NY Court Rules on Personal Liability of Candidates and Treasurers

In December 2006, the First Department of the New York State Appellate Division held that candidates and treasurers are not personally liable for public fund repayment claims under the NYC Campaign Finance Act: New York City Campaign Finance Board v. Ortiz This latest decision stemmed from actions brought by the Campaign Finance Board against two unsuccessful 2001 City Council candidates, whose campaign committees failed to submit documentation for campaign expenditures before the completion of their post-election audits. In a unanimous decision written by Justice Richard T. Andrias, the Appellate Division overturned the Campaign Finance Board in both matters and found that the plain language of the provision at issue applied only to the candidate’s respective committees, and not to individual candidates and treasurers. Despite the great deference given to an agency’s interpretation of the statutes it is responsible for administering, Justice Andrias found that “where, as here, the question is one of pure statutory construction, dependent only on accurate apprehension of legislative intent . . . there is little basis to rely upon any special competence or expertise of the administrative agency.” The Board had also sought the court to impose additional penalties against the parties for their refusal to repay the funds. The Appellate Division rejected the request finding that the Board is the body empowered to determine violations and to assess penalties, and could not ask the courts to impose additional penalties. Note: The original form of this article was published in the January 29, 2007 Genova, Burns & Vernoia Corporate Political Activity Law Update