BILL ANALYSIS
SB 739
Page 1
Date of Hearing: July 7, 2009
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
SB 739 (Tony Strickland) - As Amended: May 20, 2009
SENATE VOTE : 31-0
SUBJECT : Political Reform Act of 1974: fundraising.
SUMMARY : 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.
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 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.
3)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.
4)Provides that any person who knowingly or willfully violates
the PRA is guilty of a misdemeanor.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
1)Purpose of the Bill : According to the author:
SB 739
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Current law allows a spouse or domestic partner of an
elected official or candidate to receive compensation for
fundraising services on behalf of the elected official or
candidate. However, this activity does raise ethical
questions since spousal incomes are community property.
This question was raised in 2004 after Senator Strickland
hired his wife's company to serve as the campaign's
professional fundraiser. A complaint was filed with the
Ventura County District Attorney's office. The District
Attorney determined all transactions were legal and no
further action was taken.
While the District Attorney determined the legality of the
issues, the ethical issues remained. The public has
demanded greater transparency in government. Campaign
activities, particularly those involving fundraising,
should be transparent.
[SB 739] [p]rohibits a spouse or domestic partner of an
elected official or candidate from receiving compensation
for fundraising services for the benefit of the elected
official or candidate. A willful violation of this section
is punishable as a misdemeanor.
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. As indicated above, the author of
this bill found himself in such a situation in 2004.
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.
In fact, California law already recognizes that ethical concerns
SB 739
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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.
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
Fair Political Practices Commission
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094