BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 952 (Torres) - Prohibited financial interests: aiding and abetting. Amended: As Introduced Policy Vote: Public Safety 6-0 Urgency: No Mandate: Yes Hearing Date: May 23, 2014 Consultant: Jolie Onodera SUSPENSE FILE. Bill Summary: SB 952 would specifically prohibit an individual from aiding or abetting a public officer or person in violating the law prohibiting financial conflicts of interest, and would extend the penalties under existing law to apply to the individual who willfully aids or abets, as specified. Fiscal Impact: Potential increase in state costs for prison terms for aiding or abetting a public officer. To the extent three or four individuals are sentenced to state prison under the provisions of this bill, annual costs would be in the range of $90,000 to $125,000 (General Fund) assuming an average in-state contract bed cost of $31,000. Background: Current law prohibits members of the Legislature, state, county, district, judicial district and city officers or employees from having a financial interest in any contract made by them in their official capacity, or by any body or board of which they are members. Additionally, current law prohibits state, county, district, judicial district and city officers or employees from being purchasers at any sale or vendors at any purchase made by them in their official capacity. Finally, current law prohibits the State Treasurer and Controller, county and city officers, and their deputies and clerks from purchasing or selling, or in any manner receiving for their own or any other person's use or benefit, any state, county or city warrants, scrip, orders, demands, claims, or other evidences of indebtedness against the state, or any county or city thereof. A person found in violation of any of the above prohibitions is punishable by a fine of not more than $1,000 or by imprisonment in the state prison, and is forever disqualified from holding any office in this state. (GC §§ 1090, 1093, 1097) SB 952 (Torres) Page 1 Although current law provides that all persons concerned in the commission of a crime, whether it be a felony or misdemeanor, and whether they directly commit the act constituting the offense, or aid and abet in its commission, are principals in any crime so committed (PC § 31), the courts have held that there is no aider and abettor liability under GC § 1090 (D'Amato v. Superior Court (2008) 167 Cal.App.4th 861). The Fourth District Court of Appeals followed this holding in an unpublished decision in People v. Baine (2012) Cal.App. Unpub. LEXIS 8038: "We share our colleagues' view that the Legislature intended Government Code section 1090 to exclude criminal liability on either a conspiracy or an aiding and abetting theory for anyone other than public officials and public employees with a financial interest in the underlying contract." Proposed Law: This bill would specifically prohibit an individual from aiding or abetting a public official or person from violating the law prohibiting financial conflicts of interest under GC §§ 1090 and 1093, and would extend the penalty provisions under GC § 1097 to aiders and abettors. Prior Legislation: AB 1059 (Wieckowski) 2013 would have extended the application of existing financial interest prohibitions on public officers and employees to independent contractors who perform a public function, and specifically provide when an independent contractor, or an owner, officer, employee, or agent of the independent contractor, has a financial interest in a contract. This bill was not heard by a committee. AB 850 (de la Torre) 2009 would have provided that no person shall knowingly induce or participate in or conspire with a public official to violate the law prohibiting financial conflicts of interest in the award of public contracts. This bill failed in the Assembly Committee on Appropriations. Staff Comments: According to statistics provided by the Department of Justice (DOJ), 32 arrests under GC § 1090 resulted in 11 convictions over three years from 2011 through 2013. CDCR also indicates there have been 14 commitments to state prison over the past three years with GC § 1097 as a subordinate SB 952 (Torres) Page 2 offense. It is unknown how many convictions under the governmental conflict of interest codes would have been impacted by the liability extended to aiders and abettors under the provisions of this bill, nor how many potential aiders/abettors would have been potentially charged for each conviction, but to the extent three or four individuals are sentenced to state prison in any one year, annual costs would be in the range of $90,000 to $125,000, assuming the average contract bed cost of $31,000 (based on the estimated in-state contract bed cost per year reflected in the 2014-15 Governor's Budget). Future costs would be dependent on the number of applicable commitments and any changes in the cost of contracted bed space to the extent it continues to be utilized by CDCR. The U.S. Supreme Court has ordered the CDCR to reduce prison crowding to 137.5 percent of the prison system's design capacity by February 28, 2016. Although public safety realignment has achieved significant reductions in the prison population, and the 2014-15 Governor's Budget projects meeting the population cap in the near-term, the analysis by the Legislative Analyst's Office suggests that CDCR's long-term prison caseload will likely exceed this cap. Because California's institutions already exceed the population limit, any near-term and future increases to the state's prison population would require the state to pursue one of several options including contracting-out for additional bed space or releasing current inmates early onto parole.