BILL ANALYSIS Ó
AB 2320
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Date of Hearing: April 1, 2014
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 2320 (Fong) - As Introduced: February 21, 2014
SUBJECT : Political Reform Act of 1974: campaign funds.
SUMMARY : Prohibits a spouse or domestic partner of an elected
officer or a candidate for elective office from receiving, in
exchange for services rendered, compensation from campaign funds
held by a controlled committee of the elected officer or
candidate for elective office.
EXISTING LAW :
1)Creates the Fair Political Practices Commission (FPPC), and
makes it responsible for the impartial, effective
administration and implementation of the Political Reform Act
(PRA).
2)Prohibits a spouse or domestic partner of an elected officer
or a candidate for elective office from receiving compensation
from campaign funds held by a controlled committee of the
elected officer or candidate for elective office for services
rendered in connection with fundraising for the benefit of the
elected officer or candidate for elective office.
3)Prohibits the use of campaign funds for an expenditure that
confers a substantial personal benefit on any individual or
individuals with authority to approve the expenditure unless
the expenditure is directly related to a political,
legislative, or governmental purpose.
4)Prohibits the use of campaign funds to compensate a candidate
or elected officer for the performance of political,
legislative, or governmental activities, except for
reimbursement of out-of-pocket expenses incurred for
political, legislative, or governmental purposes.
5)Provides that any person who knowingly or willfully violates
the PRA is guilty of a misdemeanor.
FISCAL EFFECT : Unknown. State-mandated local program; contains
crimes and infractions disclaimer.
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COMMENTS :
1)Purpose of the Bill : According to the author:
The Political Reform Act (PRA), among other provisions,
places restrictions on the use of campaign funds for state
and local candidates and elected officers. For example,
the PRA prohibits the use of campaign funds for gifts or
personal purposes unless they are directly related to a
political, legislative, or governmental purpose.
Furthermore, the PRA prohibits campaign funds from being
used to compensate a candidate or elected officer for the
performance of political, legislative, or governmental
activities, except for reimbursement of out-of-pocket
expenses incurred for political, legislative, or
governmental purposes.
In 2009, the Legislature passed and the Governor signed SB
739 (Strickland), which prohibits a spouse or domestic
partner of an elected officer or a candidate from receiving
compensation from campaign funds for services rendered in
connection with fundraising for the benefit of the elected
officer or candidate.
Despite these restrictions, ethnical concerns may continue
to arise, because existing law allows a candidate or
officeholder to pay a spouse for services other than
fundraising services that are rendered to, and paid by, the
campaign. Under such circumstances, a candidate or
officeholder can personally benefit financially from
contributions received by his or her campaign.
AB 2320 improves transparency and strengthens campaign
integrity by prohibiting a candidate or officeholder from
paying his or her spouse or domestic partner from campaign
funds for providing services to the campaign.
2)Background : Candidates and officeholders both within and
outside of California often find themselves the subject of
scrutiny and controversy for paying a spouse or other family
member for professional services rendered to, and paid by,
their campaign committees.
Consequently, in 2009 the Legislature passed and the Governor
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signed SB 739 (Strickland), Chapter 360, Statutes of 2009,
which prohibits a spouse or domestic partner of an elected
officer or a candidate for elective office from receiving
compensation from campaign funds held by a controlled
committee of the elected officer or candidate for services
rendered in connection with fundraising for the benefit of the
officeholder or candidate.
However, as mentioned above in the author's statement, ethical
concerns continue to come up because existing law allows a
candidate or officeholder to pay a spouse for services other
than fundraising services that are rendered to, and paid by,
the campaign. Under California's community property laws, any
income earned by a married person while living with his or her
spouse generally is considered to be community property, which
is jointly held by both spouses. As a result, when a
candidate pays his or her spouse for professional services
rendered to the candidate's campaign committee, the campaign
committee's payment indirectly becomes the candidate's
personal property. These arrangements are controversial
because they allow candidates to personally benefit from the
contributions that their campaigns seek and accept. Under
such circumstances, a candidate or officeholder can personally
benefit financially from contributions received by his or her
campaign.
In fact, California law already recognizes that ethical
concerns may arise when a candidate can personally benefit
financially from contributions received by his or her
campaign. For that reason, the PRA prohibits campaign funds
from being used to compensate a candidate or elected officer
for the performance of political, legislative, or governmental
activities, except for reimbursement of out-of-pocket expenses
incurred for political, legislative, or governmental purposes.
Along the same lines, the PRA limits the amount of money that
a candidate may loan to his or her own campaign. Those limits
were put into place due to concerns that money raised by a
candidate subsequent to an election to repay that candidate's
personal loan to his or her campaign committee would go into
the candidate's own pocket, indirectly resulting in campaign
contributions becoming a candidate's personal funds.
This bill expands on the prohibitions already in current law
by eliminating provisions of law that allow the spouse or
domestic partner of an officeholder or candidate to receive
AB 2320
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compensation from campaign funds for services rendered for
purposes other than fundraising for the benefit of the elected
officer or candidate.
3)Political Reform Act of 1974 : California voters passed an
initiative, Proposition 9, in 1974 that created the FPPC and
codified significant restrictions and prohibitions on
candidates, officeholders and lobbyists. That initiative is
commonly known as the PRA. Amendments to the PRA that are not
submitted to the voters, such as those contained in this bill,
must further the purposes of the initiative and require a
two-thirds vote of both houses of the Legislature.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Nichole Becker / E. & R. / (916)
319-2094