BILL ANALYSIS �
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THIRD READING
Bill No: AB 2320
Author: Fong (D)
Amended: As introduced
Vote: 27
SENATE ELECTIONS & CONSTIT. AMEND. COMMITTEE : 4-0, 6/17/14
AYES: Padilla, Hancock, Jackson, Pavley
NO VOTE RECORDED: Anderson
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 75-0, 4/24/14 (Consent) - See last page for
vote
SUBJECT : Political Reform Act of 1974: campaign funds
SOURCE : Author
DIGEST : This bill 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.
ANALYSIS :
Existing law:
1. Prohibits, pursuant to the Political Reform Act (PRA), a
spouse or domestic partner of an elected officer or a
CONTINUED
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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.
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.
This bill 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.
Background
Compensating Spouses . 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, the Legislature passed and the Governor 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, 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
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property laws, any income earned by a married person while
living with his/her spouse generally is considered to be
community property, which is jointly held by both spouses. As a
result, when a candidate pays his/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/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/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/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/her
campaign committee would go into the candidate's own pocket,
indirectly resulting in campaign contributions becoming a
candidate's personal funds.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 6/30/14)
League of Women Voters of California
ARGUMENTS IN SUPPORT : The League of Women Voters of
California states that this bill "[?] closes a loophole that
currently allows the use of campaign funds to pay a spouse or
domestic partner for many kinds of services. Donors have a
right to expect that their money is going directly to their
candidate's campaign for office and not used in a manner by
which the candidate could personally benefit.
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"The League of Women Voters supports measures of financing
political campaigns that combat corruption and undue influence.
We believe that tightening the prohibition on hiring a spouse or
domestic partner will help to restore public confidence in our
election process."
ASSEMBLY FLOOR : 75-0, 4/24/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Grove, Hagman, Hall, Roger Hern�ndez, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Medina, Melendez, Mullin, Muratsuchi, Nestande, Olsen, Pan,
Patterson, Perea, V. Manuel P�rez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A.
P�rez
NO VOTE RECORDED: Gray, Harkey, Mansoor, Nazarian, Vacancy
RM:d 7/1/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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