California campaign finance reporting bills on verge of governor’s desk

02/20/2014 11:00 PM

02/20/2014 11:07 PM

A pair of bills requiring greater transparency from electioneering nonprofits are one step away from Gov. Jerry Brown.

Lawmakers have sought to fortify campaign spending rules since out-of-state nonprofit groups poured $11 million into the 2012 election cycle, a flexing of financial muscle that eventually earned the entities a $1 million California Fair Political Practices Commission fine. Both the Senate and the Assembly on Thursday approved bills that would implement new rules in time for this year’s election.

“Simply put, our law needs to catch up with the way” nonprofits have found to skirt reporting requirements, Assemblyman Rich Gordon, D-Menlo Park, said in bringing to the Assembly floor a bill designed to force more disclosures.

Unlike donations to political action committees, contributions to nonprofit groups do not necessarily require disclosure. Advocates of tougher laws say the current system enables a shell game, with donors able to influence elections but cloak their identity.

Senate Bill 27, by Sen. Lou Correa, D-Santa Ana, seeks to address the situation by laying out circumstances in which politically active nonprofits must reveal their donors.

Under current law, nonprofits are compelled to detail their donors only if they have spent on a previous political contest. Critics describe a resulting loophole in which groups can set up a new nonprofit for a given election and be exempted from disclosure, since it is the organization’s first effort.

Correa’s bill would instead trigger disclosure from nonprofits that hit certain thresholds, such as spending at least $50,000 during a given election or $100,000 over four elections. They would need to list donors who gave more than $100 with the intent to have the money spent on a campaign, or donors who gave over $1,000 when the money wasn’t given for explicitly political purposes.

“The people have a right to know who’s given to campaigns,” said Gary Winuk, chief of enforcement for the FPPC. “Nonprofits have been used to hide donations, as we’ve seen.”

In a show of their supermajority might, Assembly Democrats mustered 55 votes – one more than the two-thirds required to pass the measure and send it back to the Senate for a final vote. The bill has an urgency clause that would make it take effect prior to the 2014 election.

“If you’re going to give money to a nonprofit and you know it’s going to be used for campaign purposes, just disclose it,” Correa said after the vote. “It’s a very simple concept, which is that people need to know who is supporting what causes or which candidates.”

The measure drew opposition from Republicans, who argued that donors should be allowed to remain unidentified to protect themselves from retaliation. Assemblyman Don Wagner, R-Irvine, cited a a 1958 U.S. Supreme Court decision allowing donors to the National Association for the Advancement of Colored People to remain anonymous for fear of reprisal.

“You have a right to participate in this democracy,” Wagner said. “You have a right to do it anonymously.”

As the Assembly was acting on Correa’s bill, the Senate approved a bill by Gordon that also seeks broader campaign finance disclosures. Assembly Bill 800 tightens rules around how “subagents,” such as organizations that buy television and radio airtime, report their spending.

The bill also empowers the FPPC to begin audits and investigations or seek injunctions before an election occurs. Should Brown sign the bill, the FPPC would be able to exert its new authority during the current election season.

The California Political Attorneys Association has opposed that provision, arguing that the expanded powers would invite abuse and remove the chance for campaign committees and nonprofits under FPPC scrutiny to get a fair hearing.

“Historically, the FPPC has been an impartial referee, making the call after the play or game,” California Political Attorneys Association President Jason Kaune wrote in an email. “Now it seeks to insert itself in the political process before an election and before an alleged violator has even filed a disclosure form.”

But the bill’s author argued that, by allowing the FPPC to act more aggressively, the bill would make Californians better informed when they enter the voting booth.

“It allows for clearing up concerns about campaigns in real time,” Gordon said. “I’d like to have those answers,” he added, “before I vote.”

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