Reforms in Campaign Finance Forge Ahead Amidst No Shortage of Scandal

(A wrap-up of news in the campaign finance/open government realm. – promoted by Brian Leubitz)

California voters will consider a measure next June to create a system of public financing for Secretary of State races. There seems to be no shortage of reasons why voters would be concerned about the role of large private contributions in our elections system. Tidbits include a sitting Assemblymember and former candidate laundering campaign funds, lobbyists working to block reforms while facing further restrictions on wining, dining, and sleeping with legislators, and a U.S. Supreme Court hell bent on making things worse.

Details below:

California Fair Elections Act Clears Legal Challenge, Heads for June 2010 Ballot The Institute of Governmental Advocates, a trade association of professional lobbyists, has failed in its second attempt to prevent voters from considering a measure that would allow candidates for Secretary of State to run for office without using large private contributions. On November 23rd, California Superior Court Judge Michael Kenny tossed out the lobbyists’ claim that the Fair Elections Act (which passed the legislature as AB 583) unfairly increased the fee lobbyists pay to register with the Secretary of State. A federal court had reached a similar conclusion. Kenny found that:

Petitioners’ claim of clear invalidity ignores provisions of AB 583 that the $700 fee may not be a tax whose sole purpose is to raise revenue for a publicly financed campaign system and, instead, may serve a legitimate regulatory purpose: implementation of public campaign financing to remediate the negative perceptions and effects of the current privately financed campaign system, created in large part by lobbyists’ campaign contributions. Government Code section 91017 in section 4 of AB 583 identifies negative public perceptions and effects resulting from the current privately financed campaign process: “(c) The current campaign finance system fuels the public perception of corruption at worst and conflict of interest at best. . .; (e) The current campaign finance system undermines the First Amendment right of voters and candidates to be heard in the political process. . .; and (f) . . . Voters would like the opportunity to elect a Secretary of State who has not accepted any contributions from entities or individuals that employ lobbyists.” To remedy the legative public perceptions and effects of the current system, Government Code section 91019 in section 4 of AB 583 identifies as purposes of the legislation establishing a publicly financed campaign process for Secretary of State: “(e) To diminish the danger of actual corruption or the public perception of corruption. . . ; (f) To reduce the perception of influence of lobbyist employers upon future Secretaries of State and their administration of the lobbyist disclosure program.” In effect, the negative perceptions and effects on elections attributable to lobbyists’ campaign contributions would be remedied by the implementation of a publicly financed system supported in part by the $700 fee imposed on lobbyists and their employers.

Asm. Anderson Busted for Evading Contribution Limits and Disclosure Rules Assemblymember
Joel Anderson has agreed to pay a $20,000 fine for his role in laundering campaign funds through the Fresno County Republican Central Committee, which has agreed to a fine of $29,000. Three individuals in the Hamann family, who are in the construction business, and two Indian tribes funneled contributions of $8,000 to $10,000 each through the Fresno Republican Party which then gave them to Anderson – violating both the $3,900 contribution limit and masking the true source of these funds. Gregg Hamann told the San Diego Union tribune that he couldn’t remember why he gave the money: “Honestly as I’m sitting now, four months ago there was a cause we felt could be advanced,” but “I have no recollection of what that cause was.” Anderson also returned nearly $150,000 to the Fresno, Placer, and Stanislaus Republican Party Committees from his Assembly campaign which they had then redirected to his Senate campaign. The FPPC has notified the Placer Republican Party it has insufficient evidence to prosecute them, but committee member Peter Hill not only left the committee but left the Republican party over the matter, saying it didn’t pass the smell test. “They are crowing because they got away with it. Technically, it may not have risen to the level” where the FPPC would act but “in real life it was money laundering and they got away with it,” Hill told the Sacramento Bee. Also of interest, on June 30 Sempra Energy made a $2,500 contribution to the Fresno Republican Party and on the same day the party gave $2,375 to Anderson without disclosing Sempra as the source of funds. This was before Sempra had a black eye in the press for allegations that one of its lobbyists was engaged in a sexual tryst with Assemblymember Mike Duvall, but perhaps there were other reasons that either Sempra or Anderson did not want to disclose the contribution.

Read the FPPC staff investigation report here.

Assembly Candidate Ayres Indicted for Money Laundering
Not to be outdone by Sempra, Robert Osborne was one of nine people facing a 155-count indictment for reimbursing people with developer funds for making campaign contributions to Jim Ayers when he ran unsuccessfully for the 65th Assembly District in 2006. Note: Candidates running under the California Fair Elections Act (if approved by voters next June) would not accept any private contributions once qualified, so the possibility of accepting laundered funds is eliminated. Enforcement is strict – candidates who violate that would be barred from running for office for five years. OC Register, Mission Viejo Man Indicted in Corruption Case and Will Duvall Scandal Spur Clearer Rules for Lobbyist Behavior? In the wake of a sex scandal that lead Mike Duvall to resign from the Assembly and suggested that energy lobbyists had used sex as an influence tactic, some legislators and staff are interested in tightening rules to require lobbyists to disclose what legislators they meet with and topics discussed and clarify rules for romantic relationships between lobbyists and members they are lobbying (as is already the case with spouses). Assemblymember Roger Neillo said, “I’m sure it happens,” when asked on camera if lobbyists were “messing around” with legislators, but it remains to be seen whether the legislature will do anything about it.

CalPERS Board Member Admits Taking Illegal Contribution from Placement Agent Villalobos
Charles Valdes, a current CalPERS board member, has agreed to pay a $12,500 fine for accepting campaign contributions over the legal limit, including a contribution from placement agent Alfred Villalobos. Villalobos is under scrutiny after it was revealed that he has received some $50-$70 million in commissions from investment companies for helping them pitch their deals to CalPERS. Villalobos is a former CalPERS board member himself and has hired former CalPERS Chief Executive Fred Buenrostro to help grease deals. Current Board President Rob Feckner is asking board members to stop meeting with placement agents like Villalobos.

Read the LATimes editorial, Are CalPERS’ Hands Clean?

FPPC Cracks Down on Gifts to Legislators’ Families
Staff of the Fair Political Practices Commission have recommended a rule that would count gifts from lobbyists and their employers to the spouses and families of sitting legislators under the cap of $420 per year that officials can personally accept from any one source Currently, gifts to family members are unlimited and exempt. The Commission will consider the rule at its December 10 meeting.

Supreme Court will Rule Soon on Corporate Expenditure Bans
The United States Supreme Court will likely rule in the next few weeks in the case Citizens United v. FEC. The ruling could roll back the logic of a century-old law that bans federal contributions to candidates. California has no such ban, so our laws would be unaffected by the ruling although it could reduce our options for tougher laws in the future.

See San Francisco Chronicle Editorial A Serious Challenge to Campaign Laws