BILL ANALYSIS
AB 850
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Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 850 (De La Torre) - As Amended: May 5, 2009
Policy Committee:
JudiciaryVote:10-0
Urgency: No State Mandated Local Program:
Yes Reimbursable:
SUMMARY
This bill provides 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.
FISCAL EFFECT
Potential GF costs to the extent convictions lead to state
prison commitments. If four individuals were sentenced to state
prison under this bill, annual costs would be about $160,000.
Violation of the section of law being amended by this bill is
punishable by a fine of up to $1,000 or imprisonment in state
prison. The person convicted is also forever disqualified from
holding any office in the state.
COMMENTS
1)Purpose . The author states, "Under current law, Government
Code section 1090 prohibits members of the Legislature and
[others] from being financially interested in any contract
made by them in their official capacity, or by any body or
board of which they are members. In several cities throughout
California, elected or appointed officials have been convicted
in cases involving illegal expenditures of public funds.
Assembly Bill 850 protects the expenditure of public money by
eliminating temptation, avoiding the appearance of
impropriety, and assuring the public entity of the official's
undivided and uncompromised allegiance by holding all parties
accountable for corrupt actions. Assembly Bill 850 will
AB 850
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protect public funds by extending liability to include not
just elected officials but third parties who are also
participants of the corrupt schemes. This bill will provide
that the associated contractual party can also be held liable
for the wrongdoing associated with the corrupt expenditure of
public funds."
2)Need for the Bill . In Klistoff v. Superior Court, 157 Cal.
App. 4th 469 (2007) the City of South Gate sued a waste
hauling business and its principal (Klistoff) for conspiracy
to violate Government Code Section 1090, alleging that the
principal, through the waste hauling business, made payments
to a city official in exchange for the official's efforts to
ensure that a refuse collection and recycling services
provider, in which the principal was vice-president and
operations manager, obtained a contract from the city. The
court held that because only public officials or employees can
violate section 1090, the principal and the waste hauling
business, who were not public officials or employees, could
not be held liable for conspiracy to violate section 1090.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081