Last week a Power Plays item misstated city campaign finance rules on loans from candidates to their own campaigns—and did so in a way that obscured a major strategic (and personal) gamble by Andrew Rasiej.
As reported earlier, Campaign Finance Board records show that 36 candidates have taken out $1.16 million in loans so far this campaign season, taking the money from banks, other people, or their own pockets. The loans are legal as long as they don’t come from a corporation or a PAC, but any loans that aren’t paid back by Election Day are considered contributions—and if the unpaid debt exceeds contribution limits, the campaign could face a fine.
I wrote last week (wrongly) that candidates could contribute unlimited amounts to their campaigns. Doh! Of course, that’s only true if candidates don’t participate in the Campaign Finance Board’s system of matching funds and spending limits. Candidates who do participate in the system can donate up to three times the individual limit to their own venture. That translates into a self-financing limit of $14,850 for mayor, comptroller, and public advocate; $11,550 for borough president; and $8,250 for City Council races. (Thanks to the John Doe whose e-mail politely pointed out my folly.)
While several candidates with outstanding debts would be in jeopardy of fines if the election were held today, no one has loaned his campaign more money than Rasiej—$525,000 in loans in his name, one of them a $100,000 bank loan. He lent himself the cash in four installments: April, June, July, and August. The last loan came just a few days after Rasiej was left out of the first round of public matching funds payments.
Since his campaign has spent more than it raised from donations, Rasiej’s last loan of $150,000 probably helped carry the campaign until the CFB released its second round of payments, in which Rasiej’s bid received more than $500,000 in public funding.
But while the loans might have kept the campaign afloat, they now leave Rasiej $510,150 over the personal contribution limit. If he doesn’t pay himself back, he might have to pay hefty CFB fines for excessive contributions, in addition to being half a million bucks lighter. That’s a tough pill to swallow if one wins. If he loses? Ouch.