Candidates, Expenditures and Making Sense of it All

by | Oct 8, 2020 | In the News

Candidates, expenditures and making sense of it all

Authored Jointly by the State Ethics Commissioners William Lang, chairman; Jeff Baker; Stuart Bluestone; Garrey Carruthers; Ronald Solimon; Judy Villanueva; and Frances Williams and the New Mexico Secretary of State Maggie Toulouse Oliver.

As New Mexico enters another election season, candidates from all corners of the state will collectively raise and spend millions of dollars to get elected.

And whether they’re a first-time candidate or a seasoned campaigner, they will all repeatedly face a particular question: “Can we use campaign funds for this?”

The New Mexico Campaign Reporting Act governs how funds raised by a campaign can be spent and explicitly states they can be used toward “expenditures of the campaign”; performing certain duties of their office; and donations to other political campaigns, the state general fund or certain charitable organizations. While the Campaign Reporting Act enumerates limitations on use and the Secretary of State’s Candidate Campaign Finance Reporting Guide provides a practical interpretation and some common examples, gray areas invariably arise that may require campaigners to self-evaluate or otherwise seek guidance to maintain compliance with the law regarding their use of campaign funds.

For expenditures solely dedicated to furthering a campaign and that could not be attributed to any other purpose, it’s common sense that most are permissible. However, certain expenditures permissible under the Campaign Reporting Act are nevertheless prohibited by the Election Code — namely, those that benefit potential voters so as to influence their votes.

Think, for example, of expenditures for gift cards, bus passes and meals that suggest an intent to purchase votes. To avoid this issue, candidates should ask themselves: “Could a reasonable person perceive this expenditure as made to induce the recipient to vote in a particular way?”

At the other end of the spectrum are expenditures that are clearly impermissible. For example, a personal trip to a ski resort or a spa, payments toward personal credit card debt or a new watch. The common trait that makes expenditures like these stick out is that they are all personal and have nothing to do with a campaign.

To avoid these expenditures, the filtering questions are: “Would the candidate make this expenditure if they were not in or running for office?” or “Is the candidate receiving some personal gain from this expenditure?” If the answer is yes, the expenditure likely would be considered personal and an impermissible use of campaign funds.

But what about expenditures that clearly support a campaign but also have a personal component, such as a laptop, phone or tank of gas? The tank of gas is simple — the New Mexico Administrative Code already outlines a system for tracking campaign-related mileage and reimbursement. However, the other examples depend on whether an expenditure will ever entail personal purposes. The Secretary of State’s guide and New Mexico Administrative Code (1.10.13.25) state that permissible expenditures of the campaign are “reasonably attributable to the candidate’s campaign and not to personal use or personal living expenses.” In contrast, if an “expense would exist even in the absence of the candidacy, or even if the legislator were not in office,” then it would not be considered related to the campaign.

Thus, if a laptop were bought for a campaign but later kept for personal use, it would not meet both criteria under the Campaign Reporting Act. A campaigner would need to buy the laptop from the campaign with personal funds for the original purchase price to keep the device for personal use. Similarly, a candidate could not use campaign funds to pay for his or her regular phone bill because it is a personal expense that would exist otherwise. However, buying an additional phone used exclusively for campaigning or paying for an overage due to the campaign likely would be permissible.

State law provides for transparency, guidance and enforcement of these issues. The secretary of state administers the campaign finance reporting system used by candidates to disclose the use of their campaign funds. The public can search this information at login.cfis.sos.state.nm.us/#/index. The Secretary of State’s Office educates candidates on reporting requirements and seeks voluntary compliance from candidates required to comply with the Campaign Reporting Act spending limitations.

For expenditures that fall into a gray area, candidates and campaign treasurers may seek advisory opinions from the secretary of state or the State Ethics Commission. The latter investigates, adjudicates and enforces violations of the Campaign Reporting Act. Visit www.sec.state.nm.us to learn more.

 

Read this article in the Santa Fe New Mexican.