An advisory opinion has been requested whether a loan may be "converted" into a contribution that qualifies as a threshold or matchable contribution pursuant to New York City Administrative Code §3-702(2) and (3).
The New York City Campaign Finance Act specifically excludes loans from the definitions of threshold and matchable contributions. Administrative Code §3-702(2), (3). Since only "monetary contributions" may qualify as threshold or matchable contributions, id., the remaining question is whether the forgiving of a loan is a "monetary" or an "in-kind" contribution. See Campaign Finance Board Rule 101(w); see also Rules and Regulations of New York State Board of Elections, 9 NYCRR §6200.6(a) (1).
The forgiving of a loan is a contribution by the lender in the amount of the loan. See Administrative Code §3-702(8). While the act of lending may constitute the provision of money to a candidate, the act of forgiving a loan does not. Indeed, the benefit to a candidate provided by the forgiveness of the loan (i.e., the extinguishing of a campaign debt) is the same regardless whether the underlying loan was of cash, goods, or services.
The distinction between a monetary contribution and the forgiving of a loan is also recognized in financial disclosure statements designed by the New York State Board of Elections. These statements contain separate schedules for the reporting of monetary contributions (schedule 2A) and loans forgiven (schedule 12). The forgiving of a loan is therefore more appropriately characterized as an in-kind, rather than monetary, contribution, and may therefore not qualify as a threshold or matchable contribution.
A candidate may therefore "convert" a loan to a threshold or matchable contribution only by repaying the loan and accepting from the lender a monetary contribution which meets the requirements of Administrative Code §3-702(2) or (3) and does not exceed the contribution limit applicable under Administrative Code §3-703(1) (f).
NEW YORK CITY CAMPAIGN FINANCE BOARD