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)
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          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)
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          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.