Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
January 26, 2007
CERTIFIED MAIL
RETURN RECEIPT REEQUESTED
ADVISORY OPINION 2006-37
Barry J.C. Kissin
Kissin for Congress
148 West Patrick Street
Frederick, MD 21701
Dear Mr. Kissin:
We are responding to your advisory opinion request on
behalf of yourself and your principal campaign committee,
Kissin for Congress ("the Committee"), concerning the
application of the Federal Election Campaign Act of 1971, as
amended (the "Act"), and Commission regulations to the
Committee's reimbursement to you of a portion of the funds
you provided the Committee during the course of your
campaign. The Commission concludes that the Committee may
disburse these funds to you.
Background
The facts presented in this advisory opinion are based
on your letter and accompanying affidavits received on
December 1, 2006.
You were a candidate in the 2006 Democratic primary
election for the House of Representatives seat from
Maryland's Sixth Congressional District. This was your
first candidacy for election to political office at any
level.
On March 3, 2006, you deposited $5,000 of your personal
funds into the Committee's campaign depository. On March
21, 2006, you deposited an additional $20,000 of your
personal funds into the Committee's campaign depository.1
The Committee reported each of these deposits as
contributions from you. However, you have submitted
affidavits from yourself and the Committee's chairman, each
dated November 27, 2006, indicating that you intended to be
reimbursed for the $25,000 total of both deposits to the
extent funds were available after all Committee expenses
were paid. You have also submitted an affidavit from the
Committee's treasurer, also dated November 27, 2006,
indicating that you intended to be reimbursed with respect
to the $20,000 deposit, and this affidavit does not address
the $5,000 deposit. The Committee's 2006 Year-End Report
shows its current cash on hand is $15,230.34 and that it has
no outstanding debts or obligations.
Question Presented
May your principal campaign committee disburse
$15,230.34 to you as a partial reimbursement of funds you
provided to the Committee that the Committee reported as
contributions?
Legal Analysis and Conclusions
Yes, your principal campaign committee may disburse
$15,230.34 to you because such disbursement would constitute
a repayment of a loan from you to the Committee.
The Act provides six categories of permissible uses of
contributions. See
2 U.S.C. 439a(a). Such uses are permitted provided that
they do not result in campaign funds being converted to
personal use by any person. 2 U.S.C. 439a(b)(1). "Personal
use" occurs when a "contribution . . . is used to fulfill
any commitment, obligation, or expense of a person that
would exist irrespective of the candidate's election
campaign or individual's duties as a holder of Federal
office." 2 U.S.C. 439a(b)(2). Campaign funds may be used
to repay a loan from a candidate, the proceeds of which were
used in connection with his or her campaign, because such
debt repayment is an authorized expenditure in connection
with that candidate's campaign for Federal office.2 See
2 U.S.C. 439a(a)(1); Advisory Opinion 2003-30 (Fitzgerald).
The Act further requires that the reports filed by a
candidate's principal campaign committee disclose, among
other transactions, all loans made by or guaranteed by the
candidate, as well as contributions from the candidate. 2
U.S.C. 434(b)(2)(B), (G) and 434(b)(8); see also 11 CFR
104.3(a)(4)(iv) and 104.3(d). Debts and obligations owed by
or to a political committee that remain outstanding shall be
continuously reported until extinguished. 11 CFR 104.11(a).
When determining the nature of a transaction between a
candidate and the candidate's authorized committee, the
Commission has taken into account not only the way in which
the transaction was reported, but also affidavits evidencing
the intent of the parties involved in the transactions. For
example, in Advisory Opinion 1997-21 (Firebaugh), the
candidate had forgiven advances of personal funds so that
the committee could terminate. The committee reported this
forgiveness as an "in-kind contribution." Subsequently, the
committee received an unanticipated refund of $46,131 from a
media vendor. The committee sought the Commission's
permission to reimburse the candidate the amount of the
refund to repay a portion of the previous advances. The
candidate and the committee's treasurer both submitted
affidavits stating that the transactions should have been
reported as advances, rather than in-kind contributions.
The Commission accepted the affidavits as proof that the
transactions should have been reported as
advances, and it allowed the refund to be made by the
committee to the candidate. See also Statement of Reasons-
Final Repayment Determination of Buchanan for President,
Inc. (Aug. 1, 1995) (affidavits submitted by a presidential
primary candidate and the chairman of his principal campaign
committee stating that receipts of candidate funds should
have been reported as loans rather than contributions were
sufficient to demonstrate the true nature of the
transactions and allow repayment to the candidate).
The affidavits by you, your campaign chairman and the
Committee's treasurer support a determination that you and
the Committee intended that $20,000 of the personal funds
you deposited into the Committee's account would be
reimbursed to you if feasible. Further, the affidavits from
you and your campaign chairman support a determination that
the additional $5,000 of the personal funds you deposited
into the Committee's account would be reimbursed to you if
feasible, and the affidavit of the Committee's treasurer
presents no contrary information. Based on these
affidavits, the Commission concludes that both the $20,000
and $5,000 deposits were loans from you to the Committee
that were mistakenly reported as contributions.
Accordingly, the Commission determines that the $15,230.34
remaining in the Committee's accounts (or any other
Committee funds up to a total of $25,000) may be paid to you
as partial repayment for your loans to the Committee.
In addition, the Committee must amend its April 2006
Quarterly Report and all subsequent reports to reflect the
debts owed by the Committee to you, and the Committee should
reference this Advisory Opinion in a memo entry.
Furthermore, to the extent the loans by you to the Committee
remain unpaid, the Committee must either continue to
report the obligations or report your forgiveness of those
obligations, as appropriate. See 11 CFR 104.11(a). The
amended reports should be filed within 30 days of the
receipt of this opinion. See Advisory Opinion 1997-21
(Firebaugh).
The Commission expresses no opinion regarding the
application of Federal tax law to the proposed activities
because that question is not within the Commission's
jurisdiction.
This response constitutes an advisory opinion
concerning the application of the Act and Commission
regulations to the specific transaction or activity set
forth in your request. See 2 U.S.C. 437f. The Commission
emphasizes that, if there is a change in any of the facts or
assumptions presented, and such facts or assumptions are
material to a conclusion presented in this advisory opinion,
then the requestor may not rely on that conclusion as
support for its proposed activity.
Sincerely,
(signed)
Robert D. Lenhard
Chairman
Enclosures (Advisory Opinions 2003-30 and 1997-21)
_______________________________
1 The $25,000 was deposited via checks drawn on your
personal checking account. These deposits do not represent
bank loans, brokerage loans, or lines of credit under
applicable statutory provisions. See 2 U.S.C.
431(8)(B)(vii) and (xiv).
2 If the candidate loan is in excess of $250,000, the amount
in excess may not be repaid with proceeds from contributions
received after the date of the election in which the
candidate was running. See 2 U.S.C. 441a(j).