[EL] Yang's money offer

[Tom@TomCares.com]

That case is about a candidate and her friends using campaign funds to pay
rent to live in a house even after Election Day. Has no relevance to giving
campaign funds to strangers as a demonstration of a candidate’s universal
basic income policy proposal.

On Fri, Sep 13, 2019 at 5:19 PM Adav Noti <anoti at campaignlegalcenter.org>
wrote:

> *FEC v. O'Donnell*, 209 F. Supp. 3d 727, 740 (D. Del. 2016) (upholding
> constitutionality of personal use ban because it “reduces corruption and
> promotes public confidence in the campaign finance and political system”
> and “also increases participation in the political process by allowing
> contributors to support a campaign without worrying that their funds will
> be converted to personal use”).
>
>
>
>
>
> *From:* Svoboda, Brian (Perkins Coie) <BSvoboda at perkinscoie.com>
> *Sent:* Friday, September 13, 2019 11:37 AM
> *To:* Adav Noti <anoti at campaignlegalcenter.org>; Paul Ryan CC <
> pryan at commoncause.org>; Rick Hasen <rhasen at law.uci.edu>; Lori A Ringhand <
> ringhand at uga.edu>
> *Cc:* Election Law Listserv <law-election at uci.edu>
> *Subject:* RE: [EL] Yang's money offer
>
>
>
> Where is the evidence that 30114 was intended as a “donor protection”
> statute, or that “donor protection” suffices as a state interest under
> Buckley to support limits on how or for what a campaign may spend its funds?
>
>
>
> Why aren’t disclosure, the market, and the competitive nature of elections
> sufficient to serve the interest of “donor protection?” For example, if
> donors will see from the FEC report that the candidate spent all of their
> funds on emery boards, and might withhold their future contributions as a
> result, then doesn’t the candidate have a sufficient incentive to spend the
> funds more closely to the donors’ expectations?
>
>
>
> =B.
>
> *Brian G. Svoboda*  *|*  *Perkins Coie* *LLP*
> 700 Thirteenth Street N.W.
> <https://www.google.com/maps/search/700+Thirteenth+Street+N.W.+%0D%0AWashington,+DC+20005?entry=gmail&source=g>
> Washington, DC
> <https://www.google.com/maps/search/700+Thirteenth+Street+N.W.+%0D%0AWashington,+DC+20005?entry=gmail&source=g>
> 20005
> <https://www.google.com/maps/search/700+Thirteenth+Street+N.W.+%0D%0AWashington,+DC+20005?entry=gmail&source=g>
> -3960
> PHONE: 202.434.1654
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> E-MAIL: BSvoboda at perkinscoie.com
> IMPORTANT TAX INFORMATION: This communication is not intended or written
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> purpose of avoiding penalties that may be imposed on the taxpayer under the
> Internal Revenue Code of 1986, as amended.
>
> NOTICE: This communication may contain privileged or other confidential
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> copying or disclosing the contents.  Thank you.
>
>
>
> *From:* Adav Noti <anoti at campaignlegalcenter.org>
> *Sent:* Friday, September 13, 2019 11:01 AM
> *To:* Paul Ryan CC <pryan at commoncause.org>; Rick Hasen <rhasen at law.uci.edu>;
> Svoboda, Brian (WDC) <BSvoboda at perkinscoie.com>; Lori A Ringhand <
> ringhand at uga.edu>
> *Cc:* Election Law Listserv <law-election at uci.edu>
> *Subject:* RE: [EL] Yang's money offer
>
>
>
> I agree with Paul, in that the plain statutory language appears to bar the
> payments, so the fact that they happen to be consistent with Yang’s
> platform doesn’t seem to have any bearing on their legality.  For example,
> a federal candidate running on “the rent is too high” platform couldn’t use
> campaign funds as “advertising” to draw attention to her issue by paying
> her high rent.  And although Brian is indisputably right that the personal
> use ban serves an anticorruption interest (which isn’t implicated here),
> it’s also a donor-protection statute.  Perhaps many of Yang’s donors would
> be fine with their money being used this way, perhaps not; the statute
> doesn’t say personal use becomes ok if some of the underlying contributors
> are cool with their contributions being spent in precisely the way the
> statute prohibits, i.e., to pay other people’s non-campaign expenses.
>
>
>
> I’m not saying this is the most egregious FECA violation in the world, and
> it does raise interesting questions.  But I don’t think there’s very much
> ambiguity in the application of the statutory language here.
>
>
>
> Adav
>
>
>
> *Adav Noti*
> Senior Director, Trial Litigation & Chief of Staff
>
> Campaign Legal Center
> 1101 14th Street NW, Washington, DC 20005
> <https://www.google.com/maps/search/1101+14th+Street+NW,+Washington,+DC+20005?entry=gmail&source=g>
>
> 202.736.2203 | @AdavNoti
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>
> anoti at campaignlegalcenter.org
>
>
>
>
>
> *From:* Law-election <law-election-bounces at department-lists.uci.edu> *On
> Behalf Of *Paul Ryan
> *Sent:* Friday, September 13, 2019 10:49 AM
> *To:* Rick Hasen <rhasen at law.uci.edu>; Svoboda, Brian (Perkins Coie) <
> BSvoboda at perkinscoie.com>; Lori A Ringhand <ringhand at uga.edu>
> *Cc:* Election Law Listserv <law-election at uci.edu>
> *Subject:* Re: [EL] Yang's money offer
>
>
>
> I largely agree with Brian’s analysis, boiled down to the conclusion that
> though the statutory prohibition on personal use *could* be read to
> restrict Yang’s Freedom Dividend scheme, the statute *should not* be read
> this way, because such a reading doesn’t advance the purposes of the
> statute.  But in my mind, the legal question isn’t whether Yang’s use of
> the funds constitutes impermissible personal use—it’s whether the Freedom
> Dividend recipients’ use of funds constitutes impermissible personal use.
> This is because the plain language of the statute
> <https://urldefense.proofpoint.com/v2/url?u=https-3A__uscode.house.gov_view.xhtml-3Freq-3D-28title-3A52-2520section-3A30114-2520edition-3Aprelim-29&d=DwMGaQ&c=XRWvQHnpdBDRh-yzrHjqLpXuHNC_9nanQc6pPG_SpT0&r=liAVgWK_6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag&m=l5t0_g3Cb0YfYLo0QdvZivdN_d-sWJ0S0d3VK3npXlc&s=POzi6nu0O4DJ_eCDiEFgGnmj91UnuPZzk35WBG1e48Q&e=>
> doesn’t only apply to candidates and campaign staff; the statutory language
> applies to “any person.” The statute reads:
>
>
>
> “A contribution . . . shall not be converted *by any person* to personal
> use. . . . [A] contribution . . . shall be considered to be converted to
> personal use if the contribution or amount is used to fulfill any
> commitment, obligation, or expense *of a person* that would exist
> irrespective of the candidate's election campaign . . . including (A) a
> home mortgage, rent, or utility payment; (B) a clothing purchase; (C) a
> noncampaign-related automobile expense; (D) a country club membership; (E)
> a vacation or other noncampaign-related trip; (F) a household food item;
> (G) a tuition payment; (H) admission to a sporting event, concert, theater,
> or other form of entertainment not associated with an election campaign;
> and (I) dues, fees, and other payments to a health club or recreational
> facility.”
>
>
>
> I’m not a strict textualist, but a strict textualist might argue that: (1)
> the recipients of Freedom Dividends are “persons” under the plain language
> of the statute; the Freedom Dividends are contributions received by Yang;
> so if the recipients of Freedom Dividends spend these campaign
> contributions on their mortgage or rent or utilities of household food
> items, etc., they’ve converted campaign contributions to personal use in
> violation of the statute.
>
>
>
> I’m not advocating this interpretation. I’m not drafting a complaint on
> this. But when asked by a journalist whether the plain language of the
> statute *could* be read in a way to render this Freedom dividend illegal,
> my answer was/is “perhaps.” And I wish we had an FEC quorum, so the
> Commission could consider and opine on why the plain language of this
> statute should not be interpreted/enforced in such a manner as to restrict
> the uses of Yang’s Freedom Dividends by their recipients.  Best,
>
>
>
> *Paul Seamus Ryan*
>
> Vice President, Policy & Litigation
> 805 Fifteenth St. NW, Suite 800
> <https://www.google.com/maps/search/805+Fifteenth+St.+NW,+Suite+800+%0D%0AWashington,+DC+20005?entry=gmail&source=g>
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> (o) 202.736.5716 | (m) 202.262.7315
> *www.commoncause.org
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> LinkedIn
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>
> [image: CCLogo_HorizontalTag]
>
>
>
>
>
> *From:* Rick Hasen <rhasen at law.uci.edu>
> *Sent:* Friday, September 13, 2019 10:13 AM
> *To:* Svoboda, Brian (Perkins Coie) <BSvoboda at perkinscoie.com>; Lori A
> Ringhand <ringhand at uga.edu>; Paul Ryan <PRyan at commoncause.org>
> *Cc:* Election Law Listserv <law-election at uci.edu>
> *Subject:* Re: [EL] Yang's money offer
>
>
>
> If I had more time and the brain power of Brian, I would have written
> something like this. It strikes me that this is not personal use or vote
> buying at all: but a publicity stunt aimed as a means of campaign
> advertising. In other words, it is a legitimate campaign expense.
>
> I would worry when giveaways move into the arena of vote buying. This is
> not that.
>
>
>
> *From: *Law-election <law-election-bounces at department-lists.uci.edu> on
> behalf of "Svoboda, Brian (Perkins Coie)" <BSvoboda at perkinscoie.com>
> *Date: *Friday, September 13, 2019 at 6:22 AM
> *To: *Lori A Ringhand <ringhand at uga.edu>, Paul Ryan <PRyan at commoncause.org
> >
> *Cc: *Election Law Listserv <law-election at uci.edu>
> *Subject: *Re: [EL] Yang's money offer
>
>
>
> I carry no brief for Andrew Yang or his campaign: my check, I suppose, is
> in the mail. And, as always, the views below are my own and no one else’s.
> However, I see the debate over his “cash giveaway” as reflecting a
> casuistry that is creeping back into the informed debate over campaign
> finance. By this way of thinking, a transaction “seems wrong,” could
> plausibly be restricted by a simple textual reading of the statute, and
> hence **should** be restricted. This strain has been there all along in
> the history of FECA’s enforcement, but I think we are seeing the beginning
> of its resurgence, in part as a reaction to the sharp, post-2008
> deregulation of the field, and in part because of the growing
> democratization of the election law field.
>
>
>
> Still, it remains true that one must interpret statutes like 52 U.S.C.
> 30114’s personal use ban in light of their structure, history and intended
> purpose, and also against the backdrop of the First Amendment principles
> that limit and inform campaign finance regulation. The purpose of the
> personal use ban is to avoid corruption or its appearance. Its origins lie
> in the Congressional ethics rules. The Senate Ethics Committee put it
> fairly well when it recommended censure of Senator Thomas Dodd in 1967: he
> had used “the influence and power of his office ... to obtain, and use for
> his personal benefit, funds from the public through political testimonials
> and a political campaign.” While not then formally proscribed, his conduct
> was found “‘contrary to accepted morals . . . [and] the public trust
> expected of a Senator, and tend[ed] to bring the Senate into dishonor and
> disrepute.’’
>
>
>
> In the Dodd case, in the prohibitions later formally adopted by the House
> and Senate, and in the 1979 FECA amendments that extended those
> prohibitions to non-incumbent candidates, the anti-corruption purpose of
> the personal use ban was clear. The ban was, and remains, intended to avoid
> corruption or its appearance, by preventing current and future
> officeholders from seeking funds that could be used for an entirely
> unattenuated personal benefit. Seen one way, a private contribution to a
> candidate’s campaign presents **some** risk of corruption, encouraging a
> current or future officeholder to make decisions other than on the merits.
> Converting contributions to personal use takes the risk to an entirely
> different level, by providing the officeholder or future officeholder with
> a much greater level of personal benefit.
>
>
>
> It’s hard to see how that anti-corruption interest supporting the personal
> use ban is implicated when neither the future officeholder, nor anyone he
> or she particularly cares about like a family member or a staffer, has
> anything themselves to gain from the payments. The FEC has recognized this
> through advisory opinions, including one very audacious one – never
> superseded, and still on the books – where a candidate sought and obtained
> permission to use campaign funds to set up a trust for a child he met on
> the trail. The lack of personal benefit to the candidate was decisive to
> the Commission’s granting of the request, which makes sense when one
> considers the statute’s anti-corruption purpose:
> https://www.fec.gov/files/legal/aos/1986-39/1986-39.pdf
> <https://urldefense.proofpoint.com/v2/url?u=https-3A__nam02.safelinks.protection.outlook.com_-3Furl-3Dhttps-253A-252F-252Fwww.fec.gov-252Ffiles-252Flegal-252Faos-252F1986-2D39-252F1986-2D39.pdf-26data-3D02-257C01-257CPRyan-2540commoncause.org-257Ce60d9f719c4840931c1008d73854708b-257Cdb39e4b4de324cf9b66e9d02d8172178-257C0-257C1-257C637039807648074595-26sdata-3Dp2TwBoGoHiRCVCoqylSknSU-252BV6THNYLreqfeb0RTRHw-253D-26reserved-3D0&d=DwMGaQ&c=XRWvQHnpdBDRh-yzrHjqLpXuHNC_9nanQc6pPG_SpT0&r=liAVgWK_6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag&m=l5t0_g3Cb0YfYLo0QdvZivdN_d-sWJ0S0d3VK3npXlc&s=MajFMfTSG5bNCjkz9LnLsiV6259YXLBu1aUBZ8d18PY&e=>.
>
>
>
>
> Also, the personal use restriction operates against the background of a
> strong, oft-repeated principle of federal campaign finance law, which is
> that candidates normally have broad discretion over the spending of their
> funds. The FEC has said this repeatedly in its advisory opinions, and said
> so explicitly so when it explained the personal use rules in 1995. Unspoken
> here are the First Amendment principles that limit government restraints on
> campaign spending: under what circumstances may the state, outside the
> context of voluntary restrictions a candidate may take on through the
> public financing system, say to a campaign that it can’t spend its funds in
> a particular way? Again, I carry no brief for the Yang campaign, but it
> seems to me that a complaint against someone like him might have some
> boomerang potential for those who seek to further the cause of reform. The
> respondent might very well argue that he is a long-shot candidate, that his
> proposal represents a plain attempt to “throw the long ball” and get
> attention from the voters that he otherwise wouldn’t get (certainly Yang
> succeeded at that last night, at least on Election Law Twitter), and that
> government enforcement in that case would implicate Buckley’s principles on
> the regulation of expenditures.
>
>
>
> Thus, I think the discussion of the “cash giveaway” merits some careful
> reflection: on this particular question, on other personal use-related
> issues like the charges leveled at so-called “Zombie campagns,” and on the
> future trajectory of FECA’s interpretation and enforcement.
>
>
>
> =B.
>
> *Brian G. Svoboda*  *|*  *Perkins Coie* *LLP*
> 700 Thirteenth Street N.W.
> <https://www.google.com/maps/search/700+Thirteenth+Street+N.W.+%0D%0AWashington,+DC+20005?entry=gmail&source=g>
> Washington, DC
> <https://www.google.com/maps/search/700+Thirteenth+Street+N.W.+%0D%0AWashington,+DC+20005?entry=gmail&source=g>
> 20005
> <https://www.google.com/maps/search/700+Thirteenth+Street+N.W.+%0D%0AWashington,+DC+20005?entry=gmail&source=g>
> -3960
> PHONE: 202.434.1654
> FAX: 202.654.9150
> E-MAIL: BSvoboda at perkinscoie.com
> IMPORTANT TAX INFORMATION: This communication is not intended or written
> by Perkins Coie LLP to be used, and cannot be used by the taxpayer, for the
> purpose of avoiding penalties that may be imposed on the taxpayer under the
> Internal Revenue Code of 1986, as amended.
>
> NOTICE: This communication may contain privileged or other confidential
> information.  If you have received it in error, please advise the sender by
> reply email and immediately delete the message and any attachments without
> copying or disclosing the contents.  Thank you.
>
>
>
> *From:* Law-election <law-election-bounces at department-lists.uci.edu> *On
> Behalf Of *Lori A Ringhand
> *Sent:* Friday, September 13, 2019 7:41 AM
> *To:* Paul Ryan <PRyan at commoncause.org>
> *Cc:* Election Law Listserv <law-election at uci.edu>
> *Subject:* Re: [EL] Yang's money offer
>
>
>
> I think the NYT is missing a big part of this story: the personal data the
> Yang campaign is getting from every single person who bites on this and
> registers with the webpage. Yang’s campaign is very social media driven,
> and I suspect this give away will be followed by a huge surge in highly
> personalized, largely under the radar, micro-targeted online advertising.
>
>
>
>
> On Sep 12, 2019, at 8:56 PM, Paul Ryan <PRyan at commoncause.org> wrote:
>
> [External Sender]
>
> Solid analysis, I think, from the New York Times: https://nyti.ms/2LOrgiT
> <https://urldefense.proofpoint.com/v2/url?u=https-3A__nam02.safelinks.protection.outlook.com_-3Furl-3Dhttps-253A-252F-252Furldefense.proofpoint.com-252Fv2-252Furl-253Fu-253Dhttps-2D3A-5F-5Fnyti.ms-5F2LOrgiT-2526d-253DDwMGaQ-2526c-253DXRWvQHnpdBDRh-2DyzrHjqLpXuHNC-5F9nanQc6pPG-5FSpT0-2526r-253DliAVgWK-5F6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag-2526m-253Dh6-2DZFK9T74dViolAT0FxLTuKDgDXdrZ6a5Ec3ZjbQHo-2526s-253DOdgLtKSNmmsKhR0gtqBQtWKC-5FVy9y-2Dflgw-5FmXyBFvu0-2526e-253D-26data-3D02-257C01-257CPRyan-2540commoncause.org-257Ce60d9f719c4840931c1008d73854708b-257Cdb39e4b4de324cf9b66e9d02d8172178-257C0-257C0-257C637039807648084588-26sdata-3D-252FrXT5JEi5VPdiWBhljp5nrDcyz6My-252BPyjDL9eEEsih8-253D-26reserved-3D0&d=DwMGaQ&c=XRWvQHnpdBDRh-yzrHjqLpXuHNC_9nanQc6pPG_SpT0&r=liAVgWK_6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag&m=l5t0_g3Cb0YfYLo0QdvZivdN_d-sWJ0S0d3VK3npXlc&s=cYW6Ult-Z0WY92IhL3mqnw6TrFLFV54e4G3U10Fd_Rs&e=>
>
>
>
> Paul Seamus Ryan
>
> Vice President, Policy & Litigation
>
> Common Cause
>
> (202) 262-7315
>
>
> On Sep 12, 2019, at 8:13 PM, "larrylevine at earthlink.net" <
> larrylevine at earthlink.net> wrote:
>
> How close does Yang’s offer of $1,000 a month for a year for 10 people who
> reply to his campaign twitter account come to violating federal law?
>
> Larry
>
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