BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1666| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1666 Author: Swanson (D) Amended: 6/9/10 in Senate Vote: 21 SENATE LOCAL GOVERNMENT COMMITTEE : 4-0, 6/16/10 AYES: Aanestad, Kehoe, DeSaulnier, Price NO VOTE RECORDED: Cox ASSEMBLY FLOOR : 76-0, 5/13/10 - See last page for vote SUBJECT : Local government: whistleblower hotline SOURCE : City of San Diego DIGEST : This bill authorizes a city, county, or city and county auditor or controller who is elected to office to maintain a whistleblower hotline to receive calls from persons who have information regarding fraud, waste, or abuse by local government employees. ANALYSIS : The California Whistleblower Protection Act authorizes the State Auditor to receive complaints from state employees and members of the public who want to report improper governmental activity (SB 37, Maddy, Chapter 12, Statutes of 1993). An "improper governmental activity" is any action that violates the law, is economically wasteful, or involves gross misconduct, incompetency, or inefficiency. The complaints received by the State Auditor are confidential, and the identity of the CONTINUED AB 1666 Page 2 complainant may not be revealed without the permission of the complainant, except to an appropriate law enforcement agency conducting a criminal investigation. If there is reasonable cause to believe that a state employee or agency has engaged in improper governmental activity, the State Auditor must report the nature and details of the activity to the head of the employing agency, or the appropriate appointing authority. The State Auditor must keep investigations confidential, but may issue reports of substantiated investigations, keeping confidential the identity of all individuals involved. The Attorney General must maintain a statewide whistleblower hotline to receive calls from the public with information regarding possible violations of state or federal statutes, rules, regulations, or violations of fiduciary responsibility by a corporation or limited liability company to the shareholders, investors, or employees. The Attorney General must refer calls to the appropriate government authority for further investigation. During the initial review, the identities of the whistleblower and the party being investigated are confidential (SB 777, Escutia, Chapter 484, Statutes of 2003). This bill authorizes a local whistleblower hotline to receive calls from people who have information regarding "fraud, waste, or abuse" by local government employees. This bill defines "fraud, waste, or abuse" as any activity by a local agency or employee that is undertaken in the performance of the employee's official duties, including activity outside the scope of his or her employment, that: 1.Violates any local, state, or federal law or regulation relating to corruption, malfeasance, bribery, theft of government property, fraudulent claims, fraud, coercion, conversion, malicious prosecution, misuse of government property, or willful omission to perform duty. 2.Is economically wasteful. 3.Involves gross misconduct. The bill specifies that the term "improper government AB 1666 Page 3 activity" has the same meaning as "fraud, waste, or abuse." This bill specifies that the identity of the individuals reporting the improper government activity, and the subject employees, must be kept confidential except, that an auditor or controller can provide a copy of a substantiated audit report that includes the identities of the subject employees and other pertinent information concerning the investigation to the appropriate appointing authority for disciplinary purposes. The substantiated audit report, and subsequent investigatory materials or information, and the disposition of any resulting disciplinary proceedings are subject to the confidentiality provisions of applicable local, state, and federal statutes, rules, and regulations. This bill also makes additional technical and conforming amendments. Comments In response to city auditors' concerns that state law insufficiently protected whistleblowers who call local hotlines, and individuals who are investigated as the result of those calls, the Legislature imposed confidentiality rules on local whistleblower hotline calls and investigations (AB 2001, Swanson, Chapter 325, Statutes of 2008). City officials want to clarify some of the Swanson bill's provisions. In implementing the local whistleblower hotline rules enacted by the 2008 Swanson bill, San Diego city officials identified three problems that this bill fixes. First, current law broadly allows hotlines to collect information on possible violations of state, federal, or local statutes, rules, or regulations. By narrowing this language to "fraud, waste, and abuse," this bill ensures that the local whistleblower process focuses on those activities and not on personnel complaints that are more appropriately handled by human resources departments. Second, the bill specifies that the confidentiality rules do not prohibit an auditor or controller from providing a substantiated audit report to an appropriate authority for disciplinary purposes. Third, the bill clarifies that its confidentiality provisions do not apply to complaints AB 1666 Page 4 submitted to other city or county agencies or hotlines. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 6/16/10) City of San Diego (source) ASSEMBLY FLOOR : AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield, Bradford, Brownley, Buchanan, Charles Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon, DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick, Gilmore, Hall, Harkey, Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande, Niello, Nielsen, Norby, V. Manuel Perez, Portantino, Ruskin, Salas, Saldana, Silva, Smyth, Solorio, Audra Strickland, Swanson, Torlakson, Torres, Torrico, Tran, Villines, Yamada, John A. Perez NO VOTE RECORDED: Caballero, Hagman, Skinner AGB:nl 6/17/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****