SR-07-14-2015-7ACity Council Meeting: July 14, 2015
Agenda Item: 7 -A
To: Mayor and City Council
From: Marsha Jones Moutrie, City Attorney
Subject: Proposed Ordinance Regulating Lobbying and Request to Consider
Changing Rules On Disclosures
Recommended Action
Staff recommends that the City Council consider the attached proposed ordinance
regulating lobbying and introduce the ordinance for first reading, either as proposed or
as revised following public input and Council deliberation.
Executive Summary
At its meeting of December 16, 2014, Council directed staff to prepare a proposed
ordinance that would require lobbyists to register with the City and would include other
provisions to promote transparency. The attached proposed ordinance fulfills that
directive. It would require paid lobbyists to register and file quarterly disclosure forms
about their work, clients and compensation. The ordinance includes a list of exemptions
intended to ensure that the ordinance is narrowly tailored to achieve its purpose of
transparency without impermissibly burdening First Amendment rights. The ordinance
would also prohibit lobbyists from undertaking specified deceptive actions, require them
to pay a fee to cover administrative costs, and establish remedies for violations.
Additionally, staff recommends that Council consider modifying its rules to require
disclosure of off record contacts relating to quasi - judicial matters and give direction to
staff.
Background
Lobbying is a constitutionally protected activity - an individual right guaranteed by the
First Amendment. Lobbying is also a service, which supplies information to public
officials to aid in their decision making. This service is widely utilized. The City itself
employs lobbyists in Sacramento and Washington to protect its interests.
However, lobbying also poses risks to government and a democratic society. These
risks include corruption, the appearance of corruption, and erosion of public trust.
Lobbying may cause officials to base their decisions on biased or limited perspectives
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and information. It may foster a public perception that special interests have special
access to decision makers that allows such interests to dominate governmental
decision - making to the detriment of the greater good. Whether or not these perceptions
are accurate as to any particular situation or issue, the perceptions themselves
undermine public confidence in government.
To address these concerns many jurisdictions have adopted laws regulating lobbying,
and the courts have upheld them. Congress enacted the Federal Regulation of
Lobbying Act in the 1940's. It requires lobbyists to register and file disclosure
statements. The United States Supreme Court upheld that law as constitutional,
rejecting claims that it violated First Amendment rights. United States v. Harris, 347
U.S. 612 (1954). Likewise, in California, the state supreme court upheld provisions of
the Political Reform Act (Govt. Code Section 81000 and following) that require state
lobbyists to register and report receipts, expenditures and activities, among other things.
Fair Political Practices Commission v. Superior Court, 25 Cal.3d 33 (1979). Today,
more than 20 cities in California have adopted laws regulating lobbying.
In preparing this recommendation, staff reviewed laws regulating lobbying in a dozen
California jurisdictions and the cities of Chicago and New York. Predictably, these laws
and the regulatory systems they establish, range from very simple in smaller cities to
quite complex in larger jurisdictions.
Examples of cities with minimal regulations include West Hollywood, Malibu and Beverly
Hills. All three define "lobbyist" or "legislative advocate" as, roughly speaking, a person
compensated to communicate with city officials or employees and thereby influence
legislative or administrative actions. West Hollywood's law merely requires that
lobbyists register with the City and pay registration fees. Malibu's law requires
registration, prohibits lobbying without having first registered and includes a revolving
door prohibition, which prohibits City Council members from serving as lobbyists within
two years of leaving office. Beverly Hill's ordinance is slightly more complex. In
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addition to requiring registration, it also requires "legislative advocates" to identify their
clients at public meetings, and it establishes administrative remedies for violations.
None of these three laws require periodic reporting on lobbying activities; nor do they
impose any prohibitions on specific activities.
In comparison, the lobbying laws of larger cities tend to impose significantly more
extensive requirements. For instance, the lobbying laws of Los Angeles, San Diego,
Oakland, Irvine and San Jose vary, but they all require filing of periodic reports or
disclosure statements on lobbying activities. Most larger cities' laws contain thresholds
of applicability, such as dollar amounts earned lobbying or time spent lobbying. Some
do not limit the definition of "lobbyist" to persons lobbying for compensation. Instead,
they define the term "lobbying" and include longer lists of exemptions. Some divide
lobbyists into categories: "contract lobbyists ", who are hired on contracts to provide
lobbying services: "in -house lobbyists ", who work for corporations and other
organizations and lobby on their employers' behalves; and "expenditure lobbyists ", who
make payments or incur expenditures on advertisements or public relations campaigns
to persuade others to lobby. Some local laws have very complex regulatory systems,
usually administered by the City Clerk.
Discussion
As the diversity of other cities' laws illustrate, Council has a wide range of choices. In
drafting the proposed ordinance staff attempted to meet the concerns addressed by
Council in a relatively simple way. This approach is based on the assumptions that the
new regulatory system can and should be assessed and improved based on experience
and that relative ease of administration is desirable, at least at the outset.
The proposed ordinance contains a statement of purpose, definitions, and exemptions.
Its basic requirements are that lobbyists register with the City, make periodic
disclosures about their activities, and pay registration fees to cover City costs. A few
activities would be prohibited. Remedies would be established.
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The ordinance would define lobbying as influencing or attempting to influence a city
official with regard to a legislative or administrative action of the City. The class of
regulated lobbyists would include only those paid or promised compensation for their
services. (This class is sometimes referred to as 'contract lobbyists "). Also, the
regulations would apply only to paid lobbyists whose compensation for lobbying
exceeds $1,000 in any three month period.
The proposed law would include a list of persons and activities that the law does not
regulate:
• Public officials acting in their official capacity;
• Persons engaged in publishing or broadcasting news, editorials, and
commentary;
• Individuals whose attempts to influence are limited to appearing and speaking at
public meetings or submitting writings for consideration at a public meeting;
• City employees and contractors providing reports or recommendations to the City
as part of their work for the City;
• Owners of real property and businesses attempting to obtain decisions relating to
their own property or businesses;
• Those submitting bids or proposals for City contracts and negotiating contracts
with the City;
• Whistleblowers;
• Persons meeting with the City Attorney, City Clerk, Risk Manager or their staff
members regarding any claim, litigation matter, negotiation, or legal dispute or
issue;
• Members of staff or boards of directors of non - profit organizations whose
attempts to influence governmental action are on behalf of the organizations;
• Members of neighborhood associations representing the associations;
• Persons whose communications are related to the work of City bargaining units
or terms and conditions of bargaining agreements between the City and a
recognized bargaining units, management decisions as to terms or conditions of
employment, or proceedings before the Personnel Board;
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® Communications about solely ministerial actions; and
® Persons providing direct response to an enforcement proceeding by the City of
Santa Monica.
Most of these exemptions may, strictly speaking, be unnecessary because the
ordinance regulates only paid lobbyists who are paid more than $1000 per quarter for
lobbying. However, following the approach taken by other cities, the exemptions are
included to make clear the City's intent to respect constitutional rights by regulating as
narrowly as possible consistent with the goals of promoting public confidence and
transparency.
Registration Requirements
The registration requirement is standard for lobbying ordinances. It would require
lobbyists to register with the City within ten days of undertaking regulated lobbying
activities. Lobbyists would be required to supply basic information about their lobbying
business, the nature of their work, their clients, and the governmental decisions they
seek to influence. Registration would be accomplished using a form supplied by the
City Clerk, and the registration forms would be publically available year round in the City
Clerk's office.
Disclosure Requirements
Like the registration requirement, the disclosure requirement in the proposed ordinance
is similar to other cities'. It would require lobbyists to file quarterly reports disclosing the
name, business address and telephone number of each client who pays the lobbyist to
lobby; the specific matter and agency lobbied (itemized by client), and; the approximate
amount paid to the lobbyist by each client for lobbying within designated ranges. This
requirement would ensure public access to information about lobbyists' activities and
thereby effectuate the goal of transparency. Quarterly reports would be filed with the
City Clerk's Office and be publically available there.
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Prohibitions
The law would prohibit certain deceptive practices:
® Doing or refraining from doing any act with the purpose or intent of placing any
City official under personal obligation to the lobbyist;
® Communicating with a City official on behalf of a fictitious person or in the name
of any real person without that person's consent;
® Representing directly or indirectly that the lobbyist can control or obtain the vote
or action of any City official;
® Causing or influencing the introduction of any ordinance, resolution, appeal,
application, petition, nomination or amendment for the purpose of thereafter
being employed as a lobbyist to secure its granting, denial, confirmation,
rejection, passage or defeat; and
® Intentionally deceiving or attempting to deceive a City official as to any material
fact pertinent to any pending or proposed legislation or administrative action.
Administration and Remedies
The program would be administered by the City Clerk. The costs of the program would
be covered by the lobbyists' registration and reporting fee established by the ordinance.
The fee would be set by Council resolution after Council establishes the program's
scope. Presumably, the offices of the City Clerk and the City Attorney would jointly
provide assistance and guidance on registration and reporting requirements. And, since
this would be a completely new program for Santa Monica, staff anticipates reporting
back to Council periodically, including with suggestions for revisions and improvements
based on experience.
The proposed ordinance includes both civil and criminal remedies. Violators may be
prosecuted as misdemeanors by the City Attorney's Office. Additionally, any person or
the City may enforce the requirements of the law through a civil action for injunctive
relief, damages, and punitive damages. Additionally, the proposed ordinance
authorizes awarding attorney's fees to a successful plaintiff.
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Possible Chanqe To Council Rules
To better achieve the goals of this ordinance, Council could also consider changing its
own rules to require disclosure of off record contacts with lobbyists and others in quasi -
judicial proceedings — a practice which the Planning Commission has followed for years.
Staff recommends consideration of this change in the Council rules as a means of
promoting transparency and insulating Council decisions against the possibility of Due
Process challenges.
Alternatives
There are many. The Council could adopt a regulatory system more or less complex
than that proposed by staff. For instance, a broader class of lobbying activities could be
regulated, the proposed law focuses on contract lobbyists. Some cities also regulate "in
house lobbyists" and so- called "expenditure lobbyists ". Staff does not recommend that
approach at this time because it seems advisable to start with a simpler system and
learn from the experience before expansion. Also, the City could require that lobbyists
file a registration form for each client, which might make it easier for members of the
public to access information about lobbying activities, as some larger cities do.
However, staff believes that the comparatively small number of lobbyists working in
Santa Monica does not necessitate individual client registrations, at least at this time.
Next Steps
Staff suggests that the law go into effect January 1, 2016. This would allow staff time to
share information about the law, devise forms and record keeping protocols, and
establish registration fees based on estimated costs of enforcing whatever provisions
Council adopts. Staff will undertake this work after Council establishes the scope of the
regulatory system.
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Financial Impacts & Budget Actions
If Council adopts the proposed ordinance, there will be costs associated with the
regulation of lobbyists. Staff anticipates that these costs would be covered through
registration fees.
Prepared by: Marsha Jones Moutrie, City Attorney
Approved:
WAMMV4�
M rsha J n s MoutrGe
Ci y Atto
Attachments:
Proposed Ordinance Regulating Lobbying
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Forwarded to Council:
Rick Cole
City Manager
City Council Meeting: July 14, 2015
Santa Monica, California
ORDINANCE NUMBER (CGS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA REGULATING LOBBYING
WHEREAS, Santa Monica is committed to a robust, inclusive and transparent
public process; and
WHEREAS, the possibility of special interests privately influencing decision
makers outside of the public purview undermines the people's confidence that their
government serves the broader public interest; and
WHEREAS, regulation of lobbying activities helps ensure governmental
transparency and thereby fosters public confidence in government; and
WHEREAS, the City recognizes that First Amendment Rights must be
safeguarded and endeavors to do so in all circumstances, including in the regulation of
lobbying; and
WHEREAS, since lobbying is a constitutional right guaranteed by the First
Amendment, this ordinance is intended to both promote public confidence through
transparency and respect individual rights.
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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 Chapter 4.85 shall be added to
Municipal Code as follows:
4.85.010 Statement of Purpose
Santa Monica's City government exists to serve the people of Santa Monica.
They have the right to witness monitor, and control their government. Governmental
transparency effectuates these rights and makes it possible for the people to trust that
their government serves the common good Transparency includes making available
information about the identity of persons groups and entities that seek to influence
governmental decisions particularly when that influence is not exerted in public.
The people of Santa Monica acting individually, in groups and through entities
also have the right to petition and influence their government to secure their own
interests even to do so anonymously if they so desire. Lobbying effectuates those
rights and is protected by the First Amendment Moreover, lobbying can contribute
positively to sound decision making by providing information to decision makers.
However, if kept secret lobbying activities may undermine transparency and erode
public trust in government by causing the people to fear that their government serves
special interest and not the general welfare.
This
law is
intended to strike a
balance between
these competinq rights and
interests
Its purpose
is two-fold: first
to effectuate the people's
right to monitor their
`a
government's work and thereby ensure that it functions to promote the general welfare;
and second to preserve the right of individuals groups and entities to petition and
influence their government and thereby advance their own interests.
4.85.020 Definitions
For purposes of this chapter, the following definitions shall apply.
(a) City Official means the members of the CitV Council, Planning Commission,
Architectural Review Board Landmarks Commission Personnel Board, City Manager
City Attorney City Clerk Police Chief Fire Chief, other CitV Department Heads,
Building Officer City Engineer, and Zoning Administrator.
(b) Client means anV person entity, organization or group that compensates a
lobbyist for lobbying or on whose behalf compensated lobbying occurs.
(c) Contact or Contacting means anV direct or indirect communication with a
City Official undertaken by anV means oral written or electronic including, but not
limited to through an agent associate or employee and undertaken in any context
including at a public meeting.
(d) Compensation or Compensated means any economic consideration for
services rendered or to be rendered in the future to a client including, but not limited to,
payment distribution transfer, loan deposit or other rendering of money, property
services or anything else of value totaling $1,000 or more in any consecutive 3 month
period.
(e) Lobbying or Lobbying Activity means influencing or attempting to influence
a City Official with regard to a legislative or administrative action of the City.
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(f) Lobbyist means any person or entity, acting directly or through others, who
engages in or who intends to engage in Lobbying or Lobbying Activity on behalf of one
or more Clients from whom the lobbyist has received or has entered into an agreement
for Compensation for LobbVing Activity.
4.85.030 Exemptions
The following are exempt from the requirements of this chapter:
(a) Public official acting in their official capacities;
(b) Persons engaged in creating publishing or broadcasting news items
editorials commentaries and similar communications;
(c) Those whose attempts to influence government action are limited to
appearing at public meetings or preparing processing or submitting writings for
consideration or use at public meetings if their communications are part of the public
record;
(d) CitV employees and contractors providing reports or recommendations to
CitV Officials as part of their work for the CitV;
(e) Persons representing themselves attemptinq to obtain decisions relating
to their own properties or businesses;
(f) Anyone submitting a bid or proposal for a CitV contract or negotiating the
terms of a City contract for goods or services;
(g) Persons lodging "whistleblower" complaints with the City
(h) Persons who meet with the City Attorney or City Clerk regarding any claim or
litigation matter;
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(i) Persons whose communications relate solely to a memorandum of
understanding or collective bargaininq agreement between the City and an employee
organization;
(i) Communications about solely ministerial actions of the City or City
enforcement actions;
4.85.040 Registration Requirement
A lobbyist shall register with the City Clerk no later than ten days after qualifying
as a lobbyist under this chapter, on a registration form provided by the City, and shall
thereon disclose:
(a) name;
(b) business street and mailing address;
(c) e -mail address;
(d) telephone number;
(e) the names of all owners of the lobbyist's business if the business is a sole
proprietorship or partnership of less than 5 members,
(f) a description of the nature of the business entity or organization;
(g) the name business address and phone number of each client receiving
lobbying services;
(h) the nature of each client's business;
(i) a brief description of the governmental decision that the lobbyist seeks to
influence on each client's behalf;
f j) the name of each person employed or retained by the lobbyist to engage
in lobbying activities on each client's behalf.
4.85.050 Quarterly Reports of Lobbying Activities
A A lobbyist shall file a quarterly report for every calendar quarter during
which the lobbyist retains that status with the City Clerk not later than fifteen calendar
days after the end of the qualifying quarter, whether or not any lobbying activities have
occurred during such period. Electronic reporting may also be permitted by the City
Clerk.
B. Quarterlv reports must be filed by April 15, Julv 15, October 15 and
January 15 for the prior calendar quarter, and are delinquent thereafter.
C. Each quarterly report must contain the same information as required to be
disclosed in the registration report, for those activities occurring in that quarter. If a
lobbyist has terminated all lobbying activities during such quarter, the lobbyist may file a
declaration of termination with the quarterly report. The final quarterly report must
include disclosure of any lobbying activities during the quarter of termination.
D. Each quarterly report must disclose:
(1) the total compensation promised or received from each client listed
during the reporting period for lobbying activity within the following ranges: ($0.00
- $500) ($501 - $1,000), ($1,001 - $10,000), ($10,001 - $100,000), (over
$100,000):
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(2) Contacts made with City Officials or City Officials -elect during the
preceding calendar quarter for the purpose of influencing or attempting to
influence legislative or administrative action. Contact information must include a
brief description of the item(s) of legislative or administrative action the lobbyist is
seeking to influence and the number of contacts in the following ranges: (1) (2 —
5), (6 — 10) or (11 or more);
(3) Activity expenses such as payments that directly benefit any City
Official, City Official -elect or member of his or her immediate family or domestic
partner made during the preceding calendar quarter. Activity expenses include
gifts as defined by Chapter 12.08 honoraria consulting fees salaries and other
forms of compensation but do not include campaign contributions
E. Records pertaining to the registration and quarterly reports must be
preserved by the lobbyist for inspection and audit by the City for a period of five years
from the date of production.
4.85.060 — Prohibitions
A lobbyist shall not do any of the following:
(a) Intentionally deceive or attempt to deceive a City Official as to any
material fact pertinent to any proposed or pending Governmental Decision;
(b) Act or refrain from acting with the purpose and intent of placing any City
Official under personal obligation to the lobbyist;
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(c) Cause or influence the introduction of any ordinance, resolution appeal
application petition or amendment thereto for the purpose of thereafter being employed
as a lobbyist to secure its granting denial confirmation, rejection passage or defeat;
(d) Cause any communication to be sent to a City Official in the name of a
fictitious person, group or entity or in the name of a real person group or entity without
their consent;
(e) Represent directly or indirectly that the lobbyist can control or obtain a
vote or action of any City Official.
4.85.070 Lobbyist Registration Fees
A lobbyist's annual registration fee is hereby established to be set and
periodically adjusted by City Council resolution in an amount sufficient to cover the
costs of administering this Chapter.
Such fee may be prorated for lobbyists who initially register after June 30tH
4.85.080 Remedies
(a) Criminal Penalty. Anv person who is convicted of violating this Chapter
shall be guilty of a misdemeanor and upon conviction shall be punished by a fine of not
greater than one thousand dollars or by imprisonment in the County Jail for not more
than six months, or by both such fine and imprisonment.
(b) Civil Action. Any person including the City may enforce the provisions of
this Chapter by means of a civil action. The burden of proof in such cases shall be
preponderance of the evidence. A violation of this Chapter may be asserted as an
affirmative defense in an unlawful detainer action.
(c) Iniunction. Any person who commits an act proposes to commit an act or
engages in anv pattern and practice which violates this Chapter may be enioined
therefrom by any court of competent iurisdiction An action for injunction under this
subsection may be brought by any aggrieved person by the City Attorney, or by anv
person or entity who will fairly and adequately represent the interest of the protected
class.
O Penalties and Other Monetary Awards Any person who violates or aids or
incites another person to violate the provisions of this Chapter is liable for actual
damages suffered by the aggrieved part or statutory damages in the sum of between
one thousand dollars and ten thousand dollars whichever is greater, and shall be liable
for such attorneys' fees and costs as may be determined by the court in addition
thereto. The court may also award punitive damages to any plaintiff, including the City,
in a proper case as defined by Civil Code Section 3294 The burden of proof for
purposes of punitive damages shall be clear and convincing evidence
(e) Nonexclusive Remedies and Penalties The remedies provided in this
Chapter are not exclusive and nothing in this Chapter shall preclude any person from
seeking any other remedies penalties or procedures provided by law.
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, is hereby repealed or modified to that extent necessary
to effect 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
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court of 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 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 30 days from its adoption.
APPROVED AS TO FORM:
M RSH NE MO / RIE
Ci ttorn y
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