Recent Developments in Political Law Regulation

With the 1998 election season having come to a close, we would like to draw your attention to the following developments in political law:

Proposition 208 Appeal to be Heard by Ninth Circuit

Proposition 208, the comprehensive campaign contribution disclosure initiative approved by California voters in 1996, is still enjoined from being enforced. However, the Federal Ninth Circuit Court of Appeals will consider an appeal of the decision invalidating the measure on December 8, 1998 in San Francisco. A decision from the appeals court is expected sometime in early 1999.

U.S. Supreme Court to Decide the Meaning of "Illegal Gratuity"

Earlier this month, the U.S. Supreme Court agreed to decide a case arising out of the probe of former Agriculture Secretary Mike Espy. The case, U.S. v. Sun-Diamond Growers of California, 138 F.3d 961 (1998), concerns the making of gifts to Espy while he served in the Clinton Cabinet. A lower court found Sun-Diamond guilty of making illegal gratuities, while the appellate court held the judge's instructions were too broad and "the giver must intend either to reward some past concrete official act or acts, or to enhance the likelihood of some future act or acts." Id. at 966. Oral argument in the case is expected next Spring, with a decision anticipated before July, 1999.

In a related matter, the trial of Mr. Espy himself is currently underway in Washington, D.C. A verdict is expected in the next several weeks.

FPPC Regulation - Gift Limit to Rise to $300 per Calendar Year

In a regulation approved by the Fair Political Practices Commission ("FPPC") at its meeting earlier this month, the gift limitation applicable to most state and local government employees will increase from $290 per calendar year to $300 per calendar year, effective January 1, 1999. The new gift limitation will remain in effect through December 31, 2000. 2 Cal.Code Regs. §18940.2.

FPPC Regulation - Late In-Kind Contribution Estimates

Last month, the FPPC adopted an amendment to its late contribution regulation that makes it clear that if the value of a late contribution differs from the estimated amount by 20% or more, the estimated report must be amended within 24 hours from the time the candidate or committee knows the estimated value is incorrect. 2Cal.Code Regs. §18425. For example, a late in-kind contribution includes the value of an employee's time when that employee is loaned to a campaign but still compensated by his or her employer.

FPPC Advice - Plaques and Trophies Valued Under $250 Are Not Reportable

In September, the FPPC reversed outdated advice that required lobbyists, lobbying firms, and lobbyist employers to disclose a personalized plaque or trophy valued at less than $250 provided to an official. Since such plaques or trophies are excluded from the definition of "gift" in the Act, the FPPC ruled that they need not be reported on lobbying disclosure forms.

Private Attorney General Actions Spark Controversy

A little noticed provision of the Political Reform Act of 1974, as amended (the "Act") provides that private citizens can request the FPPC to take enforcement action against alleged violators of the Act. See Gov't Code §91007. If the FPPC chooses not to act within 40 days, or fails to issue an order within an additional 40 days, the private party can file suit against the alleged violator in Superior Court. The suit can recover the amount not properly reported, with one half going to the State, one half to the prevailing plaintiff. Tony Miller, a co-author of Proposition 208, has made at least 160 such requests in the last several weeks and is expected to make more in the future. This has provoked concern among major donors and others about facing civil suits if the FPPC fails or chooses not to act in response to such requests. In fact, the majority of enforcement settlements considered and approved by the FPPC at its November meeting were in response to "demand letters" initiated by Mr. Miller. The FPPC is evaluating what, if any, options it has to respond to this trend.

Primary Election in 2000 Moved from June to March

In an effort to increase California's influence in presidential politics, the Legislature approved moving California's primary election to March 7, 2000. However, with the defeat earlier this month of Proposition 3, there is a question whether the major political parties will recognize the results of our open primary voting system. If not, Democrats and Republicans may chose their delegates to the national conventions in 2000 by caucus or state convention. Further complicating the matter is a challenge to the open primary law itself, Proposition 198, that is pending with the Federal Ninth Circuit Court of Appeals.

Bipartisan Commission to Review the Political Reform Act

The Legislature approved a measure this summer that creates a commission to review the Act on its 25th anniversary. This 14-member, bipartisan body, will have until October 1, 1999 to report its findings to the Legislature. SB 1737 (McPherson), Chapter 1080 of 1998.

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