New York’s New Public Trust Act Expands Independent Expenditure Disclosure

Effective June 1, 2014, the Public Trust Act included in this year’s State Budget legislation redefines “Independent Expenditures” (IEs) in state and local elections.  The new definition includes expenditures conveyed to 500 or more members of a general public audience in the form of an audio or video sent by broadcast, cable or satellite, a written communication via advertisements, pamphlets or the like, or other published statement that meets either the “magic words” test of expressly calling for the election or defeat of a clearly identified candidate at any time OR “refers to and advocates for or against” a clearly identified candidate or ballot proposal on or after January 1 of the relevant election year.

Exceptions are made for news and editorial publications, candidate debates, member-to-member communications within membership organizations of not more than 500 members, and Internet communications (other than paid ads).  Moreover, the definition of general public audience does not extend to an audience “solely comprised” of members, employees and other specified persons connected to a labor organization, corporation, unincorporated business entity, or trade association.

The new definition appears to both broaden and narrow current State Board of Elections (SBOE) section 6200.10 regulations.  For example, the current SBOE rules do not specify an audience threshold or format trigger for the definition.  Most significantly, the current SBOE rules extend only to communications that meet the magic words test; the election-year-communication-that-refers-to+advocates-for/against-a-candidate is a new trigger, as is the coverage of ballot proposal advocacy.

The new law (like current SBOE regs) requires all persons making IEs to first pre-register with the SBOE as a political committee.  If an IE costs more than $1,000 it must include a disclaimer clearly stating who paid for or otherwise published or distributed the communication and that the communication was “not expressly authorized” by any candidate.  These IE registrants must disclose to the SBOE on a weekly basis (each Friday) any contribution received of over $1,000 and expenditures made over $5,000.

Given the June 1 effective date, the first weekly IE disclosures would be due on Friday June 6.  That’s right, D-Day.  Within the last 30 days before the primary or general election, these disclosures are due within 24 hours.  Unlike current political committee disclosure requirements, an IE registrant’s report must include the occupation and employer of contributors, the name of the clearly identified candidate or ballot proposal referenced in the IE-paid ad, and a copy of that political communication.

The SBOE is directed to promulgate regulations and to provide suitable forms.  Presumably, the SBOE will now conform its existing IE rules to the new statutory standard.  It is less clear whether the State Attorney General or NYC Campaign Finance Board will see a need to adjust their separate IE definitions and disclosure provisions in light of this new Election Law definition.

One oddity is the new statute’s description of when communications are not treated as independent of a candidate.  After enumerating the content triggers as including a “call for … the defeat of the clearly identified candidate” or “advoca[cy] … against a clearly identified candidate”, the definition excludes “communications where such candidate… did authorize … or cooperate in such communication.”  (Emphasis added.)  This phrasing suggests that a negative ad against a clearly identified candidate may remain an IE,and therefore not be treated as an in-kind contribution to an opposing candidate who benefits, even if that opponent has authorized or cooperated in that ad.  In all likelihood, such a result is not what was intended.

Topics:  Disclosure Requirements, Independent Expenditures

Published In: Communications & Media Updates, Elections & Politics Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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