The Oakland Public Ethics Commission would like to remind all candidates and treasurers who participated in the March, 2002, election of the local law pertaining to loans and unpaid campaign expenses.

The Oakland Campaign Reform Act (OCRA) generally treats loans -- other than those from a commercial lending institution -- as a contribution subject to the contribution limitations under OCRA. Thus if an individual or business makes or guarantees a loan to you or your campaign committee of more than $600.00 (the individual contribution limit for candidates agreeing to voluntary expenditure limits), that loan could constitute a violation of OCRA's campaign contribution limits. [OCRA §3.12.090(A)]

(Please note that candidates may loan or contribute any amount to their own campaigns unless they are participating in Oakland's Limited Public Financing Program.)

Every loan must be evidenced by a written agreement that shall be filed along with the FPPC campaign statement in which the loan is first reported. [OCRA §3.12.090(B)]

In addition to personal loans, "extensions of credit" in excess of one thousand five hundred dollars ($1,500) for a period of more than ninety (90) days are subject to OCRA's contribution limits unless the candidate can demonstrate an intent to repay through a set payment schedule which is being adhered to on a regular basis. [OCRA §3.12.090(D)]

In other words, OCRA treats as a "contribution" any extension of credit, such as an unpaid bill for services, which totals $1,500.00 and remains on the books for more than 90 days without regular payment. Since OCRA limits individual contributions to no more than $600, a bill of more than $1,500 that remains unpaid for more than 90 days could constitute a violation of OCRA's $600 limit.

Please note that OCRA does not specify the amount or frequency of payment in reducing a campaign debt. Arguably even a nominal payment, regularly made, would be enough to maintain compliance with OCRA, so long as the amount and frequency of the payment is not obviously a "sham" to avoid application of the contribution limit. Factors such as the amount of debt, number of creditors and the campaign's financial resources will be taken into account in the event of a dispute.

If you have any questions regarding the application of this law, or any other provision of OCRA, please do not hesitate to contact the Public Ethics Commission at 510-238-3593.