Loading...
SR-8-A (178) CA:RMM:jld704/hpc City Council Meeting 5-26-92 <i;1l; 1991 Santa Monica, California STAFF REPORT TO: Mayor and city Council FROM: city Attorney SUBJECT: Ordinance Amending Article XI of the Santa Monica Municipal Code Relating to campaign and Election Reform At its meeting of October 15, 1991, the City Council directed the City Attorney to prepare amendments to the campaign and election laws of the city of Santa Monica. The accompanying ordinance has been prepared ~n accordance with this direction and is presented to the c~ty Council for its consideration, introduction and first reading. The proposed ordinance applies to all elected city positions. The Santa Monica-Malibu Unified School District Board and the Santa Monica Community College District Board are excluded from the ordinance. The principal reasons for the exclusion are that each Board is a separate legal and political entity from the City and, as separate political institutions, each Board is responsible for the management of its internal affairs. This principle of comity should be given recognition here. Additionally, since each Board has authority beyond the City boundaries, difficult legal questions would arise concerning the ability of the City to exert the authority of its law outside city limits. - 1 - J-IJ MAY ~ ~ 1991 Before the City Council votes on the proposed ordinance, the City Council has to decide what contribution limits should be made part of the ordinance. Sections 11203, 11204, 11205, 11206, and 11207 each require contribution amounts to be established. Section 11203 deals with contribution limits to candidates and their supporting or opposing committees. In the past, some members of the city Council recommended that $250.00 be established as the maximum amount of any contribution. Alternatively, the city council may want to establish $100.00 as the maximum contribution amount. This latter amount has become the de facto standard utilized by many candidates who wish to control ttspecial interest" funding of their campaigns. Current City law sets the contribution limit at $500.00. Proposition 73 had set it at $1,000.00. Section 11204 concerns the maximum contribution that can be made by "small contributor political action committees." These committees are formed so that "average" citizens can pool their limited funds, create a committee and thereby together have significant input into the political process. Since the city Council may want to encourage the formation of these committees, these committees should be permitted to contribute up to a greater limit amount. An amount between $500.00 and $1,000.00 would appear to be appropriate. Section 11205 deals with total contributions that can be received from organizations such as corporations, labor unions, and partnerships which are defined in the ordinance. While an individual corporation, for instance, would be bound by the limitations imposed by Section 11203 and could not contribute - 2 - more than that amount to any candidate or committee, this Section deals with the total amount of contributions that a candidate or committee can receive from all corporate or organizational contributors. Most commentators suggest that limitations of this sort should be calculated to insure that less than half of a candidate's or a committee's contributions come from these types of organizations. In Santa Monica, a limit of $10,000.00 to $15,000.00 would accomplish this objective. Section 11206 establishes a limit on the amount of contributions that can be made between candidates and committees. It is suggested that the limit set in Section 11203 be used here, that is, a limit of $100.00 to $250.00. section 11207 creates an overall limit on contributions that any person can make during an election. The Section is designed to prevent a person from, for instance, contributing $100.00 to each of ten candidates. If the City Council wishes to create such an overall limitation, it needs to establish what the cap should be. For consistency sake, it probably should be some multiple of the amount set in section 11203, and should probably be somewhere between $500.00 and $1,000.00. Apart from establishing contribution limits, other sections of the proposed ordinance are noteworthy. Section 11208 regulates the period when candidates can seek contributions. The section permits contributions to be accepted beginning only six (6) months prior to election. Unlike Proposition 73, which has been judicially interpreted as improperly favoring incumbents and thereby unconstitutional, Service Employees International Union v. Fair Political Practices Comm., 955 F.2d 1312 (9th Cir. 1992), - 3 - this provision effectively prevents incumbents from getting an "unfair" early fundraising advantage over other candidates, which was the flaw found in Proposition 73. sections 11208 and 11209 regulate fundraising after an election and use of surplus campaign funds. section 11208 permits a candidate to raise funds after an election, but such funds can only be used to retire campaign debt. Under section 11209, if surplus funds exist they may be used only for certain limited purposes such as charitable donations, political party contributions, and debt repayment. Section 11215 is designed to prevent officeholders from accepting contributions in excess of the Chapter's requirements by imposing a voting disqualification on an officeholder who accepts such contributions. The section is intended to reduce the appearance of conflicts of interest that arise when individuals or businesses make improper campaign contributions to elected officials and then solicit or enter into City contracts. Any office holder who accepts a contribution in excess of the amount permitted is barred from participating in any decision or vote on the matter and any contract entered into is void. Under section 11217, corporations can only make campaign contributions out of segregated accounts that they have established in accordance with the federal Election Campaign Act of 1971. This Section in effect is designed to prevent a corporation's general revenues from being used for election purposes. Instead, corporations must establish political action committees. - 4 - section 11218 limits the sources from which corporations can make independent expenditures in support of or in opposition to candidates. The section, which incorporates federal law, permits such expenditures to be made only if they come from segregated accounts, equivalent to Political Action committees, which have been expressly established and funded for this purpose. Federal law and some states have like provisions. Section 11230 requires the City Clerk to conduct an independent audit of elections to determine compliance with the requirements of the ordinance. RECOMMENDATION It is recommended that the city council establish contribution amounts for sections 11203, 11204, 11205, 11206, and 11207 and that the accompanying ordinance be introduced for first reading. PREPARED BY: Robert M. Myers, City Attorney Joseph Lawrence, Assistant City Attorney - 5 - CA:RMM:ct443jhpcjpc city council Meeting 5-26-92 Santa Monica, California ORDINANCE NUMBER (City council series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AMENDING ARTICLE XI OF THE SANTA MONICA MUNICIPAL CODE RELATING TO CAMPAIGN AND ELECTION REFORM THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS FOLLOWS: SECTION 1. Article XI of the Santa Monica Municipal Code is amended to read as follows: SECTION 11200. Title. This Chapter shall be known as the city of Santa Monica campaign and Election Reform Act of 1992. SECTION 11201. Findings and Purpose. The city Council of the City of Santa Monica finds and declares: (a) Monetary contributions to political campaigns are a legitimate form of participation in the American political process, but the financial strength of certain individuals or organizations should not permit them to exercise a disproportionate or controlling influence on the election of candidates. - 1 - (b) The rapidly increasing costs of political campaigns have forced many candidates to raise larger and larger percentages of money from interest groups with a specific financial stake in matters before City governmental bodies. This has caused the public perception that votes are being improperly influenced by monetary contributions. This perception is undermining the credibility and integrity of the governmental process. (c) Officeholders are responding to high campaign costs by raising ever increasing amounts of money. This fundraising distracts public officeholders from important public matters and encourages contributions which may have the appearance of a corrupting influence. (d) High campaign costs have the effect of discouraging citizens from running for public office since, without access to large campaign contributors, newcomers to the political process cannot wage effective campaigns. (e) By enacting this Chapter, the City Council seeks: to ensure that individuals and interest groups in our society have a fair and equal opportunity to participate in the elective and governmental processes; to reduce the influence of large contributors with a specific financial stake in matters before city governmental bodies; to limit overall expenditures in campaigns; to reduce the - 2 - excessive fundraising advantage of incumbents and thus encourage competition for elective office; to improve the disclosure of contribution sources in reasonable and effective ways; and to help restore public trust in governmental and electoral institutions. SECTION 11202. Definitions. Unless a word or phrase is specifically defined in this Chapter, the definitions set forth in the Fair Political Practices Act, Government Code sections 82000 et seq. shall apply to this Chapter. The following words or phrases as used in this Chapter shall have the meanings set forth below. (a) Candidate. Any individual who has qualified to be listed on a ballot or who has solicited write-in votes on his or her behalf for election to the Santa Monica City Council, Santa Monica Rent Control Board, or any other elected office of the City of Santa Monica, or who receives a contribution or makes an expenditure or gives consent for any other person to receive a contribution or to make an expenditure with a view to bringing about such person's election to such office, whether or not the specific elective office for which such person will seek election is known at the time the contribution is received or the expenditure is made, and whether or not such person - 3 - has announced candidacy or filed a declaration of candidacy at such time. t1Candidatetl also includes any office holder who is subject of a recall petition. (b) Committee. Any person or combination of persons who directly or indirectly receives contributions or makes expenditures or contributions for the purpose of influencing or attempting to influence the action of the voters for or against the nomination or election of one or more candidates, (c) Election. Any general or special election held to elect or remove a member of the Santa Monica City council, the Santa Monica Rent Control Board, or any other elected office of the City of Santa Monica. (d) organization. Any corporation, association, partnership, committee, labor organization, political party, or other similar legal entity or arrangement, whether organized for profit or not. (e) Person. A natural born individual, as well as any organization. (f) Small Contributor Political Action Committee. t1Small contributor political action committee" means any committee which meets all of the following criteria: - 4 - (1) All of the contributions it receives from any person in a twelve month period total $50 or less. (2) It has been in existence at least six months. (3) It contributes to at least five candidates. (4) It is not a candidate controlled committee. (5) It receives contributions from more than 100 persons. SECTION 11203. Limitations on contributions from Persons. (a) No person shall make to any candidate for office or to the controlled committee of such a candidate or to any committee which supports or opposes such candidate, a contribution or contributions totaling more than Dollars ($ .00) for each election in which the candidate was on, is on, or is likely to be on the ballot or in which the candidate sought or seeks write-in votes. (b) No candidate for office or the controlled committee of such a candidate or any committee which supports or opposes such candidate shall accept from any person a contribution or contributions totaling - 5 - more than Dollars ($ .00) for each election. (c) No person shall make any contribution except during the time period specified in Section 11208 of this Act. SECTION 11204. Limitations on Contributions from Small contributor Political Action Committees. (a) No small contributor political action committee shall make to any candidate for office, or to the controlled committee of such a candidate or to any committee which supports or opposes such candidate a contribution or contributions totaling more than Dollars ($ .00) for each election in which the candidate, was on, is on, or is likely to be on the ballot or in which the candidate sought or seeks write-in votes. (b) No candidate for office or the controlled committee of such a candidate or any committee which supports or opposes such candidate shall accept from a small contributor political action committee a contribution or contributions totaling more than Dollars ($ .00) for each election. (c) No small contributor political action committee shall make any contribution except during - 6 - the time period specified in Section 11208 of this Act. SECTION 11205. Limitations on Total Contributions from organizations. No candidate, or controlled committee of such a candidate, shall accept contributions which in the aggregate total more than Dollars ($ .00) from organizations for any election. SECTION 11206. Transfers. No candidate, committee controlled by a candidate, or officeholder shall make any contribution or transfer of campaign funds in an amount greater than Dollars ($ .00) to any candidate, officeholder, or committee supporting or opposing a candidate or officeholder, including to any fund, account or committee established by or in support of the candidate or officeholder in any subsequent election. SECTION 11207. Limitation on Total Election Contributions. For each elected office subject to this Chapter, no person shall contribute in the aggregate more than Dollars ($ ) to candidates who seek or sought election to that office and to committees who - 7 - support or oppose candidates for election to that office. SECTION 11208. Time Period When contributions Permitted. (a) Beginning January 1, 1993, no candidate or committee shall accept any contribution except commencing six (6) months prior to the election date when the candidate will seek or is likely to seek elected office, or when the committee will support or oppose a candidate. (b) A candidate or committee may accept contributions after the date of the election, but such contributions shall remain subject to the contribution limitations established by this Chapter for that election and, except as provided for in Section 11209, such contributions shall be used solely to pay for debts arising from the election. SECTION 11209. Surplus Contributions. If after all election expenses are accounted and paid for, any officeholder, candidate or committee has any unexpended contributions or surplus campaign funds, the candidate, officeholder or committee may use such contributions or funds only as follows: (a) The payment of outstanding campaign debts. (b) The pro rata repayment of contributions. - 8 - (c) Donations to any bona fide charitable, educational, civic, religious, or similar tax-exempt, nonprofit organization, where no substantial part of the proceeds will have a material financial effect on the former candidate or elected officer, any member of his or her immediate family, or his or her campaign treasurer. (d) Contributions to a political party or committee so long as the funds are not used to make contributions in support of or opposition to a candidate for elective office. (e) contributions to support or oppose any candidate for federal office, any candidate for elective office in a state other than California, or any ballot measure. SECTION 11210. Return of Contributions. A contribution shall not be considered to be received if it is not negotiated, deposited, or utilized in any way, and in addition if it is returned to the donor within ten (10) days of receipt. SECTION 11211. Aggregation of Payments. (a) All contributions made by a person or small contributor political action committee whose contributions or expenditure activity is financed, directed, or controlled by any corporation, partnership, committee, labor organization, association, political party or any other person or - 9 - committee, including any parent, subsidiary, branch, division, department or local unit of the corporation, labor organization, partnership, committee, association political party or any other person, or by any group of such persons, shall be considered to be made by the person, organization, or entity financing, directing or controlling the contribution as well as the person, small contributor or political action committee making the contribution. (b) Two or more entities shall be regarded as the same person or small contributor political action committee when any of the following apply: (1) The entities share the majority of members of their boards of directors. (2) The entities share two or more officers. controlled (3) by The entities the same majority are owned shareholder or or shareholders. (4) The entities are in a parent subsidiary relationship. (c) An individual and any general partnership in which the individual is a partner, or an individual and any corporation in which the individual owns a controlling interest, shall be regarded as the same person. - 10 - (d) No committee which supports or opposes a candidate for office shall have as officers, individuals who serve as officers on any other committee which supports or opposes the same candidate. No such committee shall act in concert with, or solicit or make contributions on behalf of, any other committee. This subdivision shall not apply to treasurers of committees if these treasurers do not participate in or control in any way a decision on whether the candidate or candidates receive contributions. SECTION 11212. Loans. (a) A loan shall be considered a contribution from the maker as well as the guarantor, if any, of the loan and shall be subject to the contribution limitations of this Chapter. (b) Every loan to a candidate or committee shall be by written agreement and shall be filed with the candidate's or committee's campaign statement on which the loan is first reported. (c) A loan made to a candidate or committee by a commercial lending institution in the regular course of business on the same terms available to members of the public shall not be subject to the contribution limitations of this Chapter. (d) Extensions of credit, other than loans pursuant to subdivision (c) of this Section, for a - 11 - period of more than thirty (30) days are subject to the contribution limitations of this Chapter. SECTION 11213. Family contributions. (a) Contributions by a husband and wife shall be treated as separate contributions and shall not be aggregated under this Chapter. (b) contributions by minors shall be treated as contributions by their parents or guardian and attributed equally to each parent or guardian. SECTION 11214. One campaign committee and One Checking Account Per Candidate. A candidate shall have no more than one campaign commi ttee and one checking account per election out of which all expenditures shall be made. This section shall not prohibit the establishment of savings accounts, but no qualified campaign expenditures shall be made out of these accounts. SECTION 11215. Disqualification for Receipt of Improper Contributions. (a) In addition to any other penalty prescribed by law, no person who accepts or whose controlled committee accepts any contribution in violation of this Chapter T shall use his or her public office to influence or to participate in any decision, hearing, or vote affecting the contributor for a period of four years after receipt of the - 12 - contribution. If a person utilizes his or her pUblic office in violation of this Section, any contract, agreement or approval of any kind made with the participation of a disqualified official is void. (b) This section shall be interpreted in accordance with the rules and regulations adopted pursuant to the Fair POlitical Practices Act, Government Code Sections 87100 et seq. SECTION 11216. Independent Expenditures. Except as otherwise permitted by law, any person, who makes independent expenditures supporting or opposing a candidate shall not accept any contribution in excess of the applicable limitations set forth in this Chapter. SECTION 11217. Limitation on Corporate contributions. No corporation shall make an independent expenditure in support of or in opposition to any candidate subject to this Chapter unless the expenditure is from a segregated fund established in accordance with the Federal Election campaign Act of 1971, 2 V.S.C. Sections 431 through 455. SECTION Expenditures. expenditures 11218. Notice of Independent Any person who makes independent of more than Five Hundred Dollars - 13 - ($500.00) in support of or in opposition to any candidate or measure shall file with the City Clerk notice of such expenditure within ten (10) days of making such payment, except that any expenditures made within ten (10) days of the election shall be reported to the city Clerk no later than twenty-four (24) hours after the close of the election. Notices shall be filed for each Five Hundred Dollars ($500.00) of expenditure. SECTION 11219. Filing of statements. (a) Each candidate and each commi ttee supporting or opposing a candidate or candidates or any ballot measure and each member of the Santa Monica City Council, Santa Monica Rent Control Board, or any other elected office of the city of Santa Monica, shall file with the City Clerk each statement required under Chapter 4 of Title 9 of the Government Code (Political Reform Act of 1974). (b) In addition to the disclosure requirements of the Political Reform Act, candidates, their controlled committees and other committees primarily formed to support or oppose measures or candidates covered by this Chapter, shall disclose all contributions cumulating Fifty Dollars ($50.00) or more, by providing the amount of the contribution as well as the name, address, occupation, employer, and employer's address of each - 14 - such contributor; and shall disclose all expenditures of Fifty Dollars ($50.00) or more, by providing the amount of the expenditure as well as the name and address of the recipient and a description of the consideration for the payment. SECTION 11220. Printed Literature. All literature that is printed by or on behalf of any person, candidate or committee including, but not limited to, small cards and billboards, shall be identified with the name and address of the candidate or committee, or chairperson and secretary, or at least two officers of the political group or organization on whose behalf or order the same is printed. If the literature is printed on behalf of any person or group of persons who are not also a candidate or committee, the person or group of persons shall be identified. Such identification of said persons shall be printed legibly and shall be appropriate to the size and type of the literature, but in no event shall such printing be less than in six (6) point type. Compliance with Government Code Sections 84305 et seq. shall be deemed compliance with this Section. - 15 - SECTION 11221. Disclosure of occupation and Employer. No contribution exceeding Fifty Dollars ($50.00) shall be deposited into any campaign account unless the name, address, occupation, employer, and employer's address of the contributor is on file in the records of the recipients of the contribution. SECTION 11222. Candidate's statement of Qualifications. (a) Each candidate for Santa Monica city Council, Santa Monica Rent Control Board, or other elected office of the city of Santa Monica, may prepare a statement of qualification on an appropriate form provided by the city Clerk. Such statement may include the name, age, and occupation of the candidate and a brief description of no more than two hundred (200) words of the candidate's education and qualifications expressed by the candidate. Such statement shall be filed in the office of the city Clerk when the candidate's nomination papers are returned for filing. It may be withdrawn but not changed during the period of filing nomination papers and until 5:00 p.m. of the next working day after the close of the nomination period. (b) The City Clerk shall send to each voter together with a sample ballot, a voter's pamphlet - 16 - which contains the written statements of each candidate's qualifications that is prepared pursuant to this Section. The statement of each candidate shall be printed in type of uniform size and darkness and with uniform spacing. The City Clerk shall provide for and certify a Spanish translation to those candidates who wish to have one. (c) The costs of printing, handling, and translating of any statement submitted pursuant to this Section shall be paid by the City. (d) The city Clerk may reject any statement which contains any obscene, libelous or defamatory matter, which violates the constitutional or civil rights of any person, or which is prohibited by state or federal law from being circulated through the mail. (e) Nothing in this Section shall be deemed to make any such statement or the authors thereof free or exempt from any civil or criminal action or penalty because of any false or libelous statements offered for printing or contained in the voter's pamphlet. SECTION 11223. Distribution of Newsletter Prohibited During campaign. No newsletter or similar matter shall be circulated by mass mailing or similar method by the Santa Monica City Council, - 17 - Santa Monica Rent Control Board, or their administrative officers as follows: (a) Within eighty-eight (88) days prior to any municipal election to approve or disapprove any ballot measure. (b) within eighty-eight (88) days prior to an election to select any member of its governing body. (c) After any member of its governing body has filed a nomination petition pursuant to Municipal Code section 11000. SECTION 11224. Ballot Order. In any election for any City office, the order in which a candidate's name or ballot measure shall appear on the ballot shall be randomly determined by the city Clerk. SECTION 11225. criminal Misdemeanor Actions. Any person who violates any provision of this Act is guilty of a misdemeanor and each violation of any section shall constitute a separate offense. SECTION 11226. civil Actions. Any person aggrieved by any violation of this Chapter may sue to enjoin violations of or to compel compliance with any provisions of this Chapter. In addition to being subject to any equitable relief that may be granted, any candidate, officeholder, or committee that violates any contribution, expenditure, or - 18 - disclosure provision of this Chapter shall forfeit to the city Treasury Five Hundred Dollars ($500.00) or three (3) times the amount of the unlawful contribution or expenditure, whichever is greater. The prevailing party shall be entitled to recover costs and reasonable attorneys' fees. SECTION 11227. AUdits of Campaigns. The City Clerk shall conduct an independent audit following each election that is subject to the contribution limitations of this Chapter in order to determine compliance with the requirements of this Chapter. The audit shall be completed within 180 days of the certification of the election results and the audit findings shall be publicly disclosed and presented to the city council. SECTION 2 _ Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, are hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance. SECTION 3. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of any competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City council hereby declares that it would have passed this Ordinance, and each and - 19 - every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional. SECTION 4. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This ordinance shall become effective after 30 days from its adoption. APPROVED AS TO FORM: ~,-.\" ROBERT M. MYERS city Attorney "6- - - 20 -