The Road to the March 7, 2017 Election – Part 4: Spending Campaign Funds

• Part I: Getting Started
• Part II: Public Examination Period and Litigation
• Part III: Committee Responsibilities

This series will provide a cursory overview of the steps needed to run for local office in Los Angeles County. The information provided is not intended to be legal advice. Readers should be cognizant that other local rules may apply in addition to state law.

In Parts 1 through 3, we focused on various forms to be completed and deadlines to be met, as well as the significance of the public examination period. In this blog post, we’ll focus on the laws regarding how candidates can spend their campaign funds.

Limits on Spending

The rule is that expenditures must be reasonably related to a political, legislative, or government purpose.

Generally, legitimate expenditures involve typical campaign expenses such as consultants, filing fees, campaign literature and mailings.  Campaign funds may also be used to make donations to political committees and to pay for attorney expenses that are campaign related like suing for defamation (as opposed to paying for your divorce).

The opposite are expenses for personal purposes. Personal purposes might include purchase of your clothes, paying for a wedding, or buying that Lamborghini that you’ve always wanted. Candidates should generally avoid using campaign funds to pay for personal expenses.

The FPPC has created a code system that can serve as a great way to spot red flag expenses. An expense that has a code, for example “FND” (or fundraising events), is likely to comply with the spending rules. An expense that does not fit into a code should be given special attention. It does not mean that the expense is necessarily prohibited, but it does require you to specifically identify how it is reasonably related to a political, legislative, or government purpose.

Sometimes it is unclear if an expense is legitimate. It is not unusual for treasurers to ask for advice from the FPPC before any campaign funds are paid. The FPPC will respond with an opinion letter expressing their opinion on the expense. This can be a way to protect yourself if you get in trouble for the expenditure later on.

A Requirement to Report

In addition to these limits, you’ll have to report how much you spend and what you spent it on. Hence, the existence of the code system mentioned earlier. Expenditure reporting goes on the semi-annual statement you’ll have to file that was mentioned in Part 3. Not all expenditures have to be reported in detail. For expenditures of less than $100, you only have to add them all and report the total amount.

As such, it is important to keep detail records of your payments. At the very least, make sure you have the date of the payment, name and address of the payee, the committee I.D. number if applicable, and the amount of the payment. Be aware that there are additional records to maintain when you make contributions or independent expenditures through your committee.