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Andrew Yang’s plan to give 10 families $1,000 a month drew giggles, Oprah GIFs — and legal concerns

On Sept 12., tech entrepreneur Andrew Yang outlined his "Freedom Dividend" plan at the third Democratic debate, which would give 10 families $1,000 each month. (Video: ABC)

Entrepreneur Andrew Yang said in a memorable moment during Thursday’s Democratic presidential debate that his campaign plans to randomly select 10 families from all over the country and give them $1,000 a month. He directed viewers to his campaign website, which said in white block text, “WIN $1,000 A MONTH,” and below, in parentheses, “No strings attached.”

The “promotion period,” according to the campaign website, started Thursday at 8 p.m. Eastern time and ends on Sept. 19, 11:59 p.m. Eastern time

News of Yang’s plan elicited giggles from his opponents, GIFs and jokes galore on social media, and several legitimate concerns on legality.

The “promotion,” which his campaign teased under the banner #YangsDebateSurprise ahead of Thursday’s debate, is part of a pilot program for his trademark proposal for a universal basic income, called the Freedom Dividend. The policy would give every American older than 18 a thousand dollars a month, no matter their employment status.

“We have to get our country working for us again instead of the other way around,” said Yang, a Washington outsider who has outlasted two governors, a senator and two members of the House. “It’s time to trust ourselves more than our politicians.”

Yang has already been paying $1,000 a month to three families, one in Iowa, another in New Hampshire and a third in Florida. After inquiries from reporters about the legality of the payouts, Yang, who funded the contributions himself, reported them as gifts on his campaign finance reports. It’s unclear how the expansion of the plan would work.

On the debate state, Yang’s announcement was met with titters from several other candidates. South Bend, Ind., Mayor Pete Buttigieg, who spoke after Yang, said, “It’s original, I’ll give you that."

On Twitter, Yang’s plan was likened to a “sweepstakes” — a kind of contest that people can enter free with the hope of earning a grand prize.

Some, such as celebrity lawyer and Trump foe Michael Avenatti, criticized the move as a “stunt.” Others tweeted GIFs of Oprah, comparing the entrepreneur to the media executive known for giving out free prizes on her television shows.

Alexis Ohanian Sr., co-founder of the social platform Reddit, tweeted his support for the plan, writing, “Hey @AndrewYang I like this idea so much I’ll do it personally for those 10 people if you can’t.”

Several conservative leaders, including the president’s lawyer Rudolph W. Giuliani, suggested that Yang’s plan is illegal.

Federal elections law bans the use of campaign funds for “personal use,” which includes expenses for a home mortgage or rent, clothing purchase, country club membership, a vacation or household food items. It is defined as funds that would be used regardless of whether that candidate was running for office.

A spokesman for Yang’s campaign said payments will be made at random to those who sign up for it on the campaign website, and that the payments are considered a campaign expense because they are “being made to further the goals of the campaign.” The campaign said they consulted with legal counsel, who approved the proposal.

But some campaign finance lawyers expressed concern. The crux of the issue seems to boils down to language in the law, which prohibits the personal use of campaign funds by “any person.” The 10 people who stand to receive Yang’s dividends are likely to spend this money for personal purposes, potentially placing Yang’s plan in violation of the law.

The personal use prohibition has a dual purpose: to prevent corruption as well as to protect donors and make sure that their money is “not going to line anybody else’s pocket other than for services provided to the campaign,” said Adav Noti, a former lawyer for the Federal Election Commission who is now chief of staff of the Campaign Legal Center, a group that advocates greater restrictions in campaign finance.

“To maintain donors’ faith in the system, it’s important that they have some reasonable level of certainty that their money — especially small-donor money, but all money — is getting used” for a campaign purpose, Noti said.

If the campaign were to make these expenditures as an exchange for services — for example, requiring recipients to make media appearances on behalf of the campaign — there may be a legal reasoning that the payments are fees for services, he added.

But the campaign said there will not be such requirements for the recipients and that the payments will not be used as fees for services.

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Jessica Levinson, an election law professor at Loyola Law School in Los Angeles, said campaign funds can be used broadly for political purposes but that writing checks to voters or supporters pushes the boundaries of what constitutes a political purpose.

“If the regulations were a rubber band, this would be stretching it to its extreme,” Levinson said.

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The FEC, which enforces campaign finance laws and regulations, recently lost its voting quorum. Without a quorum, Yang cannot seek any advisory opinions to receive guidance on whether these payments are according to law, experts said.

“We’re in a place where presidential candidates can start handing out checks, and it’s not clear if the FEC will act in any way. Without a quorum, there’s literally nothing they can do,” Levinson said.

During Thursday’s debate, Yang, the son of Taiwanese immigrants, also raised eyebrows when he suggested that he knows a lot of doctors because he is Asian. Some found the comment bewildering; others criticized him for reinforcing an unfair and harmful stereotype of Asian Americans as “model minorities.”