

office but who, pending the Council's vote, may decide to run for re-election. We

strongly urge the CFB not to take this action and propose the following alternative.

We propose that for this and only this upcoming election, the spending limit

be raised for any challenger running against an incumbent who has already spent beyond

the limit. We acknowledge that not all spending for a city or borough wide race would

benefit the Council campaign, so we propose that the CFB raise the election year

spending limit by two thirds of all spending above the out year spending limitations for

council races for challengers. So, for example, if a council incumbent spent $343,000 on

a race for Citywide office in 2008, then the challenger would have a spending limit of

$361,000. $343,000 exceeds the $43,000 spending limit for 2008 by $300,000. Two

thirds of $300,000 is $200,000. Add the $161,000 spending limit for 2009 council races

and you would have an expenditure limit of $361,000. We would also recommend that

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the bonus funding for candidates who run against high-spending non- participants apply

to participants in this unique situation.

As of July 12, 2008, sitting City Council Members and Borough Presidents who

were running for higher office had spent over $5 million. No doubt that number is much

higher now. The CFB proposal treats these expenditures as if they never happened by

offering current council members the option of "freezing" their accounts. Challengers,

on the other hand, playing by the rules have been hamstrung with the $43,000, 2006-2008

spending limit.

If the CFB adopts the draft guidelines, it will likely drive potential challengers out

of the race. Many City Council Members favoring the extension have argued that if the

people do not like their vote, the people can vote them out. While theoretically possible,

the undeniable advantages of incumbency make these arguments ring hollow. The CFB's

proposed guidelines will deny the voters a choice at this critical juncture of the City's

political life by handing incumbents a huge advantage.

Incumbents running for higher office have spent significant sums on raising funds

and have benefitted from the spending they have already made. Moreover, fundraising

in itself without even spending the money raised raises the profile of candidates, itself

a significant advantage. The media has been reporting for over a year about the

fundraising prowess of various city council members running for higher office. There

have been few, if any, media reports on plucky council candidates who raised $20 or $30

thousand.

Moreover, relationships with major donors that have been established through

huge fundraising expenditures will make raising money for the upcoming council

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campaigns much, much easier for incumbents. It is pure fiction to deny the advantages of

spending tens or hundreds of thousands of dollars on fundraising efforts. Council

incumbents running for reelection will benefit significantly from this spending.

Pretending otherwise is bad public policy.

Similarly, other types of spending will provide a big benefit to incumbents. Large

amounts of money spent up front to consultants well in advance of when the most work is

to be done, the election year, will lead to significantly discounted or donated services for

what will now be a smaller council campaign. We doubt that the CFB will be able to

detect such in-kind contributions. And, at any rate, to pretend that such expenditures

provide no benefit to a Council campaign amounts to willful ignorance. Furthermore,

donations to political organizations before the "freeze" will provide other benefits for the

Council campaign. For example, certain polling activities are likely to be useful in a

council race, and obviously, any expenditures on voter contact will be a giveaway to the

council campaign under the draft guidelines.

Rather than ignoring the direct and indirect benefits of millions of dollars of

spending, the CFB must take clear, affirmative steps to level the playing field. At the

very least, it should allow challengers to spend as much money as their incumbent

opponents. Hence, our proposal.

Our one-time only proposal may need Council approval. But the CFB is

empowered by law to make recommendations to the Council, and we strongly urge you

to make recommendations that will level the playing field between incumbents and

challengers in this situation. We also suggest that the CFB's draft guidelines would

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require Council legislation, and there would almost certainly be litigation challenging its

enactment by the CFB alone in its current form.

We thank the CFB for this opportunity to respond to its proposed guidelines, and

look forward to working with you to make this unusual situation as fair as possible to all

candidates.

Leo Glickman, Esq.Stoll, Glickman & Bellina, LLP

David Kerpen, 23 r d Council DistrictYetta Kurland, 3 r d Council DistrictRichard Realmuto, 10 t h Council DistrictYdanis Rodriguez, 10 t h Council DistrictJo Anne Simon, NY State Committeewoman, 33 r d DistrictBob Zuckennan, 39 t h Council District

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Advisory Opinion No. 2008-7 (November 3, 2008)

SUMMARY

On No vember 3, 2009, Mayor Bloomberg signed Local Law N o. 51 (2008), extendingterm limits from two terms to three for c urrent elected officials. The Board is issuing thisadvisory opinion to address the impact of this legislation on two g roups of candidatessubject to the provisions of the Cam paign Financ e Act: (1) Candidates with reportedactivity who now will seek re-election to their incum bent offices in 2009, instead of thehigher offices they anticipated seeking in 2009; and (2) Can didates with reported activitywho w ill no longer run in 2009, but will seek office in 2013. The Board interprets the Actand Rules to perm it Group 1 ca ndidates to either "restart" the 2009 election by "freezing"the original comm ittee and opening a new one for 2009, applying a 15 percentfundraising ex penditure to the 2013 expenditure limit, or maintain the same c omm itteefor 2009 and allocate expenditures between the aborted 2009 cam paign and the 2009 re-election campaign. Group 2 candidates may m aintain the same c omm ittee for 2013 andapply a 15 percent rate of ex penditures for funds raised prior to the 2013 election cycletowards the 2013 expenditure limit. The Board's interpretation of the relevant law , asoutlined in this Opinion, attempts to m ake it practical for all candidates who wish to jointhe Progra m to do so, to treat both incumbents and po tential challengers in 2009 and 2013fairly, and to enco urage co mpetitive races for a ll offices covered by the Prog ram.

FULL TEXT

Re: N ew York City Administrative Co de ("Admin. Code") 3-703(1)(d), (e), (f), (g),(14), 3-705, 3-706, 3-708(11), 3-710(2)(c), 3-718, 3-719; New York City Cam paignFinance Board Rules ("Rules") 1-04(f), 1-07, 1-08(c), (o), 3-03(c)(2), 4-01; Advisory

Opinion Nos. 1993-7 (July 20, 1993), 1997-6 (June 24, 1997), 2001-12 (September 20,2001), Op. No. 2008-7.

Overview

Today, Mayor Bloom berg signed Local Law N o. 51 (2008) which extends term limits forcurrent elected officials. This unprecedented change in the electoral landscape less thanone year prior to the primary elections compels the New Y ork City Campa ign FinanceBoard (the "Board") to provide guidance concerning the legislation's effect on ca ndidatessubject to the provisions of the Cam paign Finance Act (the "Act").1 Given this significantchange in the law, there are num erous legal and practical implications for many current

and potential candidates incumbents and challengers alike. The Board is issuing thisadvisory opinion (the "Opinion") to address the impact of this legislation on two g roupsof candidates:

1. Group 1: Candidates w ith reported activity who now will seek re-election to theirincumbent offices in 2009, instead of the higher offices they anticipated seekingin 2009;

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2. Group 2: Candidates with reported activity who now will not run in 2009, butwill seek office in 2013.

This Opinion is restricted in its application. It only applies to these two groups ofcandidates. It does not apply to those candidates who cho ose to continue to run for thesame (or higher) office that they were planning on running for prior to the passage o f thislegislation. This Opinion also does not apply to those who have no t had any financialactivity as of the date of issuance o f this Opinion. It also does not ap ply to candidateswho otherw ise would fall into Group 1 but who fail to mak e a timely choice of Option Aor B. Z

Specifically, the Board interprets the Act a nd its Rules to:

1. Allow "Group 1" candidates to choose between two options:1. "Restart" the 2009 election by freezing their current com mittee until the

2013 election cycle, and opening a new committee for the 2009 election;

all expenditures incurred prior to the issuance of this Opinion, exceptthose associated with fundraising (as defined below), will not counttowards the 2009 re-election campaign or the 2013 election; or

2. Use their current com mittee for the 2009 election to his/her current office;return over-the-limit contributions; all expen ditures incurred will beallocated between the aborted 2009 cam paign and the 2009 re-electioncampaign.

2. Allow "Group 2" candidates to keep the committee that was originally establishedfor 2009 to instead be used for a 2013 election. All expe nditures incurred prior toJanuary 12, 2010, exce pt those associated with fundraising, will not count towardsthe 2013 election.

This approach falls within the Board's mandate, effectuates the law's purpose, andencourages participation in the Campaign F inance Program (the "Program") by notpenalizing can didates for changing their plans at this late date in the election cycle inlight of this extraordinary legislation.3 The Board has solicited and taken into accountcomm ents from the public.3 The Board acknowledges that this Opinion cannot an ticipateevery possible situation that candidates affected by this chang e may fac e. Candidateswith circumstances that are not covered by this Opinion are encouraged to promptlycontact the Board's Candidate Services Unit for further guidance 5

INTRODUCTION

On October 23, 2008, the New York City Council passed legislation extending termlimits from two terms to three for current elected officials, allowing such candidates torun for their incumben t seats in the 2009 gene ral election. As a result of this uniquecircum stance, there are significant legal and prac tical issues, as well as issues of fairness,that the Board needs to consider in interpreting a nd applying the Act. The ex tension ofterm limits three years into the 2009 election cycle creates an unprecedented challengefor the Board.

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As a result of this legislation, many can didates may no long er choose to run in the 2009election or may c hoose to run for a different office than that for which they have beenraising and spending m oney. The biggest challeng e is that the Board's rules presume thatall contributions and spending a re for a ca ndidate's next election. At this late point in theelection cycle, a substantial number of candidates have received many contributions at ahigher limit than will apply if they run for a "lower office." More importantly, manycandidates ha ve spent well over the total ex penditure limits for the "lower office."

The Boa rd's interpretation of the relevant law, as outlined in this Opinion, attempts tomak e it practical for all candidates who wish to join the Program to do so, to treat bothincumbents and potential challengers in 2009 and 2013 fairly, and to encouragecompetitive races for all offices covered by the Program. The Board strongly believesthat the ultimate "level playing field" is achieved throug h Progra m participation, and theapproac h outlined in this Opinion strives to reach this goal, to the overall benefit of allcandidates and the public.

I. Group 1 Candidates:

Candidates Must Provide Proof That They Were Previously Seeking Higher Offices

The first group of candidates affected by the chang e in term limits, herein referred to as"Group 1," are those candidates who had raised and spent money for a cam paign forhigher office but now are intending to seek their lower incu mbent office. These Group 1candidates have two options (described below).

To avail themselves of these options, these candidates must show that they wereoriginally running for a higher office in 2009, but now that term limits have been

extended, they will run for re-election. For c andidates choosing Option A , this showingwill allow them to overcom e the presumption in the rules that contributions and spendingare for the next election and to receive the favorable treatment for contributions andspending that this Opinion provides.See e.g.,Rules 1-04(f) (contributions), 1-08(c)(expen ditures), 7-03(c) (both);see also Advisory Opinion Nos. 1997-6 (June 24, 1997)(the "Ferrer Opinion"), 1993-7 (July 20, 1993) . For candidates cho osing Option B, eac hcandidate will have to overcome the presumption by demonstrating that each expendituredid not benefit his/her re-election cam paign.S ee Ferrer Opinion.

Candidates who w ish to choose Option A or B must provide a written submission to theBoard of the following: (1) a prior declaration to the Board o f the higher office sought; or

(2) other indicia that they were seek ing higher office, including but not limited, to: (a)candidate so licitation an d/or receipt of contributions at a highe r contribution limit, or (b)prior public statements by the candidate in the press or through publicly distributedmaterial demonstrating an intent to run for a higher office.

Given tha t it is late in the election cyc le, the deadline for subm ission of this proof isJanuary 15, 2009.2- By this date, candidates must submit this form, attaching any relevantevidence; this same form will also require candidates to choose O ption A ory

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setting an early deadline the Board ho pes to ensure a reasona bly level playing field forcandidates an d their opponents. This deadline also provides clarity for the public andcandidates, avoids additional disclosure deadlines which apply beginning the year of theelection, and provides a bright line for Board administration and audit.

The filing of this form do es not obligate the ca ndidate to run for the "lower" or a nyoffice. However, if the candida te does not ultimately run for the lowe r office this Opiniondoes not apply. Such candidates are encouraged to seek further guidance

A. Option A: Restart the 2009 Election Campaign

Group 1 ca ndidates may cho ose to "restart" the 2009 election by "freezing" their originalcomm ittees, and opening a new com mittee for their 2009 re-election cam paign. Theoriginal comm ittee must remain "frozen" until January 12, 2010, the beginning of the2013 election cycle. The can didate would start the 2009 election with no funds and noexpenditures except as provided below. Option A optimizes the goal of ensuring Program

participation in both the 2009 and 2013 elections.Candida tes will be allowed to ma ke only ministerial transactions, such as bank fees, fromthese "frozen" comm ittees.2 All outstanding debts for services or goods incurred prior tothe issuance of this Opinion must be settledbefore a candidate "freezes" his/hercommittee. 0 0Candidates who wish to preserve previously raised matchable claim s for the2013 election must choose Option A.

1. Reporting Requirements

Candidates w ill be required to file disclosure statements for both the "frozen"

2009 committee and new 2009 committee, if applicable, on January 15, 2009(covering the period through Jan uary 11, 2009). Thereafter, the "frozen" 2009com mittee will file semi-annual disclosure statemen ts with the Board of Elections("BOB"), until the first disclosure statement for the 2013 election cycle.1 1 Thenew 2009 c omm ittee will file with both the Board an d the BOE as required forany 2009 comm ittee.

2. Contributions

Candidates m ay keep co ntributions made prior to the issuance of this Opinion inthe original 2009 "frozen" com mittee. These contributions in the "frozen"comm ittee wo uld be eligible for matching funds for a 2013 election.See Rule 1-07(a). Contributors may make contributions to the new 2009 committee up to theapplicable limit for the 2009 election for the office the candidate is now seek ing,L2even if such contributors have already con tributed to the "frozen" com mittee. The"Doing Business Law" 3 now in effect w ill apply to all contributions.

3. Expenditures

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Most ex penditures by the original 2009 comm ittee prior to issuance of thisOpinion will not be applied to the new 2009 re-election com mittee; nor will theybe applied to the future 2013 electionli (except as detailed below). Expendituresmade by the original 2009 committee between November 3, 2008 (the date of theissuance of this Opinion and the effective date of Local Law No. 51) and the"freezing" of this comm ittee w ill count towards the 2009 expenditure limit.1 6 SeeAdmin. Code 3-706(2).

Notwithstanding this, certain costs associated w ith funds raised by the com mittee for theaborted 2009 election will count aga inst the candidate's spending limit for the 2013election. Under this option, candidates are freezing the original 2009 co mm ittee, andthus, will be using the funds raised for the aborted election campa ign for a 2013 election.Since the candidate clearly will "receive[]" the benefit of the funds raised in 2013, thecost of raising those funds must count towa rds the 2013 spending limit.See Admin. Code 3-706(1), (2); Rule 1-08(b); cf. Adm in. Code 3 -703(14)(b); Rule 3-03(c)(2) (requiringan allocation of cost for transfers). In order to ensure as fair and efficient a process aspossible, the Boa rd will calculate the fundraising expenditure by assessing a 15 percentflat rate of the total amount of funds on hand in the candidate's frozen committee onJanuary 11, 2009.1 1 If the 15 percent allowance is greater than the campaign's totalspending before the issuance of this Opinion, only the lower total amount will apply."-

If the committee for the 2009 re-election cam paign wishes to use any goo ds (e.g.,computers, office equipment, furniture, supplies, lists) that were originally purchased bythe comm ittee for the aborted 2009 campaign, the new com mittee must purchase thegoods from the original com mittee. The goods must be purchased at the same prices thatwere paid by the com mittee for the aborted 2009 election, and such purchases will counttowards the can didate's spending limit for his/her 2009 re-election cam paign. Admin.

Code 3-706(1), (2); Rule 1-08(b). Such purchases m ust be made prior to the deadlinefor "freezing" the original comm ittee, January 15, 2009.

Candidates who choose O ption A, but fail to ac tually "freeze" their comm ittees (i.e.continue to engage in comm ittee activity) lose the ability to take advantage of anybenefits provided by O ption A.

B. Option B: Maintain Current Committee for 2009 Election

Group 1 candidates may choose to continue to use their current 2009 committees.'`'` -

1. Reporting Requirements

Candidates will continue to report activity in the sam e ma nner as previously.

2. Contributions

All candidates must abide by the contribution limit for the 2009 office s/he isseeking.n Admin. Code 3-703(1)(f). If a contribution ex ceeds the legal

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contribution limit for the incumbent o ffice sought, the over-the-limit portion mustbe returned to the co ntributor. The deadline for returning over-the-limit portionsof contributions is June 10, 2009, the Program certification deadline 22Contributions returned by this date will not be subject to findings of violation bythe Board. Funds in the committee which comply with applicable contributionlimits and other rules will be eligible to be ma tched with public funds for the 2009election. Admin. Code 3-703 , 3-705.

3. Expenditures

Expenditures will be reviewed on a case-by-case basis. The Board rules presumethat expen ditures are for the next election. Rules 1-08(c), 7-03(c). Expe ndituresmade by a ca ndidate who subsequently abandons his/her campaign for a higheroffice and seeks re-election to a lowe r office are "presumptively subject to the[lower office] spending limit," with certain exce ptions. Ferrer Opinion. 23

The Bo ard's presumption functions as the starting point for determining w hich, if any, ofa candida te's expenditures are not subject to the spending limit for the lower office.Id .Expe nditures will not count towards the 2009 election to the candidate's current office ifthe candidate can overcome this presumption by demonstrating that such expenses wereactually used for the aborted 2009 cam paign, with no or minimal benefit to thecandidate's 2009 re-election campaign. Apportionment of expenditures will be based onthe standards applied in the Ferrer Opinion. Candidates who choose Option B w ill face aheavy burden in dem onstrating that the spending they have already incurred should notcount towards their re-election campaigns.See Ferrer Opinion2' ; see also AdvisoryOpinion No. 1993-7 (July 20, 1993). Therefore, when deciding whether to choose OptionB, a candidate should con sider that most expen ditures incurred by the original 2009

com mittee for the higher office will likely apply to the new 2009 re-election cam paign.

Once a candidate files the requisite folio indicating s/he w ould like to pursue Option B,2-5which must be submitted to the Board by Janua ry 15, 2009, the Board w ill imm ediatelybegin the process of apportioning ex penditures based on the Ferrer Opinion. The Boa rdwill complete this analysis by the M ay 15, 2009 filing date and inform the candidate ofthe total amount of ex penditures that w ill apply to the spending limit for the 2009election.

II. Group 2 Candidates

The other group of candidates affected by this legislation an d covered by this Opinion arethose candidates who have been running an active 2009 campaign, but now choo se todelay running until 2013. In order to qualify as a mem ber of this group, a candidate m usthave activity reported or required to be reported on the January 15, 2009 disclosurestatement. These candidates may use the same committee that was originally intended fora 2009 election for the 2013 election. This committee can rem ain active.

1. Reporting Requirements

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The com mittee must file the January 15, 2009 disclosure stateme nt to reportactivity during the period of July 12, 2008 January 11, 2009. It must alsocontinue to file any additional manda tory disclosure statements until thecommittee files a termination of candidacy form with the Board.0 To receive thebenefits of this Opinion, a candidate m ust file a termination of ca ndidacy form byJune 10, 2009, the certification date. Thereafter, the com mittee will report only tothe BOE until the first Board disclosure statem ent of the 2013 election cyc le, inwhich the com mittee will report all activity from the start of the comm ittee'sexistence.U

2. Contributions

The 2013 contribution limit applies to the 2013 election; a contributor ca n onlycontribute to the com mittee within the legal limits. Funds in the comm ittee will beeligible for public matching for a 2013 election.

3. Expenditures

Except for expenditures associated with fundraising, committee expendituresmade for the aborted 2009 election will not count towards the 2013 expenditure

Only expenditures made from January 12, 2010 onwards will counttowards the 2013 election cycle.See Adm in. Code 3-706(1), (2); Rule 1-08(c).Since ca ndidates will be using the funds previously raised for the aborted electioncam paign for the 2013 election, costs associated with raising those funds incurredby the comm ittee for the aborted 2009 election will count ag ainst the candidate'sspending limit for the 2013 election.See Adm in. Code 3-706(2). Again, in orderto ensure as fair and efficient a process as possible, the Board w ill calculate the

fundraising allocation by assessing a 15 percent flat rate of the total am ount offunds in the comm ittee on January 11, 2010.3 3 the 15 percent allowance isgreater than the c ampa ign's total spending before the issuance of this Opinion,only the lower total am ount will apply.

CONCLUSION

Given the unique c ircumstances presented by the legislation ex tending term limits, theBoard ha s issued a plan that provides a legal, practical, and fair course of action:A TheBoard's conclusions, resting on its interpretation of the C ampaign Finance A ct, aresupported by the Board's power to take a ctions "necessary and pro per to carry out thepurposes of [the Act]." Admin. Code 3-708(11); see Advisory Opinion No. 2001-12(September 20, 2001). In the face of this significant legislative change , the Board's planaddresses the practical implications of the term limits extension, while ma intaining theintegrity and purpose of the Program and the law.

NEW YORK CITYCAMPAIGN FINANCE BOARD

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i All candidates running for one of the five covered offices may or, comptroller, publicadvocate, borough president, city council memberare subject to the Act's contributionlimits, ban on certa in contributions, and reporting requirements.See Admin. Code 3-703, 3-718, 3-719.

z This Opinion also does not apply to candidates in future elections who never soughtoffice in 2009 or did not have any reported com mittee activity in the 2009 election cycle;nor does it permanently alter how the Board norm ally administers the Program andconducts Boa rd business.

3- Local Law N o. 51 (2008). In the event that Local Law N o. 51 does not survive litigationchallenges or fails to obtain the requisite federal pre-clearan ce, the Board will re-evaluatethe application of this Opinion. See Voting Rights Act of 1965, 5,42 U.S.C. 1973c(requiring pre-clearance for a ny attempt to change "any voting qualification orprerequisite to voting, or standard, practice, or procedure with respect to voting" in any"covered jurisdiction").

4- On October 14, 2008, the Board issued a press statement seeking comments from thepublic on how to address these issues. On Oc tober 17, 2008, the Board released anoutline of its proposal and requested further com men t from the public. On October 23,2008, the Board issued a press statement seeking c omm ents from the public until October28, 2008, and informing the public of the Board's intention to issue an advisory opinionaddressing these issues on N ovember 3, 2008.

The Board will release a plain language document that explains this Opinion and givesdetailed guidance to candidates on how to implement the advice herein for theircam paigns. This guidance docum ent will be available on the Board's website at

www.nyccfb.info and will be sent via e-mail from the Board to all cand idates and theirtreasurers.

n For cam paigns choosing Option A, which requires them to re-start their 2009 cam paignswith no funds and no ex penditures, the Board interprets that funds expended prior to thepassage of Loca l Law N o. 51 were for the election for higher office. Such expenditures,except those associated with raising funds, will provide no or m inimal benefit to thesecandidates' 2013 election.

The filing of this form on this date coincides with the filing of the mandatory disclosurestatement that is also to be filed with the Board on January 15, 2009. If a candidate does

not mak e this showing and file this form by January 15, 2009, then the candidate cannottake advantage of Option A or B.

This form will be available on the Board's website at www.nyccfb.info and will be sentvia e-mail from the Board to a ll candidates and their treasurers.

2 Any pa yments for bookk eeping services and preparation of applicable disclosurestatements for the "frozen" committee can be m ade by the new 2009 com mittee for the

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"lower" office and w ill count towards the applicable 2009 ex penditure limit.See Admin.Code 3-70 6(1), (2); Rule 1-08(b). These expend itures, however, are not related to the2009 cam paign and thus will be deducted when calculating the 2009 unspent campaignfunds. See Admin. Code 3-710(2)(c); Rule 1-02 (definition of "unspent cam paignfunds").

If a candidate fails to do so, then paym ent of such debts can be ma de by the new 2009comm ittee for the "lower" office and w ill count towards the applicable 2009 expenditurelimit.See Admin. Code 3-706(1), (2).

"The Board's C-SMART software allows candidates to file these statements with boththe City and State BOE.

1 2 See Admin. Code 3-703(1)(0.

See Admin. Code 3-702(18), 3-703 (1-a), (1-b); Rule 4-01(n).

u There is no spending limit for the 2013 election cycle that ordinarily would apply tospending made before 2010.See Admin. Code 3-7060), (2).

1 1 In order to avoid potential unfairness, the Board, in the course of its normal auditfunctions, will evaluate ex penditures incurred between October 17, 2008 (the date theBoard issued its Opinion guidance docum ent) and Novem ber 3, 2008 to determine ifthese expenditures, due to their am ount and n ature, should be allocated to the 2009election for "lower office."

Payments m ade by the original 2009 c omm ittee to settle outstanding debts incurred by

that comm ittee prior to the issuance of this Opinion will not count towards the 2009spending limit provided that the cam paign can adequately document the da te these debtswere incurred.

1 1 The Board ack nowledges that 15 percent might not be a perfect replica of anyparticular candidate's actual spending on fundraising. 15 percent is a reasonableapproximation of the standard fee charged by professional fundraisers. In the interests ofclarity and certainty for candidates and the Bo ard's audit process, the Board uses thisallocation.

All candidates are subject to ongoing auditing of their cam paign finances.See Admin.

Code 3-703(1)(d), (g), 3-7100); Rules 4-01, 4-05. During this audit process, theBoard w ill evaluate expenditures, including the am ount of funds in the com mittee onJanuary 11, 2009, for compliance w ith this Opinion to ensure full enforcement of theCampaign Finance Act.

n For the 2013 elections there are three applicable spending limitsthe limit for thethree years prior to the year of the election (the "out-year limit"), the primary limit, and

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the general election limit.See Adm in. Code 3-706(1), (2); Rule 1-08(b). Thefundraising allowance will count towards the out-year limit.

20 Based on a review o f the actual disclosures to date, it is the Board's belief that fewcandidates can choose Option B and still participate in the Program.

n The contribution limits apply to all candidates for a c overed office even if they choosenot to participate in the Program.

22 The refund of any over-the-limit portion of a contribution must be ma de by bank orcertified check. Rule 1-04(c)(1). This Opinion does not add ress the deadlines forreturning contributions which are subject to the "doing business" limits.

a The Ferrer Opinion apportioned expenditures between Fernando Ferrer's 1997abandoned mayoral cam paign and his Bronx borough presidential campaign. The Boardfound that most ex penditures incurred for the abandoned m ayoral campaign appliedtowards the Bronx borough presidential campaign. The noted ex ceptions includedspending for polls and research for higher office, salaries for the higher office cam paignstaff, cost of campaign offices and equipment outside of the lower office geographicalarea, and co sts of announcem ents, literature and events for the higher office, as long asthe candidate wa s able to demonstrate there was no benefit or even anc illary benefit tothe campaign for lower office.See Ferrer Opinion.

Li Costs that were attributed to the lower office expen diture limit in the Ferrer Opinioninclude all fundraising costs, most contributions to other candidates and politicalorgan izations, any staff salaries, offices and equipment which provided a benefit to thecam paign for lower office, and a propo rtional allocation of costs for public events and

communications for the higher office.See Ferrer Opinion.a This form will be available on the Board's website atwww.nyccfb.info and will be sentvia e-mail from the Bo ard to all candidates and their treasurers.

z 6hat ma ny of the assumptions outlined in Section II do not apply if this committee

is used in an intervening election, e.g., an election for state o ffice. The m ethodologyoutlined in Section II also does not apply to any special elections the candidate m ay runin in the 2009 or 2013 election cycles.

1 2 1Disclosure statements are due on March 15, 2009 and May 15, 2009; if the candidate

does not file a termina tion form prior to the start of these disclosure periods, s/he mustfile that statemen t. The termination of candidac y form will be available on the Board'swebsite atwww.nyccfb.info and will be sent via e-mail from the Board to all candidatesand their treasurers.

a Cam paigns may use the Board's C-SMAR T software to ma ke their filings with the Cityand State BO Es. The Board's Candidate Services Un it is available to assist candidates.

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