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AO 2013-05 – Use of Campaign Funds to Pay Temporary Storage Costs

A retiring officeholder may use campaign funds to pay costs associated with the temporary storage of officeholder and campaign materials. These costs are ordinary and necessary expenses of a federal officeholder and are not personal use of campaign funds.

Background
Representative Elton Gallegly retired from Congress in January 2013. As of July 2013, his principal campaign committee has $528,257 cash-on-hand and no debt.

Representative Gallegly has hundreds of boxes of campaign and officeholder materials in storage that he has accumulated over the course of his 26-year career in Congress.  Most of these materials will eventually be sent to California Lutheran University for archiving. Also in storage are a few personal items that will be archived from Representative Gallegly’s Washington, D.C. office, as well as furniture, books, and memorabilia that will be given away or otherwise disposed of. Representative Gallegly has been paying the usual and normal charge to store the materials in a commercial, public storage facility and will continue to do so. He plans to dispose of all of these items by the end of 2013. Representative Gallegly asks if he may use campaign funds to pay costs associated with the temporary storage of the items pending their final disposition after his retirement.

Analysis
Under the Federal Election Campaign Act (the Act) and Commission regulations, permissible uses of campaign funds include paying any ordinary and necessary expenses incurred in connection with duties of the individual as a holder of Federal office, as well as “any other lawful purpose,” but not conversion to “personal use.” See 2 U.S.C. §439a(a)(2); 11 CFR 113.2(a). Conversion to personal use occurs when funds in a campaign account are used to fulfill any commitment, obligation or expense that would exist irrespective of the candidate’s election campaign or duties as a holder of federal office.  See 2 U.S.C. §439a(b)(2); 11 CFR 113.1(g). The costs of winding down the office of a former federal officeholder for a period of six months after he or she leaves office are ordinary and necessary expenses. 11 CFR 113.2(a)(2). This six-month winding down period acts as a safe harbor and does not preclude a former officeholder who can demonstrate that he or she has incurred ordinary and necessary winding down expenses more than six months after leaving office from using campaign funds to pay those expenses.  See Expenditures; Reports by Political Committees; Personal Use of Campaign Funds, 60 Fed. Reg. 7862, 7873 (Feb. 9, 1995). Winding down costs include the necessary administrative costs of terminating a campaign or congressional office, such as office space rental, staff salaries and office supplies. See 11 CFR 110.1(b)(3)(ii), 116.1(a).

In Advisory Opinion 1993-06 (Panetta), the Commission concluded that the cost of archiving and storing campaign papers, files, and other materials is an ordinary and necessary winding down expense. See also Advisory Opinion 1996-14 (de la Garza). Similarly, expenses incurred to store Representative Gallegly’s officeholder and campaign materials in a commercial storage facility pending final disposition are also ordinary and necessary expenses incurred in winding down his campaign and congressional offices. The costs are not considered personal use because they would not exist irrespective of Representative Gallegly’s election campaign or his duties as a holder of federal office.

The Commission considered the Congressman’s extensive tenure in Congress and the resulting length of the archival review in concluding that storage costs incurred for up to one year after the Congressman’s retirement are ordinary and necessary winding-down expenses under the Act and Commission regulations.

Date Issued: 7/25/2013; 4 Pages

(Posted 8/16/2013; By: Zainab Smith)

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