A state lawmaker wants to double the reporting threshold for political campaigns in California — allowing major donors to contribute more money and campaigns to spend more money before filing a disclosure report.

Under the Political Reform Act of 1974, as modified by later laws, candidate and independent expenditure committees must file disclosure reports after accepting $1,000 or more in a calendar year. Similarly, the state requires major donors to file campaign reports after contributing $10,000 or more in a calendar year.

Assemblyman Richard Gordon, D-Menlo Park, believes it’s time to increase those disclosure limits. Assembly Bill 594 would require candidate and independent expenditure committees to file a disclosure report after spending $2,000 or more in a calendar year. The reporting threshold for major donors would increase from $10,000 to $20,000 or more.

Political amateurs punished by campaign finance laws

Since his election to the state Assembly in 2010, Gordon has carved out a special niche in campaign finance legislation with bills to increase regulation and disclosure requirements. In 2012, Gordon authored Assembly Bill 481, which added new reporting requirements for independent expenditure and major donor committees. Last year, Gov. Jerry Brown signed Gordon’s bill, Assembly Bill 800, to give the Fair Political Practices Commission “the authority to conduct immediate audits when political campaigns are suspected of illegal activity and requires subcontractors and sub-vendors to disclose their donations.”

State-level political campaigns continue to be big budget blockbusters. According to the Sacramento Bee’s analysis of campaign finance reports, “candidates and independent groups collectively spent at least $150 million on Assembly and Senate contests statewide over the two-year election cycle.”

Why would a Democratic politician with a record of authoring campaign finance laws seemingly aid money in politics? Like his previous campaign finance proposals, Gordon’s current legislation has support from the state’s campaign watchdog, which argued that low campaign spending limits reduce political participation.

In a memo obtained by the Los Angeles Times, Erin Peth, executive director of the FPPC, said that the current campaign finance rules “can be a barrier for those individuals who wish to participate, but who will not be raising or spending large amounts of money in connection with an election.” Peth also argued, “Committee qualification thresholds have not been updated since at least 1987 and the proposed increases in the bill are intended to adjust the thresholds with the rate of inflation.”

According to the Inflation Calculator of the U.S. Bureau of Labor Statistics, when adjusted for the rising in the cost of living, $1,000 in 1987 is the equivalent of $2,066 today.

The rationale for higher limits is supported by pro-freedom campaign finance experts, who strongly defend political contributions as a protected form of political speech. Complex campaign finance laws force average citizens to seek legal counsel before engaging in political organizing.

“While serving on the FEC from 2000 to 2005, I kept a file of letters from political amateurs caught in the maw of campaign-finance laws,” Bradley Smith, a law professor and former chairman of the Federal Election Commission, wrote in 2007. “Many of these people had no lawyers; none had the least intent to corrupt any officeholder; and all thought that they were fulfilling their civic duty by their involvement in campaigns.”

Top Two Primary could lead to more low-budget upsets

A higher campaign reporting threshold also increases the chances that those amateurs turn pro. Aided by California’s Top Two primary, which was passed by state voters in 2010, unknown candidates have been able to exceed political expectations, even achieve remarkable upsets, with low-budget campaigns. With higher reporting levels, these candidates will be able to operate in the dark for longer without tipping off incumbents.

Last November, unknown community activist Patty Lopez failed to report any expenditures in the primary campaign, despite spending a few thousands dollars. That failure to report resulted in a $400 fine by the FPPC. In the general election, she went on to upset fellow Democrat, Asm. Raul Bocanegra.

“I made a few mistakes, and I paid the price for that,” Lopez said after the election. “Most of the people on my team, we’re not in the political arena.”

Lopez’s campaign finances weren’t managed by a campaign professional, just a family friend who was willing to serve as treasurer. That’s exactly the type of grassroots campaign political watchdogs hope to encourage with relaxed campaign finance regulations.

Her victory is proof that low-budget long-shots have the potential to win. Although it’s unlikely that Bocanegra would have been intimidated by a few thousands dollars of campaign spending, some political observers believe the lack of campaign finance disclosure contributed to the perception that she wasn’t a serious threat.

Opportunity for political professionals to exploit

By aiding political amateurs with higher reporting levels, state regulators also could empower creative political professionals to exploit the outcome of primary races. In multi-candidate primary elections, political professionals could spend just under $2,000 in online ads or automated calls backing a decoy candidate.

Such a scenario has already played out in this year’s special election for the 7th State Senate District. A Democrat-led political action committee, the Asian American Small Business PAC, spent $46,380 on behalf of Michaela Hertle, a Republican candidate who had dropped out of the race.

By backing the lone Republican candidate, the political action committee hoped to thwart moderate Democrat Steve Glazer, who had built his campaign strategy on appealing to Republicans and independent voters. Glazer ultimately advanced to the May run-off against fellow Democrat, Assemblywoman Susan Bonilla. But Hertle had an impact, garnering 15 percent of the vote.

But Assemblyman Richard Gordon, D-Menlo Park, and the staff of the state Fair Political Practices Commission, California’s chief political watchdog, want to go in a different direction. FPPC staffers have endorsed AB 594, Gordon’s measure modifying the landmark Political Reform Act of 1974. This is from the L.A. Times:

Citing inflation, the state’s campaign finance watchdog agency is considering a proposal to raise the fundraising thresholds at which campaigns must report their financing, drawing some concerns from an advocate for fuller disclosure.

Currently, campaign committees and independent expenditure committees must report their fundraising and spending when they receive contributions of $1,000 or more in a calendar year. The state Fair Political Practices Commission staff is recommending that the panel support legislation that would raise that level to $2,000.

In addition, contributors must file special “major donor” reports disclosing all donations they make when they give $10,000 in a calendar year. The bill recommended by the FPPC staff would raise that threshold to $20,000.

Gordon depicted the measure as promoting democracy in comments to the Times:

“The proposed increases, while below what an adjustment for inflation would be, are intended to recognize that the cost of a true grassroots campaign has increased over this time and would allow those campaigns to still operate without the burden associated with filings.”

But the “burden” he cites has been diminishing for two decades, thanks to technology. At the national level, here’s where the campaign finance debate has been focused:

What’s the solution? Spending limits are off the table; like it or not, the Supreme Court is unlikely to reverse itself anytime soon. That leaves transparency as the issue to tackle. Mindful of potential First Amendment problems, Congress should revisit a policy Republicans offered in defiance of McCain-Feingold: Unlimited donations coupled with immediate transparency.

What could be a more modern, tech-fueled reform than requiring political candidates and groups to simultaneously deposit and disclose? Open-government groups could develop apps enabling voters to track donations to certain members of Congress or from specific interest groups, with customized alerts sent to their mobile devices.

That’s from the Jan. 27 column of Ron Fournier in the National Journal. Fournier is the former Washington bureau chief for The Associated Press.

The FPPC board is expected to discuss Gordon’s bill at its meeting Thursday.

By Katy Grimes

After big election seasons, it’s always interesting to see what the campaign and lobbying violations were. However, rarely is this information timely.

It’s even more interesting that this information is not publicized prior to election day.

Most interesting however, are the lobbying reporting violations. These always appear to me to be risk-reward decisions, and not the typical and sloppy goofs made by political campaigns. The fines for lobbying reporting violations seem to support this as they are larger than most of the campaign reporting violations. The lobbyists listed in this report received large payments for lobbying services, but failed to timely report these payments as required by California law.

Lobbying Reporting Violations

The Fair Political Practices Commission reported:

“California law requires lobbying entities to file registration forms and quarterly reports to provide the public with specified information,” the FPPC website said. The following failed to timely file the required forms or failed to include all required information:

Sacramento Advocacy and Catherine Barankin, failed to timely file quarterly lobbyist and lobbying firm reports from July 1, 2010 through September 30, 2012 involving over $500,000 in payments received for lobbying services. $22,500 fine.

California Industrial Hygiene Council and Jaime Steedman-Lyde. California Industrial Hygiene Council, a California lobbyist employer, and Jaime Steedman-Lyde, the Responsible Officer, failed to timely file ten Lobbyist Employer Reports between October 1, 2009 and September 30, 2012, failing to disclose total payments made for lobbying services in the amount of $95,557.03. $10,000 fine.

California Collaboration for Youth and Rick Benfield. California Collaboration for Youth, a California lobbyist employer, and Rick Benfield, the Youth’s Responsible Officer, failed to timely file twelve Lobbyist Employer Reports between October 1, 2009 and September 30, 2012, failing to disclose total payments made for lobbying services in the amount of $149,032.28. $12,000 fine.

State Public Affairs Committee – Junior Leagues of California and Wendy Penbera. State Public Affairs Committee – Junior Leagues of California, a California lobbyist employer, and Wendy Penbera, the Responsible Officer, failed to timely file two Lobbyist Employer Reports between October 1, 2009 and March 31, 2010, failing to disclose total payments made for lobbying services in the amount of $11,708.27. $2,000 fine.

Wildlife Center and Lindy O’Leary. Wildlife Center, a California lobbyist employer, and Lindy O’Leary, the Responsible Officer, failed to timely file five Lobbyist Employer Reports between October 1, 2009 and December 31, 2010, failing to disclose total payments made for lobbying services in the amount of $65,910.76. $5,000 fine.

California State Alliance of YMCAs and Sal Cisnaros. California State Alliance of YMCAs, a California lobbyist employer, and Sal Cisnaros, the Responsible Officer, failed to timely file twelve Lobbyist Employer Reports (Form 635) between October 1, 2009 and September 30, 2012, failing to disclose total payments made for lobbying services in the amount of $397,623.11. $12,000 fine.

See the other lobbying reporting violations here.

Campaign Reporting Violations

According to the FPPC, the biggest campaign reporting violation went to Daniel K. Tabor, Tabor for Mayor 2010, and Krishna Tabor, Treasurer. Daniel K. Tabor was a candidate for mayor of the City of Inglewood in the June 8, 2010, special election, the August 31, 2010, run-off election, the November 2, 2010, general election, and the January 11, 2011, run-off election. Tabor for Mayor 2010 was his candidate-controlled committee, and Krishna Tabor was the committee’s treasurer. They failed to timely file preelection statements for the March 18, 2010, through May 22, 2010, the July 1, 2010, through August 14, 2010, the August 15, 2010, through September 30, 2010, the October 1, 2010, through October 16, 2010, the October 17, 2010, through November 27, 2010, and the November 28, 2010, through December 25, 2010, reporting periods; failed to timely file a semiannual statement for the May 23, 2010, through June 30, 2010, reporting period; and failed to file late contribution reports within 24 hours of receiving nine late contributions, totaling approximately $29,500, between August 15, 2010, and January 10, 2011. $32,000 fine.

Californians for Privacy, Luke Breit and Michael Gunter. Californians for Privacy is a state general purpose committee organized for the purpose of decriminalizing prostitution. Luke Breit was the treasurer of the committee from April 2008, through the termination of the committee, on or about November 9, 2012. Michael Gunter took over the treasurer duties from approximately June 2008, through approximately April 29, 2009, when Mr. Breit resumed the treasurer duties. Mr. Gunter and the committee failed to file an amended statement of organization regarding a change of the committee’s treasurer; Between October 15, 2008, and March 11, 2009, Mr. Gunter caused the committee to make expenditures of campaign funds, which conferred a substantial personal benefit on him, for purposes other than directly related to a political, legislative, or governmental purpose; On or about December 2, 2009, Mr. Breit made a loan of committee campaign funds for purposes other than reasonably related to a political, legislative, or governmental purpose; the committee and Mr. Breit failed to timely file a semi-annual campaign statement for the reporting period January 1, 2010, through June 30, 2010, which was due by August 2, 2010; the committee and Mr. Breit failed to maintain the detailed accounts, records, bills, and receipts necessary to prepare the semi-annual campaign statement, for the reporting period of July 1, 2009, through December 31, 2009, to establish that the campaign statement was properly filed, and to comply with the campaign reporting provisions of the Act. $17,000 fine.

Colton Police Officers Association PAC failed to timely file a preelection statement for the October 1, 2010, through October 16, 2010, reporting period, by October 21, 2010; failed to timely report four late independent expenditures made between October 17, 2010, and November 1, 2010; and failed to properly report 60 contributions of $100 or more received during the July 1, 2010, through December 31, 2010. $7,500 fine.

Warren P. Willis, and Warren Willis for Senate 2010. Warren P. Willis was a successful candidate for California State Senate, 30th District, in the June 8, 2010 primary election and he was an unsuccessful candidate in the November 2, 2010 general election. Warren Willis for Senate 2010 was Mr. Willis’ candidate controlled committee. At all relevant times, Mr. Willis was treasurer of his committee. This matter arose out of an audit performed by the Political Reform Audit Program of the Franchise Tax Board (FTB) for the period of January 1, 2010, through December 31, 2010. Respondents failed to file a statement of organization by the April 19, 2010 due date; failed to file a pre-election campaign statement by the May 27, 2010 due date, for the reporting period of January 1 through May 22, 2010; and the committee accepted and Mr. Willis made two personal loans his committee, in the amount of $15,000 each, which caused the outstanding balance of personal loans made by Mr. Willis to his committee to exceed the $100,000 threshold by $25,000. $10,000 fine.

There was even a money laundering violation.

Ana Maria Gonzalez Ibarra, an individual who works at the Macy’s Department Store as a salesperson in the City of Chula Vista, made two campaign contributions through her friends, by reimbursing them with a personal check, for the campaign contributions they made. The two contributions, totaling $600, were made to Steve Castaneda in connection with the June 8, 2010 election in the City of Chula Vista.$10,000 fine.

Read the FPPC report here.