SR-104-000-06 (7)
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City Council Meeting 7-13-04
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JUl 2 7 2004
Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: An Ordinance Of The City Council Of The City Of Santa Monica Amending
Santa Monica Municipal Code Sections 11 .04.040 And 11.04.100 And
Adds Section 11.040.105 To The Municipal Code Relating To Campaign
Finance Reporting Requirements
Introduction
The attached proposed ordinance would modify the City's Elections Code to implement
certain suggestions made by the Santa Monica Living Wage Commission and Center
for Governmental Studies with respect to campaign finance reporting requirements.
The ordinance is presented for first reading.
Backqround
Following the referendum election held on November 5, 2002, which narrowly
invalidated the City's Living Wage Law, a community based group instituted an unofficial
inquiry into the election. In June of last year, the group, the Santa Monica Living Wage
Commission, issued a report entitled "Democracy Distorted" and presented that report
to the City Council along with various recommendations for amendments to the City's
Elections Code and other actions relating to the conduct of City elections. The Council
considered the recommendations and directed staff to evaluate them and report back
on possible actions. Staff did so at a Council meeting last December.
JUl 2 7 2004
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At that meeting, the Center for Government Studies provided detailed written comments
regarding the reforms recommended by the Living Wage Commission. A copy of those
comments is attached to this report.
Discussion
The Center's first three recommendations relate to campaign finance reporting. They
are to : (1) repeal the Municipal Code definition of "committee" so that state law will
apply; (2) require slate mailer organizations to file copies of statements required by
state law with the City Clerk by the deadlines specified in state law; and (3) require
committees making expenditures of $1,000 or more to report such expenditures to the
City Clerk unless they are direct contributions.
The proposed ordinance incorporates each of these suggestions. From a legal
perspective, only the third requires comments in addition to those supplied by the
Center. The proposed ordinance would require any committee that expends $1,000 or
more to support or oppose a candidate or measure to report. The requirement would
apply to independent expenditures, which are defined by state law as those made in
connection with a communication, which expressly advocates for or against a candidate
or measure. The requirement would also apply to member contribution expenditures
that are expenditures made to communicate to organization members about supporting
or opposing a candidate or measure. The requirement would not apply to contributions
made directly to political committees. There may be some legal risk attendant upon the
adoption of restrictions relating to committee expenditures. On the other hand, the
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Center's proposal is a limited disclosure requirement which has apparently been
successfully implemented in Los Angeles.
The Center also commented on three suggestions with respect to public disclosure.
The first is to require disclosure on an advertisement of the five largest contributors to
the committee funding the advertisement. Staff continues to recommend against such a
requirement. The Center itself points out that a federal court in California has already
struck down such a requirement as violative of privacy rights. Also the United States
Supreme Court has determined that First Amendment protections cover anonymous
political speech.
The second suggestion is to require the ballot pamphlet to include a notice regarding
the availability of campaign finance information on the City Clerk's and State's web
sites. Staff previously recommended against this requirement because it would
increase elections costs and because the availability of the information is already known
within the community. However, this is a matter of Council discretion; the requirement
could readily be added to the ordinance or, the Council could simply give direction.
Moreover, the City Clerk has suggested that a brief reference to her web page could be
added.
The third suggestion in this category is that the Municipal Code requires the City Clerk
to post campaign statements within 24 hours. Speedy posting already occurs and it is
unclear why this needs to be a legal mandate. Therefore the suggestion has been
omitted from the ordinance. However, it could be included; and, if so, the Clerk
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suggests that the language mandate posting within 24 hours or as soon thereafter as
practicable.
The final category is compliance recommendations. There are two: that the Council
create an ethics commission to enforce laws, train candidates and treasurers and
monitor issues. The creation of commissions is a matter of Council discretion.
However, staff notes that the proposed functions are already handled. Enforcement of
local election laws is undertaken through criminal prosecution and civil lawsuits.
Moreover, even if a commission were created in Santa Monica, it could likely not have
any enforcement powers because (unlike the very large cities referenced in the Center's
comments) Santa Monica has a city manager form of government. Likewise, the City
Clerk, state representatives and the City Attorney's Office already undertake training.
As to monitoring election issues, it is not clear that a separate commission is necessary
for that purpose.
The other suggestion in this category is to incrementally increase fines for repeat
violations of the state slate mailer election disclosure laws. Staff agrees with the
Center's comment to the effect that this is a matter of state law. Thus, the proposal
should be made to the State Legislature. Moreover, there may be constitutional
impediments to including a penalty consisting of disqualification from paid campaign
work.
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Financial Impacts
The adding of a brief reference in the voter's information pamphlet on the availability of
campaign finance information on the City Clerk's and State's web sites will not have a
noticeable impact on the cost of printing materials.
Recommendation
Staff recommends that the Council introduce the attached ordinance for first reading.
PREPARED BY: Marsha Jones Moutrie, City Attorney
ATTACHMENTS: Comments of Center for Government Studies
Proposed Ordinance
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Center for Governmental Studies
lm)~l West Pico Olvd.. Suilf! 120
Los Angeles, C^ 90064
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Comments to Santa Monica City Council
December 16, 2003 Meeting
Agenda Item 8-G: Response to Recommendations on Elections Submitted by the
Living Wage Commission
Paul S. Ryan, Political Reform Project Director
(310) 470-6590 x115, l'n'an(ii~cgs.ol1'o
The Center for Governmental Studies (CGS) submits for consideration by the Santa
Monica City Council the following comments regarding political refonns recommended
by the Santa Monica Living Wage Commission of Inquiry in its June 2003 report
Democracy Distorted. CGS conunents in this memorandum arc limited to Living Wage
Commission recommendations supported by CGS. Please feel free to contact CGS with
any questions, comments or concerns.
A. Campaign Finance Reporting Recomme ndations
1. Repeal the definition of "committee" found in Santa Monica
Municipal Code Section 11.04.040(b), making the state's definition of
"committee" controlling law.
Under current Santa Monica law, ballot measure committees arc not included in the
definition of "committcc." Ballot measure committees are included in the state's
definition. Relying on the state's defmition would make enforcement of the other
reporting refomls described below easier.
Under state law, a person does not become a committee until slhe receives contributions
or makes independent expenditures of$l,OOO or more. Under existing Santa Monica law,
any person who receives a contribution or makes and expenditure for the purpose of
infiuencing an election-no matter how small-becomes a committee.
CGS supports this recommendation to incorporate the state's definition of committee into
Santa Monica law and believes a SI,O(){) threshold is better public policy than the city's
current I ~ threshold.
2. Require any slate mailer organization producing a slate mailer
supporting or opposing one or more Santa Monica candidates or
ballot measures to file copies of its statement of organization (Cat.
GO\,'t Code ~ 84108) and each campaign statement required by state
law (Cal. Gov't Code ~~ 84218 anfl84219) with the Santa Monica Citv
Clerk, by the filing deadlines specified in state law.
Current state la\'..' does not require a slate mailer organization to file its campaign
statements with the Santa Monica City Clerk unless the slate mailer organization only
produces mailers that exclusively support or oppose Santa Monica candidates or ballot
measures. Slate mailers typically list candidates from the top of the ticket (e.g..
presidential or gubematorial candidates) to the bottom of the ticket ( e.g., municipal
candidates andior ballot measures). Consequently, it is rare for a slate mailer
organization to be required by existing state law to file campaign statements with the
Santa Monica City Clerk.
Santa Monica City Staff incorrectly reports that "state law already imposes" the
recommended filing requirement," citing Elections Code * 84215 (stafTmemo p. 5). The
state Elections Code does not contain a * 84215. City StafrIikely intended to reference
CaIifomia Govemment Code * 84215. Gov't Code * 84215, however, does not address
filing by slate mailer organizations. Instead, * 84215 establishes filing requirements for
"candidates, elected officers, committees, and proponents of state ballot measures or the
qualification of state ballot measures." A "slate nniler organization" is not a
"committee" under state law. (See CaI. Gov't Code *82048.4(c).)
Instead, Gov't Code ** 84218 and 84219 establish filing requirements for slate mailer
organizations. A slate mailer organization producing slate mailers supporting or
opposing candidates or ballot measures in a single county must file two copies of these
campaign statements with the clerk of the county in which it is domiciled. In addition:
. A slate mailer organization producing slate mailers supporting or opposing
candidates or ballot measures in a state election or in more than one county
must file thc original and one copy of thcse campaign statements with the
Secretary of State, two copies with the Los Angeles County Registrar-
Recorder and two copies with the San Francisco Registrar of Voters.
. A slate mailer organization producing slate mailers supporting or opposing
candidates or ballot measures in a single cOllnty or in more than one
jurisdiction within a single county must file the original and one copy of these
campaign statements with the clerk of that county.
· A slate mailer organization producing slate mailers supporting or opposing
candidates or ballot measures in a single city must file the original and one
copy of these campaign statements with the clerk of that city.
CGS believes that the state's CUlTent filing requirements for slate mailer organizations do
not adequately the public's interest in timely disclosure. CGS supports this
recommendation.
3. Require any committee that makes expenditures of$1,000 or more to
support or oppose any Santa Monica candidate or hallot measure to
report such expenditures to the Santa Monica City Clerk,
CGS supports this recommendation in large part. CGS encourages the City of Santa
Monica to apply this recommendation only to independent expenditures and member
communication expenditures. which are no longedndependent expenditures under
California state law. (See Cal. Gov't Code * 85312.). This provision should not apply to
expenditures that are direct contributions to political committees. The City of Los
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Angeles requires campaign finance reporting of both independent expenditures and
member communication expenditures and has implemented this requirement effectively.
B. Public Disclosure Recommendations
1. Require any advertisement supporting or opposing any Santa Monica
ballot measure to include a disclosure statement identifying the five
largest contributors to the committee making the expenditure for the
advertisement.
A vcry similar requirement in state law (CaI. Gov't Code * 84503) was invalidated by a
federal district comi in Sacramento. Although CGS supports this recommendation in
concept, the City of Santa Monica might face a legal challenge if it werc to adopt this
recommendation. The decision of the federal district court in Sacramento is not binding
precedent on the district court in Los Angeles that would hear a legal challenge to a
similar law ifadopted by the City of Santa Monica. Nevertheless, the City of Santa
Monica should be prepared to defend this recommendation if adopted.
2. Require the ballot pamphlet for the City of Santa Monica to include a
notice to voters regarding the availability of candidate, political
committee and slate mailer organization campaign finance
information on the Santa Monica City Clerk and the California
Secretary of State Web sites, including Web site addresses.
CGS supports this recommendation to alert voters to the availability of campaign finance
data on the City of Santa Monica's Web site.
3. Require the Santa Monica City Clerk to post on the city's Web site
",ithin 24 hours any campaign statement filed with the Clerk
pursuant to state or local law, including:
. Semi-annual and pre-election reports (Cal. Gov't Code Title 9,
Chapter 4, Article 2)
. Late contribution reports (Cal. Gov't Code ~ 84203, $1,000
threshold)
. Late independent expenditure reports (Cat. Gov't Code ~ 84204,
$1,000 thres.hold)
. Late payments to slate mailer organizations reports (Cal. Go,"t
Code ~ 84220, $2,500 threshold)
CGS supports this recommendation to mandate electronic disclosure oral! campaign
finance infomlation related to Santa Monica City elections. The City Clerk currently
posts candidate and committee campaign statements on the city's Web site, but is not
required bv law to do so. This recommendation would make the Clerk's posting of these
campaign statements a legal requirement and would include slatc mailer organization
campaign statements.
C. Compliance Recommendations
1. Create a Santa Monica Ethics Commission to enforce state arid local
campaign finance laws; train candidates and campaign treasurers;
and monitor emerging election issues.
CGS supports this recommendation to create a Santa Monica Ethics Commission similar
to those created in the cities of Los Angeles, San Diego, San Francisco and Oakland.
2. Incrementally increase the fines for repeat violations of state slate
mailer election disclosure laws-with a third violation resulting in
disqualification from paid election campaign work in California for a
period of 10 years.
CGS supports de concept of imposing incrementally increased penalties on repeat-
violators of state slate mailer disclosure laws. Imposing Stich penalties on violators who
are not active in Santa Monica elections, however, is beyond the scope of the City of
Santa Monica's authority. The City should consider imposing such penalties only for
violations related to Santa Monica elections.
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City Council Meeting 7-27-04
Santa Monica, California
ORDINANCE NUMBER
(CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA AMENDING SANTA MONICA MUNICIPAL CODE SECTIONS
11.04.040 AND 11.04.100 AND ADDS SECTION 11.040.105 TO THE MUNICIPAL
CODE RELATING TO CAMPAIGN FINANCE REPORTING REQUIREMENTS
WHEREAS, meaningful campaign finance disclosure laws are an essential
element of the democratic electoral process because they protect the voters' ability to
make informed choices; and
WHEREAS, disclosure requirements must be tailored to preserve First
Amendment rights; and
WHEREAS, the City of Santa Monica is committed to protecting both the
democratic electoral process and individual rights; and
WHEREAS, committees and slate mailer organizations pose particular
challenges to effectuating this commitment; and
WHEREAS, in order to honor its commitment and meet these challenges, the
City Council wishes to modify the City's Elections Code to address the reporting
requirements applicable to such groups,
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Santa Monica Municipal Code Section 11.04.040 is hereby
amended to read as follows:
Section 11.04.040 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
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whether or not such person has announced candidacy or
filed a declaration of candidacy at such time. "Candidate"
also includes any office holder who is subject of a recall
petition.
(b) Committee. !\ny person or combination of
persons \Nho 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 tho nomination or election of one or more
candidates.
(6Q) 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.
(a~) Organization. Any corporation, association,
partnership, committee, labor organization, political party or
other similar legal entity or arrangement, whether organized
for profit or not.
(eg) Person. A natural born individual, as well as
any organization.
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(f~) Small Contributor Political Action Committee.
"Small contributor political action committee" means any
committee which meets'all of the following criteria:
(1 ) All of the contributions it receives from any
person in a twelve month period total fifty dollars or less.
(2) It has been in existence at least six months.
(3) It contributes to at least five candidates within a
three year period.
(4) It is not a candidate controlled committee.
(5) It receives contributions from more than one
hundred persons.
SECTION 2.Santa Monica Municipal Code Section 11.04.100 is hereby amended
to read as follows:
Section 11.04.100 Filing of statements.
€aeR--Anv candidate~ and oach committee. elected
official or slate mailer organization filinq a statement
supporting or opposing a candidato or candidatos or any
ballot moasuro and oach mombor of tho Santa Monica City
Council, Santa Monica Ront Control Board or any othor
oloctod offico of tho City of Santa Monica, shall filo with tho
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City Clerk each statement required under ~Chapter 4 of
Title 9 of the Government Code (Political Reform Act of
1974) shall also file a COpy of that statement with the City
Clerk by the filinq deadline specified in state law
SECTION 3.Section 11.04.105 is hereby added to the Santa Monica Municipal
Code to read as follows:
Section 11.04.105 Reportina of committee
expenditures.
Any committee that makes expenditures of One
Thousand Dollars ($1.000) or more to support or oppose a
candidate or candidates or any ballot measure shall report
such expenditures to the City Clerk. This requirement shall
apply to independent expenditures and member contribution
expenditures but not to direct contributions to political
committees.
SECTION 4. 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, is hereby repealed or modified to that extent necessary
to effect the provisions of this Ordinance.
SECTION 5. 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 competent jurisdiction, such decision shall not affect the validity of the
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remaining portions of this Ordinance. The City Council hereby declares that it would
have passed this Ordinance and each and 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 6. 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 30 days from its adoption.
APPROVED AS TO FORM:
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