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.

Democratic legislative leaders are reassessing campaign finance practices and have canceled a lucrative golf fundraiser scheduled for the weekend. Senate President Pro Tem Darrell Steinberg and Sen. Kevin de León announced plans to conduct a “vigorous review” of fundraising practices and campaign finance laws following the suspension of Sen.

Leland Yee and two other senators involved in separate criminal investigations.

The senate leaders announced the cancellation of the Pro Tem Cup, an annual golf fundraiser at Torrey Pines in San Diego. Tickets were to benefit the state Democratic Party with a price range from $15,000 to $65,000 per person.

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

State Senator Leland Yee has been arrested on public corruption charges as part of several arrests made by the FBI.

Yee represents District 8, which includes San Francisco and San Mateo County. The former San Francisco supervisor and 2011 mayoral candidate is currently running for secretary of state.

Yee was honored last week by the Northern California chapter of the Society of Professional Journalists for his efforts last year to maintain the requirements of the California Public Records Act.

Photo of State Senator Leland Yee courtesy of Tim Bartel on Wikimedia Commons.

Lawmakers sent Gov. Jerry Brown a bill designed to strengthen campaign finance laws in response to a recent case prompting the largest campaign reporting fine in state history. Assembly Bill 800 gives the Fair Political Practices Commission (FPPC) the authority to audit campaign funds and seek court injunctions to force compliance with its investigations before elections.

The bill is a response to $15 million in anonymous donations given through an Arizona-based nonprofit that funneled the cash to California political action committees through intermediary groups. The FPPC issued a $1 million fine against two of the groups involved.

Lawmakers called a press conference to announce a package of bills to make major upgrades to government accountability rules and practices. Senator Ricardo Lara and Kevin de Leon have filed Senate Bill 1441 through Senate Bill 1444 as spot bills, with the intention to add substantive provisions at a later date.

The bills will include a ban on fundraisers at lobbyists’ homes and a ban on all gifts from lobbyists.

There is also a proposal to lower the current non-lobbyist gift limit of $440 to $200 for state and local officials.

The Board of Supervisors has adopted a Lobbyist Ordinance to regulate any person who contacts certain county officials with the purpose of promoting, supporting, modifying, opposing, or causing delay or abandonment of conduct. Ordinance No. NS-19-42 regulates contract lobbyists, in-house lobbyists, lobbying firms, and expenditure filers who influence policy without directly contacting officials.

Legislative, procurement, and grassroots activity is covered by the ordinance, which specifically provides for the possibility a political action committee will qualify as an in-house lobbyist.

Registration and disclosure forms will be available when the ordinance becomes effective on March 27, 2014.

The Ethics Commission will be holding a series of workshops over the next few months to receive input concerning proposed amendments to campaign laws. The suggested reforms include classifying the duplication of candidates’ campaign materials as nonmonetary contributions instead of independent expenditures.

In addition, the commission seeks to curb the practice of making independent expenditures on credit so as to delay disclosure of donors who verbally agree to pay the debt after the election.

Commission staff researched and produced a report to be discussed at the next commission meeting on Thursday, March 13, 2014. The report is available here.