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Although the ink is barely dry on political contributions written during the fall 1998 election cycle, many candidates already are launching campaigns for California's first early primary election, slated for March 2000. And as California enters its next political season, businesses and citizens who actively contribute to favored measures and candidates need to know the new risks of ignoring state campaign finance laws.
California political fund raising is governed by an overlapping scheme of state, local and federal statutes. One of the most often overlooked rules is the California law that requires any person or entity that contributes $10,000 or more in a calendar year to file semiannual Major Donor Committee reports. Any individual or business that contributed to the city school bond measure, the ballpark campaign, or other local or state candidates or ballot measures should review whether those contributions totaled $10,000 or more in 1998. If so, a major donor report was due Jan. 31, and contributors face a $10 fine for each day the report is late. In addition to disclosing monetary contributions, in-kind donations of goods and services must be tallied. Donors also should assess whether their political contributions are likely to reach $10,000 in 1999 or 2000, and if so, plan now to keep the records necessary to file the reports as they come due.
In the past, major donor report requirements often were ignored with little risk. The state agencies charged with enforcing these laws are busy with higher-stakes cases, including the recent contribution-laundering charges settled by San Diego waste magnate James Mashburn for $249,500. But the Fair Political Practices Commission's inattention to missing reports was brought to an abrupt halt recently because of the activism of former acting Secretary of State Tony Miller, a Sacramento lawyer.
Miller invoked a little used provision of the Government Code to file dozens of private attorney general actions against individuals and businesses who contributed $10,000 or more in a calendar year but neglected to file major donor reports. It has become easier to mine the Internet to identify violators because much of the state's public record campaign finance data is now available online. Miller was able to review recipient committee late contribution reports to see who gave $10,000 or more, and then research which contributors neglected to report themselves as major donors. Fines for failing to file the reports average about $2,000, and offenders targeted by Miller can end up paying his attorney fees as well.
Under the law allowing for private enforcement of state campaign rules, Miller must give the FPPC first shot at charging violators. But if the FPPC fails to bring a case within the time allowed, Miller's private action can proceed. Dozens of recent FPPC cases were initiated by Miller's private complaints. On the agency's December agenda, 17 of 20 enforcement actions were started by Miller, including one against Qualcomm Inc., which paid a $1,250 FPPC fine for not filing a major donor report after contributing $10,000 to Dan Lungren's gubernatorial campaign.
In addition to complaints the FPPC pursued, the agency allowed the deadline to lapse on dozens of cases that Miller subsequently prosecuted and settled. The private attorney general cases are a cause célèbre for Miller, a devoted advocate of campaign finance reform and co-author of the 1996 initiative imposing statewide contribution limits, now stalled in federal court.
The best offense to this recent spate of litigation and the bad press it can generate for corporate citizens is timely filing of required contribution reports. Legal and accounting professionals can help businesses and individuals comply with state, local and federal campaign finance laws. In addition, advice on filing state reports is available from the FPPC at (916) 322-5660. At the end of the day, as Tony Miller's actions show, it pays to pay attention.
Pamela Lawton Wilson is an attorney whose practice includes land use, political and media law matters at the civil firm of Sullivan Wertz McDade & Wallace in Downtown San Diego.
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