Yang defends $1,000 giveaway contest as 'perfectly legal'

Image: Andrew Yang speaks at the Democratic presidential debate in Houston,
Andrew Yang speaks at the Democratic presidential primary debate in Houston, Texas, on Sept. 12, 2019. Copyright Heidi Gutman ABC via Getty Images
Copyright Heidi Gutman ABC via Getty Images
By Allan Smith with NBC News Politics
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"If I gave a million dollars to a media company or consultants or hired like a small army of canvassers, no one would blink an eye," Yang said.


Democratic presidential candidate Andrew Yang insisted Sunday that his contest to provide 10 Americans $1,000 monthly for one year — which would come from campaign donations — is "perfectly legal" as campaign finance experts have expressed skepticism.

"Yes, we have an army of lawyers who signed off on it," Yang, the 44-year-old businessman who has seen his upstart presidential campaign gain momentum in recent months, told CNN's "State of the Union." "And we're sure that this is perfectly legal."

Yang added that "if I gave a million dollars to a media company or consultants or hired like a small army of canvassers, no one would blink an eye."

"But if we give the money directly to the American people, somehow, that's problematic," he continued. "So it just speaks to how messed up our system is, where giving money directly to Americans actually raises eyebrows."

During Thursday's Democratic primary debate, Yang vowed to provide 10 winners of an online raffle with $1,000 a month for an entire year, even if his presidential campaign has ended by that point. The cash contest echoes the central proposal of his campaign — the "Freedom Dividend" — which calls for the government to provide $12,000 in universal basic income to all Americans over the age of 18.

Yang has already been paying out such "Freedom Dividends" out of his own pocket to three families — one in New Hampshire, one in Iowa and one in Florida. But the use of campaign funds to do so has come under scrutiny from campaign finance experts who say it may not be legal.

The Federal Election Commission prohibits the use of campaign funds for "personal use," stating that such funds cannot be used to pay for any expenses to "fulfill a commitment, obligation or expense of any person that would exist irrespective of the candidate's campaign or responsibilities as a federal officeholder." This is known as the "irrespective test."

"The personal use restrictions apply to anyone, not just the candidate, not just the candidate's family or staff," former FEC chairman Michael Toner told NBC News. "You have to use those funds for campaign purposes."

Yang and his campaign argue the contest passes the "irrespective test" because he would not be making these payments if not for his presidential campaign, as the payments are meant to highlight his campaign's signature pledge.

Experts have offered varying positions on the legality of the contest.

Ann Ravel, a former Federal Election Commission chief, told Time, "You can't just give cash."

"If it's just given for no work done, for nothing at all, just a gift, that is inappropriate," she said.

University of California Irvine professor Rick Hasen, an election law expert, tweeted he didn't "see a legal problem so long as it is not tied to voting or registering."

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