BILL ANALYSIS Ó
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Lou Correa, Chair
BILL NO: AB 481 HEARING DATE: 7/03/12
AUTHOR: GORDON ANALYSIS BY: DARREN CHESIN
AMENDED: 6/25/12
FISCAL: YES
SUBJECT
Political Reform Act of 1974: campaign disclosure
DESCRIPTION
Existing law requires that a statement of organization for
a campaign committee disclose the full name, street
address, and telephone number, if any, of the treasurer and
other principal officers.
This bill would also require each campaign committee to
identify its principal officer or officers, as defined, and
would require each principal officer to maintain the
committee's accounts and records.
Existing law requires candidates and state ballot measure
proponents to verify their campaign statements and the
campaign statements of each committee subject to their
control, as specified.
Existing law defines "independent expenditure" as an
expenditure made by any person in connection with a
communication which expressly advocates the election or
defeat of a clearly identified candidate or the
qualification, passage or defeat of a clearly identified
measure, or taken as a whole and in context, unambiguously
urges a particular result in an election but which is not
made to or at the behest of the affected candidate or
committee.
This bill would provide that if a committee is required to
file a campaign statement or report disclosing an
independent expenditure, a principal officer of the
committee or, in the case of a controlled committee, the
candidate or state measure proponent who controls the
committee shall sign a verification on the campaign
statement or report that reads as follows:
"I have not received any unreported money or reimbursement
to make these independent expenditures. I have not
coordinated any expenditure made during this reporting
period with the candidate who is the subject of the
expenditure, with the proponent of the state measure that
is the subject of the expenditure, or with the agents of
the candidate or state measure proponent."
Existing law defines "late contribution" and "late
independent expenditure" as any contribution or independent
expenditure totaling in the aggregate $1,000 or more that
is made for or against any specific candidate, committee,
or measure involved in an election that is made or received
before the date of the election but after the closing date
of the last campaign statement required to be filed prior
to the election.
This bill would instead define "late contribution" and
"late independent expenditure" to mean a contribution or
independent expenditure made within 90 days before the date
of the election at which the candidate or measure is to be
voted on. In addition, this bill would require that a
report of a late independent expenditure also disclose the
cumulative total the committee has expended for independent
expenditures relating to the candidate or measure.
Existing law requires that broadcast and mass mailing
advertisements which are paid for by an independent
expenditure that are supporting or opposing candidates or
ballot measures include statements disclosing the following
information:
The name of the committee making the independent
expenditure.
The names of the persons from whom the committee making
the independent expenditure has received its two highest
cumulative contributions of $50,000 or more during the
12-month period prior to the expenditure.
This bill would require any advertisements which are paid
for by an independent expenditure that are supporting or
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opposing candidates or ballot measures to include such
disclosure statements.
BACKGROUND
Proposition 34 and Growth of Independent Expenditures : In
2000, the Legislature passed and the Governor signed SB
1223 (Burton), Chapter 102, Statutes of 2000, which became
Proposition 34 on the November, 2000 General Election
ballot. The proposition, which passed with 60 percent of
the vote, made numerous substantive changes to the PRA,
including enacting new campaign disclosure requirements and
establishing new campaign contribution limits, limiting the
amount that individuals could contribute to state campaigns
(ranging from $3,000 to $20,000 per election at the time,
depending on the office).
A study done by the Assembly Elections and Redistricting
Committee in 2006 and a subsequent report by the Fair
Political Practices Commission (FPPC) found that since
campaign contribution limits went into effect in California
with the passage of Proposition 34, the amount of campaign
spending done through independent expenditures increased by
more than 6,000 percent in legislative elections, and more
than 5,500 percent in statewide elections. In hotly
contested campaigns for seats in the Legislature, it is not
uncommon for spending through independent expenditures to
exceed the total amount of spending by all candidates in
the race. On the other hand, prior to the enactment of
contribution limits as a part of Proposition 34,
independent expenditures were relatively rare. In the
March, 2000 and November, 2000 elections, the last two
elections that were not subject to the Proposition 34
campaign contribution limits, the total amount of money
spent on independent expenditures for all legislative races
was less than $500,000.
COMMENTS
1.According to the author , more and more, voters receive
information from or see advertisements funded by
independent expenditure committees. As with any
information, it is important to know the source. In this
case, voters should be entitled to know who is
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responsible for and financing these campaigns.
According to the FPPC, independent expenditures have been
on the rise in California politics at both the state and
local level for the past decade. In June 2010, the FPPC
issued a finding that $127 million had been spent on
independent expenditures in the previous ten years.
Additional figures from the FPPC show that between the
June primary and the November general election in 2010,
more than $29 million in independent expenditures, or
nearly 23% of the prior decade's independent expenditure
spending, was expended on the elections for four
constitutional offices. Similarly, in 2006, the Los
Angeles City Ethics Commission noted that "increasing
numbers of candidates elected in Los Angeles since 2001
have been supported by independent spending, and few
since that time have been successful without it."
The Political Reform Act (PRA) recognizes this form of
political involvement, but decisional law has also made
clear that independent expenditures will continue to have
a role in elections. The Supreme Court's 2010 decisions
in Citizens United v. FEC and SpeechNow.org v. FEC
effectively allowed corporations, unions, individuals,
and associations to spend unlimited amounts of money from
their general treasuries on independent expenditures for
or against candidates. The Court's decision this week to
reverse the Supreme Court of Montana in American
Tradition Partnership, Inc. v. Bullock signals that we
are entering a new era of independent expenditures.
This growth of independent expenditures makes appropriate
disclosure all the more necessary. In order for voters
to make fully informed decisions, it is important that
they know, in a timely manner, who if not the candidate,
is paying for the political messaging. AB 481 makes a
number of small, but concrete changes that improve
disclosure and further the goal of greater transparency
and accountability in the area of independent
expenditures.
2.According to the FPPC , this bill contains five distinct,
but related changes to independent expenditure law. They
are, in the order found in AB 481, as follows:
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24-Hour Reporting of Independent Expenditures . At the
state and local level virtually all independent
expenditures are made within the three months prior to an
election. Under existing law applicable to state
candidates or measures, independent expenditures of
$1,000 or more made up to 90 days prior to an election
must be reported within 24 hours. However, the law
applicable to independent expenditures on local
candidates or measures, only requires reporting within 24
hours for the last 16 days before an election.
AB 481 would amend the latter section, thereby
standardizing the reporting time to 90 days prior to an
election for both state and local candidates or measures.
The bill would make a corresponding change to the
definition of "late contribution," so that it too is
consistent with the 90 days prior to an election 24-hour
reporting requirement.
The effect of the change would be simplification for
campaign report filing schedules, FPPC manuals, and
advice. This change would also provide the public with
increased disclosure about contributors to independent
expenditure committees, thereby allowing the public to
make more informed decisions about issues and candidates.
Independent Expenditure Committees: Principal Officers .
There have been a significant number of enforcement
situations where independent expenditure committees are
no longer active or have terminated by the time
violations are discovered or investigated. In these
circumstances, there may be no party left for the FPPC to
hold accountable for PRA violations. The ability for an
independent expenditure committee to violate the law then
disband and avoid liability is certainly inconsistent
with the spirit of the law.
AB 481 addresses the most direct remedy for this situation,
which is to establish principal officer liability for PRA
violations committed by their committees. The bill adds
principal officers to the existing law campaign
statement-related requirements of candidate, treasurers,
and elected officers. Beyond the circumstance where a
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committee is no longer active or has terminated, the
inclusion of principal officer liability should also have
the effect of deterring violations such as failing to
disclose contributions and expenditures, and failing to
properly identify donors on campaign advertisements.
Cumulate Independent Expenditures on Reports . Independent
Expenditure Reports are filed online with the Secretary
of State by state electronic filers during the 90 days
prior to an election. The forms are filed online or
faxed to local clerks during the 16 days before an
election, unless local law requires a longer period. The
reports are filed on a transaction-by-transaction basis,
and report isolated independent expenditures as they are
made. Third parties who are interested in tracking
independent expenditures must add the amounts spent on
successive reports together to get the total independent
expenditures by a committee or entity on a particular
candidate or measure.
AB 481 would require the cumulative total a committee or
entity has spent in independent expenditures on a
candidate or measure supported or opposed to be displayed
on the Independent Expenditure Report, in addition to the
amount of the most recent independent expenditure. The
information that the bill would mandate disclosure is
already available and tracked by independent expenditure
committees. Accordingly, the additional disclosure will
provide significant benefit to the public while posing
little burden on filers.
Independent Expenditure Source Verification . In recent
years, the FPPC has undertaken more money laundering
investigations and related administrative prosecutions.
AB 481 would amend the PRA to require independent
expenditure committees and major donors committees to
verify that they have used their own funds to qualify as
a major donor or independent expenditure committee. It
would do so by adding verification to the existing Major
Donor and Independent Expenditure Committee Campaign
Statement. By requiring a signed verification, the bill
would increase accountability of existing law regarding
the true source of the contribution or expenditure.
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Advertisement Disclosure for Independent Expenditures . For
purposes of independent expenditure disclosure, an
advertisement "is authorized and paid for by a person or
committee for the purpose of supporting or opposing a
candidate for elective office or a ballot measure or
ballot measures." Under existing law, advertisements
paid for by an independent expenditure are required to
include the name of the committee that paid for the
advertisement and the names of the top two $50,000
contributors. There is, however, an anomaly in the law -
as the disclosure applies only to "broadcast or mass
mailing" advertisement. Therefore, these disclosure
provisions do not apply to newspaper, other print
advertisements, or billboards.
AB 481 would require that any advertisement paid for by an
independent expenditure be required to include the name
of the committee that paid for the ad and the names of
the top two $50,000 contributors. There does not appear
to be a rationale why the law does not extend to all
forms of advertisement, nor should the distinction exist.
Moreover, this change is consistent with existing law
regarding "primarily formed committees," which already
requires disclosure of the top two $50,000 donors to any
advertisement for or against a ballot measure. The
effect of the change is to make it easier for the public
to know who is responsible for an advertisement and the
source of the contributions being made to fund the
independent expenditure. In turn, voters can then make
more informed decisions about issues and candidates.
PRIOR ACTION
Assembly Elections and Redistricting Committee: 5-2
Assembly Floor: 48-26
Senate E&CA Committee 3-2
(These votes do not reflect the current version of this
bill.)
POSITIONS
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Sponsor: Fair Political Practices Commission
Support: MapLight
Oppose: None received
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