The Fair Political Practices Commission (FPPC) is the state's ethics watchdog and is responsible for monitoring the behavior of public officials in California. About 100,000 government employees fall under its purview. The FPPC enforces political campaign, lobbying and conflict-of-interest laws in California, and investigates alleged violations of the Political Reform Act, a ballot initiative passed in 1974 by California voters as Proposition 9 which requires detailed disclosure of the role of money in California politics.

About California Fair Political Practices Commission  (FPPC  website)

Fair Political Practices Commission  (Wikipedia)

The FPPC was created by Proposition 9 in 1974 in the wake of Watergate, the federal scandal that ensnarled the presidency of Richard Nixon and led to his stepping down from office. Watergate added to a general public mistrust of politicians, the political system and skyrocketing campaign costs. The public demanded reform and states began to strictly regulate campaign contributions, expenditures and disclosure. Before Prop. 9 was overwhelmingly approved, laws governing public officials and campaign committees were weak and largely ignored.

Over the years, numerous attempts were made to amend the Political Act of 1974. In 1988, voters approved Proposition 68, which limited contributions to state senatorial and Assembly campaigns, and Proposition 73, which banned the use of public money in campaigning and limited the contributions that candidates, committees and political parties could accept. The California Supreme Court struck down Prop. 68 as being in conflict with Prop. 73, which received more votes. Then the federal courts struck down most of Prop. 73, which was deemed too advantageous to incumbents.

In 1996, California voters passed Proposition 208. It amended the Political Reform Act of 1974 by limiting campaign contributions to candidates for state and local office. Two years later the federal courts blocked the FPPC from implementing Prop. 208, ruling it was unconstitutionally restrictive of free speech rights. A less restrictive version of the initiative, Prop. 25, was put on the ballot in March 2000, but was overwhelmingly defeated. Supporters of the initiative blamed its defeat on big-money opposition by Governor Gray Davis, state political parties and special interest groups. Later that year, while Prop. 208 was still wending its way through the courts, voters approved Proposition 34. It was a less restrictive law meant to address the courts’ concerns about free speech.

The FPPC has periodically come under fire for being either too aggressive or not aggressive enough, or favoring one political party over another. In 2004, Governor Arnold Schwarzenegger tried to eviscerate its budget while it investigated his own use of campaign funds. A spokesman for the state’s Department of Finance said many of the reductions were proposed by the FPPC itself before Schwarzenegger took office in November. But commission officials said they didn't propose the cuts at all; they merely complied with an order to show what would happen if it had to sustain such a cut. The effort failed.

The FPPC has regulated campaign fund disclosure over the years and instituted fines when not reported correctly. Here is a list of the top five fines in cases involving contribution laundering:

·    KWPH Enterprises, Inc., DBA, American Ambulance (1997) $377,000

·    James Mashburn and Refuse Services, Inc. (1999) $249,500

·    Gresham, Varner, Savage, et al. (1996) $228,000

·    Gatlin Development Co. (1996) $192,000

·    Mid-Valley Engineering, Inc. (2002) $185,400

History of the Fair Political Practices Commission (FPPC  website)

FPPC Reports on Campaign Spending (Ballotpedia)

Proposition 34 (by Harllee Branch, University of the Pacific McGeorge School of Law)

Cuts at FPPC May Halt Probes (by Evan Halper, Los Angeles Times)

Legislative Panel Orders Audit of FPPC (by Carl Ingram, Los Angeles Times)

FPPC Backs Bipartisan Legislation Aimed at Curbing Its Openness (by Leo Wolinsky, Los Angeles Times)

FPPC chief urges overhaul of Political Reform Act (by Jennifer Chaussee, Capitol Weekly)

Political Ethics Agency Approves Fines Against Minor, Others (by Jim Miller, Riverside Press-Enterprise)

The FPPC is a bi-partisan (and in practice, a non-partisan) semi-independent state body, governed by a five-person board with a staff of 73 employees. It meets each month to hear public testimony, issue opinions, adopt regulations and decide penalties for violations of the Political Reform Act of 1974.

The commission regulates campaign financing and spending, financial conflicts of interest, lobbyist registration and reporting, post-governmental employment, mass mailings at public expense and gifts and honoraria given to public officials and candidates. It also assists state and local agencies in developing and enforcing conflict-of-interest codes. The commission educates the public and public officials on the requirements of the Act; provides written and oral advice to public agencies and officials; conducts seminars and training sessions; develops forms, manuals and instructions; and receives and files statements of economic interests from many state and local officials.

Each member serves a single four-year term. The chairman is salaried and serves full-time while the other four commissioners are part-time. Two commissioners are appointed by the governor: the commission chair and one other member who must be a registered voter of another political party. The secretary of state, the attorney general and the state controller each appoint one commissioner. If all three of the constitutional officials are members of the same political party, the state controller selects the new commissioner from a list provided by another political party.

The department enforces the Act, which was enacted by Proposition 9, to assure that:

·    state and local government serve all citizens equally, without regard to status or wealth;

·    public officials perform their duties impartially, without bias because of personal financial interests or the interests of financial supporters;

·    public officials disclose income and assets that could be affected by official actions and disqualify themselves from participating in decisions when they have conflicts of interest;

·    election campaign receipts and expenditures are fully and truthfully disclosed so voters are informed and improper practices are inhibited;

·    elections are fair;

·    no laws or practices favor incumbents;

·    the state ballot pamphlet gives useful information about state measures so voters can be less dependent on paid advertising for information;

·    the activity of those who lobby the state legislature is regulated and finances disclosed to prevent improper influence on public officials;

·    public officials and private citizens are given the means to vigorously enforce political reforms.

The department has five divisions:

Legal: The legal division interprets the Political Reform Act by developing regulations and giving advice on specific sections of the Act. It also represents the commission in litigation.

Technical assistance: The technical assistance division trains and assists those governed by the Political Reform Act and maintains the central file of economic interest statements for public officials required to file with the commission.

Enforcement: The enforcement division investigates and prosecutes violations of the Act.

Administration: The administration division is in charge of the commission's budget, business services, data processing and personnel functions.

Executive: The executive division is comprised of the chairman, who serves as the senior manager of the organization; the executive director, who also serves as senior administrator, the legislative coordinator; the communications director; and the assistant to the chairman, who serves as commission secretary.

Agency Structure  (FPPC  website)

About the Commission  (FPPC  website)

California Fair Political Practices Commission (Ballotpedia)

The FPPC gets its money to operate from the state’s General Fund. A little over 83% is spent on personnel and the rest on operating expenses and equipment. Its  2011-12 budget of $8.0 million is 3.8% smaller than the year before.

The FPPC budget has been an ongoing source of conflict, with some contending that the legislature has attempted to hamstring its operation by controlling the purse strings. The FPPC’s budget in 1990-1991 was $6 million. Fifteen years later its budget had barely increased to $6.1 million. The number of its employees had dropped from 81 to 60 during that time period. Remarkably, its caseload actually increased. The FPPC averaged 675 cases per year during the seven-year period after 1990-91, followed by a caseload of 838 cases per year for the following eight-year period.  

3-Year Budget (pdf)

Restore Full Funding to Fair Political Practices Commission (by Senator Deborah Ortiz, California Progress Report)

Commissioners Clash over New Dating Rules

Although the FPPC press release on December 5, 2011, announcing some regulatory changes touted “more stringent provisions than previous rules,” a few eyebrows were raised about one of its decisions concerning gifts to lawmakers from lobbyists.

State law bars public officials from taking gifts from someone valued at more than $420 or $10 if the source is a registered lobbyist. And officials must disclose  gifts worth more than $50. The new rule, however, waives the prohibition if the source and the lawmaker are dating and simply requires that the official abstain from voting on any matters that their dating partner has participated in.

“To the extent that legislator/lobbyist dating is a problem, real or perceived, staff defers to the Legislature to police its own house,” General Counsel Zackery P. Morazzini advised the commission in a memo. Only one commissioner, Chapman University law professor Ronald D. Rotunda, opposed the rule change.

“I find that mind-boggling,” Rotunda said, noting that the commission was created by voters because they “did not trust the Legislature. Had they policed their own house, we wouldn't be here.”

Morazzini’s memorandum acknowledged that there had been “some anecdotal evidence of  the potential for abuse,” but cautioned that rules shouldn’t be tailored to “bad actors” because they “rarely seem to fit anyone else very well.”

He said it was time to let this “bona fide dating” exception “out of the basement” because “it is never appropriate for someone to have to ask the State’s permission before she can accept an engagement ring or go out on a date.”

Phillip Ung, policy advocate for California Common Cause,  argued against the rule change. “The problem with regulating corruption in this state's political culture is that it is so prevalent that it even appears in the bedroom.”

Approval of the new FPPC rule came just a month after Rotunda and Commission Chairwoman Ann Ravel clashed over her handling of several major issues the panel had recently considered.

“They say that not even the devil knoweth the mind of man, so I don't presume to know what is her intent . . . (but) I know she acts like someone who wants to deconstruct a good chunk of the FPPC,” Rotunda said in a November interview.

Rotunda, a Republican appointed to the commission by Controller John Chiang in 2009, accused the Democrat appointed by Governor Jerry Brown in 2011 of working to “help politicians who don’t like the FPPC regulations.” He said she was allowing the general counsel and staff to make key decisions that should be up to the commission. “Under her theories, there isn't much role for the commission except to be a little window dressing,” he said.

Ravel dismissed his complaints. “I think he's obviously a very angry person and is upset about something and is just using this as an excuse,” she said. “The commission does not act without legal advice,” she said. “They can disregard it if they choose, but legal advice is appropriate to inform policy decisions.”

One of Ravel’s first acts as commission chair was to end a practice begun by her predecessor, Dan Schnur, of posting public notices of pending investigations. She claimed the notifications violated the due process rights of those who had been accused. Ravel also cancelled about half the commission’s scheduled meetings.

Commission’s Revised Gift Rules Simpler, More Stringent (FPPC press release) (pdf)

FPPC Memorandum (pdf)

California FPPC Chairwoman under Fire from Fellow Appointee (by Torey van Oot, Sacramento Bee)

California Ethics Agency Relaxes Rules on Gifts to Politicians (by Patrick McGreevy, Los Angeles Times)

California's Political Watchdog Panel Eases Its Approach to Ethics Issues (by Patrick McGreevy, Los Angeles Times)

New Chair of Campaign Finance Watchdog Draws Strong Reactions (by Will Evans, California Watch)

Online Transparency

As part of its effort to control the flow of money in politics, the FPPC makes available to the public in various forms (some limited) information about who gives contributions, who receives contributions, who has played fast and loose with the rules, and what the rules actually say. In early 2009, the commission began posting online the Form 700s that detail gifts, sources of income and other assets elected officials are required to file. In September 2010 the commission, under the direction of Chairman Dan Schnur, began posting notices of its ongoing investigations.

That policy was reversed months later when Governor Jerry Brown appointed Ann Ravel to chair the commission. Ravel said she wanted to refocus the FPPC and its resources on the more serious conflict-of-interest and money-laundering cases, and would no longer be posting investigations online. She also planned to simplify some of the ethics rules and have the agency spend more time educating officials on compliance.

Ravel said politicians are manipulating the system during campaign season by using the FPPC to cast aspersions upon their opponents. According to Ravel, a candidate's opponent will contact the agency with an ethics complaint, which is often either minor or doesn't have any basis in fact. Then the opponent will alert the media in hope of eliciting a headline in the media saying that the candidate is being investigated for ethics violations. Last year, the agency received about 1,500 complaints of alleged ethics violations, but concluded that only 223 were serious enough to merit fines.

While acknowledging Ravel’s concerns about due process, critics of her decision questioned whether less information is a good thing. “That’s the wrong decision, in our view,” the Los Angeles Times opined in an editorial. “Even Ravel acknowledges that the agency's investigations are public information.”

“As a general rule, disclosure is a good thing. Democracy is predicated on the idea that participation requires information,” the Times editorialized. “The agency should emphasize to the media and the world that the mere opening of an investigation doesn't imply any wrongdoing. One way to drive the point home would be to say so clearly on the website and at the top of every document in or about the investigation. ... But to make public information more difficult to obtain is contrary to the agency's primary mission of promoting accountability.”

FPPC Publishes Financial Disclosures Online (by Duane W. Gang, Press-Enterprise)

The FPPC: Online, Open and Ethical (Los Angeles Times editorial)

Free Tickets: Mayor Antonio Villaraigosa

The California Fair Political Practices Commission announced in April 2011 that it was recommending Los Angeles Mayor Antonio Villaraigosa be fined for failing to report free tickets to dozens of sporting and entertainment events, ranging from the finals of “American Idol” to Los Angeles Lakers games. Villaraigosa agreed to pay the fine.

FPPC Director Roman Porter said it was the largest ethics-related fine it has ever imposed, although it has administered bigger fines for campaign finance violations. Villaraigosa took tickets to more than 30 events in the five years after he became mayor in 2005, according to documents released by the commission.

The commission joined the investigation with the Los Angeles Ethics Commission, with each agency recommending fines of roughly $21,000. The Fair Political Practices Commission listed 21 counts of ethics violations and the Los Angeles Ethics Commission listed 12. According to the FPPC, Villaraigosa should have reported the tickets as gifts. The City Ethics Commission also found he erred by taking free tickets from companies and organizations that had business with the city, such as Anschutz Entertainment Group (AEG).

In a statement, Villaraigosa said the violations were unintentional and that he did not consider the tickets as gifts. Rather, the mayor said he attended the events in his official capacity as mayor. However, staff members said the mayor should have known better than to accept the gifts, which included multiple Los Angeles Dodgers games, concerts by Aretha Franklin, Shakira and others, and award shows, including the Grammys and Golden Globes. The violation carried a maximum penalty of $105,000, but the staff recommended a lesser fine, citing Villaraigosa's “lack of prior enforcement history ... his full cooperation and candor during the investigation of this matter, and his willingness to admit liability and be held accountable for his violations.”

Los Angeles Mayor to Pay Record Fine over Free Tickets (by Alex Dobuzinskis, Reuters)

LA Mayor to Be Fined for Free Tickets (by Don Thompson & Michael R. Blood, Associated Press)

Free Tickets May Score Mayor Antonio Villaraigosa a Record Fine (Fox News Latino)

Proposition 54

In 2003, Proposition 54, known as the Racial Privacy Initiative, turned up on the  ballot. It would have restricted state and local governments in California from collecting or using information about a person’s race, ethnicity, color or national origin for the purposes of public education, public contracting, public employment and other government operations. Supporters of the measure said it was the first step toward a “colorblind” society, while opponents felt that it would make it more difficult for the state to provide services and identify and correct racial disparities.

The FPPC sued Ward Connerly’s American Civil Rights Coalition, the initiative’s chief backer, in response to a complaint filed by California Common Cause, the League of Women Voters of California, the Mexican American Legal Defense and Educational Fund, Greenlining Institute, Californians for Justice and the Lawyers’ Committee for Civil Rights. Connerly was fined $95,000 for violating campaign finance disclosure laws.

Connerly had presented his initiative as a grassroot’s movement, but the settlement with the FPPC revealed that 95% of his money came from seven contributors, including longtime right-wing financial angel Joseph Coors, Fox News owner and media magnate Rupert Murdoch,  a couple of Texas entrepreneurs and the owner of the San Diego Padres baseball team, who also sat on the University of California Board of Regents.

Proposition 54 failed to pass when it garnered just 36.1% of the vote. The Fair Political Practices Commission levied an $8,000 fine against the "No on 54" committee, the group that opposed Proposition 54, for failure to file a timely campaign finance report with details on $90,282 in contributions in 2008.

The Big Money Behind Ward Connerly (by Lee Cokorinos, Equal Justice Society)

Proposition 54 (Wikipidea)

Billion-Dollar Club

The Fair Political Practices Commission follows the money. In addition to keeping an eye on candidates and politicians under the Political Reform Act, it monitors the flow of dollars through the state political system. The voters passed Proposition 34 in 2000, sending a clear message that the state wanted to “to clamp limits on contributions to prevent corruption, or the appearance of corruption from large special interests.”  Proponents of the proposition forthrightly asserted, “The vast majority of…campaign dollars come from powerful special interests seeking favors in Sacramento.” It won handily.

Yet, it was readily apparent that money flowed freely and more generously each year than the year before at the local, state and national level. Researchers believe approximately $4 billion was spent nationally during the 2010 midterm election. 2008's presidential election alone cost more than $1.7 billion and the entire election likely topped $5 billion.

In 2009, the FPPC released the first of two studies that took a look at how the state had fared in the decade since Prop. 34 passed. Did the initiative fulfill the ad campaign that promised, “Proposition 34 Will Put the Brakes on Special Interest Dollars”?

The answer was a resounding “No!” Instead, the study found a Billion Dollar Money Train careening down the tracks. “Despite the imposition of limits on the size of political contributions, overall fundraising by state and legislative candidates continues to skyrocket,” the report said. “State and legislative candidates have directly raised more than $1 billion since Proposition 34 took effect.”

Robert M. Stern, one of the coauthors of  the 1974 Political Reform Act,  co-wrote an op-ed in the Los Angeles Times that rattled off a string of suggestions for overhauling Prop. 34. An op-ed in The Sacramento Bee by a couple of state politicos blamed Prop. 34 for actually helping open the financial sluice gates. “The balance of power has swung from legislative leadership to special interests on both sides of the aisle with money to burn and axes to grind, and who can throw hundreds of thousands of dollars into determining the outcome of individual races through independent expenditures.”

In 2010, the FPPC issued its second report called, "Big Money Talks: California's Billion Dollar Club." The study listed the top 15 groups that spent over $1 billion between January 1, 2000, and December 31, 2009, to influence political campaigns in the state.

 1. California Teachers Association                                             $211,849,298

 2. California State Council of Service Employees                        $107,467,272

 3. Pharmaceutical Research and Manufacturers of America      $104,912,997

 4. Morongo Band of Mission Indians                                            $  83,600,438

 5. Pechanga Band of Luiseno Indians                                          $  69,298,909

 6. Pacific Gas & Electric Company                                               $  69,240,759

 7. Chevron Corporation                                                                $   66,257,132

 8. AT&T Inc.                                                                                 $   59,619,677

 9. Philip Morris USA                                                                     $   50,756,360

10. Agua Caliente Band of Cahuilla Indians                                  $   49,078,448

11. Southern California Edison                                                     $   43,412,031

12. California Hospital Association                                               $   43,281,456

13. California Chamber of Commerce                                           $   39,065,861

14. Western States Petroleum Association                                  $   35,214,325

15. Aera Energy LLC                                                                    $    34,671,163

According to the FPPC report, the combined total of money spent by the two public employee unions on California political campaigns in the 10-year period was $319.2 million. Six utility and energy companies cumulatively spent $308.2 million, three Indian tribes anted in $201.8 million, and two pharmaceutical and hospital companies spent another $147.9 million. Tobacco company Phillip Morris chipped in $50.7 million and the California Chamber of Commerce ponied up $39 million, according to the report.

Big Money Talks: California's Billion Dollar Club (pdf)

The Billion Dollar Money Train (pdf)

That Was Then But This Is Now (by Tony Quinn and Garry South, Sacramento Bee)

On January 19, 2011, a task force put together by soon-to-be-departed FPPC Chairman Dan Schnur made its recommendations for changes to the Political Reform Act public. Its report called for a statewide electronic filing system for campaign disclosures that consolidates all required campaign data into one searchable database. The task force said campaign reports should be simplified, robocalls should be regulated, advertising shouldn’t look like party mailers, disclosure thresholds should be changed and the spin of the revolving door between public and private employment should be slowed. Some of the changes would require action by the legislature.

Common Cause, which helped pass the original Political Reform Act of 1974, objected to the task force’s suggested lifting of certain contribution limits and used the opportunity to promote a system of public financing. It liked the idea of better rules for mailers, but would expand transparency about who was paying for the ads and how much was spent. It would stick a foot in the revolving door by closing loopholes and doubling the lobbying ban. The organization was all for the electronic filing system and wanted to see all of it exposed in a downloadable format on the FPPC website. And finally, Common Cause suggested a reform of its own: end political regifting of leftover political funds. Give it back to the donor or donate it to charity. Not to a political ally.

Chairman’s Task Force on the Political Reform Act (FPPC website)

A Chance to Rewrite California’s Ethics Law (by Larry Bush, CitiReport)

Money in Politics (Common Cause)

Task Force Updating State Campaign Laws (FPPC  website)

FPPC Chief Urges Overhaul of Political Reform Act (by Jennifer Chausee, Capitol Weekly)

Revising FPPC Regulations (FPPC  website) (pdf)

Campaign Finance Disclosure Laws

It is not unusual for the law of unintended consequences to be applied to laws with specifically intended consequences. In 1995, Brian Doherty, assistant editor of the libertarian magazine Reason, argued that the Political Reform Act, which was passed in “a wave of post-Watergate revulsion with arrogant, corrupt politicians” jumped the shark and ironically turned into a law that punishes private citizens who attempt to discipline arrogant, corrupt politicians.

The FPPC levied the largest fine in its history, $808,000, against Southern Californians Russell Howard and Steve Cicero in October 1995. They had been the president and treasurer of Californians Against Corruption (CAC), a group attempting to recall Democratic state Sen. David Roberti. Roberti, who had been Senate president for 13 years. The recall coalition got its new election in April 1994, collecting more than twice the necessary 20,670 signatures, but Roberti survived the vote.

However, the FPPC found they had failed to properly disclose who funded the campaign. The FPPC complaint included 105 counts for failing to disclose the addresses of 105 contributors, 93 counts for not listing the occupations of as many contributors and 91 counts for not listing the employers for as many contributors.

Howard chalked it up to bad bookkeeping. "My life should be ruined because I didn't fill out the proper forms in triplicate?" he asked incredulously. But Howard admitted it wasn’t just an oversight. “We were facing a very entrenched public official, and many members of our coalition were being subjected to various forms of harassment, including death threats and break-ins. We felt we simply could not justify seeing our donor's names and phone numbers being printed in the newspaper any longer.”

Although the recall campaign purported to be about “corruption,” critics contended that it was really about gun control (and Roberti’s support of it), which CAC tried to hide by refusing to disclose its donors. Howard was a former National Rifle Association director.

Californians Against Corruption's recall campaign spent $103,091, which is one-eighth the fine they received for not reporting the money.

Howard argued that California's Political Reform Act was a clear violation of his First  Amendment right to free speech although the 1976 U.S. Supreme Court case Buckley v. Valeo declared that paperwork requirements in campaign-finance laws don't violate the First Amendment. Doherty suggested that one Supreme Court precedent in a 1982 case, Brown v. Socialist Workers Party, might justify CAC’s actions and exemption from disclosure laws if it could show reasonable probability that disclosure of donors might lead to threats, harassment, or reprisals.

Howard also argued that the Act violated the Eighth Amendment. “Surely an $808,000 fine with no right to trial by jury for reluctantly, temporarily and partially withholding some donor information to protect them from harassment must surely violate the 8th Amendment and due process requirements.”

FPPC Chairman Karen Getman disagreed with the premise that there are good reasons to avoid disclosure. "The people of this state have a right to know who is behind ballot measures. We are happy to take that head-on, and we don't have any doubt we will succeed in the courts." And it did. CAC appealed the ruling all the way to the U.S. Supreme Court, where it was denied a hearing in 2003. By then the fine had grown to more than $1.1 million with interest.

The Perils of Campaign-Finance Disclosure Laws (by Brian Doherty, Reason Magazine)

Reforming the Reform Act (by Richard Ehisen and Steven T. Jones, Sacramento News & Review)

Record Penalty Levied on Foes of Gun Control (by John Schwada, Los Angeles Times)

Ann Ravel, 2011-2013

Dan Schnur,  2010 – 2011

Ross Johnson,  2007 – 2010 

Liane M. Randolph, 2003 – 2007

Karen A. Getman, 1999 – 2003

James M. Hall, 1997 – 1998

Ravi Mehta, 1995 – 1997

Ben Davidian, 1991 – 1995

John Larson, 1986 – 1991

Dan L. Stanford, 1983 – 1986

Tom Houston, 1979 – 1983

Daniel Lowenstein, 1976 – 1979