Capitol Alert

The latest on California politics and government

February 7, 2014
Sacramento lobbyists can make politicians feel at home-for $500

wine_bottles.JPGBy Laurel Rosenhall

Entertaining politicians at home has long been an accepted part of doing business for Sacramento lobbyists.

So Thursday's news that the state's political watchdog agency is cracking down on a prominent lobbyist for throwing fundraisers at his home hit the Capitol with both outrage and confusion. Among the politicians who will receive warning letters after participating in the events are Gov. Jerry Brown and Lt. Gov. Gavin Newsom, a source told The Sacramento Bee.

California law puts strict limits on lobbyists, forbidding them from making any campaign contributions to state officials, and limiting gifts - including meals - to no more than $10 in a month.

But it allows lobbyists to host low-key political fundraisers in their homes, connecting their clients with key lawmakers as they donate to a the legislator's campaign. So while lobbyists may not give a penny to a political campaign, they can offer up their homes for a low-cost campaign fundraiser and invite interest-group clients to mingle and donate.

sloat.jpegThe key, though, is that the total cost of the event must stay under $500 - and that's how lobbyist Kevin Sloat ran into trouble. Fundraisers at Sloat's house routinely involved catered menus, expensive cigars, flowers, fine wines and top-shelf liquor, according to a lawsuit filed against him in December by a former employee under investigation for embezzlement.

October 24, 2013
FPPC seeks repayment of $15 million in mystery money

Ravel.jpgIn a campaign finance case watched around the country, California's political watchdog has levied a $1 million fine against two non-profit groups for inappropriately laundering money during last year's ballot initiative wars.

The Fair Political Practices Commission announced the settlement with the Center to Protect Patient Rights and Americans for Responsible Leadership, two groups based in Arizona that the FPPC describes as part of a network operated by the conservative Koch brothers.

The groups acknowledge they broke California law by not appropriately reporting two campaign contributions.

The commission also sent letters to two California committees demanding they pay the state general fund more than $15 million they received from groups that didn't properly report the source of their funds.

Actually getting the money, however, will likely be a challenge.

Despite the size of the fine, the settlement brings Californians no closer to knowing the identities of the original individual donors.

Gary Winuk, the FPPC's chief of enforcement, said the case highlights the need to change California law to reflect that political spending is now largely being funneled through nonprofit organizations.

"They are being used to hide donors," he said.

The Arizona groups had not been active in California politics until last fall, when Democrats led by Gov. Jerry Brown were pushing for a tax increase known as Proposition 30, and Republicans were pushing Proposition 32 to limit how labor unions use the dues they collect. A few weeks before the November election, Americans for Responsible Leadership gave $11 million to the Small Business Action Committee, which was working to oppose Proposition 30 and support Proposition 32.

In September, a related group called the American Future Fund gave $4.08 million to something called the California Future Fund, which was also giving money to oppose Proposition 30 and support Proposition 32.

The FPPC and the Attorney General's Office set out to determine who was behind the mysterious donations.

Today's settlement answers part of the question, revealing that the money for the two donations came from the Center to Protect Patient Rights, which acknowledges that it should have reported its contribution last year. But it does not compel the groups to report which individuals gave them the money.

The lawyer representing the Center to Protect Patient Rights said his client's lack of reporting amounted to a mistake.

"This was the first contribution they had ever made in the state of California," Malcolm Segal said, adding that the state's campaign finance laws amount to a "very complicated environment with many, many regulations."

"They believed they were in compliance," Segal said. "But the FPPC believed they were mistaken about their compliance and (under state law) even a mistake is punishable conduct."

The FPPC says the Center to Protect Patient Rights is affiliated with billionaire businessmen Charles and David Koch, who run a network of nonprofit groups around the country that solicit donations and then use the money to support Republican causes. The format allows donors to support political causes without being identified. When donors give directly to a political cause, their identities are reported in campaign finance reports. But when donors give to a nonprofit, the law does not require their identities be disclosed.

Because the groups acknowledge they did not report contributions as they should have, the FPPC can now go after the recipients of the money to pay the funds to the state. The agency sent letters today to Barbara Smeltzer, head of the California Future Fund, and Joel Fox of the the Small Business Action Committee, directing them, respectively, to pay $4.08 million and $11 million to California's general fund.

"It's required under state law," Winuk said. "Just receiving a contribution where the true source is not disclosed means you have to give it up."

But the attorney for the Small Business Action Committee said his group is not required to pay the money, arguing that the California laws governing so-called "disgorgement" apply to political candidates -- not ballot measures.

Furthermore, attorney Steve Churchwell said, his client was not found guilty of any violations and doesn't have $11 million anyway.

"Not one dime of this money is sitting in a bank account," Churchwell said.

"It all was spent on Props 30 and 32."

Here is the stipulation.

Here is the letter to the Small Business Action Committee.

Here is the letter to the California Future Fund.

PHOTO: FPPC Chair Ann Ravel in her office on Tuesday September 17, 2013. The Sacramento Bee/ Renee C. Byer

Editor's note: This post was updated at 2:10 p.m. with a reaction from the Small Business Action Committee.

August 28, 2013
Under pressure, Bowen puts California raw finance data online


After months of pressure from open government advocates, the California Secretary of State's office has made a mountain of campaign finance data available online.

While the secretary's office already puts some data online, the information had been broken up into discreet, separate filings. Anyone seeking to get all the information in a single digital forum had to request a CD-ROM.

Transparency watchdogs like Common Cause argued that system made it difficult to search through and organize the voluminous amounts of campaign finance and lobbying data that flows through the secretary of state's office. Secretary of State Debra Bowen pushed back, arguing that the process of putting that amount of data online would be overly costly and time-consuming.

Now Bowen's office has reversed its stance, putting the raw data online. That will make it easier to plug information on political money into sophisticated databases able to find trends and patterns.

"Following the money in politics and government is essential for making informed decisions at the ballot box," Bowen said in a press release. "The Secretary of State website is always evolving to ensure that everyone, from the occasional user to the information technology expert, can obtain public information in the way most useful to them."

Phillip Ung, a policy advocate for the California branch of Common Cause, called the change a "stark improvement," saying it "brings full access to behind the scenes raw data."

"We're always happy whenever a public agency is willing to embrace the 21st century," Ung said.

PHOTO: Secretary of State Debra Brown presents her argument during a legislative hearing on Tuesday, March 13, 2012. The Sacramento Bee/Lezlie Sterling

August 5, 2013
Business uses digital media, but not in its California campaigns

Big money ballot measure campaigns in California spend the vast preponderance of their money on fairly traditional forms of voter outreach, such as television and radio ads and direct mail, but that will have to change as voters' habits evolve, a new study suggests.

The statistical study of how business-backed ballot measure campaigns spend their funds - contrasting with how commercial business now operates - was produced by Forward Observer, a Sacramento-based political consulting firm headed by Joe Rodota, a one-time top aide to Republican Govs. Pete Wilson and Arnold Schwarzenegger, as well as the Reagan White House.

It analyzed five 2012 business-supported ballot measure campaigns and found that they spent 78.5 percent of their funds on traditional media, and another 12.5 percent on direct mail appeals, with the remaining 9 percent distributed among consultants' fees, polling, legal services and miscellaneous costs.

Less than 1 percent was spent on digital messages, even though voters increasingly rely on the Internet and social media for news and discussion about political issues, even though business is increasingly oriented toward digital commerce and even though business groups provided much of the money spent by the ballot measure campaigns.

August 1, 2013
California candidates file campaign disclosures for first half of 2013

Wednesday marked the semi-annual filing deadline for campaign finances, giving the public one of its first glimpses of how 2014 campaigns for statewide office are shaping up. Every committee received more than $1,000 in contributions had to disclose the amount they raised and spent in the first six months of 2013 to the secretary of state.

We compiled a spreadsheet with the reported data for every person seeking statewide office, including the amount each candidate raised during the first six months of the year and the amount of cash on hand as of June 30. Gov. Jerry Brown so far has the biggest war chest, with his total cash on hand topping out at $10,042,186.23.

Campaign Finance Disclosures August 2013


Capitol Alert Staff

Amy Chance Amy Chance is political editor for The Sacramento Bee. Twitter: @Amy_Chance

Dan Smith Dan Smith is Capitol bureau chief for The Sacramento Bee. Twitter: @DanielSnowSmith

Jim Miller Jim Miller covers California policy and politics and edits Capitol Alert. Twitter: @jimmiller2

David Siders David Siders covers the Brown administration. Twitter: @davidsiders

Christopher Cadelago Christopher Cadelago covers California politics and health care. Twitter: @ccadelago

Laurel Rosenhall Laurel Rosenhall covers the Legislature, the lobbying community and higher education. Twitter: @LaurelRosenhall

Jeremy White Jeremy B. White covers the Legislature. Twitter: @capitolalert

Koseff Alexei Koseff edits Capitol Alert's mobile Insider Edition. Twitter: @akoseff

Dan Walters Dan Walters is a columnist for The Sacramento Bee. Twitter: @WaltersBee

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