May an unopposed judicial candidate use campaign funds to repay a personal campaign loan and raise more to retire the debt?

Plain-English summary

The candidate had won a partisan primary and faced no general-election opponent. The campaign had received minimal contributions and relied mainly on the candidate's personal loan. The judge asked whether the campaign could use its balance to repay part of that loan and seek more contributions for the remaining debt. Source: Opinion 06-05, p. 1

Rules 21-800(D) and (E) addressed disposition of unused campaign funds after a candidate became unopposed or after an election. The committee said campaign expenses could be paid before any unused balance was returned or donated, and it treated the candidate's loan as such an expense. Source: Opinion 06-05, pp. 1–2

Following its attached Opinion 01-01, the committee concluded that further fundraising to retire outstanding campaign debt was allowed, even beyond the 30-day period for disposing of unused funds. It cautioned that any funds exceeding the debt must be distributed immediately under Rule 21-800(E), and that Rule 21-800(A)'s appearance limit and Rule 21-800(C)'s campaign-committee requirement still applied. Source: Opinion 06-05, p. 2; attached Opinion 01-01, pp. 3–7

In practice

The committee distinguished debt repayment from unused campaign funds. Its permission for more fundraising covered the outstanding campaign debt and remained subject to the cited limits on fundraising and excess funds. Source: Opinion 06-05, pp. 1–2

Common questions

Q: Could the candidate repay a personal campaign loan from the campaign account?

A: Yes. The committee treated that loan as a campaign expense payable before the rules required return or donation of unused funds. Source: Opinion 06-05, pp. 1–2

Q: Could fundraising continue after the candidate became unopposed?

A: The committee said the campaign could raise funds to pay its outstanding debt, applying its earlier Opinion 01-01 analysis of post-election debt fundraising. Source: Opinion 06-05, p. 2

Q: What happens if the campaign raises more than the debt?

A: The committee said the excess must be returned or donated immediately under Rule 21-800(E). Source: Opinion 06-05, p. 2

Background and rules framework

The opinion applied then-current New Mexico Code of Judicial Conduct Rules 21-800(D) and (E) on unused funds, Rule 21-800(A) on the appearance of impropriety in fundraising, and Rule 21-800(C) on campaign committee management. It adopted the analysis of attached Advisory Opinion 01-01, which discussed the Campaign Reporting Act. Source: Opinion 06-05, pp. 1–2; attached Opinion 01-01, pp. 3–7

Citations and references

• New Mexico Code of Judicial Conduct Rules 21-800(A), 21-800(C), 21-800(D), and 21-800(E). Source: Opinion 06-05, pp. 1–2
• NMSA 1978, § 1-19-29.1(A), (B) (1997). Source: Opinion 06-05, p. 2
• Advisory Opinion 01-01, post-election fundraising to retire campaign debt. Source: Opinion 06-05, p. 2 and attachment

See also

• NM Judicial Op. 07-08: Nonprofit Fundraising Letterhead
• NM Judicial Op. 07-09: County Hospital Board

Source

• Landing page: New Mexico judicial advisory opinions
• Original PDF: Judicial Advisory Opinion 06-05 with attached Opinion 01-01

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Advisory Committee on the Code of Judicial Conduct
Hon. James J. Wechsler, Chair Hon. Marie A Baca
Hon. Kevin L. Fitzwater
Paul L. Biderman, Esq.
Prof. Robert L. Schwartz

September 11, 2006

Re: Judicial Advisory Opinion No. 06-05

Dear Judge,
You have asked the Advisory Committee on the Code of Judicial Conduct whether you may engage in fundraising to retire the outstanding debt of your election campaign for magistrate judge. Your political party selected you as its candidate on the general election ballot by your victory in the primary election. You do not have opposition in the general election.

You have informed the Committee that for the primary election you received only minimal contributions and financed most of your campaign by a personal loan to your campaign. You intend to partially repay that debt with the balance in your campaign account and would like to raise additional funds to retire the outstanding debt.

The Code of Judicial Conduct specifically addresses the campaign funds of judicial candidates who are unopposed or become unopposed in a campaign as follows:

Candidates in partisan elections for judicial office who have a campaign fund, but who are unopposed or become unopposed in the campaign, shall return all unused and uncommitted campaign funds pro rata to the contributors of the funds, or donate the funds to a charitable organization, or to the State of New Mexico, as the candidate may choose, with disbursement of such funds to occur within thirty (30) days after the absence of opposition becomes known.

Rule 21-800(D) NMRA.

The Code of Judicial Conduct also contains a provision with regard to unused campaign funds remaining after a judicial election. It reads:

A candidate for judicial office in either a partisan or retention election who has unused campaign funds remaining after election, and after all expenses of the campaign and election have been paid, shall refund the remaining funds pro rata to the campaign contributors, or donate the funds to a charitable organization, or to the State of New Mexico, as the candidate may choose, within thirty (30) days after the date [of] the election results are certified.
Rule 21-800(E).

Your inquiry first raises the question of whether you may use the balances remaining in your campaign account to repay your personal loan to your campaign. Regardless of whether your situation is addressed by Subsection D or E of the Rule, the campaign of a candidate for judicial office may pay all expenses of the campaign and election before it must refund or donate any remaining funds. Your personal loan is clearly one such expense.

The second question, arising from the fact that your remaining campaign fund is insufficient to pay off your personal loan, is whether you may continue to raise campaign funds to pay off the balance of your loan. In Advisory Opinion 01-01, the Committee has previously addressed the question of continued fundraising by a judicial campaign in order to retire campaign after an election has been completed. (See copy attached.) We concluded that neither the Campaign Reporting Act, NMSA 1978, § 1-19-29.1(A), (B) (1997), nor the Code of Judicial Conduct prohibits post-election fund-raising activity in a judicial campaign in order to retire campaign debt, even if the fundraising takes place after the 30-day period in which unused campaign funds are to be returned or donated under Rule 21-800(E). The Committee considers the analysis of Advisory Opinion 01-01 to be applicable to your inquiry. We thus conclude that your campaign may engage in fund-raising activity to pay outstanding campaign debt.

We caution, as we did in Advisory Opinion 01-01, that if your campaign raises funds in excess of your campaign, that Rule 21-800(E) would then become applicable, requiring the immediate return of donation of such excess funds. We further caution, as we did in Advisory Opinion 01-01 that

Rule 21-800(A) requires that candidates for judicial office "refrain from campaign fund-raising activity which has the appearance of impropriety." Fund-raising activity by the campaign committee of a candidate for judicial office has a greater risk of the appearance of impropriety after the candidate has successfully been elected to the office. However, we do not read Rule 21- 800(A) to be a prohibition of such activity, particularly because of the other protections of the Code of Judicial Conduct, including the requirement of Rule 21-800(C) that fundraising be managed by a campaign committee.

Very truly yours,

James J. Wechsler
Chair
JJW:ow

cc: Hon. Marie Baca
Hon Kevin Fitzwater
Paul L. Biderman, IPL Director
Professor Robert L. Schwartz
Advisory Committee on the Code of Judicial Conduct

Hon. Frank H. Allen, Jr., Chairman
Hon. Marie A. Baca
Hon. James J. Wechsler
Prof. William MacPherson

February 14, 2001

Judge,
NM

Re: Judicial Advisory Committee Opinion 01-01

The Advisory Committee on the Code of Judicial Conduct

has received your January 4, 2001 letter requesting advice

concerning the application of Rule 21-800(E) NMRA 2000

(effective February 16, 1995) of the Code of Judicial Conduct

to your campaign for judicial office. We understand from your

letter that after the election, your campaign sought

contributions to retire outstanding campaign debt and incurred

additional fund raising debt to do so. Thirty days after the

certification of the election results, your unpaid campaign

debt exceeded the funds in your campaign account. You hope to

obtain additional contributions to retire your remaining

campaign debt.

We discern two questions in your request: first, whether you may leave your campaign account open beyond thirty days

after the date the election results were certified; and

second, whether your campaign may continue to solicit and

receive contributions to pay outstanding campaign debt after

the thirty day period.

Rule 21-800(E) provides:

A candidate for judicial office in either a partisan or retention election who has unused campaign funds remaining after election, and after all expenses of the campaign and election have been paid, shall refund the remaining funds pro rata to the campaign contributors, or donate the funds to a charitable organization, or to the state of New Mexico, as the candidate may choose, within thirty (30) days after the date the election results are certified.

As to the first question, we do not read Rule 21-800(E)

to apply. Under that provision, a candidate for judicial

office must refund funds remaining in a campaign account

within thirty days after the date the election results are

certified when the candidate has "unused campaign funds

remaining after election, and after all expenses of the

campaign and election have been paid." You have described

that your unpaid campaign expenses exceeded any unused

campaign funds which remained in your campaign account after

the election. Because of your outstanding campaign debt, you did not have "unused campaign funds" that are covered by Rule

21-800(E).

The second question relates exclusively to post-election

activity. You have indicated that your campaign has sought

contributions to retire campaign debt after the election and

has incurred additional campaign debt to raise those further

funds.

    Except     as    may   be   particularly          specified,        a   judicial

candidate is subject to the Campaign Reporting Act, Section 1-

19-25 to 1-19-36, 16-37 (1997). Generally, the Campaign

Reporting Act mandates reporting of expenditures and

contributions of a candidate for public office. See id.

The Campaign Reporting Act describes the manner in which

campaign contributions may be used and includes the

elimination of campaign debt as a lawful expenditure of

campaign contributions. See § 1-19-29.1(A)(5). Subsection B of

Section 1-19-29.1 specifically relates to candidates for

judicial office, requiring such candidates to "solicit or

accept campaign funds and return unused funds in accordance

with the provisions of the Judicial Code of Conduct." This

subsection does not address the expenditure of campaign funds.

Thus, unless prohibited by the Code of Judicial Conduct, the

Campaign Reporting Act permits a candidate for judicial office

to solicit and accept campaign funds after an election in order to pay campaign debt.

The Code of Judicial Conduct does not expressly prohibit

post-election fund-raising activity. Rule 21-800(E) discusses

unused campaign funds. The thirty-day period in the rule

requires the prompt return of unused campaign funds. It does

not require a campaign account to be closed within that period

when funds are not "unused." We believe that it would be an

overbroad reading of Rule 21-800(E) to prohibit the raising of

campaign funds to pay campaign debt after the thirty-day

period in which unused campaign funds are to be returned. In

the event that your campaign raises funds that exceed your

campaign debt such that your campaign does have unused funds,

we believe that the policy underlying Rule 21-800(E) of the

prompt return of unused funds dictates immediate return of

such funds or donation in the manner provided in Rule 21-

800(E).

 Rule    21-800(A)          requires    that    candidates         for    judicial

office "refrain from campaign fund-raising activity which has

the appearance of impropriety." Fund-raising activity by the

campaign committee of a candidate for judicial office has a

greater risk of the appearance of impropriety after the

candidate has successfully been elected to the office.

However, we do not read Rule 21-800(A) to be a prohibition of

such activity, particularly because of the other protections of the Code of Judicial Conduct, including the requirement of

Rule 21-800(C) that fundraising be managed by a campaign

committee.

As a result, we conclude that you may leave your campaign

account open to receive additional contributions to pay

remaining, existing campaign debt and distribute any excess of

funds received after paying campaign debt immediately in the

manner provided in Rule 21-800(E).

Very truly yours,

Frank H. Allen, Jr.
Chairman
Judicial Advisory Committee xc: The Honorable Marie Baca
Professor MacPherson
Thaddeus P. Bejnar