BILL ANALYSIS Ó
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Norma J. Torres, Chair
BILL NO: SB 1402 HEARING DATE: 4/22/14
AUTHOR: DeLEON ANALYSIS BY: Darren Chesin
AMENDED: 4/10/14
FISCAL: YES
SUBJECT
Political Reform Act of 1974: campaign funds: compensating
spouses
DESCRIPTION
Existing law, pursuant to the Political Reform Act (PRA),
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 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.
Existing law 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, in 2009 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
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. Under such
circumstances, a candidate or officeholder can personally
benefit financially from contributions received by his or 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 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
SB 1402 (DeLEON)
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candidate's personal funds.
This bill expands on the prohibitions already in current law by
eliminating provisions of law that allow the spouse or domestic
partner of an officeholder or candidate to receive compensation
from campaign funds for services rendered for purposes other
than fundraising for the benefit of the elected officer or
candidate.
COMMENTS
1.According to the Author : The PRA sets specific limits on the
use of campaign funds by candidates and elected officials,
markedly by prohibiting the use of campaign funds for gifts or
personal purposes. The spirit of the law is clear-candidates
and elected officials should not personally profit from their
campaign coffers. Compensation from campaign funds is limited
to reimbursement for out-of-pocket expenses incurred
specifically for political, legislative, or governmental
purposes.
However, under existing law, a spouse or domestic partner of an
elected official or a candidate can receive compensation for
providing services to a campaign, so long as they are not
fundraising services. This raises ethical questions about a
candidate or officeholder's ability to benefit financially
from contributions made to his or her campaign given that
under community property law, campaign funds received by a
spouse/domestic partner as payment would be considered jointly
owned and equally shared with the candidate/elected officer.
SB 1402 will strengthen the PRA by prohibiting spouses or
domestic partners from receiving compensation from campaign
funds for any services rendered to a campaign.
2.Related Legislation . This bill is identical to AB 2320 (Fong)
which is pending in the Assembly Appropriations Committee.
POSITIONS
Sponsor: Author
Support: None received
SB 1402 (DeLEON)
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Oppose: None received
SB 1402 (DeLEON)
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