ELECTION & POLITICAL LAW

Post-Election Debt Forgiveness | Philadelphia Campaign Finance Law | Pennsylvania Election Code | Standing |Contribution Limits | Expenditure

Cozen O'Connor v. City of Philadelphia Bd. of Ethics, PICS Case No. 13-1331 (Pa. Commw. June 18, 2013) Brobson, J. (26 pages).

Should appellant law firm choose to forgive all or any portion of the campaign committee's debt, such forgiveness would be a contribution for purposes of CFL. Trial court affirmed.

In this appeal, appellant law firm Cozen O'Connor contended that the trial court erred when it determined that the campaign finance provisions of Ch. 20-1000 of the Philadelphia Campaign Finance Law (CFL) limited the manner by which the firm could forgive $448,468.09 in legal debt incurred by the Friends of Bob Brady (committee) in defending a ballot challenge to the candidacy of U.S. Congressman Bob Brady in the 2007 Philadelphia Democratic mayoral primary.

The firm also argued that the trial court erred when it refused to also consider whether the committee could fundraise to retire the legal debt without regard to contribution limits of the CFL.

This court did not agree with the firm's central premise that once the Supreme Court found that the firm had standing to seek declaratory relief regarding proper application of CFL to firm activities, the firm could then also seek declaratory relief regarding proper application of CFL to committee activities. Rather, this court held that the firm lacked standing to seek such relief.

Because the Supreme Court limited the issue for review on remand to whether the firm had standing to bring a declaratory judgment action to determine whether it could forgive at one time and in toto its account receivable from the committee, this court reaffirmed its ruling that the firm may not pursue a declaratory judgment action to determine lawfulness of committee actions. Accordingly, the court affirmed the trial court's decision to limit its review to the issue accepted for review by the Supreme Court and to refuse to address any question related to how CFL would impact post-election committee activities.

Here, the issue was whether CFL contribution limits would apply if the firm chose to forgive the committee's pre-election legal fee debt. That issue turned on whether post-election forgiveness of pre-election campaign debt would be a contribution under CFL, not on whether debt incurred was a committee expenditure. The court agreed with the firm that the committee's debt was not an expenditure.

The court explained that liberally construing the term, contribution is broad enough to embrace all contributions to candidates and their committees, whether pre- or post-election. In turn, legal fees incurred by a campaign committee to keep a candidate on the ballot are incurred for the purpose of influencing the outcome of an election. A candidate's placement on or removal from the ballot influences the election because it directly affects choices voters have when they cast their votes. Contrary to the firm's argument, the determination of whether a candidate will remain on the ballot has more than "some incidental effect" on election outcome.

Accordingly, should the firm choose to forgive all or any portion of the committee's debt, such forgiveness would be a contribution for purposes of CFL because: 1) forgiveness of debt is expressly included in the definition of contribution; 2) the definition is not limited to only pre-election forgiveness of debt; and 3) the legal fee debt was incurred pre-election for the purpose of giving voters the opportunity to vote for Congressman Brady in the 2007 Democratic mayoral primary, i.e., to influence the outcome of the election.