BILL ANALYSIS �
AB 2692
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Date of Hearing: April 22, 2014
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 2692 (Fong) - As Introduced: February 21, 2014
SUBJECT : Political Reform Act of 1974: expenditures.
SUMMARY : Requires a person who improperly benefits from the
personal use of campaign funds to forfeit the value of the
personal benefit received, as specified. Specifically, this
bill :
1)Provides that if the Fair Political Practices Commission
(FPPC) determines in an administrative action that an
expenditure was made that confers a substantial personal
benefit to a person who had the authority to approve that
expenditure, but the expenditure is not directly related to a
political, legislative, or governmental purpose, that the
individual who received the substantial personal benefit shall
pay to the General Fund (GF) of the state an amount equal to
the substantial personal benefit that he or she received.
2)Provides that a payment to the GF of the value of the benefit
received, as required by this bill, shall be in addition to
any penalty imposed by the FPPC.
EXISTING LAW :
1)Creates the FPPC, and makes it responsible for the impartial,
effective administration and implementation of the Political
Reform Act (PRA).
2)Requires campaign expenditures to be reasonably related to a
political, legislative, or governmental purpose. Requires
campaign expenditures that confer a substantial personal
benefit on an individual with the authority to approve the
expenditure of campaign funds to be directly related to a
political, legislative, or governmental purpose. Provides
that the term "substantial personal benefit" for these
purposes means an expenditure that results in a direct
personal benefit of more than $200. Provides that a violation
of these provisions is punishable as follows:
a) By a fine of up to $5,000 per violation in an
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administrative proceeding by the FPPC; or,
b) By a penalty of up to three times the amount of the
unlawful expenditure, in a civil action brought by the
FPPC.
FISCAL EFFECT : Unknown. State-mandated local program; contains
a crimes and infractions disclaimer.
COMMENTS :
1)Purpose of the Bill : According to the author:
California law recognizes that ethical concerns may
arise when a candidate personally benefits financially
from contributions received by his or her campaign.
For that reason, the Political Reform Act 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. Additionally, state law prohibits
candidates and committee officers from using campaign
funds for personal expenses.
Individuals who violate the "personal use" provisions
of California law are subject to civil or
administrative fines, but existing law does not
require a person to forfeit the personal benefit that
he or she received from the illegal expenditure of
campaign funds. The purpose of California's "personal
use" restrictions on campaign funds is to ensure that
funds solicited for campaign purposes are used for
those purposes, and are not used to personally enrich
candidates, officeholders, and political committee
officers. To further that purpose, and to provide a
greater disincentive against the improper use of
campaign funds, AB 2692 requires individuals who
violate the "personal use" laws to forfeit the
improper benefits that they received, in addition to
any fines they face for violating state law.
2)Personal Use of Campaign Funds : Existing law generally
prohibits campaign funds from being used for personal
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expenses, and instead requires campaign expenditures to be
reasonably related to a political, legislative, or
governmental purpose. When a campaign expenditure results in
a personal benefit of more than $200 to an individual who had
the authority to approve the expenditure, the expenditure must
be directly related to a political, legislative, or
governmental purpose. These provisions are intended to ensure
that campaign funds are not used as a method of personally
enriching candidates and officers of political committees.
As is the case with other suspected violations of the PRA, the
FPPC may bring an administrative enforcement action if it
believes that an individual or a committee has improperly used
campaign funds for personal purposes. When the FPPC
determines that a violation has occurred, it can impose a
monetary penalty of up to $5,000 per violation. Because the
maximum monetary penalty available in an administrative
enforcement action is not dependent on the value of the
personal benefit received, it is possible that a person could
receive an improper personal benefit from campaign spending
that exceeds the maximum penalty that the FPPC can impose
through the administrative process. The FPPC does have the
ability to bring a civil lawsuit for a violation of the
personal use provisions of law, in which case the maximum
monetary penalty available is three times the amount of the
unlawful expenditure. Such civil lawsuits, however, are
uncommon, and the FPPC deals with a substantial majority of
enforcement cases through its administrative enforcement
process. By requiring a person to forfeit the value of an
improper personal benefit that he or she received, this bill
will ensure that a person who uses campaign funds for personal
purposes does not receive a benefit in excess of the maximum
possible administrative fine.
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3)Arguments in Support : In support of this bill, the League of
Women Voters of California writes:
The League believes that the regulation of campaign
finance practices must support the public's right to
know and combat corruption and undue influence, and
that monitoring and enforcement must be effective. AB
2692 will help ensure that there is a direct
political, legislative, or governmental purpose for
any use of campaign funds that gives substantial
personal benefit to a candidate, elected officer, or
other individual with authority over those funds.
We support this measure that will provide additional
deterrence from the improper use of campaign funds.
4)Related Legislation : AB 1692 (Garcia), which was approved by
this committee on April 1, 2014 on a 6-0 vote, prohibits the
use of campaign funds to pay a fine, penalty, judgment, or
settlement that is imposed for the improper personal use of
campaign funds, among other provisions.
5)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
League of Women Voters of California
Opposition
None on file.
Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094
AB 2692
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