FPPC Bulletin
March 2005
Fair Political Practices Commission
Volume 31, No. 1

[Image of the Seal of the State of California]

The FPPC Bulletin is published by the Fair Political Practices Commission
428 J Street, Suite 620, Sacramento, CA 95814
Internet: http://www.fppc.ca.gov
Toll-free advice line: 1-866-ASK-FPPC (1-866-275-3772)
Telephone: 1-916-322-5660
Enforcement hotline: 1-800-561-1861
The Bulletin is published quarterly on the FPPC web site. To receive the Bulletin by e-mail, use our web site Mailing Lists tool at http://www.fppc.ca.gov/index.html?id=408


In this issue:

Toll-free Advice line
Court backs FPPC
California Fair Political Practices Commission
Commission Meetings
Meeting dates for 2005
Two new commissioners join FPPC
Highlights of 2004
Meeting Summaries
Enforcement summaries
Clerks’ Corner
Legislation report
Website Update
Litigation report
Advice summaries


Toll-free Advice Line:
1-866-ASK-FPPC

Public officials, local government filing officers, candidates, lobbyists and others with obligations under the Political Reform Act are encouraged to call toll-free for advice on issues including campaign contributions and expenditures, lobbying and conflicts of interest. FPPC staff members answer thousands of calls for telephone advice each month.

Return to index


Constitutionality of Disclosure Rules
Upheld in Major Court Decision

The U.S. District Court in Sacramento has ruled in the Commission’s favor in a case that challenged the constitutionality of certain important disclosure rules.
The case was filed by the California Pro-Life Council (CPLC) against the FPPC in 2000. The court action challenged the constitutionality of disclosure rules for groups which are not exclusively political committees but engage in political activity — such as advocating for or against ballot measures. District Court Judge Frank C. Damrell held hearings on the issue last December and issued an opinion February 22.

In the same case, the 9th U.S. Circuit Court of Appeals in San Francisco had ruled in 2003 that the FPPC had the ability to regulate express ballot measure activity. In that decision, the 9th Circuit directed the District Court to determine whether the state had a constitutionally sufficient reason to require the disclosure.

Damrell, in his ruling, found that the state has a compelling state interest in requiring disclosure of certain contributions to CPLC, as well as disclosure of expenditures by CPLC to fund express ballot measure advocacy. The court also found that the challenged rules were sufficiently tailored to pass constitutional muster, concluding its opinion:

“The court further finds that the regulatory scheme imposed on CPLC and groups like CPLC who engage in express ballot measure advocacy is the least restrictive means available for California to achieve its compelling interest in fully informing voters and preventing organizations from disguising their involvement in express ballot measure advocacy.”

FPPC Chair Liane Randolph called the decision “a complete victory for the FPPC and the public’s right to know which contributors are supporting ballot measure activity in California.”

Return to index


California
Fair Political
Practices Commission

Commissioners

Liane Randolph, Chair
Philip Blair
Sheridan Downey III
A. Eugene Huguenin, Jr.
Ray Remy

Return to index


Commission Meetings

Meetings are generally scheduled monthly in the Commission Hearing Room, 428 J Street, 8th Floor, Sacramento. Please contact the Commission or check the FPPC web site, http://www.fppc.ca.gov, to confirm meeting dates.

Pursuant to section 11125 of the Bagley-Keene Open Meeting Act, the FPPC is required to give notice of its meetings ten (10) days in advance of the meeting. In order to allow time for inclusion in the meeting agenda and reproduction, all Stipulation, Decision and Order materials must be received by the FPPC no later than three (3) business days prior to the ten day notice date.

The Commission meeting agenda and supporting documents are available free of charge on the Commission's web site at http://www.fppc.ca.gov. Additionally, past and future agendas are posted on the web site.

Return to index



Fair Political Practices Commission
2005 Commission Meeting Schedule

The Fair Political Practices Commission currently is planning to meet on the following dates during calendar year 2005:

Tuesday, April 19

Thursday, May 12

Thursday, June 9

Thursday, July 7

No meeting in August

Thursday, September 1

Thursday, October 6

Thursday, November 3

Thursday, December 1

Meetings generally begin at 9:30 a.m. or 9:45 a.m. in the FPPC’s 8th floor hearing room at 428 J Street, Sacramento, but check the FPPC website regularly as dates and times can change.

Return to index


Two New Commissioners Appointed to FPPC

By Jon Matthews
FPPC Publications Editor
Two new commissioners have been appointed to the five-member Fair Political Practices Commission.

Ray Remy, a longtime business leader and a former state department head, was named to the Commission by State Controller Steve Westly.

A. Eugene Huguenin, Jr., a veteran Sacramento-area attorney, was appointed to the Commission by Secretary of State Kevin Shelley prior to Shelley’s resignation from office.

Both appointments were made in February.

“We welcome our new commissioners and look forward to working with them. Ray and Gene bring to the FPPC a strong and diverse background from the worlds of business, government, law and education,” said Commission Chair Liane Randolph.

Remy replaces FPPC Commissioner Pamela Karlan, a Stanford University Law School professor whose term expired January 31, 2005. Huguenin replaces Commissioner Thomas S. Knox, a partner with the Sacramento law firm of Knox, Lemmon & Anapolsky, LLP. Knox’s term also expired January 31.

“Commissioners Karlan and Knox contributed greatly to the Commission and its work during their years here. Their grasp of complex legal issues, their commitment to public service, and their keen sense of fairness were deeply appreciated,” Randolph said.

New Commissioner Huguenin practices labor, employment and education law in Elk Grove near Sacramento.

Before relocating in 2000 from the Bay Area, he practiced labor and education law in Los Angeles and Burlingame, advising and representing the California Teachers Association and its local affiliates throughout the state for 27 years. He continues to advise and represent public employees and their organizations in judicial and administrative proceedings, as well as provide consultation on educational policy and procedures. He is a member of the California Political Attorneys Association, the Sacramento and Los Angeles County Bar Associations, the State Bar of California and the American Bar Association. He received his Bachelor’s degree in Business Administration in 1966, and his Juris Doctorate in 1969, from the University of Washington. Prior to joining the teachers’ association, Huguenin worked in the Seattle area with a local teachers’ association and a national accounting firm.

A Democrat, Commissioner Huguenin’s term expires January 31, 2009.

New Commissioner Remy is president of RR Consulting of South Pasadena. He previously served as director of the state Employment Development Department and was the longtime president of the Los Angeles Area Chamber of Commerce. He also served as Deputy Mayor and Chief of Staff under former Los Angeles Mayor Tom Bradley, is a former Executive Director of the Southern California Association of Governments and former Assistant Director of the League of California Cities. He is a member of the American Society for Public Administration and previously served as that group's national president. He currently is a member of the Board of Trustees and the Executive Committee of Claremont McKenna College, and also is a member of the Executive Committee of the Association of Independent Colleges of California. He is a former president of the Institute for Local Self Government. He received a Master's degree in Public Administration from the University of California, Berkeley, and received his undergraduate degree from Claremont McKenna.

A Republican, Commissioner Remy's term expires January 31, 2009.

With the exception of the chair, FPPC commissioners are part time, serve without salary and receive a $100 stipend for each monthly meeting.

Return to index


Our 30th Year of Service

FPPC’s 2004 Achievements
Include Major Enforcement,
Education, Litigation
and Regulatory Actions

The Fair Political Practices Commission, created by the people through a 1974 ballot initiative, began operation in 1975 and marked its 30th year of service to Californians in 2004.

As it began three decades ago, the Commission remains a non-partisan panel of five members that is responsible for administering and enforcing the Political Reform Act’s rules on conflicts of interest, campaign contributions and expenditures and lobbying disclosure.

Our regulated community includes tens of thousands of state and local government officials and designated employees, as well as state and local candidates, campaign committees and major donors and lobbyists.

The mission statement of the FPPC declares that the agency promotes “the integrity of representative state and local government in California through fair, impartial interpretation and enforcement of political campaign, lobbying, and conflict of interest laws.”

In the early years, Commission communications to regulated persons and the public were primarily conducted through the post office, telephone and public meetings.

Today, our monthly public Commission meetings remain the heart of our activity, but we also use our extensive website and automatic
e-mail systems to more efficiently get the word out about our proposals, actions and projects.

Despite resource limitations and heavy caseloads in its regular programs, the Commission launched or continued a variety of major new initiatives in 2004. These included:

A proposed pilot project intended to consolidate California’s conflict-of-interest laws
The approval and publication of new guidelines for filing officers of Statements of Economic Interests
A new regulation that applies state candidate contribution limits to state candidate-controlled ballot measure committees
Continued improvements to our website and e-mail systems
A continued commitment to seek more input and feedback from the regulated community and the public in the formative stages of our rulemaking process
Adoption of newly amended regulations to provide clearer guidance to those committees using electronic methods to make and receive contributions
Major litigation defending the Political Reform Act
A discussion of the challenges of regulating Internet political campaigning
Revision of the FPPC’s Campaign Disclosure Manuals and other key publications

The FPPC is one of the smaller state agencies and has its office and headquarters in Sacramento at 428 J Street. We have a staff of approximately 60 employees and had a 2004-05 fiscal year budget of approximately $6.1 million. The chair of the Commission serves full time and is salaried, while the four other commissioners serve part time and receive a modest stipend for each monthly meeting.

The Commission had over 225 agenda items before it during its 2004 meetings, requiring extensive preparations and review of documents by the commissioners prior to each meeting.

The following are some of the major highlights of the FPPC’s work in 2004:


Enforcing the law

The FPPC’s Enforcement Division had an extremely busy year and opened 839 enforcement case files. The division completed prosecution of 168 cases during the year. The Commission assessed $1,445,562 in administrative and civil fines in 2004, compared to $798,734 in 2003 (please see the charts accompanying this article for details).

Of these cases in 2004, 32 percent stemmed from our Statement of Economic Interests Nonfilers Proactive (streamlined) Program, 27 percent from our Late Contribution Reports Proactive (streamlined) Program, 22 percent from campaign and other violations, 15 percent from our Major Donor Proactive (streamlined) Program, and 3 percent from conflict-of-interest violations.

The special proactive programs used by the Enforcement Division result in expedited prosecutions and more timely public disclosure. The division strives to educate and alert respondents with the goal of preventing additional violations of the Political Reform Act in the future.

During 2004, the Commission approved changes to the streamlined enforcement program for Statement of Economic Interests NonFilers. The changes incorporated the use of one-page stipulation documents similar to those used in the other streamlined enforcement programs, and modified the schedule of penalties imposed under the program

The 2004 fines brought the cumulative total of FPPC fines to $15,951,310, combined administrative and civil, since the agency began operation in 1975. (This total does not include $89,450 in assessed fines that were waived by the Commission in 1976 and during the 1980s.)

While the vast majority of enforcement cases are resolved through stipulated settlement agreements, the FPPC also is empowered to take enforcement cases before the civil courts. Attorneys and other staff from the Legal Division and Enforcement Division, in some cases with the assistance of outside counsel, devote much of their time to these cases.

Developments in major civil cases ongoing in 2004 included:

The 3rd District Court of Appeal in Sacramento upheld the right of the FPPC to sue the Agua Caliente Band of Cahuilla Indians for failing to disclose the tribe’s contributions to political campaigns and its lobbying activities.
The 3rd District Court of Appeal in Sacramento affirmed a Sacramento Superior Court ruling which denied a motion to dismiss a lawsuit filed by the FPPC against the American Civil Rights Coalition (ACRC) and its CEO, Ward Connerly, for violating campaign disclosure laws in the unsuccessful campaign for passage of Proposition 54 in the Nov. 7, 2003, special election.
The 3rd District Court of Appeal upheld the right of the FPPC to sue the Santa Rosa Indian Community for violations of campaign disclosure provisions of the Political Reform Act. The three-judge appellate court panel ruled 2-1 to reverse an earlier Superior Court decision that had granted a motion by the tribe to dismiss the suit.

The cases are continuing. In 2004, the FPPC also was able to obtain civil court settlements in several other major enforcement cases.
During 2004, Enforcement Division staff members also participated in training sessions for district attorneys and other outside law enforcement officials, seminars of the Council on Governmental Ethics Laws and other events.

Informing the public and
regulated community

While one of the key duties of the FPPC is enforcing the Political Reform Act, the Commission also places much of its emphasis on educating and advising the regulated community so as to prevent and avoid future violations.

FPPC staff members answered thousands of calls for telephone advice from members of the regulated community. The FPPC saw its very popular toll-free advice line—1-866-ASK-FPPC—complete its fourth full year of operation in 2004.

On all lines coming into the FPPC in 2004, including our toll-free line, our Technical Assistance Division staff members answered 50,629 calls seeking advice, guidance and other assistance.

Here are some interesting facts about the calls we received:

By far the busiest hour of the day was from 9 a.m. -10 a.m.
The busiest day of 2004 was April 1, with 435 calls made to the FPPC (veteran staff members believe this was a record).
The busiest month of 2004 was October, with 6,481 calls.
The slowest month was May, with 2,560 calls.
Generally, the number of daily calls ranged between 120 and 150.

Callers asked a broad variety of questions, including how to comply with the Political Reform Act's rules governing campaign contributions and expenditures, how to avoid conflicts of interest, how to complete Statements of Economic Interests (Form 700s), and how to comply with lobbying disclosure requirements.

On the more complicated advice issues, the FPPC wrote 276 letters of advice to those with obligations or duties under the Political Reform Act. The Legal Division and Technical Assistance Division held regularly scheduled joint internal advice meetings on the more complex issues pertaining to advice.

The FPPC's Technical Assistance Division offered numerous in-person seminars on a variety of subjects. Held at FPPC headquarters in Sacramento and in various other communities and agency offices, these seminars provided an informal overview of Political Reform Act obligations. Staff members offered PowerPoint presentations, informal discussions, and lengthy opportunities for questions and answers. Unfortunately, budget reductions have affected the ability of our staff members to travel. In some cases, other agencies and local governments have helped finance travel expenses for seminars requiring longer trips from Sacramento, and the FPPC greatly appreciates the assistance. Seminars in 2004 included:

Thirteen candidate/treasurer seminars in locations ranging from Berkeley to San Diego, with a total attendance of approximately 500 persons
Seven seminars for Statement of Economic Interests filing officers, with attendance averaging at least 25 attendees per session
Seven seminars for specific agencies and their Statement of Economic Interests filers, with attendance averaging at least 25 per session
Seven seminars for local agencies on how to amend their conflict-of-interest code, with a total attendance of about 130
Addresses to two city clerk meetings in Fresno and San Diego
Four campaign filing officer workshops
Seven Statement of Economic Interests outreach visits
Five campaign disclosure outreach visits
Assistance at lobbyist ethics training sessions

Other Commission staff, including those from Executive, the Legal Division, the Enforcement Division and the Public Education Unit, also participated in many outreach and educational activities. Groups and organizations addressed by FPPC staff included the California Council on School Attorneys, the state Assembly Fellows, Compton Community College, the California Association of Public Retirement Systems (CALAPRS) attorneys’ roundtable, the San Francisco Ethics Commission, the California Broadcasters’ Association, the California Political Attorneys Association, the California Political Treasurers Association, the County of San Diego, the City Attorneys' Continuing Education Program of the California League of Cities and the California Association of Sanitation Agencies.

The FPPC was an active participant in the 26th annual conference of the Council On Governmental Ethics Laws (COGEL), held December 5-8 in San Francisco. COGEL is an international organization of government agencies, organizations, and individuals with responsibilities or interests in governmental ethics, elections, campaign finance, lobby laws and freedom of information.

FPPC Commission members and staff helped plan the COGEL event, served as committee members, and moderated or served as panelists for a variety of sessions, including seminars on pre-election enforcement actions; tribal sovereignty issues; the enforcement of ethics, campaign finance and lobbying laws and media relations.
In another major project, at its December 9 meeting the Commission adopted guidelines for Statement of Economic Interests filing officers. The guidelines, published on our website, provide a suggested timeline for notifications to individuals who must file an annual Statement of Economic Interests.

The FPPC produced or revised a number of publications during 2004. Two new campaign disclosure manuals, developed during 2003, were given final approval by the Commission at its January 2004 meeting and thereafter published on the FPPC’s website. The new manuals include information on candidates’ and committees’ record keeping requirements, definitions important to campaigns, reporting obligations and restrictions and prohibitions.

Numerous FPPC forms and accompanying instructions also were revised in 2004 to conform with changes to the Political Reform Act and to simplify compliance.
Other new or revised publications included a 2004 Addendum to FPPC Campaign Disclosure Information Manuals C - E, the 2004 version of the Political Reform Act of 1974, an updated fact sheet on Committee Termination Requirements for State Candidates and Officeholders, a new fact sheet on Important Changes in Campaign Reporting Rules and four issues of our newsletter, the FPPC Bulletin. The e-mail subscription list for the Bulletin grew to over 1,000 persons during 2004.

The FPPC’s media director, assisted by the executive fellow and other staff, responded to hundreds of inquiries from journalists from newspapers, radio and television broadcast networks and stations, magazines, web-based publications, newsletters and the foreign press. Assistance provided by the agency included copies of Statements of Economic Interests and other public records, in-depth interviews, telephone assistance and publication of numerous press releases and press advisories. The office produced over 35 news releases or news advisories during the year.

With the assistance of all divisions, the Public Education Unit coordinated the FPPC’s website, published the FPPC Bulletin and other educational publications, provided a dial-in broadcast of Commission meetings and offered other services.

Interpreting the law

The Commission issued two new formal opinions during 2004:

In re Roberts, 17 FPPC
Ops. 9, O-04-093.
The Commission adopted an opinion concluding that the term “spouse,” for purposes of the Political Reform Act, should include domestic partners. A new law amending the Family Code, which took effect January 1, 2005, prompted analysis of the issue. The specific opinion request pertained to the application of the disqualification provisions of the Act in a domestic partnership situation. The Commission subsequently adopted a regulation addressing this issue.

In re Taylor, 17 FPPC
Ops. 1, O-04-103
An unsuccessful candidate for Governor in the March, 2004, statewide special election requested an exemption from the requirement that he identify on his Statement of Economic Interests (Form 700) certain sources of income to his wholly owned law firm. His request was based on the unusually sensitive nature of a practice specializing in “tax controversies.” The opinion concluded that in light of all the circumstances, the candidate had established sufficient cause for the exemption he sought from the disclosure requirements of Government Code section 87207(b)(2).

The Commission, assisted by the Legal Division and other staff members, also continued its interpretation and implementing of the Political Reform Act through a variety of major regulatory projects. These efforts included the adoption, amendment or repeal of over 40 regulations during 2004.

Major new regulations included 18530.9, which states that the contribution limits of California Government Code sections 85301 and 85302 now apply to state candidate-controlled ballot measure committees. The regulation took effect on November 3, 2004, the day after the statewide general election. Generally, ballot measure committees controlled by state candidates are now subject to the same contribution limits as candidate committees. The rule is being challenged in court and defended by the FPPC.

On October 7, 2004, the Commission considered a staff proposal intended to consolidate conflict-of-interest laws not currently under the Commission’s jurisdiction. The proposal would dedicate staff resources to the incorporation of Public Contracts Code sections 10410 and 10411 into the Political Reform Act, and the development of a pilot project to grant limited jurisdiction to the Commission over Government Code section 1090, et seq., through a three-year pilot project. The pilot project was endorsed by the League of Cities. The Commission formerly directed staff to pursue both projects legislatively. The pilot project, as proposed, would not move or amend section 1090 of the Government Code, would run for a three-year period, would follow a process similar to the existing Commission opinion process as set forth in Commission regulations, and the Commission would need to be given sufficient additional funding to deal with the increased workload (including the educational component).

The Political Reform Act has been amended numerous times since its initial approval by voters. FPPC commissioners and staff members constantly track new legislation affecting the Act, and the Commission may take positions on bills when it deems appropriate. Those involved in tracking and analyzing bills include the executive director, executive fellow, assistant to the Commission, Commission counsel and others.

In other 2004 activity, the Commission and staff redoubled efforts to encourage participation in the FPPC’s Interested Persons process.
Interested Persons’ meetings in 2004 invited public comment on a wide range of rulemaking subjects including filing officer guidelines, mass mailings sent at public expense, reporting and valuation of gifts, candidate controlled ballot measure committees and the possible consolidation of certain of California’s conflict-of-interest laws (see previous reference).

To further encourage participation in the Interested Persons’ process, the Public Education Unit launched a new, consolidated web page with links to meeting information and background materials, and published a new, color brochure entitled, “Voicing Your View—The FPPC welcomes public comment and participation in its Interested Persons process.”

In an effort to further assess the impact of technology on the political process, the Commission received and discussed the final recommendations of the Bipartisan California Commission on Internet Political Practices. The Internet Commission’s report, which is posted on our website, provides information regarding the scope of online political activity and examines issues raised by this activity. According to the report, the Internet Commission believes that “the Internet and associated new technologies, if allowed to flourish, increasingly will be used in ways that improve the quality of campaigns and elections.”

Filing and code review duties

In 2004, FPPC staff members received, logged, reviewed and filed 21,361 Statements of Economic Interests and Statements of Economic Interests amendments from public officials across California. These statements are public records and copies are made available by the Commission to the public upon request at no charge or, for larger orders, for a nominal fee.

Designated employees and officeholders at virtually all state and local agencies, as well as candidates for public office, use the FPPC “Form 700” to file these personal financial statements. The FPPC reviewed and revised the Form 700 during 2004—an annual project.

Many Statements of Economic Interests are not filed directly with the FPPC, but instead go to local or state agency filing officers or other officials. As previously noted, the FPPC published new guidelines for Statement of Economic Interests Filing Officers. FPPC staff members also assisted state, local and multi-county government agencies in the adoption, review and update of their individual conflict-of-interest codes.

Staff in the Technical Assistance Division also are responsible for reviewing conflict-of-interest codes for over 650 state and multi-county agencies. Every other year, agencies must review their conflict-of-interest code and submit changes to the FPPC. Five political reform consultants review code changes as well as assist in preparing codes for new agencies and commissions that are formed.

Administration

In 2004, the FPPC’s small Administration Division provided computer and data processing support, budgeting, purchasing, printing, personnel services, public reception, mailing, document receiving and many other vital services. Information Technology personnel continued their work on the development of an internal computer network—an “intranet” — intended to improve internal employee communication and assist in project management. The division continued to assist the agency in ensuring that operations costs meet budget constraints.

The Commission’s Budget

Although it has extensive statewide
responsibilities, the FPPC is one of the smaller state agencies in terms of both its budget and number of authorized staff
positions. The total budget appropriation for fiscal year 2004-2005 was $6.1 million. Five years earlier, in fiscal year 2000-2001, the budget was $6.6 million, or $500,000 more than in fiscal year 2004-2005. Administrative and civil fines collected by the FPPC are not retained by the Commission but are forwarded to the state’s General Fund.


The FPPC: Who we are

The Fair Political Practices Commission was created by the Political Reform Act of 1974, a ballot initiative passed by California voters as Proposition 9.

The Commission is a bipartisan, independent body of five members that administers and enforces the Political Reform Act’s rules on conflicts of interest, campaign contributions and expenditures and lobbying disclosure.

The Commission educates the public and public officials on the requirements of the Act. It provides written and oral advice to public agencies and officials; conducts seminars and training sessions; develops forms, manuals, instructions and educational materials; and receives and files economic interests statements from many state and local officials.

The Commission investigates alleged violations of the Political Reform Act, imposes penalties when appropriate and assists state and local agencies in developing and enforcing conflict-of-interest codes.

The Governor appoints two commissioners, including the chairman. The Secretary of State, the Attorney General and the State Controller each appoint one commissioner. Commissioners serve a single, four-year term, and no more than three members can be registered with the same political party. The chairman is salaried and serves full-time, and the other four members serve part-time.

The Commission generally meets once each month to hear public testimony, issue opinions, adopt regulations, order penalties for violations of the Act and take other action.

Supporting the Commission is a staff of 60 employees. The Commission has four main divisions — Enforcement, Technical Assistance, Legal and Administration, as well as a small executive staff and a Public Education Unit.

The Commission is headquartered at 428 J Street in downtown Sacramento. The public reception area is in Suite 620.

[Image of: FPPC Staff Services Analysts Emily Bowden and Cyndi Glaser are among our staff members who each year receive, check, log and file thousands of Statements of Economic Interests from government officials and designated employees. ]

List of 2004 Interested Persons’ Meetings

November 9 (10 a.m.)
Eliminating paper copies of quarterly lobbying disclosure reports
November 9 (2 p.m.)
Review of revised forms and Instructions
August 25
Relating to the proposed incorporation of other conflict-of-interest laws into the Political Reform Act
July 22
Filing officer guidelines for Statements of Economic Interests
June 17
Relating to the possible incorporation of conflict-of-interest rules existing in other bodies of law, into the Political Reform Act
June 14
Relating to regulation 18901 - Mass Mailings Sent at Public Expense
June 14
Relating to Proposition 34, Government Code section 85307, loans and extensions of credit
May 26
Relating to regulations 18946 (Reporting and Valuation of Gifts); and 18946.4 (Tickets to Nonprofit and Political Fundraisers)
April 7
Relating to the possible incorporation of Government Code section 1090 into the Political Reform Act
March 24
Conflict of interest regulations: Standards of care
March 10
Proposal to extend the termination date of committees and allow committee reopening
February 18
Proposition 34: Sections 85303 and 85310: Candidate controlled ballot measure committees
January 13
Conflict-of-interest regulations and general plans.
Proposal to merge Government Code section 1090 and other statutory and common law conflict-of-interest provisions into the Political Reform Act.

— Excerpt from one of the Legal Division memoranda presented to the Commission in 2004 follows:

In recent years, changes in technology have provided candidates and committees with the ability to receive contributions via credit card, debit account and other similar electronic means. In response, the regulated community has sought advice regarding the permissibility of electronic contributions and a determination of the types of records which must be maintained for these contributions. Staff has advised that electronic contributions are allowed under the Political Reform Act (the “Act”) and are “received” when authorized by the contributor. However, interviews with several treasurers indicated that the regulated community follows a different time line for determining when an electronic contribution is “received.” In addition, these interviews revealed that the types of records kept for electronic contributions vary within the regulated community. In order to remedy these discrepancies, staff proposes amendments to regulations 18401 and 18421.1 which would establish recordkeeping and disclosure standards for electronic contributions. Regulation 18401, the required recordkeeping regulation, would be amended to outline which records must be retained for a contribution made through electronic means. (See Appendix A - Proposed Amendments to Regulation 18401.) Regulation 18421.1, which contains the standards for determining when a contribution is made or received, would be amended to provide a clear rule for determining when an electronic contribution has been “made” or “received.”

 

Return to index



Meeting Summaries

Summaries of actions at the Commission’s regular monthly meetings are posted on the Commission’s website at:

http://www.fppc.ca.gov/index.html?id=63

See the following article for a summary of enforcement actions.

Return to index


 

Enforcement Summaries

February Commission
Meeting

Conflicts of Interest Violations
and Campaign Reporting Violations

In the Matter of Terry Morgan and Terry Morgan for West Hollywood City Council, FPPC No. 01/215. Staff: Senior Commission Counsel Deanne Canar and Chief Investigator Sue Straine. Respondent Morgan was a former member of the Business License Commission for the City of West Hollywood and an unsuccessful candidate for West Hollywood City Council. Respondent Terry Morgan for West Hollywood City Council was the committee established by Respondent Morgan to support his candidacy for city council. Respondent accepted a campaign contribution of more than $250 from a party to a proceeding that was pending before the business license commission, in violation of Government Code section 84308, subdivision (b) (1 count). Respondents Terry Morgan and Terry Morgan for West Hollywood City Council failed to timely file a post-election semi-annual campaign statement, in violation of Government Code section 84200, subdivision (a) (1 count). $2,500 Fine.

In the Matter of Donald Schrader, FPPC No. 01/254. Staff: Senior Commission Counsel William L. Williams, Jr. and Investigator III Jon Wroten. Respondent Donald Schrader violated the Political Reform Act by making a governmental decision in which he had a financial interest, in violation of Government Code section 87100 (2 counts), and using or attempting to use his official position to influence governmental decisions in which he had a financial interest, in violation of Government Code section 87100 (1 count). $10,000 fine.

Campaign Reporting Violations

In the Matter of Kings Arco Arena Limited Partnership, FPPC No. 04/165. Staff: Commission Counsel Elizabeth K. Conti and Investigator III Jon Wroten. Respondent Kings Arco Arena Limited Partnership is a sports and entertainment business located in Sacramento. Respondent failed to timely disclose a late contribution in a properly filed paper late contribution report, in violation of Government Code section 84203, subdivision (a) (1 count); and failed to timely disclose a late contribution in a properly filed electronic late contribution report, in violation of Government Code section 84605, subdivision (a) (1 count). $10,000 fine.

In the Matter of Consumers and their Attorneys, Yes on Proposition 30, FPPC No. 00/101. Staff: Commission Counsel Elizabeth K. Conti and Accounting Specialist William Marland. Respondent Consumers and Their Attorneys, Yes on Proposition 30 was a state ballot measure committee headquartered in Sacramento. Respondent failed to report sub-vendor information for payments made to Morris & Carrick, a political consulting firm based in New York, in violation of Government Code section 84211 and 84303 (5 counts). $10,000 fine.

In the Matter of Dick Frank, and Re-elect Dick Frank Assessor, FPPC No. 02/1076. Staff: Senior Commission Counsel Julia Bilaver and Investigator II Charlie Bilyeu. Respondent Dick Frank was a successful incumbent candidate for Assessor of San Luis Obispo County in an election held on March 5, 2002. Respondent Re-elect Dick Frank Assessor was the controlled committee of Respondent Dick Frank. Respondents failed to timely file a semi-annual campaign statement by July 31, 2002, for the reporting period Feb. 17 through June 30, 2002, in violation of Government Code section 84200, subdivision (a). $5,000 fine.

Contributor Identification Violation

In the Matter of Calsan, Inc., FPPC No. 01/641. Staff: Senior Commission Counsel Melodee A. Mathay and Investigator III Jon Wroten. Respondent is a garbage hauling company located in Downey. In 1999, Respondent was the true source of three campaign contributions, totaling $849, made to two Cerritos City Council candidates and a candidate for the Compton Community College Board of Trustees. The contributions were made in the name of a company employee, in violation of Government Code sections 84301 and 84300 (3 counts). $4,500 fine.

Late Contribution Reporting Violations – Streamlined Program

Failure to Timely Disclose Late Contributions. Staff: Chief Investigator Sue Straine, Investigator III Jon Wroten, and Political Reform Consultant Mary Ann Kvasager. The following persons and entities have entered into stipulations for failing to timely disclose late contributions in properly filed late contribution reports in 2003, in violation of Government Code Section 84203:

In the Matter of Mirsaied Kashani, FPPC No 2004-762. MirSaied Kashani of Los Angeles failed to timely disclose a late contribution of $10,000 (1 count). $1,500 fine.

In the Matter of Sandra Lee, FPPC No. 2004-763. Sandra Lee of Santa Monica failed to timely disclose a late contribution of $10,000 (1 count). $1,500 fine.

In the Matter of Casey Wasserman, FPPC No. 2004-766. Casey Wasserman of Los Angeles failed to timely disclose a late contribution of $20,000 (1 count.) $3,000 fine.

In the Matter of James & Janet Ray, FPPC No. 2004-767. James & Janet Ray of Corona Del Mar failed to timely disclose a late contribution of $30,000 (1 count). $4,500 fine.

In the Matter of B&B Framing, Inc., FPPC No. 2004-768. B&B Framing, Inc. of Moreno Valley failed to timely disclose a late contribution of $20,000 (1 count). $3,000 fine.

In the Matter of Frank Mancuso, FPPC No. 2004-774. Frank Mancuso of Los Angeles failed to timely disclose a late contribution of $10,000 (1 count). $1,500 fine.

In the Matter of Joseph Eger, FPPC No. 2004-780. Joseph Eger of Stockton failed to timely disclose late contributions totaling $17,150 (2 counts). $2,572.50 fine.

Major Donor Non-filing Violations – Streamlined Program

Failure to Timely File Major Donor Campaign Statements. Staff: Chief Investigator Sue Straine, Investigator III Jon Wroten, and Political Reform Consultant Mary Ann Kvasager. The following persons and entities have entered into stipulations for failing to file major donor campaign statements that were due during the calendar years of 2003 and 2004, in violation of Government Code section 84200:

In the Matter of Mitchell D. Kapor, FPPC No. 2004-791. Mitchell D. Kapor of San Francisco failed to timely disclose contributions totaling $40,000 in 2003. (1 count). $400 fine.

In the Matter of George C. Ross, FPPC No. 2004-795. George C. Ross of New York, New York failed to timely disclose contributions totaling $10,000 in 2003. (1 count). $400 fine.

In the Matter of Michael Hall Kieschnick, FPPC No. 2004-796. Michael Hall Kieschnick of Palo Alto failed to timely disclose contributions totaling $10,000 in 2003. (1 count). $400 fine.

In the Matter of L. Thomas Lakin, FPPC No. 2004-806. L. Thomas Lakin of Malibu failed to timely disclose contributions totaling $10,000 in 2003. (1 count). $400 fine.

In the Matter of 25th Ward Regular Democratic Organization, FPPC No. 2004-811. 25th Ward Regular Democratic Organization of Chicago, Illinois failed to timely disclose contributions totaling $10,000 in 2003. (1 count). $400 fine.

In the Matter of Filter Recycling Services, Inc., FPPC No. 2004-819. Filter Recycling Services, Inc. of Colton failed to timely disclose contributions totaling $15,400 in 2003. (1 count). $400 fine.

In the Matter of Axel & Inge Karlshoej, FPPC No. 2005-004. Axel & Inge Karlshoej of Yuba City failed to timely disclose contributions totaling $10,000 in 2004. (1 count). $400 fine.

Statement of Economic Interests - Streamlined Program

Failure to Timely File Statements of Economic Interests. Staff: Political Reform Consultant Linda Denly. The following persons have entered into stipulations for failing to timely file statements of economic interests, in violation of Government Code sections 87202, 87203, 87204 or 87300:

In the Matter of Catalina Madrigal, FPPC No. 04/635. Catalina Madrigal, a member of the Salinas Planning Commission, failed to timely file a 2003 annual statement of economic interests, in violation of Government Code section 87203 (1 count). $100 fine.

In the Matter of Seng Cha, FPPC No. 04/641. Seng Cha, an alternate commissioner for the California Strawberry Commission, failed to timely file a 2003 annual statement of economic interests, in violation of Government Code section 87300 (1 count). $100 fine.

In the Matter of Julie Hartsell, FPPC File No. 04/754. Julie Hartsell, a commissioner for the San Mateo County Civil Service Commission, failed to timely file a 2001, 2002 and 2003 annual statement of economic interests, in violation of Government Code section 87300 (3 counts). $300 fine.

In the Matter of Stephen Laymon, FPPC File No. 04/621. Stephen Laymon, a member of the Atwell Island Water District, failed to timely file a 2003 annual statement of economic interests, in violation of Government Code section 87300 (1 count). $100 fine.

Proposed Administrative Law Judge
Decision

In the Matter of Harry J. Pappas, FPPC No. 02-723. Staff: Senior Commission Counsel William L. Williams and Chief Investigator Susan Straine. Respondent Henry J. Pappas qualified as a major donor and state general purpose committee on or about February 19, 2002, and failed to file five required late contribution reports over a roughly 24-hour period between February 19 and February 20, 2002. Respondent also failed to file an electronic copy of his semi-annual report due on January 31, 2003. Following an administrative hearing in Sacramento on September 10, 2004, Administrative Law Judge M. Amanda Behe found that Respondent had violated the Act as alleged in all six counts, and assessed a fine of $2,000 for each failure to submit a late contribution report. After finding that Respondent’s failure to file an electronic copy of his semi-annual report was “inadvertent,” the Administrative Law Judge declined to add a further penalty to the total sum of $10,000 assessed on Counts One through Five. The Commission adopted the proposed decision of the Administrative Law Judge. $10,000 fine.


January Commission
Meeting

Statement of Economic Interests
– Default

In the Matter of Jeff Palmisano, FPPC No. 02/620. Staff: Commission Counsel Jeffery A. Sly and SEI Coordinator Mary Ann Kvasager. Respondent Jeff Palmisano, a member of the Planning Commission for the City of Delano, failed to timely file a 2001 annual, 2002 annual and leaving-office statement of economic interests, in violation of Government Code sections 87203 and 87204 (3 counts). $6,000 fine.

Campaign Reporting Violation - Default Decision

In the Matter of David Boul, FPPC No. 99/438. Staff: Commission Counsel Steven Meinrath. Respondent David Boul is a businessman who resides in Moreno Valley. As an independent expenditure committee making expenditures in opposition to a candidate for the Ontario City Council, Respondent failed to disclose a late independent expenditure in a properly filed late independent expenditure report, in violation of Government Code section 84204 (1 count); failed to file a post-election semi-annual campaign statement, in violation of Government Code section 84200, subdivision (b) (1 count); and failed to file a supplemental independent expenditure report, in violation of Government Code section 84203.5 (1 count). $4,000 fine.

Conflict of Interest Violations

In the Matter of Henry M. Duque, FPPC No. 00/593. Staff: Senior Commission Counsel Julia Bilaver and Investigator III Jon Wroten. Respondent Henry M. Duque was a member of the California Public Utilities Commission. As a public official, Respondent made nine governmental decisions in which he had a financial interest, in violation of Government Code section 87100 (9 counts). $18,000 fine.

In the Matter of Kenneth Wallace, FPPC No. 01/093. Staff: Senior Commission Counsel Melodee A. Mathay and Investigator III Dan Schek. Respondent Kenneth Wallace was a member of the Board of Directors for the Midway Heights County Water District in Placer County from 1996 through 2002. As a member of the water board, Respondent Wallace failed to disqualify himself from making and participating in making governmental decisions in which he had a financial interest, in violation of Government Code section 87100 (2 counts). $3,500 fine.

Campaign Reporting Violations

In the Matter of K. Hovnanian Forecast Homes, FPPC No. 03/792. Staff: Commission Counsel Elizabeth K. Conti and Investigator III Jon Wroten. Respondent K. Hovnanian Forecast Homes is a home construction and sales business located in Ontario, Calif. Respondent failed to timely disclose a late contribution in a late contribution report, in violation of Government Code section 84203 (4 counts); failed to timely file a semi-annual campaign statement, in violation of Government Code section 84200, subdivision (b) (3 counts); failed to electronically file a semi-annual campaign statement, in violation of Government Code section 84605, subdivision (a) (2 counts); and failed to disclose a late contribution in an electronically filed late contribution report, in violation of Government Code section 84605, subdivision (a) (2 counts). $26,000 fine.

In the Matter of Harold B. Williams, FPPC No. 03/832. Staff: Commission Counsel Elizabeth K. Conti and Investigator III Jon Wroten. Respondent Harold B. Williams is a securities broker who resides in San Diego, Calif. Respondent failed to disclose a late contribution in a late contribution report, in violation of Government Code section 84203 (1 count), and failed to file a semi-annual campaign statement, in violation of Government Code section 84200, subdivision (b) (1 count). $8,550 fine.

In the Matter of Andrew Ludwick, FPPC No. 03/278. Staff: Commission Counsel Elizabeth K. Conti and Investigator III Jon Wroten. Respondent Andrew Ludwick is a self-employed private investor who resides in Palo Alto, Calif. Respondent failed to timely file a semi-annual campaign statement, in violation of Government Code section 84200, subdivision (b) (2 counts), and failed to timely file a semi-annual campaign statement electronically, in violation of Government Code section 84605, subdivision (a) (2 counts). $11,000 fine.

In the Matter of Citizens For Traffic Relief and Frank Mooney, FPPC No. 00/687. Staff: Senior Commission Counsel William L. Williams, Jr. and Investigator III Dan Schek. Respondents Citizens For Traffic Relief and Frank Mooney violated the Political Reform Act by failing to timely file pre-election campaign statements, in violation of Government Code section 84200.5, subdivision (c) (2 counts), and by failing to timely disclose a late contribution in a properly filed late contribution report, in violation of Government Code section 84203, subdivision (a) (1 count). $4,500 fine.

In the Matter of Tom Ammiano, Tom Ammiano for Mayor, and Esther Marks, FPPC No. 01/408. Staff: Senior Commission Counsel Melodee A. Mathay and Investigator II Charlie Bilyeu. Respondent Tom Ammiano was a candidate for Mayor of the City and County of San Francisco in the 1999 election. Respondent Tom Ammiano for Mayor was the controlled committee of Respondent Ammiano. Respondent Esther Marks was the treasurer of Respondent Committee. Respondents failed to properly deposit cash contributions into Respondent Committee's campaign bank account, in violation of Government Code section 85201, subdivision (c) (1 count), and made prohibited cash expenditures in excess of $100, in violation of Government Code section 84300, subdivision (b) (1 count). $2,500 fine.

In the Matter of Antonio Cardenas, Tony Cardenas 2000, Maria Sanchez, and Kinde Durkee, FPPC No. 01/645. Staff: Senior Commission Counsel Julia Bilaver and Investigator III Dan Schek. Respondent Antonio Cardenas was a member of the California State Assembly, an unsuccessful candidate for Secretary of State, and a successful candidate for the Los Angeles City Council. Respondent Tony Cardenas 2000 was a controlled committee of Respondent Cardenas. Respondents Maria Sanchez and Kinde Durkee served as the treasurers of Respondent Committee at different times. During 11 reporting periods, Respondents failed to timely disclose required information regarding expenditures of $100 or more made with a campaign credit card, in violation of Government Code section 84211, subdivision (k) (11 counts). Respondents Antonio Cardenas, Tony Cardenas 2000, and Maria Sanchez: $24,500 fine. Respondents Antonio Cardenas, Tony Cardenas 2000, and Kinde Durkee: $10,500 fine.

In the Matter of Guadalupe Arellano, Arellano for Mayor, and Luis Ramirez, FPPC No. 02/051. Staff: Senior Commission Counsel Julia Bilaver and Investigator II Charlie Bilyeu. Respondent Guadalupe Arellano was a member of the Gilroy City Council, and an unsuccessful candidate for Mayor. Respondent Arellano for Mayor was the controlled committee of Respondent Arellano. Respondent Luis Ramirez served as the treasurer of the committee. Respondents failed to timely file a semi-annual campaign statement, in violation of Government Code section 84200, subdivision (a) (1 count). $1,000 fine.

In the Matter of Tahnya Ballard, Ratepayers for Tahnya Ballard and Patricia Austin, FPPC No. 01/156. Staff: Commission Counsel Jeffery A. Sly. Tahnya Ballard was an unsuccessful candidate for a seat on the Board of Directors of the Sacramento Municipal Utility District, during the November 2000 general election. Patricia Austin was the treasurer of Ballard’s controlled campaign committee. Respondents failed to timely file two semi-annual campaign statements, in violation of Government Code section 84200, subdivision (a) (2 counts). $2,000 fine.

In the Matter of Juan Vargas, Vargas 2000, and Deanna Liebergot, FPPC No. 01/699. Staff: Commission Counsel Jeffery A. Sly and Investigator III Jon Wroten. Respondent Juan Vargas was a successful candidate for the California State Assembly, 79th District, during the November 2000 general election. Respondent Vargas 2000 was the controlled committee of Respondent Vargas. Deanna Liebergot was the treasurer of the committee. Respondents failed to disclose late contributions in timely filed late contribution reports, in violation of Government Code section 84203 (3 counts), and failed to send major donor notification letters to contributors of $5,000 or more, in violation of Government Code section 84105 (1 count). $6,000 fine.

Statements of Economic Interests – Streamlined Program

Failure to Timely File Statements of Economic Interests. Staff: Commission Counsel Jeffery A. Sly and Political Reform Consultant Linda Denly. The following persons have entered into stipulations for failing to timely file statements of economic interests, in violation of Government Code sections 87202, 87203, 87204 or 87300:

In the Matter of Thomas Soto, FPPC No. 04/637. Thomas Soto, a member of the state Board of Corrections, failed to timely file a 2003 annual statement of economic interests in violation of Government Code section 87300 (1 count). $100 fine.

In the Matter of Glenn Parker, FPPC No. 04/691. Glenn Parker, a member of the Wildlife Corridor Conservation Authority, failed to timely file a 2003 annual statement of economic interests in violation of Government Code section 87300 (1 count). $100 fine.

Late Contribution Reporting Violations - Streamlined Program

Failure to Timely Disclose Late Contributions - Proactive Program. Staff: Chief Investigator Sue Straine, Investigator III Jon Wroten, and Political Reform Consultant Mary Ann Kvasager. The following persons and entities have entered into stipulations for failing to disclose late contributions in timely filed late contribution reports in 2002, 2003 and 2004, in violation of Government Code section 84203:

In the Matter of Solectron Corporation, FPPC No. 04-715. Solectron Corporation of Milpitas failed to timely disclose a late contribution totaling $10,000 in 2004 (1 count). $1,500 fine.

In the Matter of Donaghy Sales, LLC, FPPC No. 04-716. Donaghy Sales, LLC of Fresno failed to timely disclose a late contribution totaling $10,000 in 2004 (1 count). $1,500 fine.

In the Matter of American Specialty Health Plans, FPPC No. 04-765. American Specialty Health Plans of San Diego failed to timely disclose a late contribution totaling $12,500 in 2003 (l count). $1,875 fine.

In the Matter of Norman Lear, FPPC No. 04-769. Norman Lear of Beverly Hills failed to timely disclose two late contributions totaling $30,000 in 2003 (2 counts). $4,500 fine.

In the Matter of Dennis O’Brien and The O’Brien Group, FPPC No. 04-775. Dennis O’Brien and The O’Brien Group of San Mateo failed to timely disclose a late contribution totaling $25,000 in 2002 (1 count).). $3,750 fine.

In the Matter of Shapell Industries, Inc., Nathan Shapell & Affiliated Entities, FPPC No. 04-777. Shapell Industries, Inc., Nathan Shapell & Affiliated Entities of Beverly Hills failed to timely disclose a late contribution totaling $10,000 in 2002 (1 count). $1,500 fine.

In the Matter of Lusardi Construction Company, FPPC No. 04-778. Lusardi Construction Company of San Marcos failed to timely disclose a late contribution totaling $10,000 in 2002 (1 count). $1,500 fine.

In the Matter of Mark Christopher Auto Center, Mountain View Chevrolet, CSM&C Expansion, FPPC No. 04-779. Mark Christopher Auto Center, Mountain View Chevrolet, CSM&C Expansion of Ontario failed to timely disclose a late contribution totaling $10,000 in 2002 (1 count). $1,500 fine.

In the Matter of Farmers Group, Inc. and Affiliated Entities, FPPC No. 04-673. Farmers Group, Inc. and Affiliated Entities of Los Angeles failed to timely disclose late contributions totaling $19,400 in 2004 (12 counts). $2,910 fine.

Major Donor Violations
- Streamlined Program

Failure to Timely File Major Donor Statements - Proactive Program. Staff: Chief Investigator Sue Straine, Investigator III Jon Wroten, and Political Reform Consultant Mary Ann Kvasager. The following persons and entities have entered into stipulations for failing to file major donor campaign statements that were due for the calendar years 2002 and 2003, in violation of Government Code section 84200:

In the Matter of Sawhill Consulting, FPPC No. 04-802. Sawhill Consulting of Sacramento failed to timely disclose contributions totaling $10,000 in 2002 (1 count). $400 fine.

In the Matter of People For The American Way, FPPC No. 04-798. People for The American Way of Washington, DC, failed to timely disclose contributions totaling $11,000 in 2003 (2 counts). $400 fine.

In the Matter of Association of American Medical Colleges, FPPC No. 04-800. Association of American Medical Colleges of Washington, DC, failed to timely disclose contributions totaling $10,000 in 2003 (1 count). $400 fine.

In the Matter of Brett Messing, FPPC No. 04-0804. Brett Messing of Los Angeles failed to timely disclose contributions totaling $14,000 in 2003 (1 count) $400 fine.

In the Matter of B. L. Schwartz, FPPC No. 04-794. B. L. Schwartz of New York, New York failed to timely disclose contributions totaling $15,000 in 2003 (1 count). $400 fine.

In the Matter of Syntex USA LLC, FPPC No. 04-797. Syntex USA LLC of Palo Alto failed to timely disclose contributions totaling $27,726 in 2002 (1 count). $800 fine.

In the Matter of Advanced Diagnostic And Surgical Center, Inc., FPPC No. 04-807. Advanced Diagnostic And Surgical Center, Inc. of Alhambra failed to timely disclose contributions totaling $25,000 in 2003 (1 count). $400 fine.

In the Matter of Herbert M. Gelfand, FPPC No. 04-793. Herbert M. Gelfand of Beverly Hills failed to timely disclose contributions totaling $10,500 in 2003 (1 count). $400 fine.

December Commission
Meeting

Sending a Mass Mailing at Public
Expense

In the Matter of the City of Inglewood, FPPC No. 01/112. Staff: Senior Commission Counsel Julia Bilaver and Investigator III Leon Nurse-Williams. Respondent City of Inglewood sent 10 mass mailings at public expense that impermissibly featured various elected city officials, in violation of Government Code section 89001 (10 counts). $50,000 fine.

Reporting/Gift Limit Violation

In the Matter of Frank Aiello, FPPC No. 02/427. Staff: Senior Commission Counsel Julia Bilaver and Investigator III Leon Nurse-Williams. As a member of the Pittsburg City Council, Respondent failed to disclose the source of a gift on four separate statements of economic interests, in violation of Government Code section 87207 (4 counts), and accepted two gifts in excess of the annual gift limit, in violation of Government Code section 89503, subdivision (a) (2 counts). $20,000 fine.

Campaign Reporting Violations

In the Matter of Louis Byrd, Committee to Elect Louis Byrd, Ianthe Byrd and Shirley Byrd, FPPC No: 02/189. Staff: Commission Counsel Steven Meinrath and Investigator III Sandra Buckner. Respondent Louis Byrd is mayor of the City of Lynwood. Respondent Committee to Elect Louis Byrd is the controlled committee of Respondent Byrd. Respondents Ianthe Byrd and Shirley Byrd were the committee treasurers. Respondents Louis Byrd, Committee to Elect Louis Byrd, and Ianthe Byrd made campaign expenditures from a source other than the campaign bank account, in violation of Government Code section 85201 (1 count); Respondents Louis Byrd, Committee to Elect Louis Byrd, and Shirley Byrd failed to disclose required occupation and employer information regarding contributors, in violation of Government Code section 84211, subdivision (f) (3 counts), and failed to disclose a late contribution in a properly filed late contribution report, in violation of Government Code section 84203 (1 count). $18,000 fine.

In the Matter of Jerry Rindone, Jerry Rindone for City Council, and Sandra Hodge, FPPC No. 01/596. Staff: Commission Counsel Jeffery A. Sly and Investigator III Sandra Buckner. Respondent Jerry Rindone was a successful candidate for a seat on the Chula Vista City Council during the 2000 general election. Respondent Sandra Hodge was the treasurer of Respondent Rindone's controlled committee, Jerry Rindone for City Council. Respondents received six cash contributions of $250, totaling $1,500, in violation of Government Code section 84300, subdivision (a) (1 count). $1,800 fine.

Campaign Money Laundering Violation

In the Matter of Lisa Ross-Woolson, FPPC No. 04/177. Staff: Senior Commission Counsel Deanne Canar and Supervising Investigator Dennis Pellón. Respondent Lisa Ross-Woolson, also known as Lisa Ross, is a self-employed media consultant in San Diego. In September 2003, the Commission issued a Default Decision and Order in the Matter of Colin Flaherty, FPPC No. 99/783, imposing an administrative penalty of $76,000 on Flaherty for, among other things, 36 violations of Government Code section 84301, commonly referred to as "campaign money laundering." Respondent Ross made five contributions on behalf of Flaherty, for which she was reimbursed, without disclosing to the recipients of the contributions that Flaherty was the true source of the contributions and other required information, in violation of Government Code section 84302 (5 counts). $7,500 fine.

Conflicts of Interest and SEI DIsclosure Violation

In the Matter of Larry C. Wahl, FPPC No. 99/097. Staff: Senior Commission Counsel Deanne Canar and Investigator III Sandra Buckner. Respondent Larry C. Wahl, a former member of the Chico Planning Commission, and currently a member of the Chico City Council, failed to disqualify himself from making planning commission decisions involving local developers that had each contributed in excess of $250 to his city council campaign during the preceding 12 months, and failed to disclose his receipt of the campaign contributions on the record of the proceedings in which those decisions were made, in violation of Government Code section 84308 (4 counts). Respondent Wahl also failed to fully disclose his reportable economic interests on three consecutive annual statements of economic interests, from 1997 through 1999, in violation of Government Code sections 87203 and 87206 (3 counts). $12,000 fine.

Late Contribution Report – Streamlined Program

Failure to Timely File Late Contribution Reports. Staff: Chief Investigator Sue Straine, Investigator III Jon Wroten, and Political Reform Consultant Mary Ann Kvasager. The following persons and entities have entered into stipulations for failing to file late contribution reports that were due for the calendar year 2002, in violation of Government Code section 84200:

In the Matter of Bohn & Bohn, Robert H. Bohn Jr., and Robert H. Bohn, FPPC No. 03/835. Bohn & Bohn, Robert H. Bohn Jr., Robert H. Bohn of San Jose, failed to timely disclose contributions totaling $10,000 (1 count). $1,500 fine.

Statement of Economic Interests – Streamlined Program

Failure to Timely File Statements of Economic Interests. Staff: Commission Counsel Jeffery A. Sly and Political Reform Consultant Linda Denly. The following persons have entered into stipulations for failing to timely file statements of economic interests, in violation of Government Code sections 87202, 87203, 87204 or 87300:

In the Matter of Luis Pulido, FPPC No. 04/599. Luis Pulido, a member of the 32nd District Agricultural Association Orange County Fair, failed to timely file a 2003 annual statement of economic interests, in violation of Government Code section 87203 (1 count). $100 fine.

In the Matter of Robert Hattoy, FPPC No. 04/423. Robert Hattoy, a commissioner for the state Department of Fish and Game, failed to timely file a 2003 annual statement of economic interests, in violation of Government Code section 87300 (1 count). $100 fine.

In the Matter of Russell Stewart, FPPC File No. 04/497. Russell Stewart, a planning commissioner for the City of Coalinga, failed to timely file a 2003 annual statement of economic interests, in violation of Government Code section 87203 (1 count). $100 fine.

In the Matter of Ralph Morrow, FPPC File No. 04/348. Ralph Morrow, mayor of the City of Avalon, failed to timely file a 2003 annual statement of economic interests, in violation of Government Code section 87202 (1 count). $100 fine.

In the Matter of James Langhorne, FPPC File No. 04/332. James Langhorne, a member of the Santa Barbara City Building and Fire Code Board of Appeals, failed to timely file a 2003 annual statement of economic interests, in violation of Government Code section 87300 (1 count). $100 fine.

In the Matter of Robert Boileau, FPPC No. 03/648. Robert Boileau, a member of the California Uniform Construction Cost Accounting Commission, failed to timely file a 2002 annual statement of economic interests, in violation of Government Code section 87300 (1 count). $250 fine.

In the Matter of Ariane Terlet, FPPC No. 03/860. Ariane Terlet, a member of the Dental Examiners Board for the California Department of Consumer Affairs, failed to timely file a 2002 annual statement of economic interests, in violation of Government Code section 87300 (1 count). $500 fine.

Correction

Carol Romo, in FPPC enforcement Case No. 04/411, should have been identified as a
Committee Member/Registered Nursing Board, and not as a member of the Registered Nursing Board, in the December 2004 Bulletin.

Return to index



The Clerks’ Corner


Updating the Conflict-of-Interest
Codes of State Agencies

By Lynda Cassady
Assistant Chief
Technical Assistance Division

FPPC staff members are gearing up to review conflict-of-interest code amendments for state agencies.
Each state agency was required to notify the Commission by March 1, 2005, whether its current conflict-of-interest code was accurate and up to date. Agencies that determined their code needs updating are required to propose amendments, schedule a public notice period so that affected staff may comment, and submit the amendments to the FPPC.
The most common amendments to a code include adding new positions, deleting positions that no longer exist and renaming positions due to an agency’s reorganization.
The law requires state agencies to submit the amendments to the FPPC within 90 days of filing the biennial notice. The deadline will be on or before May 1, 2005, for most agencies.
Agency staff should also review the disclosure categories to ensure that they are tailored to the duties and responsibilities of each position. It is important to remember that two court cases (City of Carmel-by-the Sea v. Young and County of Nevada v. MacMillen) have decided that a proper conflict-of-interest code strikes a balance between the need for impartial decision making and an official’s privacy interests. A code is properly drafted when it requires officials to report only those interests that may give rise to a conflict. In an effort to make the job of code reviewing easier, agencies are encouraged to use the “model” disclosure categories adopted by the Commission as a resource. The FPPC website (www.fppc.ca.gov) posts the disclosure categories and also provides additional information that may be helpful:

http://www.fppc.ca.gov/index.html?id=370

In addition, FPPC staff members are always available to assist as questions arise.

Return to index


 

Legislative
Update

The following information on legislation is condensed from the Legislative Report prepared for the March 21, 2005, Commission meeting. For the complete report, please see the meeting agenda on our website at:

http://www.fppc.ca.gov/index.html?id=329

Updates on bills can be found on the FPPC’s website at :

http://www.fppc.ca.gov/index.html?id=365


AB 347 (Huff) would make any violation of the Act currently punishable as a misdemeanor a “wobbler” (misdemeanor or felony, at the option of the prosecutor).

AB 709 (Wolk) would clarify that ballot measure committees controlled by elective state office (ESO) candidates are subject to limits, and sets that limit at the same level for all ESO candidates. Would subject primarily formed ballot measure committees to the post-election fundraising restrictions. Would subject multiple ballot measure committees controlled by a single candidate for the same measure(s) to a single limit.

SB 145 (Murray) would authorize an elected state officer to accept contributions after the date of the election to the office presently held for the purpose of paying expenses associated with holding office or for any other purpose authorized by the Political Reform Act of 1974, subject to certain limitations. The bill would set limits on the amount of contributions that may be made to an elected state officer in a calendar year and on the aggregate amount of contributions that a state officer may receive in a calendar year.

AB 16 (Huff) would prohibit contributions to the Governor or members of the Legislature between the date of the May budget revision and the date of the enactment of the budget bill for the upcoming fiscal year.

AB 40 (Wolk) would prohibit lobbyists who contract with an elected state officer from lobbying that officer, his or her staff or the staff of any committee the member chairs, and requires notification to the Secretary of State by lobbyists who enter into a contractual agreement with an elected state officer. AB 40 would also require that any payment conditioned on the outcome of an election (for example, campaign management or consulting services) be disclosed in pre-election reports.

SB 8 (Soto) would extend the one-year post-governmental employment restrictions currently applicable to state public officials to local elected officials, county chief administrative officers, city managers or administrators and special district general managers or chief administrators.

SB 11 (Bowen) would prohibit a candidate for elective state or local office from accepting any contributions from a manufacturer or vendor of voting equipment or systems.

SB 145 (Murray) would authorize an elected state officer to accept contributions after the date of the election to the office presently held for the purpose of paying expenses associated with holding office or for any other purpose authorized by the Political Reform Act of 1974, subject to certain limitations. The bill also would set limits on the amount of contributions that may be made to an elected state officer in a calendar year and on the aggregate amount of contributions that a state officer may receive in a calendar year.

AB 513 (Richman) would expand the definition of administrative action for lobbying disclosure purposes to include the selection of an underwriter for state or local bond business.

AB 583 (Hancock) would enact the California Clean Money and Fair Elections Act of 2005, which would authorize eligible candidates, as defined, to obtain public funds according to specified procedures and requirements, provided that certain thresholds are attained. The bill would impose responsibility for the administration of the provisions of the bill on the Fair Political Practices Commission. The bill would appropriate $500,000 each fiscal year from the fund created by the bill to the Fair Political Practices Commission for the purpose of administration of the act, as specified.

AB 739 (Nation) would lower the monetary thresholds that require reporting of communications which clearly identify a candidate for elective state office but does not expressly advocate the election or defeat of the candidate, made within 45 days of an election, and that subject those communications to the bill’s restrictions. The bill would lower the threshold from $50,000 to $10,000.

AB 891 (DeVore) would, for reporting purposes, treat as a contribution the value to a candidate of any slate mailer that exceeds the consideration paid by the candidate. Would require a slate mailer organization to notify any candidate benefiting from a slate mailer, for which full consideration is not paid, of the value of the contribution; require the Commission to adopt regulations providing a method of valuing slate mailer communications.

AB 938 (Umberg) would require committees that are required under existing law to file online or electronically to also file a report online or electronically disclosing expenditures totaling $10,000 or more to support or oppose the qualification or passage of a ballot measure, and disclosing other specified information, within 10 business days of making the expenditure.

AB 1391 (Leno) would define when a general purpose committee becomes a “state,” “county,” or “city” committee for purposes of when and where reports are filed.

AB 1404 (Coto) would designate the county board of education instead of the county board of supervisors as the code reviewing body for a school district in a multi-district county, a community college district, or a school-related joint powers authority located wholly within a single county. The Superintendent of Public Instruction would be the code review body for a county board of education, a county office of education, or a school district of a county with only a single school district.

AB 1558 (Wolk) Commission-sponsored Govt. Code sec. 1090 pilot project to issue opinions subject to certain procedures, and would make reliance on advice in one of these opinions evidence of good faith in any civil proceeding, as specified.

SB 25 (Ackerman) would create a presumption that a contribution received in response to a written solicitation from an elective state office candidate or his or her committee is received in response to that solicitation, for that candidate or committee, or for the term of office specified in the solicitation. The bill also would repeal two sections related to the now obsolete March state primary election.

SB 36 (Florez) would require nonprofit (501(c)(4)) organizations to file campaign disclosure reports as a recipient committee if they spend $1,000 or more in a calendar year on advertisements that do not expressly advocate, but clearly identify a state candidate or a ballot measure.

SB 721 (Chesbro) Existing law provides that any elector may challenge copy for the ballot pamphlet for statewide elections by showing that the copy is false, misleading, or inconsistent with specified statutory law, and that the issuance of a writ of mandate to amend or delete copy will not substantially interfere with the printing and distribution of the ballot pamphlet. This bill would codify the requirements of existing law that, in ruling on a challenge to ballot pamphlet copy, a court indulge all legitimate presumptions in favor of the propriety of the copy, and find the copy sufficient in cases where reasonable minds could differ as to the sufficiency of the copy.

SB 784 (Committee) would adjust the contribution limits biannually according to the CPI, to include adjustments on the same basis for the reporting thresholds of section 82015, which applies to payments of $5,000 or more made by a second party to a third party at the behest of a candidate who is an elected officer. This would affect the threshold at which elected officials must disclose “co-sponsored” payments for legislative, governmental or charitable purposes.

SB 18 (Ortiz) would declare that it is the intent of the Legislature that the Independent Citizen’s Oversight Committee define which positions would be subject to the Political Reform Act and that the requirements for the reporting of economic interest be commensurate with those required of state agency appointees.

ACR 1 (McLeod) would urge the Independent Citizen's Oversight Committee established pursuant to Proposition 71 approved by the voters at the November 2, 2004, general election, to adopt robust conflict-of-interest standards for itself and for the members of its working groups, to comply with standards set forth in provisions of law relating to open meetings of public agencies and public records, and to report to the Legislature by April 1, 2005.

Return to index



Website
Update

By Jon Matthews
FPPC Publications Editor

Meeting agendas

One of the most important functions of the FPPC’s website is publishing agendas and supporting materials for upcoming meetings of the Commission.
Agendas, by law, are posted 10 days in advance of the scheduled date of Commission meetings and are also sent out on our agenda automatic e-mail list.
FPPC staff members post not only the agenda document itself, but also supporting materials such as enforcement stipulations, memoranda on proposed regulatory changes, updates on major court cases, and many other topics. The agenda, which is presented in a quick-loading and accessible HTML format, has links to these accompanying materials.

If you haven’t already, check out our agendas page. It’s accessible either through the “Agendas” link on the left side of our home page or directly at:

http://www.fppc.ca.gov/index.html?id=329

This page will take you to the current agenda, past agendas and a schedule of upcoming meetings. Please note that dates and times of meetings can change, so check the website for updates.

New version of the Act is posted

We have published and posted the 2005 version of the Political Reform Act of 1974. You can find it in our Publications section or at this link:

http://www.fppc.ca.gov/index.html?id=51

Return to index



Litigation Report

Pending litigation report prepared for the Commission’s March 21, 2005, meeting:

California ProLife Council, Inc. v. Karen
Getman et al.

This action challenged the Act’s reporting requirements for express ballot measure advocacy. In October 2000 the Federal District Court for the Eastern District of California dismissed certain counts for standing and/or failure to state a claim, and later granted the FPPC’s motion for summary judgment, eliminating further counts in a judgment entered on January 22, 2002. Plaintiff appealed that judgment to the Ninth Circuit Court of Appeal. The Ninth Circuit rejected plaintiff’s legal claims, affirming that the challenged statutes and regulations were not unconstitutionally vague, and that California may regulate ballot measure advocacy upon demonstrating a sufficient state interest in so doing. The Ninth Circuit remanded the matter back to the district court to determine whether California can establish a state interest sufficient to support its committee disclosure rules, and whether the state’s disclosure rules are properly tailored to that interest. On December 17, the court heard cross-motions for summary judgment on these questions, and on February 22, 2005, the court issued its decision granting defendants’ motion and denying plaintiff’s. The case is now closed, but plaintiff has a right within 30 days to appeal the district court’s decision to the Ninth Circuit.

FPPC v. Agua Caliente Band of Cahuilla
Indians, et al.

The FPPC alleges in this action that the Agua Caliente Band of Cahuilla Indians contributed more than $7.5 million to California candidates and ballot measure campaigns between January 1 and December 31, 1998, but did not timely file major donor reports disclosing those contributions, and likewise failed to disclose more than $1 million in late contributions made between July 1, 1998, and June 30, 2002. The FPPC later amended the complaint to add a cause of action alleging that the tribe failed to disclose a $125,000 contribution to the Proposition 51 campaign on the November 5, 2002, ballot. Defendants responded to the lawsuit by filing a motion to quash service, alleging that they could not be civilly prosecuted for violating the Political Reform Act because of tribal sovereign immunity. On February 27, 2003, the Honorable Loren McMaster of the Sacramento County Superior Court ruled in the FPPC’s favor. On April 7, defendants filed a petition for writ of mandate in the Third District Court of Appeal, challenging the decision of the trial court. The petition was summarily denied on April 24, 2003, whereupon defendants filed a petition for review in the California Supreme Court. On July 23, 2003, the Supreme Court granted review and transferred the case back to the Court of Appeal, where oral argument was heard before Justices Blease, Sims, and Davis. On March 3, 2004, the Court issued its opinion, affirming the Superior Court’s decision after concluding that “the constitutional right of the State to preserve its republican form of government trumps the common law doctrine of tribal immunity.” On April 6, 2004, Blue Lake Rancheria and Mainstay Business Solutions, a Government Sponsored Enterprise of the Blue Lake Rancheria, filed with the California Supreme Court a request for depublication of the court of appeal decision. Associate Justice Sims of the Third District Court of Appeal, author of the opinion, filed a letter with the Supreme Court on April 19, 2004, requesting that the depublication request be denied on the ground that it had not been properly served on the Third District Court of Appeal, depriving him of an opportunity to respond to the depublication request. In the interim, on April 13, 2004, the Agua Caliente Band of Cahuilla Indians filed a Petition for Review in the California Supreme Court. On June 23, 2004, the Supreme Court granted the Petition for Review. On September 23, 2004, the Agua Caliente Band of Cahuilla Indians filed its opening brief with the Supreme Court and on December 30 the FPPC filed its opposition brief. The tribe has obtained extensions of time for its reply brief, which is now due on April 1, 2005.

FPPC v. Santa Rosa Indian Community of the Santa Rosa Rancheria

In this action the FPPC alleges that the Santa Rosa Indian Community of the Santa Rosa Rancheria failed to file major donor semi-annual campaign statements in the years 1998, 1999 and 2001, involving more than $500,000 in political contributions to statewide candidates and propositions, and that defendants failed to disclose more than $350,000 in late contributions made in October 1998. The complaint was originally filed on July 31, 2002, and was amended on October 7, 2002. On January 17, 2003, defendants filed a motion to quash service, based on its claim of tribal sovereign immunity. On May 13, 2003, the Honorable Joe S. Gray of the Sacramento County Superior Court entered an order in favor of defendants. On July 14, 2003, the FPPC appealed this decision to the Third District Court of Appeal, where the matter was scheduled for oral argument. The Attorney General filed an amicus brief in support of the FPPC’s position. On July 16, 2004, the Commission’s appellate counsel was apprised that the tribe had secured new counsel to pursue this appeal and would be seeking a continuance of the oral argument date. On July 29, 2004, the Santa Rosa Indian Community of the Santa Rosa Rancheria filed a substitution of attorneys replacing Monteau & Peebles with Lang, Richert & Patch of Fresno, as appellate counsel. Concurrent with the filing of the substitution of attorneys, a request for continuance of the date for oral argument was made. The court granted a continuance to October 19, 2004, at 9:30 a.m. The court heard oral argument on October 19, 2004, and on October 27, 2004, issued a decision in favor of the Commission overturning the trial court’s granting of defendant’s motion to quash. The tribe filed a petition for review with California Supreme Court which was granted on January 12, 2005; however, any action on the case has been deferred pending the outcome of the Agua Caliente case.

FPPC v. American Civil Rights Coalition, et al.

In a lawsuit filed in the Sacramento County Superior Court on Sept. 3, 2003, the FPPC alleges that the American Civil Rights Coalition (“ACRC”) and its CEO Ward Connerly failed to file campaign statements reporting the source of almost $2 million contributed to promote the passage of Proposition 54 on the Oct. 7 ballot. An application for intervention in the lawsuit was filed on September 16 by a group known as the “DOE Class” of past and potential contributors to ACRC, seeking among other things to postpone a hearing on the FPPC’s motion for preliminary injunction to an unspecified later date. The court went forward with the injunction hearing on September 19, 2004, denying the FPPC’s motion on the ground that the factual record was not sufficiently developed to warrant a preemptive remedy. Defendants next brought a special motion to strike the complaint under Code of Civil Procedure § 425.16. On December 1, 2003, the Superior Court denied this special motion. On December 3, 2003, defendants appealed to the Third District Court of Appeal. On August 16, 2004, the court of appeal issued its decision affirming the trial court’s denial of defendant’s special motion. The case is now scheduled for a trial setting conference in the Superior Court on May 2, 2005.

California Republican Party, et al. v FPPC et al.

On October 12, 2004, the California Republican Party, the California Democratic Party, and the Orange County Republican Party filed a Complaint in the Federal District Court seeking injunctive and declaratory relief from two provisions of the Act, sections 84503 and 84506, which require a committee paying for ballot measure advertisements to identify their two highest contributors of $50,000 or more. On October 20, 2004, plaintiffs amended their Complaint, and noticed a motion for Temporary Restraining Order to be heard on October 26, 2004. The FPPC filed its Opposition to this motion on October 22. The Attorney General’s office represented the Commission at the hearing before the Honorable Frank C. Damrell, Jr. The following day, the Court issued a preliminary injunction enjoining the Commission from enforcing the provisions of the Act above against plaintiffs. The Commission filed its Answer on December 3, 2004.

Citizens to Save California, et al.
v. FPPC

On February 8, 2005, Citizens to Save California and Assembly Member Keith Richman filed a Complaint for Permanent Injunction and Declaratory Relief in Sacramento Superior Court alleging that Citizens, a newly-formed advocacy group closely aligned with the Governor’s legislative agenda, wished to solicit and receive unlimited contributions in anticipation of a campaign for several ballot measures that may decided in a special election that may be held in November. The lawsuit challenges the Commission’s adoption of regulation 18530.9 in June, 2005, which imposes on candidate-controlled ballot measure committees the contribution limit applicable to the controlling candidate. Plaintiffs claim that this regulation violates their First Amendment rights of speech and association, and that the Commission lacked statutory authority to adopt the regulation in the first place. Shortly after the Complaint was filed, an additional group of plaintiffs led by Governor Arnold Schwarzenegger intervened in the action, prompting the California Public Interest Research Group to attempt to intervene as a defendant. The court has not yet decided whether to permit intervention by CALPIRG, and a motion for preliminary injunction set by plaintiffs on shortened time has been delayed pending the decision on CALPIRG’s intervention.

FPPC v. Democratic National Committee, Non-federal-Corporate et al.

In a lawsuit filed in the Sacramento Superior Court on February 25, 2005, the FPPC alleges that a California campaign committee sponsored by the national Democratic party committee, and the treasurers of that committee, failed to file a second pre-election campaign statement disclosing $1.2 million in contributions to the California Democratic Party. The defendants have been served with a copy of the Complaint. A response to the Complaint is due March 31, 2005.

Return to index


 

FPPC Advice Summaries


Formal written advice provided pursuant to Government Code section 83114 subdivision (b) does not constitute an opinion of the Commission issued pursuant to Government Code section 83114 subdivision (a) nor a declaration of policy by the Commission. Formal written advice is the application of the law to a particular set of facts provided by the requestor. While this advice may provide guidance to others, the immunity provided by Government Code section 83114 subdivision (b) is limited to the
requestor and to the specific facts contained in the formal written advice. (Cal. Code Regs., tit. 2, §18329, subd. (b)(7).)
Informal assistance may be provided to persons whose duties under the act are in question. (Cal. Code Regs., tit. 2, §18329, subd. (c).) In general, informal assistance, rather than formal written advice is provided when the
requestor has questions concerning his or her duties, but no specific government decision is pending. (See Cal. Code Regs., tit. 2, §18329, subd. (b)(8)(D).)

Formal advice is identified by the file number beginning with an “A,” while informal assistance is identified by the letter “I.” Letters are
summarized by subject matter and month issued.

Campaign

James C. Harrison
Remcho, Johansen & Purcell
Dated: December 21, 2004
File Number A-04-217
The public official asked if she may donate campaign funds to a nonprofit organization earmarked to be used to hire a consultant and other costs. The official would later be hired by the organization and receive a salary from that organization after the donation has been expended. The letter explained that the donation would be prohibited if her donated campaign funds are used to pay for her salary, or the donation makes other funds available to pay for her salary.

Thomas S. Bunn III
Newhall County Water District
Dated: December 10,2004
File Number I-04-231
A local water district is advised that the Act does not prevent adoption of local campaign contribution and expenditure limits, provided such limits do not conflict with the provisions of the Act. So long as there is compliance with section 81013, the validity of such local ordinances, do not fall under the purview of the Act.

Prosper Acquah
California Assembly
Dated: December 21, 2004
File Number A-04-249
A state candidate’s campaign committee established for a 2004 election may not deposit checks made out to that committee into the candidate’s 2006 reelection committee’s campaign bank account. If the 2004 committee has net debt, it may accept the contributions, or the 2004 committee may return the contributions.

Linda A. Troyan
City of Santee
Dated: December 6, 2004
File Number A-04-251
The City of Santee held a special election on February 15, 2005. Candidates and committees are authorized to combine the semi-annual and first pre-election campaign statements.

Donna J. Rogers
City of Palo Alto
Dated: December 28, 2004
File Number I-04-255
The City of Palo Alto is advised that its mail-out ballot and protest procedure being carried out as required by Art. XIII D, Section 4 of the California Constitution related to a storm drainage fee increase is not a “measure” nor an “election” within the meaning of the Act.

Dennis Zell
California Assembly
Dated: November 17, 2004
File Number A-04-176
Reconsideration of prior advice (Zell Advice Letter, No. A-04-142). The initial letter declined to conclude that auction bids by candidates for advertising space on a billboard established the billboard’s fair market value. On reconsideration, the same conclusion is reached. The Commission cannot assume a fair market value based on prices offered by a restricted class of buyers based on a court injunction.

James V. Lacy
“No New Taxes”
Dated: October 21, 2004
File Number A-04-195
Advises a ballot measure committee on the application of the advertising disclosure statutes in an upcoming ballot measure campaign.

C. April Boling
San Diego County Republican Central
Committee
Dated: October 22, 2004
File Number A-04-212
Provides a discussion on how to report expenditures made by a central committee’s federal account when the expenditures support both state and federal candidates.

Venessa Spilios
Brown for Attorney General
Dated: October 21, 2004
File Number A-04-214
Advises a candidate for state elective office that the investment of campaign funds in auction rate securities is not permitted under regulation 18524.

Sue Olvera
Contra Costa County
Dated: October 29, 2004
File Number A-04-229
Advises the County of Contra Costa that the semi-annual campaign statement covering through December 31, 2004, may be combined with the first pre-election statement due in connection with a February 15, 2005, formation district election.

Conflict of Interest

Kathryn E. Donovan
California Air Resources Board
Dated: December 23, 2004
File Number I-04-193
A state board appointee is advised that the “public generally” exception for certain specialized appointments to boards and commissions in regulation 18707.4 does not apply to the seat to which she was appointed.

Heather C. McLaughlin
City of Benicia
Dated: December 6, 2004
File Number A-04-194
Two members of a city council are advised on whether they have conflicts of interest in council decisions regarding a public use easement on a parcel of private property. One councilmember owns property within 500 feet of the easement and has a conflict of interest, the other owns property beyond 500 feet and does not have a conflict of interest.

Heather C. McLauglin
City of Benicia
Dated: December 6, 2004
File Number A-04-235
A mayor is precluded from participating in council decisions regarding an empty city lot because the mayor owns a business less than 500 feet from the lot.

Scott H. Howard
City of Glendale
Dated: December 20, 2004
File Number I-04-199
A city attorney asks for general advice regarding possible conflicts of interest for design review board members who are sources of income to each other. In addition, the letter offers general advice explaining how subcontractors can be disqualifying sources of income.

Terri Milton
Palm Springs Desert Resorts Convention and Visitor’s Authority
Dated: December 28, 2004
File Number I-04-201
A local official is advised that the Act does not bar a public official from maintaining outside employment during their tenure as a public official, but that the compensation received for co-authoring a book is subject to the reporting and disqualification provisions of the Act. However, the honorarium ban does not apply to his compensation for co-authoring the book.

Stephen A. Kronick
Amador Water Agency
Dated: December 6, 2004
File Number A-04-220
A public official has been advised that he does not have an economic interest in a family trust because the criteria of regulation 18234(c) are not met. Therefore, the official may participate in a decision involving the possible location of a water pipeline and storage tank on property held by the family trust.

Bill Schneiderman
Mi-Wuk/Sugar Pine Fire Protection District
Dated: December 6, 2004
File Number I-04-228
The members of the district’s board may vote on procurement policies, unless board members have economic interests in businesses that may be affected by the decision. In addition, the Act does not bar volunteer firefighters from posting business cards and announcements on the firehouse bulletin board.

Morgan L. Foley
City of Coronado
Dated: December 8, 2004
File Number A-04-232
A council member is advised that absent evidence rebutting the presumption that any effects on a council member’s real property will not be material, it is not reasonably foreseeable that decisions on removal of traffic diverters will have a material financial effect on the public official’s real property.

Celia Brewer
City of Solana Beach
Dated: December 14, 2004
File Number A-04-233
A council member requests additional advice regarding whether the “public generally” exception applies to him regarding a sand replenishment decision which may affect the value of his home. The information provided by the public official regarding residences in the jurisdiction did not meet the requirements of the first prong of the “public generally” exception, which requires a significant segment of property owners or homeowners.

Ralph Hicks
Port of San Diego
Dated: December 16, 2004
File Number I-04-237
An employee for a local government agency is advised that nothing in the Act prohibits him from pursuing outside employment, including acting as a sales representative for, and receiving commission income from, a privately-owned company. His ability, however, to make, participate in making, or influence governmental decisions will depend on applying the appropriate materiality standards and verifying that there will be no reasonably foreseeable material financial effect on any persons who are a source of income to him. Because, in some cases, when a governmental decision affects a public entity, the effect of the decision flows to all residents in the jurisdiction, the “public generally” exception may apply to conflicts of interest arising by virtue of his possible income from governmental entities.

David Davis
City of Santa Barbara
Dated: December 6, 2004
File Number A-04-242
The public official is advised that an unpaid position on the board of a 501(c)(3) organization is not a financial interest in the 501(c)(3) organization under the Act and will therefore not result in his disqualification from decisions regarding the 501(c)(3).

Catherine L. DiCamillo
City of South Lake Tahoe
Dated: December 31, 2004
File Number A-04-256
The council member has been advised that though her spouse is a lieutenant with the county sheriff’s department, the council member may participate in decisions concerning department’s wages, salaries and benefits, so long as the decisions affect all employees in the same job classification as her spouse in the same manner. The council member may not make or participate in decisions concerning the hiring, firing, demotion, or suspension of her husband, or decisions that would set a salary for her husband that is different from salaries paid to other employees in the same job classification or position.

Michelle Le
San Juan County Environmental Health
Department
Dated: December 28, 2004
File Number I-04-259
The public official is advised that the Act does not prohibit public officials from maintaining outside employment, however, income received from the employment may be subject to the Act’s reporting and disqualification provisions.

Mark H. Cibula
Shasta County District Attorney’s Office
Dated: December 31, 2004
File Number I-04-260
The letter advises the requestor that he may be required to recuse himself from making or participating in the making of a governmental decision affecting the district attorney’s office while sitting on the county board of supervisors, depending upon the facts surrounding the decision.

Jean Cihigoyenetche
City of Fontana
Dated: December 31, 2004
File Number I-04-261
The requestor, counsel for a local agency, is advised regarding an employee of the agency who was running for city office, that holding multiple governmental positions simultaneously does not inherently create a conflict of interest under the Act. Salary and reimbursement of expenses or per diem received from a state, local or federal government agency are expressly exempted from the definition of “income” for purposes of the Act. Consequently, unless the employee’s personal finances are otherwise affected by a governmental decision, his salary received as a public official (in either capacity) is not a disqualifying economic interest.

H. Peter Klein
Mendocino County
Dated: November 10, 2004
File Number A-04-180
A planning commissioner does not have a disqualifying conflict of interest in decisions regarding a county-wide grading ordinance merely because the ordinance might increase or decrease the cost of a driveway on a parcel of unimproved real property the planning commissioner owns, should she decide to build a house on it in the future.

Steve Messina
City of Benicia
Dated: November 30, 2004
File Number A-04-200
Advises a city council member on the application of conflict-of-interest rules to future governmental decisions that involve other clients of council member’s attorney.

Richard G. Barakat
City of Bradbury
Dated: November 19, 2004
File Number I-04-209
A city council member was advised he has a conflict of interest under the Act if he participates in a decision to annex property within 500 feet of his home unless he can show that (1) there will be no material financial effect on his property, or (2) the “public generally” exception applies. The council member was also advised that he was not prohibiting from communicating with his constituents.

Larry Myers
Native American Heritage Commission
Dated: November 18, 2004
File Number I-04-213
General advice is provided to the executive section of a state agency regarding the conflict-of-interest analysis applicable to public officials who accept private-sector employment while continuing to serve as public officials.

Michael D. Milich
City of Modesto
Dated: November 23, 2004
File Number I-04-216
A city employee was lead employee on several traffic projects. The projects were reclassified as traffic mitigation measures under CEQA for a new Kaiser Hospital development. The city employee’s wife is an employee at Kaiser Hospital. However, the employee may participate in roadway decisions so long as the projects are separable from the Kaiser Project.

Cynthia A. Sterling
Fresno City Council
Dated: November 9, 2004
File Number A-04-227
A member of the city council has a conflict of interest because of an economic interest in an irrevocable future trust in which they have a beneficial interest of 10% or greater. A conflict of interest arose when she was asked to make decisions regarding the revitalization of real property located in the trust.

Peter M. Thorson
City of Temecula
Dated: November 23, 2004
File Number A-04-238
Where three council members (of five) have conflicts of interest, legally required participation may be invoked in order to requalify one of the three disqualified members to participate in the proceeding for the duration of the proceeding. If the selected member leaves the council and the seat cannot be filled, the legally required participation rule may be invoked to requalify one of the two remaining members, until the proceeding is completed or until a new member is appointed or elected.

Cynthia Hernandez
City of Indio
Dated: November 17, 2004
File Number I-04-240
A deputy city clerk who has been elected as city clerk but has not assumed office seeks advice as to whether there is a conflict of interest under the Act in holding both offices simultaneously. She was advised that this is not a PRA issue and she was urged to contact local city attorney or Attorney General with respect to the doctrine of incompatible offices.

Derek Johnson
Isla Vista Recreation and Parks District
Dated: November 17, 2004
File Number I-04-244
Advice regarding conflicts of interest that result from the public official holding two public positions. He is advised that a public official should request advice from the Attorney General’s office since his question pertains to incompatible activities and Government Code Section 1090.

Heather C. McLaughlin
City of Benicia
Dated: November 19, 2004
File Number A-04-225
A city mayor is advised that he does not have a conflict-of-interest under the Act in making appointments to the city’s design review commission and planning commission when one or both commissions will consider approval of a development project on property that he owns, as long as he has no financial interest in the appointees and there has been no decision as to how the appointee will vote. The mayor however, cannot influence the decisions.

Kathleen Faubion
City of Milipitas
Dated: October 13, 2004
File Number A-04-163
Advises a planning commissioner, who is also a real estate agent, on the impact of the conflict-of-interest rules on her participation in the commission’s consideration of and recommendations regarding a local housing development project.

Janet Bibby
County of Mariposa
Dated: October 6, 2004
File Number A-04-188
The public official may participate and vote in union discussions regarding the increase of the salaries and benefits of all employees in the same job classification as her husband. Although the official will be permitted to participate in collective bargaining agreements involving adoption of general personnel policies, a decision to hire, fire, promote, demote, or discipline the official’s husband, or to set a salary for her husband which is different from salaries paid to other employees of the agency in the same job classification or position would require the official’s disqualification from participation in the negotiations with the union. The official also received advice regarding property she owns located within the boundaries of a general plan amendment. She will not be permitted to make, participate in making or influence any decision regarding amendments to the general plan, unless the presumption of materiality can be rebutted.

Charles T. Kilian
City of Cupertino
Dated: October 20, 2004
File Number I-04-189
A member of the city council may have a conflict-of-interest as executive director of the local chamber of commerce if there is a reasonably foreseeable material financial effect on the chamber resulting from a decision concerning a member of the chamber.

Sonia R. Carvalho
City of Yorba Linda
Dated: October 14, 2004
File Number A-04-197
A member of transportation corridor agency may participate in decisions involving the proposed southern extension of a public toll road system so long as the decision does not have a material and foreseeable financial effect on his employer. The fact that the decision may impact a client of his employer’s is not determinative because while he has an ownership interest in the firm, his interest is less than 10 percent of the firm.

Brent Meyer
Department of Transportation
Dated: October 21, 2004
File Number I-04-202
An employee of governmental agency is precluded from influencing governmental decisions within his or her own agency. Influencing includes contact on behalf of the employee’s private employer.

Glenn Mondo
Nexus and Geneva Commons Projects
Dated: October 6, 2004
File Number A-04-205
Because the public official’s residence is located more than 500 feet from proposed boundaries of two projects, there is a presumption of no materiality. As long as the presumption is not rebutted, neither of two decisions will result in disqualification.

Statement of Economic
Interests

Kathryn E. Donovan
California Commission for Jobs and Economic Growth
Dated: December 28, 2004
File Number A-04-190
A requestor is advised that based on the Siegel test it does not appear that the California Commission for Jobs and Economic Growth is a governmental agency at this time. Therefore, this organization is not required to adopt a conflict of interest code.

Philip D. Kohn
City of Laguna Beach
Dated: December 22, 2004
File Number A-04-258
A council member is not required to report salary income earned and received by her spouse prior to their marriage on her statement of economic interests, nor will it give rise to a conflict of interest for her. The council member must report on her statement of economic interests her community property interest (50%) in income received by her spouse after their marriage, and this economic interest could give rise to a conflict of interest.

Jay Cohan
City of Los Altos
Dated: November 24, 2004
File Number A-04-241
Advises that unless an investment meets an exemption from reporting under the Act, the filer must report investments of $2,000 or more in business entities located in or doing business in the City of Los Altos. The requestor is also advised that gifts are reportable, unless they are from sources exempted by the Act. Finally, this letter advises that the requestor’s agency may amend its conflict of interest code to remove his position.

Mass Mailing

Bruce Colbert
Desert Hot Springs
Dated: November 17, 2004
File Number A-04-164
A mailing that addresses concerns regarding a proceeding before a local regulatory body, is not a “mass mailing” prohibited by the Act when all costs of production and distribution are paid by a nonprofit body. The Act does not prohibit a mayor from writing a letter and providing a newspaper column for inclusion in this mailing.

Linda Hill
San Bernardino City Unified School
District
Dated: November 4, 2004
File Number A-04-218
A school district was advised that yearbooks sold to its students containing photographs of the elected school board members would be an unsolicited request for information and would not be a prohibited mass mailing under the Act, provided the students were not requested or induced by the board to purchase the yearbooks.

Gift Limits

Jon Waldie
State Assembly
Dated: December 31, 2004
File Number I-04-257
The California Assembly is advised that free airport parking and shuttle services are not gifts if the requirements of regulation 18944.2 are met.

Thomas D. Glasser
San Bernardino County
Dated: December 28, 2004
File Number I-04-264
A filer is not required to disclose real property or money, both given to him by his father, as either gifts or income on his Statement of Economic Interests. However, the property would be disclosed on Schedule B – Interests Real Property if it is located in California.

Gregory P. Priamos
City of Riverside
Dated: November 9, 2004
File Number A-04-191
Dated: November 24, 2004
File Number A-04-247
The president and CEO of a nonprofit 501(c)(3) organization has recently been elected to the city council. The officer is in charge of fundraising for the nonprofit but his salary is one paid out of public funds. The officer asks whether the donations are considered reportable gifts and whether he must disclose donations to the nonprofit which are over $5,000 and made at his behest. Under the Act, donations received by a nonprofit are not considered gifts to the public official. In addition, under the limited facts set forth in the letter, the city council member does not have reporting requirements because the donations are made for purposes unrelated to the officer’s office candidacy. Also see the follow up letter further clarifying the conclusion in A-04-191.

Steven T. Mattas
City of South San Francisco
Dated: November 22, 2004
File Number A-04-207
Provided a discount on a condominium is made in the regular course of business by the company offering it the discount would not be considered a “gift” to a council member because it is made available to members of the public without regard to official status.

Randall W. Keen
California Protocol Foundation
Dated: October 22, 2004
File Number A-04-219
Gifts of travel are not subject to gift limits if the travel is provided by a 501(c)(3) organization and the travel is reasonably related to an issue of state, national, or international public policy. Generally, a person is considered the source of a gift if the person makes the gift to an official and is not acting as an intermediary. Where a third party makes a payment to a person and the third party directs and controls the use of the payment to make a gift to a clearly identified official, the third party is the source of the gift. The letter also discusses gifts to a public agency.

Personal Use

Ash Pirayou
Committee to Protect Neighborhood
Libraries
Dated: October 22, 2004
File Number A-04-221
A local ballot measure committee asks if it may contribute a portion or all of its current cash on hand to another local ballot measure committee with similar goals without violating the “personal use” restrictions of the Act. The transfer of funds is allowable if the transfer does not have a substantial personal benefit on any person who directs or controls activities of the contributing committee.

Revolving Door

David Rist
Department of Toxic Substances Control
Dated: October 8, 2004
File Number A-04-187
A scientist with the Department of Toxic Substances Control is advised on the application of post-government employment restrictions as he contemplates future employment with a city government to advise it on contamination issues of former military installations.

Lobbying

Nicole G. Paquette
Animal Protection Institute
Dated: December 6, 2004
File Number I-04-211
A lobbyist employer is given general advice regarding lobbyist employment contracts and the prohibition against contingency fee arrangements.

Return to index