The Board of Supervisors will soon vote on ethics legislation introduced last year by City Attorney Dennis Herrera and Board of Supervisors President David Chiu. Ordinance 130374 would amend the Campaign and Governmental Conduct Code to expand the definition of lobbyist and require random audits of lobbying reports.

The lobbying exemption for contractors and their attorneys would be limited to in-house officers and employees. Meeting the definition of a lobbyist would depend on the number of contacts with officials rather than the previous measure of compensation. Outside consultants communicating with public officials regarding contract bidding and negotiating would be subject to the registration and reporting requirements of lobbying.

The ordinance will likely be decided at the board meeting on June 10, 2014.

The 9th Circuit U.S. Court of Appeals has upheld political committee disclosure requirements of California’s Political Reform Act of 1974.

The ProtectMarriage.Com et al. v. Bowen et al. decision denied a challenge to semiannual disclosures requiring the identification of individuals who contributed more than $100 during or after a campaign, in addition to each contributor’s address, occupation, and employer.

The court further held the government’s interest in disclosing contributions to ballot initiative committees was not merely a pre-election interest.

The Ethics Commission’s website is currently inaccessible due to repeated DDOS (distributed denial-of-service) attacks on the commission’s website hosting vendor.

The Commission’s electronic filing systems remain accessible here.

Status updates regarding the commission’s website are available here.

The Assembly is now considering a bill passed by the Senate to further restrict gifts to lawmakers. Senate Bill 1443 prohibits all gifts from lobbyists and reduces the value of gifts state officials can receive from a non-lobbyist source to $200 per calendar year. Currently, lobbyists may provide gifts of $10 per calendar month and officials can receive $440 from a non-lobbyist source per calendar year.

The bill also prohibits most recreational tickets to concerts, professional sporting events, and amusement parks.

Photo of the California Senate chamber by David Monniaux on Wikimedia Commons.

Gov. Jerry Brown has signed a bill to close “dark money” loopholes used to avoid disclosure of campaign contributors.

Senate Bill 27 requires large donations from nonprofits and other multipurpose organizations to be disclosed. The top 10 contributors to state committees will now be posted online by the Fair Political Practices Commission.

The bill becomes effective immediately, but with a delayed operative date of July 1, 2014.

The Assembly has passed a bill to ban fundraisers at the homes of lobbyists. Assembly Bill 1673 passed without a no vote and without debate.

The bill modifies the definition of “contribution” by removing a $500 exception for home or office fundraisers if the host of the fundraiser is a lobbyist, lobbying firm, or lobbyist employer. Any payments by the lobbying occupant related to the costs of the fundraiser would then potentially be a prohibited contribution to officials and candidates.

In the Senate, a similar home fundraiser bill (Senate Bill 1441) currently awaits a floor vote.

The Ethics Commission has prepared draft amendments to the Election Campaign Control Ordinance (ECCO). The proposed ECCO amendments include a provision to classify a committee’s otherwise independent payment as a “contribution” if the payment is for an advertisement duplicating materials found in a candidate’s advertisement or on the candidate’s website. Such payments would be subject to both contribution limits and source prohibitions.

The commission has invited public comment at the next meeting on May 8, 2014. The draft amendments are available here.

Photo of the San Diego skyline courtesy of Tomcio77 on Wikimedia Commons.

Q. My company is a registered lobbyist employer in California.   I do not currently meet the threshold for lobbyist registration, however, I do engage in some lobbying activity.  Am I required to disclose this activity on the company’s report?

A. In California, lobbyist employers are required to track and disclose compensation and expenditures for non-lobbyist employees (NLEs) on quarterly disclosure reports. If you meet the NLE threshold for reporting, you are required to disclose your pro-rata share of compensation and related expenditures, even if you do not meet the registration threshold.  Specifically, you qualify as an NLE if you spend more than 10 percent of your compensated time in any calendar month in connection with lobbying activities.  However, this does not include compensation paid to an employee whose duties are solely clerical, manual, or are limited to the compilation of data or statistics.

If you qualify as an NLE, you must track your compensation and reimbursed expenditures dedicated to state lobbying activities.  This combined figure is included on the employer report (Form 635) in Part D, Other Payments to Influence Legislative or Administrative Action.  When estimating your time, you will need to include all time spent in connection with lobbying activities, including direct communications with public officials in the presence of your company’s or trade association’s contract lobbyist.  Although there is an exception in the Fair Political Practices Commission regulations allowing employees to not count this type of direct communication towards the registration threshold, you must nevertheless track and disclose this time on your company’s employer report if you exceed the NLE reporting threshold.   You will also need to include grassroots activity, research, and preparation time.

Be mindful of the gap between the NLE reporting threshold and the lobbyist registration threshold. If your level of activity exceeds the lobbyist registration threshold, you are required to register within 10 days.  The registration threshold for in-house employees is defined as spending one-third or more of your compensated time in any calendar month engaging in direct communications with a qualifying official for the purpose of influencing legislative or administrative action.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: experts@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

Gov. Jerry Brown has appointed Judge Jodi Remke as the new chair of the Fair Political Practices Commission (FPPC).

Remke is currently the presiding judge of the State Bar Court, which is responsible for the discipline of attorneys.

The appointment fills a vacancy created by Ann Ravel’s appointment to the Federal Election Commission.

State senators are receiving a refresher in ethics and bills to require tougher ethics rules are advancing following a series of legal cases involving Democratic lawmakers.

Senate President Pro Tem Darrell Steinberg canceled committee hearings Wednesday, April 23 and ordered senators and their top aides to devote the day to ethics training.

The ethics proposals approved by a committee include a ban on fundraising during the end of legislative sessions, a reduction in the value of gifts officials may accept, and a prohibition on such items as spa treatments and golf games.

Photo of the California Senate chamber courtesy of David Monniaux on Wikimedia Commons.

In light of the United States Supreme Court ruling in McCutcheon v. FEC, the Los Angeles Ethics Commission announced it would no longer enforce the aggregate limits on contributions to city and school board candidates.

Limits on contributions to individual candidates remain in place.

Photo of the Los Angeles skyline by Nserrano on Wikimedia Commons.

Gov. Jerry Brown has called a special session of the Legislature to convene on April 24, 2014.

Brown wants lawmakers to replace the rainy day fund measure currently on the November ballot with a new constitutional amendment establishing a dedicated reserve capable of paying down state debts and unfunded liabilities.
Photo of the California Senate Chamber by David Monniaux on Wikimedia Commons.

The Ethics Commission fined Marc Chase $80,000 for funneling illegal contributions to the 2012 campaigns of San Diego County Dist. Atty. Bonnie Dumanis and ex-Mayor Bob Filner. Chase, the co-owner of a luxury car dealership in La Jolla, admitted he laundered money from Mexican businessman Jose Susumo Azano Matsura into the mayoral campaigns of Dumanis and Filner.

Azano was a major customer of Chase, who served as a “straw” donor to hide Azano’s name. Election law forbids contributions from foreign nationals.

Chase also pleaded guilty in federal court to eight misdemeanor counts of campaign funding violations. He could face eight years in prison when sentenced Nov. 13, 2014.

Photo of the San Diego skyline courtesy of Tomcio77 on Wikimedia Commons.

Gov. Jerry Brown has signed a bill designed to strengthen campaign finance laws and bolster enforcement. Assembly Bill 800 gives the Fair Political Practices Commission (FPPC) the authority to audit campaign funds and seek court injunctions to force compliance before elections.

Previously, the FPPC was unable to commence audits of committees until after the conclusion of the general election. The bill also gives preference to civil actions filed by the FPPC in court to ensure disclosures happen before the election.

The bill took effect upon signature.