The NCSL Blog

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By Amanda Zoch

In the third Democratic presidential debate, Andrew Yang introduced a “Freedom Dividend,” a program that would allow 10 people to receive $1,000 a month for a year through a raffle on his campaign website. This program serves as a pilot for Yang’s Universal Basic Income plan that would provide $1,000 a month to every U.S. citizen older than 18.

Andrew Yang following the second Democratic presidential debate in July 2019. Brendan Smialowski/AFP/Getty ImagesOne concern dominates responses to Yang’s campaign stunt: Is it legal?

Ann Ravel, former chair of the Federal Election Commission, says the program violates federal campaign finance regulations on personal use. On the other hand, Yang averred on CNN’s “State of the Union,” “We have a team of lawyers who signed off on it. We’re sure it’s perfectly legal.”

Regardless of whether this campaign strategy strikes your fancy or gets your goat, it raises questions about the definition of “personal use.”

Federal campaign laws prohibit using campaign funds for “personal use,” and the “irrespective test” is used to distinguish between campaign/officeholder expenses and personal expenses. If the expense would exist irrespective of the person’s role as a candidate or elected official, then campaign funds cannot be used.

This means that campaign funds cannot be used for expenses such as mortgages, rent, vacations, entertainment not associated with campaign events, and gifts of anything more than nominal value on holidays or special occasions.

States tend to have personal use rules similar to the FEC, though some are reconsidering expenses often viewed as personal use, such as child care and security services, while others are making efforts to prohibit previously allowed campaign expenses. For example, both New York and California have pending legislation that would limit a candidate or elected official’s ability to use campaign funds for legal fees in certain situations.

Personal use rules can be ambiguous, and unintentional violations can occur. SB S2513 in New York aims to clarify appropriate use of campaign funds by altering the law’s language. While the election law currently explicates what is not an allowable use of campaign funds, the bill proposes to change the language to include what is allowed.

Even when personal use rules seem clear, surprising distinctions can occur. In Texas, for example, event tickets for a spouse to a candidate’s networking event are not a permissible campaign expense, but Spanish lessons for candidates in districts with large Hispanic populations are.

In Michigan, an expenditure that does not “further the nomination or election of the candidate” could result in a penalty of up to $1,000, 90 days in jail, or both. In Kansas, a similar violation could incur a first-time fine of up to $5,000. With thousands of dollars on the line, candidates and elected officials would be wise to spend some quality time understanding their states’ limits on the personal use of campaign contributions.

Amanda Zoch is an NCSL legislative policy specialist and Mellon/ACLS Fellow.

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.