BILL ANALYSIS �
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Alex Padilla, Chair
BILL NO: AB 2692 HEARING DATE: 6/17/14
AUTHOR: FONG ANALYSIS BY: Darren Chesin
AMENDED: AS INTRODUCED
FISCAL: YES
SUBJECT
Political Reform Act: expenditures
DESCRIPTION
Existing law requires campaign expenditures to be reasonably
related to a political, legislative, or governmental purpose.
Campaign expenditures that confer a substantial personal benefit
on an individual with the authority to approve the expenditure
of campaign funds must be directly related to a political,
legislative, or governmental purpose. The term "substantial
personal benefit" for these purposes means an expenditure that
results in a direct personal benefit of more than $200. A
violation of these provisions is punishable as follows:
By a fine of up to $5,000 per violation in an administrative
proceeding by the Fair Political Practices Commission (FPPC);
or,
By a penalty of up to three times the amount of the unlawful
expenditure, in a civil action brought by the FPPC.
This bill 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:
Provides that if the 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.
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.
BACKGROUND
Personal Use of Campaign Funds : Existing law generally
prohibits campaign funds from being used for personal 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.
COMMENTS
AB 2692 (FONG)
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1. 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. Related Legislation . AB 1692 (Garcia), which is also
pending in this committee, 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.
SB 831 (Hill), pending in the Assembly, prohibits the
expenditure of campaign funds for specified purposes,
including personal vacations, payments for membership dues
for a country club or health club, clothing to be worn by
the candidate or officeholder, tuition payments, and
others.
PRIOR ACTION
AB 2692 (FONG)
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Assembly Elections and Redistricting Committee: 6-0
Assembly Appropriations Committee: 17-0
Assembly Floor: 76-0
POSITIONS
Sponsor: Author
Support: League of Women Voters of California
Oppose: None received
AB 2692 (FONG)
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