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Interpretative Opinion 01-2021

Interpretative Opinion No. 2021-01

September 10, 2021

VIA E-MAIL

Thorn Pozen, Esq.

Goldblatt, Martin, Pozen, LLP.

1432 K Street NW, Suite 400r

Washington, DC 20005

Dear Mr. Pozen

This responds to your request for an opinion regarding the segregation of funds from non-resident contributors to candidates in the District of Columbia’s Fair Elections Program and the funds received from District residents which are matched through the Program.

You inquired whether the non-resident contributions may be used for the following purposes:

Paying potential campaign-related fines or penalties?

Paying for other campaign-related expenditures that otherwise aren’t allowed by the matching funds (like hair services for campaign photos/events)?

And, once the campaign is terminated , can those segregated and accounted-for funds be transferred to a Constituent Service Fund after campaign close-out (assuming the candidate is elected to office and that that office is allowed to maintain a CSF)

D.C. Official Code §1-1163.32f(c)(2)(D) provides that,

“(d) A participating candidate shall not make expenditures for the following:

(1) Legal expenses not directly related to acts taken under this chapter or the Elections Code;

(2) Payment of any penalty or fine imposed pursuant to federal or District law;

(3) Compensation to the participating candidate or a member of the participating candidate's immediate family, except for reimbursement of out-of-pocket expenses incurred for campaign purposes;

(4) Clothing and other items or services related to the participating candidate's personal appearance;

(5) Contributions, loans, or transfers to another candidate's political committee or a political action committee;

(6) Gifts, which, for the purposes of this paragraph, shall not include printed campaign materials such as signs, brochures, buttons, or clothing; and

(7) Any other purpose that the Board establishes through rules issued pursuant to § 1-1163.32l.”

Therefore, the use of campaign funds to pay fines and penalties by participants in the Fair Elections

Program is expressly prohibited. In addition payments for services related to the participating candidate’s appearance are also prohibited. Consequently, hair services for a campaign photo event fall into that category.

D.C. Official Code §1-1163.32h (a)(2) provides that “(2) No later than 60 days after a special or general election in an election cycle for which a participating candidate was on the ballot, the participating candidate shall remit to the Director of Campaign Finance, for deposit in the Fair Elections Fund, the remaining funds in the participating candidate's campaign accounts. The losing participating candidate shall also donate any equipment purchased by the campaign to a non-profit organization, within the meaning of section 501(c)(3) of the Internal Revenue Code and operating in good standing in the District for a minimum of one calendar year before the date of any donation, that is unaffiliated with the candidate, the candidate's immediate family, the principal campaign committee, the principal campaign committee chair and treasurer, the immediate family of the principal campaign committee chair and treasurer, and any board of directors or similar governing body on which sits the candidate, the candidate's immediately family, or the principal campaign committee chair or treasurer.”

Clearly this provision does not distinguish between contributions from residents of the District of Columbia which were matched and contributions from non- residents which were not matched. The requirement as stated is that “the participating candidate shall remit … remaining funds in the participating candidate’s accounts.” There is no ambiguity in the provisions of the Fair Elections Act that suggest that contributions from non-residents of the District of Columbia to participating candidates may be segregated for purposes of paying fines and penalties, paying for services related to the candidate’s personal appearance or to establish a Constituent Service Fund.

In view of the foregoing, it is the opinion of the Office of Campaign Finance, that none of the expenditures you inquired about would be allowable under the Fair Elections Program.

The foregoing is an Interpretative Opinion of the Director of the Office of Campaign Finance. Pursuant to D.C. Official Code §1-1163.06, you are entitled to request an Advisory Opinion from the Board of Elections on this transaction or activity.

Should you have any additional questions, please contact William O. SanFord, General Counsel at (202) 671-0550.