Dem Fund Decision: Credit Card Fees = ​“Contributions”

A decision about how to count campaign contributions means Liam Brennan will have $383 extra to spend on his quest to become New Haven’s next mayor — and his competitors may need to reexamine their books.

The New Haven Democracy Fund handed down that decision at a meeting Wednesday evening.

The Fund administers the city’s public-financing system for mayoral candidates. It decided that when donors opt to pay an online credit card transaction fee for a campaign contribution, that paid fee, too, counts as a contribution.

That hadn’t been clear in the past. So candidates treated those fees different ways.

The issue arose this past month after Brennan’s campaign reported those donor-paid fees as financial contributions. It submitted those figures as countable in the financial match qualifying candidates receive from the Fund.

Not much money was at stake: An estimated $383.

But no campaign had tried to do that before in the NHDF’s 15 years of operation. The effort called into question whether candidates who didn’t report those fees were in the process violating a key rule for qualifying for public money: The rule that candidates may not receive individual contributions above $445. That’s because a donated but not-counted $1 transaction fee, for instance, would bump that contribution to an impermissible $446.

Everyone involved was as confused as the reader probably is now.

So the Democracy Fund asked the state for help. It asked for a state legal opinion about how the state’s version of the public-financing system looks at this issue. That matters because the New Haven Democracy Fund has candidates use the same State Elections Enforcement Commission (SEEC) forms for reporting donations.

SEEC Legal Compliance Director Shannon Clark Kief sent the NHDF this opinion on Tuesday. The upshot: When a donor pays the online credit card transaction fee, that does count as a contribution. It’s up to New Haven whether it wants to consider that a monetary contribution or an ​“in-kind” contribution.

Then the NHDF board voted Wednesday night to set policy for this campaign year: Campaigns are to include the transaction fees as a monetary contribution. That small fee amount will then become eligible for the 2 – 1 dollar match the NHDF gives qualifying candidates for contributions up to $35.

That means the Brennan campaign will indeed be able to claim the around $383 matching money it sought in its initial filing based on first quarter 2023 fundraising, said NHDF Administrator Aly Heimer.

It also means that the campaigns of the two other mayoral candidates participating in the Democracy Fund, Democrats Justin Elicker and Shafiq Abdussabur, need to reexamine their filings and return to donors any transaction fees that would have put their contributions above the $445 limit. And they need to count those transaction fees as contributions moving forward.

The NHDF decision covered just this year’s election so the board has time to examine a long-term policy, specifically the question of whether to count the transaction fees as monetary or in-kind contributions. And, if the latter, whether they’d be permissible under NHDF rules.

Candidate Brennan said the ruling vindicates the campaign’s view that those transaction fees count as contributions under state law.

“I regret that this may have to cause the other campaigns to amend their filings, but under campaign finance law, this was clearly always the correct decision,” Brennan stated. ​“Making change is always a team effort.” 

The NHDF, a voluntary program, provides an initial public grant and matching funds to eligible mayoral candidates who agree to cap individual donations at $445 and swear off contributions from political committees.