New York City Campaign Finance Board v. Snyder

10 Misc. 3d 841
CourtCivil Court of the City of New York
DecidedNovember 21, 2005
StatusPublished

This text of 10 Misc. 3d 841 (New York City Campaign Finance Board v. Snyder) is published on Counsel Stack Legal Research, covering Civil Court of the City of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New York City Campaign Finance Board v. Snyder, 10 Misc. 3d 841 (N.Y. Super. Ct. 2005).

Opinion

[842]*842OPINION OF THE COURT

Diane A. Lebedeff, J.

The primary and previously unanswered question present here is whether, under New York City’s system of public financing of local election campaigns, a candidate and committee benefiting from public matching funds may be sued for the return of public funds where they utterly refuse to document that public funds were used for campaign purposes.1 For reasons set forth below, the court finds that the governing legislation incorporates a basic obligation of candidates and committees to show that the public’s tax dollars were put to the public’s intended use, enforceable on contract principles by a suit for recoupment on the facts presented. Two subsidiary issues involve civil penalties, both those already administratively imposed and those requested herein.2

Plaintiff New York City Campaign Finance Board moves for summary judgment on its complaint seeking relief against Gary D. Snyder and his election committee, Elect Gary Snyder (the Committee, of which Snyder was treasurer). Snyder and the Committee cross-move for the dismissal of the claims raised against them.

As a representative of the Libertarian Party in the general election of November of 2001, Snyder ran as a candidate for a position on the City Council covering District 6, which embraces the West Side of Manhattan from West 55th Street to West 96th Street. Snyder and his Committee enrolled in the New York City Campaign Finance Program and the Committee received [843]*843$19,124 in public matching funds. Snyder, a business analyst, ran on the Libertarian Party’s philosophy of “socially tolerant/ fiscally conservative” and asserted that “the money we pay to government” serves to “redistribute wealth from the politically-unconnected to the politically-connected to keep the politicians in power,” expending approximately $40 of public funds for each of the reported 478 votes he received; he lost to Gail A. Brewer, a particularly well-credentialed Democrat, who garnered over 34,000 votes.3

The Board staff followed a regular administrative course of collecting financial reports, reviewing the reports through its administrative audit process, and requesting Snyder and the Committee submit documentation. On two different occasions, the full Board found violations of applicable guidelines and imposed civil penalties upon the Committee.4 By the end of the postelection administrative review process, the Committee failed to document campaign expenditures to the Board — which was requested to be done by the submission of bank statements and copies of cancelled checks — and a staff letter later demanded return by the Committee of the full grant of public matching funds of $19,124. Thereafter, this suit was commenced, with the Board seeking recoupment of public funds, payment of the as[844]*844sessed civil penalties, and the imposition of a $10,000 civil penalty by the court.

The Recoupment Claim

The Board requests a judgment for all public matching funds from Snyder and his Committee on the basis that the campaign has not provided to the Board copies of bank statements and cancelled checks, thereby refusing to demonstrate the actual use of campaign funds, including public funds, for proper campaign purposes. These factual claims are not denied by the candidate or the Committee.

Two questions must be answered to determine if this specialized administrative agency is permitted to sue upon a plenary claim for recoupment. The first involves the candidate’s objection that a candidate cannot be subjected to personal liability and the second is whether this specific claim first must proceed through the administrative review process.

As to a candidate’s personal liability, the court finds sufficient support for a straightforward claim against a candidate based upon a contract standard on the facts present here. The legislative expectation that a participating candidate would comply with a basic obligation of accountability is set out as part of the legislative intent and findings (Local Law No. 69 [1990] of the City of New York § 1 [“The council intends . . . (to) mak(e) public funds available to candidates for municipal office . . . who abide by reasonable requirements for campaign financing disclosure and record-keeping” (emphasis added)]). The statutory expression of this requirement is incorporated in the definition of candidates eligible to receive public funds (Administrative Code § 3-703 [1] [c] [eligibility limited to those who “choose to participate ... by filing a written certification . . . which sets forth his or her acceptance of an(d) agreement to comply with the terms and conditions for the provision of such funds”]). Further, eligible candidates are subject to the clear obligation that they “must . . . furnish . . . documentation and other proof of compliance” as required by the Board (Administrative Code § 3-703 [1] [d] [emphasis added]).

Recognizing that “[t]he starting point in any case of statutory interpretation must, of course, always be the language itself, giving effect to its plain meaning” (American Tr. Ins. Co. v Sartor, 3 NY3d 71, 76 [2004]; Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583 [1998]), the legislation supports the finding that a contract-based obligation is incorporated into [845]*845the Campaign Finance Act. The court is not amending the statute by adding words that are not there (American Tr. Ins. Co. v Sartor, supra; People v Gersewitz, 294 NY 163, 169 [1945], cert dismissed 326 US 687 [1945] [“The court has no power to supply even an inadvertent omission of the Legislature”]).

In this case, the individual defendant, as candidate and treasurer of the Committee, signed the required written certification agreeing to comply with the Campaign Finance Act, the Campaign Finance Board Rules, and the Campaign Finance Board administrative procedures. He received public funds by reason of his undertaking, rendering his agreement contractual. Given a contract-based obligation, it also then follows that a signatory is subject to the obligation of good faith and fair dealing, because “[i]n New York, all contracts imply a covenant of good faith and fair dealing in the course of performance. This covenant . . . encompass [es] any promises which a reasonable person in the position of the promisee would be justified in understanding were included” (511 W. 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 153 [2002] [internal quotation marks and citations omitted]). And, as indicated by the fact that this case represents the only reported instance of a total failure to supply documentation, there is no reason to doubt that participants in the New York City Campaign Finance Program do understand that the quid pro quo for receiving public funds is accounting to the Campaign Finance Board for campaign funds and basic compliance with Board requirements.

As to protests regarding personal liability of a candidate or others related to a campaign, the law can and does impose such liability where it is supported by the facts. It is simply not true that personal financial liability is foreign to campaign law and can never be imposed (compare Karl Rove & Co. v Thornburgh, 39 F3d 1273 [5th Cir 1994] [senatorial candidate held responsible for authorized campaign costs], with Richmond Adv./Reinhold Assoc. v Del Guidice,

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Bluebook (online)
10 Misc. 3d 841, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-york-city-campaign-finance-board-v-snyder-nycivct-2005.