Senate Bill S3697

                                
 
BILL NUMBER: S3697           REVISED MEMO 02/26/2019

SPONSOR: GOUNARDES
 
TITLE OF BILL:  An act to amend the election law, in relation to
campaign funds for use at a business owned by a candidate or the candi-
date's family

 
PURPOSE OR GENERAL IDEA OF BILL:

Prohibit candidates from using campaign funds to purchase goods or
services from a business owned by the candidate or a member of his or
her family.

 
SUMMARY OF PROVISIONS:

Section one of the bill adds a new section 14-133 to the Election Law.
Subsection 1 of this new section prohibits a candidate from expending
campaign funds to purchase goods or services from a business in which
the candidate and members of the candidate's family collective have an
ownership or beneficial interest of at least thirty-five percent or, in
the case of a partnership or professional corporation, direct or indi-
              

rect ownership interest of at least five percent.

Subsection two defines the term "candidate's family" to mean a person
who is within two degrees of consanguinity or affinity to the candidate.
People who are within two degrees of consanguinity to a candidate are
the candidate's children, grandchildren, parents, siblings, and grand-
parents. People who are within two degrees of affinity to a candidate
are the candidate's spouse and the children, grandchildren, parents,
siblings, and grandparents of the candidate's spouse.

Section two of the bill provides that this act shall take effect imme-
diately.

 
EXISTING LAW:

Election Law section 14-130 prohibits candidates from converting
campaign funds for personal use that is unrelated to the campaign or
holding a political office or party position. Payments to a candidate's
family are allowed only when the "family member is providing bona fide
services to the campaign. If a family member provides bona fide services
to a campaign, any salary payments or other compensation in excess of
the fair market value of the services provided shall be considered
payments for personal use." Election Law § 14-130(3)(iv). Unfortunately,
section 14-130 does not prohibit a candidate spending campaign funds to
purchase goods or services from a business that is directly or indirect-
ly owned by the candidate and/or a member of the candidate's family.

 
JUSTIFICATION:

When a person contributes to a candidate for public office, that person
does so because he or she believes in and wants to support the candi-
date. While campaign contributors support the use of their campaign
contributions to host campaign events or purchase goods or services
needed by the campaign, they probably would not support the use when the
entity hosting the campaign event or providing the goods or services is
owned by the candidate or the candidate's family.


Throughout our lives, many of us have been told that we should live by
the Golden Rule. We should treat others the way that we wish to be
treated. This legislation will codify the Golden Rule campaign contrib-
utions. Candidates will no longer be able to funnel campaign funds to
themselves or family members by hosting a campaign event at an event
hall owned or operated by the candidate or a member of the candidate's
family or purchasing good or services from a business owned or operated
by the candidate or a member of his or her family.  Under the Golden
Rule for campaigns, candidates will treat and use campaign funds in the
manner in which they, as campaign contributors, expect their contrib-
utions to a candidate to be used.

As public servants and potential public servants, candidates need to
remember that they serve or will serve their constituents and all New
Yorkers. They promise to use their best judgment to act in the best
interest of their constituents and all New Yorkers. Using campaign funds
in a manner that provides financial gain to the candidate or a member of
his or her family is a form of money laundering that only serves to
benefit the candidate and his or her family. The rest of the candidate's
constituents are not benefitted by such a use of campaign funds. This
legislation will ensure that candidates follow the Golden Rule so that
neither the candidate nor the candidate's family will reap personal
financial gain from the expenditure of campaign funds.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.