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HomeMy WebLinkAboutProposed Ordinance for Political Campaign Contribution Limit REQUEST FOR CITY COUNCIL ACTION Submitted by Gail Hutton Department City Attorney All Date Prepared December 10, , 1979 Backup Material Attached x Yes No Subject Political Campaign Regulations City Administrator's Comments D_'" til 1 � a 17 Di screti onary with Council . Y Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions: STATEMENT OF ISSUE: Whether to introduce the Home Council' s proposed political campaign ordinance. RECOMMENDATION: Council, in its discretion, may introduce the ordinance, not introduce it, amend it , or table it . ANALYSIS: Analysis of this ordinance will be forthcoming. Since there are only three and one-half days between Council meetings and the next agenda deadline, there was insufficient time to prepare an analysis of the proposal; we will endeavor to supply a detailed analysis in the forth- coming CA, prior to consideration of the proposal by Council.. This ordi- nance, promulgated by the Home Council, was previously tabled by the Council, and the vote taken at the meeting of December 3, 1979, was to bring it back from the table and have it prepared for the agenda. It has been placed in ordinance form without any substantive changes from the Home Council' s draft . Note that there is a blank on page 4 , relating to the amount of fees paid by "influence brokers," which Council will need to deter- mine. FUNDING SOURCE: The major responsibilities under this ordinance are delegated to the City Clerk. V PIO V78 HOME COUNCIL .®R P.O. BOX 1601, HUNTINGTON BEACH, CALIF. 92647 A OPEN LETTER November 29, 1979 City Council City Hall Huntington Beach California 92648 Dear City Council Members, Members of the HOME Council last evening authorized its officers to make a last ditch attempt to capture your attention on the problem of past campaigning abuses and to again solicit your support of the campaign reform proposal put before you in August of this year. Specifically we request that the HOME Council campaign reform proposal be "brought back to the table" on Monday, December 3rd. To refresh your memory, HOME Council brought the proposed campaign reform draft to you at your August 6th meeting. At that time a motion to place the proposal on a future agenda failed. HOME Council was back on August 20th, only to see a motion to table (indefinitely) pass. During the interim we have waited patiently for the City Council to give direction to the City Attorney in regards to a new ordinance or the amendment and/or repeal of the existing, inadequate ordinance which was gutted by earlier court actions . Not wanting your body to fail in your responsibility. to act we must make you aware of the fact that time grows short: We know that it takes a minimum of two weeks to prepare a ordinance for publication, two readings, and thirty days before it goes into effect. The 1980 election filing period rapidly approaches (second week of January) . If you fail to act on a campaign ordinance now, you will not be atle to implement any ordinance before fund raising efforts begin. There are four campaign problems unique to the City of Huntington Beach. They are as follows : 1 ) Individual developers c:_rcumventing the intent of the $200 limit by donating in the name of the many partner— ships they control , thereby making several contributions to each chosen candide, 2) The direct election participation of uncontrolled com- mittees (PACs) that heavily support candidates by direct mail advertising, etc . Through PACs developers are again circumventing the intent of the $200 individual contribution limit. UNCONTROLLED COMMITTEE SPENDING EXCEEDED $32,000 IN THE 1978 ELECTIONS. 3) Candidates overspending money taken from their own pocket as they get caught up in the big money election race . 1978 CANDIDATES CONTRIBUTED OVER $887000 TO THEIR OWN CAMPAIGNS. Unfortunately court decisions do not allow legislation to control this factor, but if overall spending (1978 TOTAL SPENDING WAS $171 ,000) were reduced candidates would undoubtedly reduce the amount they pour into their own election campaign fund. 4) Influence Brokers - Although not a problem in past elec- tion periods, this problem lies on the horizon as several of Huntington Beach' s top administrators have resigned to become involved in the local building industry as either consultants or contractor/developers. Examples are Richard Harlow, H. E. "Bill" Hartge , and John Behrens. It is our opinion that we have acted responsibly in bringing a community problem, with a reasonable solution proposal, to the attention of the City Council in a timely manner (Aug. 179 ) allow- ing sufficent lead time for study, decision and codification. Timing and publicity certainly allowed plenty of time for alternate proposals to be put forward by City Council members or by the business community. In the absence of any alternate proposals and given the immed- iate need to act, we earnestly solicit your approval of the (tabled) proposal before your body. It is our opinion that should you fail to act now to resolve these election abuses, unique in West Orange County, such will undoubtedly be interpreted b;y the public to be and endorsement of such practices. Again, we solicit your immediate action. Sincerely yours, HOME Council Members Lorraine Faber Secretary Encl . 1978 Election Spending Survey Synopsis & Draft Copy of Campaign Ordinance all H13ME C13UPJCIL P.O. BOX 1601, HUNTINGTON BEACH, CALIF. 92647 1978 ELECTION ANALYSIS CITY OF HUNTINGTON BEACH Candidate Total. Campaign "$s Spent Candidate ' s Own $s CITY COUNCIL • THOMAS, John $21 ,331 $21 ,331 • MANDIC, Bob 4,336 4, 116 • BAILEY, Ruth 3 , 932 300 • MAC ALLISTER, Don 8 , 502 896 BARTLETT, Ted (Incumbent) 3 ,965 00 O'CONNOR, John 4,997 29500 COEN, Alvin (Incumbent) 1 , 550 00 OSTERLUND, Charles 1 , 270 100 HOFFMAN, Frank 14, 899 6,400 TIZZARD, Bill 1 , 116 400 ZSCHOCHE, Ed 883 868 OFFSTEIN, Gordon 550 to 600 400 BROWN, Don Short Form (less than $200) CHANDLER, Andrew " HALKYARD, Shirley it KANE, Steve it Controlled Committees Total $67,331 $37,311 Uncontrolled Committee ; Total Pro Rata 4/5 Share $25 ,694 City Council Total $93 ,027 CITY ATTORNEY BONFA, Don (Incumbent) $15 ,782 $119050 BAME, Jerome 19,406 71705 HUTTON, Gail 37,069 32, 170 $72, 257 $50,925 Uncontrolled Committees Total Pro Rata Share 1 /5 6,423 $782680 TOTAL CAMPAIGN DOLLARS SPENT. . . 171 ,707 Elected 2nd Draft /• HOME COUNCIL. J. -//a~O Afa&al aod e"x"ae ewawd P. O. BOX 1601, HUNTINGTON BEACH, CALIF. 92647 A PROPOSAL POLITICAL CAMPAIGN ORDINANCE SYNOPSIS The purpose of this proposed political campaign ordinance is to insure that future decisions of the Huntington Beach City Council and the Huntington Beach Planning Commission are not unduly influenced by campaign contributions. To achieve this purpose this ordinance is designed to discourage those who do business with Huntington Beach government from making large con— tributions to city - council election campaigns . This ordinance is also intended to broaden the base of funding for city council election campaigns by eliminating those who do business with the City as a prime source of campaign dollars. The proposed ordinance does three things : 1 . It prohibits members of the City Council from voting on matters that have a material financial effect on their major campaign contributors (who are defined as those who contribute more than $200 to a council— person' s campaign) . 2 . It regulates "City Influence Brokers" (who are defined as those who are employed to influence City decisions and who contribute more than $50 to city council campaigns) . 3 . It limits the activity of uncontrolled political action committees (PACs ) so that such committees may expend on behalf of, or contribute to, all city council candidates no more than $500. This ordinance is sensitive to constitutional and other legal constraints and is simple to administer. 9/79 CITY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION III IN IINLI))N III 11 To HONORABLE MAYOR AND MEMBERS From GAIL HUTTON OF THE CITY COUNCIL City Attorney Subject PROPOSED CAMPAIGN REFORM Date December 14, 1979 ORDINANCE We have reviewed and analyzed the Home Council' s proposed cam- paign ordinance. In considering the ordinance in the limited time available, we have considered relevant state and federal statutes, court decisions, and the county ' s parallel ordinance . We have the following comments briefly reviewing the contents of the proposed ordinance . Please note that we remark about the legal issues only, and do not address the desirability or wisdom of the ordinance, since these considerations are properly legislative, not legal . The proposed ordinance would replace existing provisions of the Huntington Beach Ordinance Code limiting campaign contributions by any person to $200 per candidate. The focus of the proposed ordinance (herein called "Ordinance" ) is to remove limitations on the amounts of campaign contributions, except in the case of influence brokers and political action committees (PAC) . Instead, the ordinance would make it illegal for a member of the City Council to make, participate in making, or in any way attempt to use official position to influence a government decision in which he knows he has a financial interest . Such a financial interest would exist if it is easily foreseeable that the deci- sion would have a material financial effect on a major campaign contributor of that member. A major campaign contributor is a person who has contributed more than $200 over 48 months to the member of the City Council or a controlled committee of that mem- ber. We will not here extensively review the provisions of the Ordi- nance, because they are largely self-explanatory . The Ordinance basically requires the major campaign contributors to be listed. There are extensive provisions relating to influence brokers , who include persons who contribute more than $50 over the past 12 months, and are employed for consideration to communicate with members of the City Council, staff assistants, city employees , and members of the Planning Commission for the purpose of influenc- ing any action. Presumably this would include architects , engineers , and various professionals retained by an applicant to assist in presenting a project to city employees or officials . This probably does not include attorneys insofar as they are representing a client in the performance of legal services, since the licensing of attorneys is preempted by the state. Influence brokers must l ag HONORABLE MAYOR AND MEMBERS Page Two OF THE CITY COUNCIL be registered, listed, and are limited in their campaign contribu- tions to $100 in the aggregate in any 12-month period . Political action committees are similarly limited in their expenditures , in an amount up to $500 in any 12-month period in the aggregate. There are also provisions relating to gifts by a city influence broker, major campaign contributor, or political action committee, or any other person who sells goods or services to the city . Viola- tion of the Ordinance constitutes a misdemeanor and, in a unique provision, makes any vote of a member of the City Council void . In addition to the change of focus from limitations on contribu- tions for a candidate to a prohibition on voting on matters affect- ing major campaign contributors , the proposed ordinance makes some other changes from the existing provisions . Violation of the exist- ing ordinance is an infraction; violation of the proposed ordinance would constitute a misdemeanor . The basic difference is that a jury trial is available in misdemeanor cases , but not in infractions , and that a jail term may be imposed in misdemeanors, but not in infractions . Also, provisions requiring candidates to be electors of the city for not less than 30 days prior to filing nomination papers have been deleted . That section was in conflict with Govern- ment Code §34882, providing that a person is not eligible to hold local office unless he resides in the geographical area of the city at the time the nomination papers are issued to the candidate . The 30-day limitation was also constitutionally suspect as an improper restriction on the freedom of expression and the right to travel. The existing ordinance does not bar voting, but the proposed ordi= nance would ban voting in any decision where it is reasonably fore- seeable that the decision will have a material financial impact on a major campaign contributor. Not only would a vote taken in viola- tion of this provision expose the council member to criminal punish- ment , the vote would be void. This latter restriction would intro- duce substantial uncertainty into council decisions , since it may - not be determined until a much later time that a vote was improper. Council should carefully consider the effect that such a voiding provision would have upon the finality of council decisions without any time limit for determining the voidness . The proposed ordinance is substantially similar to the county ' s Tin Cup ordinance . We will here highlight some of the basic dif- ferences . In the county ordinance, the determining amount of a major campaign contributor is $1,000 ; in the Home Council ' s ordi- nance, it is $200 . Likewise , the determining amount for a county influence broker is one who has contributed $250 over the past 12 months; in the Home Council ' s proposed ordinance, it is $50 . The county limitation on contributions by influence brokers is $500 , the Home Council ordinance is $100 . HONORABLE MAYOR AND MEMBERS Page Three OF THE CITY COUNCIL Other differences are that the county ordinance provides for up- dating the list of major campaign contributors monthly, whereas the city version is quarterly (§2 . 04 .050) . Perhaps through over- sight, this distinction was not maintained in §2 . 04 . 110, which required the list of influence brokers to be updated monthly, the same as the county ordinance . The county ordinance does not provide for any fee required of city influence brokers , but the Home Council version does (§2 . 04 . 090) . In one substantial difference, the county ordinance precludes gifts by influence brokers , but the Home Council version precludes the City Council from accepting gifts from a city influence broker, a major campaign contributor, or PAC (52 .04 . 150) . Also, the county ordinance does not address the problem of political action committees, which is covered in §2 . 04 . 130 and §2 . 04. 140 of the Home Council ordinance . These are the major distinctions between the county and the proposed ordinance. We are attaching hereto a memorandum from the County Counsel to the Chairman of the Board of Supervisors dated October 24 , 1977 , that .provides a fine analysis of the county proposal . What it says about the county is equally applicable to the city in this context . That opinion notes that the campaign reform ordinance is designed to be complementary. to the Political Reform Act of 1974 (Government Code §81000, et seq. ) The County Counsel ' s opinion concludes , after reviewing the relevant case law and examining the ordinance section by section, that the provisions of the ordinance are legal and that the ordinance, at least on its face, is constitutional, even though there is a potential that it may be unconstitutionally applied in certain situations . The County Counsel cautions that the ordinance, or portions of it, might be subject to a contrary conclusion by a court in the litigation context . However, we are not aware of any court decision at this time which has held the ordinance, or any portion of it, unenforceable . In fact, cities are expressly empowered by ordinance or resolution to limit campaign expenditures or contributions in municipal elec- tions . Elections Code §22808 . As a general proposition, local governments may constitutionally place reasonable limitations on campaign contributions . The United States Supreme Court has held that it is an unconstitutional limita- tion on the right of free expression to limit independent political expenditures by individuals and groups, and affix ceilings on over- all campaign expenditures by candidates . The court commented that , "A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues dis- cussed, the depth of their exploration, and the size of the audience reached. " Therefore, a $1,000 ceiling on spending relative to a HONORABLE MAYOR AND MEMBERS Page Four OF THE CITY COUNCIL clearly identified candidate improperly excluded citizens and groups from protected First Amendment communication. However, by contrast with the limitation on expenditures for political expression, a limitation on the amount that any person or group may contribute to a candidate or political committee was held to entail a "marginal restriction on the contributor ' s ability to engage in free communication . " Therefore, reasonable limitations on contributions are valid, while limitations on expenditures are not . See Buckley v. Valleo ( 1976) 424 U.S . 1, 19-22 . The recent decision of the California Supreme Court held portions of the Political Reform Act of 1974 unconstitutional . Fair Polit- ical Practices Commission v. Superior Court of Los Angeles County, 1979 157 C .R. 655 . A section of the Political Reform Act pro- hibiting lobyists from making contributions was held unconstitu- tional. However, the proposed ordinance does not prohibit such contributions, but merely limits them, so the limitation is argu- ably valid. The court held that provisions requiring disclosure of financial transactions with state officials violated the con- stitutional right to petition for grievances, but there are no such disclosure requirements in the proposed ordinance . The court went on to hold that the various other reporting requirements, regis- tration requirements , and limitations on gifts , did not constitute substantial limitations on petition and speech rights and were thus valid . Therefore, if the limitations on contributions by influence brokers is valid, it does not appear that the proposed ordinance contravenes the language of the California Supreme Court in the F.P .P .C . case . Under the Buckley case, it appears that limitations on contributions will be upheld if government demonstrates a suf- ficiently important interest and employs a means closely drawn to avoid the unnecessary abridgment of associational freedom. There- fore, while an outright ban on contributions is unconstitutional, a reasonable limitation is arguably valid . Thus , we do not see that the F. P.P .C. case discloses any substantial problem insofar as limitations on contributions are concerned . We do, however, see substantial difficulties with the prohibition contained in §2 . 04 . 140 prohibiting expenditures on behalf of can- didates by Political Action Committees . This appears to be a direct contradiction of the Supreme Court ' s holding in the Buckley case, supra. While we can limit contribution to candidates, we cannot limit expenditures to communicate political views . The ordinance is vague on whether employee representative groups would constitute influence brokers for purposes of the ordinance . A literal reading of the language of §2 .04 . 080 would appear to in- clude employee groups within the ambit of city influence brokers . While it is arguable that employee groups would not be so included, we suggest that this should be clarified in the ordinance . HONORABLE MAYOR AND MEMBERS Page Five OF THE CITY COUNCIL The significant focus of the ordinance is to make it illegal for a member of the City Council to participate in or influence a decision if it is reasonably foreseeable that he or a major cam- paign contributor have a financial interest , distinguished from the effect of the decision on the public generally . Therefore, it is the member of the City Council which would be liable for criminal sanctions, and not the major campaign contributor. Further, the restriction on participating in or influencing governmental decisions would apply to a member of the Council not only when serv- ing on the Council, but it appears that it would also apply to his participation in any governmental decision. This would include voting as a member of any board, commission, committee, or special district to which the Councilmember may be appointed. In determining whether an official has a financial interest , the section appears to incorporate the language contained in the Political Reform Act of 1974 . Thus , there is a financial interest if it is reasonably foreseeable that the decision will have a material fi- nancial effect, distinguishable from its effect on the public generally, on any business entity in which the official has an investment worth more than $1,000 , any real property in which the official has an interest worth more than $1,000 , any source of in- come aggregating $250 or more in value received by the official within twelve months prior to when the decision was made, or in a business entity in which the official was a director, partner, trustee, employee, or holds a management position. In addition, a financial interest will exist where there is such an effect on a major campaign contributor. As a result , the ordinance will impose substantial new duties on members of the City Council to examine the reasonably foreseeable effects that any decision will have not only on themselves, but on a major campaign contributor of that Councilmember . SUMMARY: The ordinance is largely constitutional. However, the following legal problems do appear : 1. Section 2 . 04 . 110 should be amended to provide for updating the list of influence brokers quarterly, instead of monthly , if it is to be consistent with §2 . 04 . 050 . However, because of the sub- stantial liability exposure this ordinance imposes on elected of- ficials, perhaps both of those sections should provide for mont;h].y lists, so that Councilmembers can be acquainted with the identity of major campaign contributors . 2 . Section 2 . 04 . 140 appears to be unconstitutional to the HONORABLE MAYOR AND MEMBERS Page Six OF THE CITY COUNCIL extent that it limits expenditures by Political Action Com- mittees . 3 . Section 2 . 04 . 180 , providing that any vote of a member of the City Council is void, introduces substantial ambiguity into City Council proceedings , and it is very likely unconstitutional. While this ordinance may effect the right of a councilmember to vote, and subject that member to punishment for violating the ordi- nance, it does not appear that it can take away his power to vote, which is vested by the city Charter. Furthermore, in many situa- tions, persons would acquire vested rights anyway in decisions made by the Council. 4 . There should be some clarification whether the employee representative groups constitute city influence brokers'. 5 . Note that a person is not a city influence broker merely because he is employed to influence an action of the City Council or Planning Commission. He must also have contributed more than $50 over the past twelve months . Therefore, the ordinance will not apply to many persons who seek to influence Council decisions but who do not themselves make contributions . On the other hand, the definition of influence broker appears to unwittingly include pro- fessionals who meet with city employees or officials , including by telephone, who are retained by an applicant to assist in presenting some project to the city . 6 . Please note that there is typographical error in 2 . 04 . 090 . A copy on file with the City Clerk has been corrected . The words "he is employed" have been added to the fourth line of that section, and, therefore, subsection (a) now reads as follows : "Each city influence broker shall register by filing with the City Clerk a recent 3 X 4 inch photograph of himself, a written authorization to act as a city influence broker from each person by whom he is employed or with whom he contracts a statement containing. . . . " /K/40�_ GAIL HUTTON City Attorney GH:RCS :ps •'' Cuunfy of. Orange MEMO • DATE: October_ 24, 1977 Honorable Thomas F. Riley �• Chairman oEPT/oisT: Board of SiiperVisors� �o Adrian Kuyper, County Counsel OJECT: Proposed Orange County Campaign Reform Ordinance By memorandum dated. October 12 , 1977 , you requested that we review as to legality and feasibility the proposed Campaign Reform Ordinance drafted by the Campaign Reform Committee and submitted to you by letter dated October 12, 1977 , by Robert Joe Vasquez, Chairman of said Committee. To ascertain the legality of the proposed Campaign Reform Ordinance (hereinafter referred to for simplicity as the "proposed ordinance" or the "ordinance") we considered it from two perspec- tives : (1) whether it or any part of it violated the United States or California Constitutions; (2) whether it was consistent with or conflicted with existing statutes concerning the regulation of po- litical activities . To- accomplish the latter we found it necessary to compare the provisions of the proposed ordinance with the Polit- ical Reform Act of 1974 (Government Code Section 81000 et seq.; and hereinafter referred to as the "PRA") and the County' s existing lobbyist ordinance (Codified Ordinances of the County of Orange Section 1-1-80 et seq. ) . In reviewing the proposed ordinance we have considered it article by article an3 section by section, first comparing it to existing statutes and then discussing any issues .which bear on the validity or constitutionality of the section under consideration. - ARTICLE 1 (GENERAL PROVISIONS) Section 1-6-1 provides that the ordinance shall be known as the Orange County Campaign Reform Ordinance. Section 1-6-2 states that the purpose of the ordinance "is to insure that the decisions of the Orange County Board of Supervisors and the Orange County Planning Commission are not unduly influenced by campaign con- tributors . " We believe that it is noteworthy that this purpose is consistent with the Findings and Declarations contained in Sec- tion 81001 of the PRA and specifically with Section 81001 (b), which states the following: "Public officials , whether elected or ap- pointed, should perform their duties in an impartial manner, free from bias caused by their own financial interests or the financial interests of �ersons who have supported them; . . . and Section 81001(c) , which states the following : "Costs of conducting election campaigns have increased greatly in recent years , and candidates have been forced to fi- nance their campaigns by seeking large contributions from lobbyists and organ- Memo to Honorable Thomas F. Riley Page 2 • . October 24, 1977 izations who thereby gain disproportionate influence over governmental decisions ; Section 1-6-3 states that the proposed ordinance is intended to supplement the PRA and that any words and phrases used in the ordinance unless defined therein shall have the meaning that they have in the PRA. After reviewing the ordinance it is obvious that almost all of it is patterned after the PRA and in many places the same language that is used in the ordinance is also used in the PRA. We see no constitutional or other legal problems with Article 1 of the ordinance. We believe it is noteworthy that to understand or interpret the provisions of the ordinance it is necessary to re- fer to the Political Reform Act of 1974 . ARTICLE 2 (MATTERS AFFECTING MAJOR CAMPAIGN CUNTRIBUTORS) Article 2 of the proposed ordinance would prohibit a member of the Board of Supervisors from making :or participating in the - making of a governmental decision if it is reasonably foreseeable that the decision will have a material financial effect on a major campaign contributor of that member. A major campaign contributor is defined (Sec. 1-6-4(c)) as a person who contributes more than $1,000 in the aggregate over the past 48 .months to the member or a controlled committee (which is defined in Government Code Section 82016) of that member. Article 2 is patterned after Chapter 7 (Government Code Sec- tions 87000-87312) of the PRA which pertains to Conflicts of Inter- est . Section 1-6-4 (a) of the ordinance , which prohibits members of the Board of Supervisors from making or participating in the making of a governmental decision in which they know or have reason to know they have a financial interest , is exactly the same as Section 87100 except "Section 1-6-4(a) only pertains to members of the Board of Supervisors whereas Section 87100 pertains to all public officials at any level of state or local government , which includes members of county boards of supervisors (Govt . Code Sec . 82041) . Government Code Section 87103 provides that an official has a "financial interest" in a decision within the meaning of Section 87100 if it is reasonably foreseeable that the decision will have a material financial effect , distinguishable from its effect on the public generally, on (a) any business entity in which the official has an investment worth more than $1, 000; (b) any real property in which the official has an interest worth more than $1 ,000; (c) any source of income acgregatin- $250 or more in value received by the official within 12 months prior- to when the decision is made ; or (d) any business entity in which the official is a director , part- ner; trustee, employee, or holds a management position. Memo to Honorable Thomas F. Riley Page 3 October 24, 1977 Section 1-6-4(b) of the ordinance; which is patterned after Government Code Section 87103 , provides that a member of the Board of Supervisors has a "financial interest" in a decision if it is reason- ably foreseeable that the decision will have a "material financial . . effect," distinguishable from its effect on the public generally, on a major campaign contributor of that member. In essence, what Section 1-6-4(b) would do is to add to the list of financial interests listed in Section 87103 any person who has contributed more than 81 , 000 in the aggregate to the member of the Board of Supervisors in question during the 48 months before the decision in question was made. Arti- cle 2 in general and Section 1-6-4(b) in particular would force members of the Board of Supervisors , before making, Participating in the making or influencing a decision, to ascertain whether the decision will have a "material financial effect" on a major .campaign contribu- tor of theirs . Sections 1-6-4(d) through (g) further define "major campaign contributor." If a person who contributes more than $1 , 000 to a member of the Board of Supervisors is an officer or director in a corporation, partner 'in a partnership or owns a business entity, that corporation, partnership , or business entity would also be a major campaign contributor unless the person filed a statement to the effect that the contribution was unrelated to the interests or business of the corporation, partnership , or business entity. Sec- tion 1-6-5 would require a major campaign contributor to file with the County Clerk a list of all corporations in which he is an offi- cer or director, partnership in which he is a partner , and business entities which he owns . Section 1-6-6 would require the- County Clerk to compile, maintain, and distribute lists of major campaign contributors . Section 1-6-8 would provide that a member is not guilty of a violation of Section 1-6-4 if he in good faith relies on the list required to be compiled by the Clerk in determining who his major campaign contributors are. Section 1-6-7 would provide that Section 1-6-4 would not prevent a member from participating in a decision to the ex- tent it is legally required for the decision to be made. This would not pertain to voting to break a tie vote . This section• is the same as Government Code Section 87101•. As to the legality of Article 2 of the ordinance, it appears to us that it is consistent with and does not conflict with the PRA. As indicated above, basically all Article 2 would do is identify an additional financial interest (sources of campaign contributions of more than $1 , 000) which could lead to a poten- tial conflict of interest by a member of the Board of Supervisors . Further , it appears to us that the addition of this additional requirement'• on the activities of members of the Board of Super- visors is authorized by Section 81013 of the PRA, which provides 4s follows : Honorable Thomas F. Riley Page 4 October 24, 1977 "Nothing in this title [Title 9* of the PRA] prevents the legislature or any other state or local agency from imposing additional requirements on any person if the require- ments do not prevent the person from com- plying with this title . We' do recognize that an argument could be made to the effect that Article 2 is in conflict with the PRA and, thus , invalid. It could be argued that Section 87103 specifically lists financial interests that could result in a conflict of interest and that Section 1-6-4(b), by identifying another financial interest , conflicts with Section 87103 , especially since that section lists as a financial interest sources of income and income is defined in Section 82030 of the PRA by specifically excluding campaign contributions . Further , it could be argued that "imposing additional requirements on any person" as used in Section 81013 contemplates things such as filing reports as opposed to a substantive limitation on the conduct of a public of- ficial. To the contrary, while it could be argued that the 'addi- tional requirements" of Section 81013 does not provide authorization for Section 1-6-4(b) , it does not prohibit such a section because that section would not prevent a member' of the Board of Supervisors from complying with the PRA. In summary on this point , although not free from doubt , we believe that Article 2 of the proposed ordinance would be found to be consistent with and not in conflict with the PRA. Even assuming the PRA does not provide authority for a County to adopt a statute such as Article 2 , we believe that a County could adopt such a statute under its police power provided for in California _ Constitution , Article XI , Section 7 . We believe that the police power is broad enough to include the regulation of political acti- vities which effect County government . As to the constitutionality of Article 2 , there are two issues : (1) whether the conflict of interest (Chapter 7) portions of the PRA upon which Article 2 is based , are constitutional; and (2) as suming constitutionality, whether the imposition of an additional potential type of conflict of interest (sources of campaign contri- butions) is constitutional . As to the first issue , to our knowledge , no court has considered the constitutionality of Chapter 7 . But the California Supreme Court has considered and found constitutional the Governmental Conflict of Interest Act (formerly Government Code Section 3600 et seq . and commonly referred to as the Moscone Dis- closure Act) which was passed in 1973 and, in effect , was repealed by the Political Reform Act of 1974. Cty. of Nevada v MacMilletl, 11 Cal. 3d 662. The statutory language prohibiting conflicts of interest con- sidered in MacMillen is almost identical to that contained in Chap- ter­7 of the PRA. Section 3625 (a) of the 1973 Act prohibited offi- cials from having economic interests which are in substantial con- Honorable Thomas F. Riley . Page 5 • October 24, 1977 ' flict with the exercise of their duties (there is no similar pro- vision -in the Political Reform Act) . Section 3625 (b) provided that "no public official shall participate in, or in any way at- tempt to influence, governmental action or decisions relating to any matter within the responsibilities of his agency in which he mows or has reason to believe he has an economic interest . " Sec- tion 3625 (c)- provided that an official has an economic interest in a matter "if the action or decision will have a material economic effect on" various listed things , which are exactly the same as those which are now listed in Government Code Section 87103 . An exception was made to former Section 3625 (b) if the action or de- cision affects the official 's economic interest "to no greater ex- tent than any other . . . member of the public, segment of the public or an industry, profession or occupation. " Sec . 3625 (e) . It was contended that the 1973 Act was unconstitutionally vague and unconstitutionally overbroad and, thus , invaded the fundamental right of privacy without serving a reasonable legisla- tive purpose. The Supreme Court held that the Act , on its face, contained sufficient assurances that unnecessary intrusions into Versonal privacy would not occur , and that it was sufficiently definite in its terms to give adequate warning to public officials Of its prohibitions and requirements . The Court took cognizance that the Act used terms such as substantial conflict" and "material economic effect" and that these were relative terms subject to some interpretation, and that reasonable men may differ with respect to the meaning of those terms . The Court found that these terms were not so uncertain and indefinite as to cause the 1973 Act to be void on its face, and stated that the provisions of the Act must be given a reasonable and practical construction in accordance with the probable intent of the Legislature. At page 673 , the Court quoted the following : "Reasonable certainty is all that is required. A statute will not be held void for uncertain- ty if any reasonable and practical construc- tion can be given the language . . . . It will be upheld if the terms may be made rea- sonably certain by reference to other defin- able sources ." Also, at pages 673-674, the Court stated "that the 1973 act 'as sufficiently definite in its terms to give adequate warning to public officials of its prohibitions and requirements ." Further, the Court indicated that "as made clear from the act ' s statement Zr legislative purposes , the act was enacted to assume an indepen- dent , impartial and honest government" and that a "substantial" conflict or a "material" effect upon economic interests is a con- :'lict or effect which could undermine the foregoing goal by pro- viding economic incentive for deciding a particular official mat- Nonorable .Thomas F. - Riley Page 6 October 24, 1977 ter without regard to its merits, or with regard to its effect upon the official' s pocketbook. We conclude from the decision in Country of Nevada v. MacMillen, supra, and especially the part of the decision upholding the nrohi- ition on a public official from making a decision which will have a "material -economic effect" on his economic interests , that Sec- tions 87100 and 87103 of the PRA and the portions of Article 2 of the proposed ordinance which are based on those sections are con- stitutional . This leaves the question of whether Article 2 is unconstitution- ally- vague and overbroad because it prohibits members of the Board from making decisions which will have a "material financial effect" on their campaign contributors and, thus , forcesthem to have to ascertain what might have a "material financial effect" on their contributors as opposed to only having to ascertain (as is required by Sections 87100 and 87103) what would have a "material financial effect" on their own investments , interests in real property, and sources of income. Based upon the Supreme Court' s holding in County of Nevada v. MacMillen, supra , we believe that the use of language in Article the proposed ordinance , such as "reasonably foreseeable, " "material financial effect" and "major campaign contributor" as they are defined in the ordinance , are constitutionally precise in that they would provide adequate warning to members of the Board of Supervisors and their campaign contributors as to what type of conduct is prohibited. Also , the California Supreme Court in MacMillen and City of Carmel-By-The-Sea v. Young (1970) , 2 Cal . 3d 259, has indicated that the purposes of assuring independent , impartial and honest government are legitimate state purposes and that statutes seeking these goals are proper. We believe the purpose of Article 2 falls within the legitimate governmental purposes identified in these cases . Thus , since the courts have found that there is a legitimate state purpose in enacting statutes , such as Article 2 , and since we believe the language used therein is sufficiently precise, we conclude that that Article is probably' constitutional and not void on its face. We base our conclusion on our belief that Article 2 is directed at the obvious situations where a Supervisor can readily ascertain whether an action he takes will have a "material financial effect" on one of his campaign contributors, such as voting to approve a contract between the County and a contributor or voting to . approve a change in zoning requested by the contributor that would allow him to develop land subject to the zone change . We can hypothesize situations where it would be difficult for a Supervisor to ascer- tain 'whether a particular action of his would have a "material Honorable Thomas F.--Riley Page 7 October 24, 1977 financial effect" on a contributor which is distinguishable from its effect on the public generally. Even so , it is still our opinion that Article 2 is constitutional on its face even though we believe that it could be unconstitutionally applied. In the MacMillen case, the Plaintiffs attempted to support their contention that the 1973 Act was unconstitutional by showing various hypothetical situations where the Act could be unconstitu- tionally applied. This argument was specifically rejected in the McMillen case at page 672: "True, as we point out below, the 1973 act is not free of uncertainties - and may gen- • • erate considerable litigation before those • matters are resolved. Yet , as the United • States Supreme Court recently stated - particularly where conduct and not merely speech is involved, we believe that the _ overbreadth of a statute must not only be real, but substantial as well , judged in relation to the statutes plainly legitimate sweep . . . . [W]hatever overbreadth may exist should be cured through case-by-case analysis of the fact situations to which - its sanctions , assertedly, may not be ap- plied. ' [Citations dmi-tted. I At..page 674, the Court stated the following: "'We cannot, and need not in this proceeding, pass. upon all hypothetical situations and tenuous circumstances which may be presented by counsel . While we recognize that a valid statute may be unconstitutionally applied , the precise limitations to be placed on the words in question can best be specified when actual cases requiring such interpretation ' are presented. "' In summary, it is our opinion that since Article 2 is intended to prohibit conduct which may be legally prohibited, and since we believe that the language used in Article 2 is sufficiently precise so as to give adequate warning of its prohibitions and requirements , it is constitutional on its face, even though it is possible to apply it unconstitutionally. But, we -recognize that , to our knowl- edge, there is no court decision which upholds this type of re- quirement , and that if a court did consider Article 2 , it might find it to be unconstitutional . Memo to Honorable .iomas F. Riley Page 8 October 24, 1977 There is another problem raised by Article 2 of the ordinance which is noteworthy. Section 1-6-5 requires major campaign contri- butors to file certain lists . It could be argued that such a re- quirement is an invasion of the right to privacy in violation of -both the United States and California Constitutions . The Court in MacMillen indicated that since the 1973 Act was intended to achieve t e legitimate purposes of assuring independent , impartial and honest government , it was not an unnecessary invasion of- privacy to require public officials to disclose certain things . - Based .on this reason- ing, we believe that if Section 1-6-5 was judicially contested, a court would uphold the requirement that those who contribute more than $1, 000 to a Supervisor be required to file lists of business organizations with whom they are associated. ARTICLE 3 (COUNTY INFLUENCE BROKERS) This Article defines a County Influence Broker (hereinafter referred to as "Broker") who (1) contributes more than $250 to any or all members of the Board of Supervisors over the past 12 months , and (2) is employed or contracts for consideration to com- municate with members of the Board of Supervisors , their staff , or members of the Planning Commission for purposes of influencing any action of the Board or Commission. Sec .. 1-6-9 . Each Broker is required to register by filing a photograph of himself , a written authorization to act as a Broker for each by whom he is employed or with whom he contracts , and file• and periodically update a statement containing his name and address , the name and address of the persons for whom he is employed or with whom he contracts and the terms of his employment or contract , and the amount of money contributed to members of the Board of Supervisors over the past 12 months . Sec . 1-6-10. Provision is made for a Broker to ter- minate his status by filing a Notice of Termination of Status . Sec. 1-6-11. The County Clerk is required to compile a list of Brokers and persons who have filed Notices of. Termination of Status and persons who employed or contracted with Brokers and former Brokers . Sec . 1-6-12 . Brokers and those who have filed a Notice of Termination within the past year are prohibited from contributing more than $500 in any 12-month period in the aggregate to all mem- bers of the Board (Sec . 1-6-13) and prohibited from making gift (s) to any Board or Planning Commission member or County employee ag- gregating more than $10. 00 per person in a calendar month (Sec . 1-7-14(a)) . Brokers are required to keep a record of all gifts and report them monthly to the County Clerk. Sec. 1-6-4(b) . Pub- lic officials and employees acting within the scope of their em- ployment and certain persons representing churchs and religious societies are exempted from Article 3. Sec. 1-6-15. Article 3 is based on the PRA in general and Chapter 6 (Govt . Code Secs . 86100-86300) in particular, which pertain to lobbyists . The PRA provisions regulating lobbyists only pertain to persons who Memo to Honorable Thomas F. Riley Page 9 October 24, 1977 ' attempt to influence state officials and employees as opposed to County .officials and employees. The definition of "County Influence Broker" contained in Section 1-6-9 is substantially the same as the definition of "lobbyist" contained in Section 82039 except Section 1-6-9 provides that a person does not become a Broker unless -he contributes more than $250 to any or all members of the Board. Under the PRA, if- a person is employed -or contracts to influence governmental action, he is considered a lobbyist regardless of whether or not he makes contributions to those he attempts to in- fluence or anyone else. In fact, State lobbyists are specifically prohibited from making contributions . Sec. 86202. Under Section 1-6-10 of Article 3 , Brokers are required to register and report the same things as are required by Government Code Sections 86101-86103 . Former State lobbyists are required to file Notice of Terminations (Govt . Code Sec .. 86103) , as would County Brokers under Section 1-6-11 , but State lobbyists would remain subject to provisions of Chapter 6 for 6 months whereas County Brokers would remain subject to Article 3 for 12 months . State lobbyists are also required to keep records of gifts and make reports of gifts . Govt . Code Secs . 86105-86107 . Persons who em- ploy or contract with State lobbyists to' influence governmental ac- tion are also required to make certain reports . Govt. Code Secs , 86107-86108. There is no similar provision in Article 3 of the proposed ordinance. State lobbyists are prohibited from- making any, contributions . (Govt. Code Sec.. 86203) and are also limited in the amount of gifts they can make (Govt . Code Sec. 86203) . The limitation on gifts contained in the proposed ordinance is the same as pertains to State lobbyists . The exceptions contained in Section 1-6-15 , amongst others , also pertain to State lobbyists . Govt . Code Sec. 86300. There is already an ordinance regulating lobbyists in force in Orange County. Cod. Ords . Co . Or. Sec. 1-1-80 et seq . Lobbyists are referred to as Governmental Advocates and defined in a manner similar to both the Political Reform Act and the proposed ordinance, except there is no provision to the effect that a person does not become a lobbyist until he has contributed certain amounts of money. The existing ordinance pertains to lobbying activities directed at any County official or employee but the proposed ordinance only pertains to activities directed at members of the Board, their staff, and members of the Planning Commission. The existing ordi- nance also requires the registration of lobbyists and the filing of reports indicating with whom they are employed by or contract with (principals) and the amount of gifts , over $25 per month per person given. Cod. Ords . Co . Or. Sec : 1-1-81 . The existing ordi- nance also requires principals to make certain reports except where Memo to Honorable Thomas F. Riley Page 10 October 24, 1977 the principals) only contact elected officials . Cod. Ords . Co . Or. Sec. 1-•1-82 . The existing ordinance contains no limitations on the making of contributions or the giving of gifts by lobbyists . The existing ordinance has a procedure whereby lobbyists who violate the ordinance would be prohibited from acting as a lobbyist for 5 -Years and subject to civil penalties . Cod. Ords . Co . Or . Secs . 1-1-87 and 1-1-88. There is no similar provision in the proposed ordinance. No Court has considered the validity of either provisions per- taining to lobbyists in the PRA or the Orange County Lobbyist Ordinance. But the United States Supreme Court has upheld the validity of Federal statutes requiring the registration of lobbyists and the disclosure of information pertaining to their activities . United States v. Harriss (1953) , 347 U.S . 612 . The Court in Harriss held that the statute was not too vague and indefinite to meet due process requirements , and it did not violate the First Amend- ment guaranties of freedom of speech, freedom of press , and the right to petition the government . The California Attorney General has specifically considered the existing Orange County Lobbyist Ordinance. 56 Ops . Cal. Atty. Gen. 229 . The Attorney General concluded the Board of Supervisors could legally enact such an ordinance pursuant to , the police powers granted to counties by Article XI , Section 7 of the California Con- stitution. Based on the above , it is our opinion that the lobbyist regis- tration and reporting provisions of Article 3 of the proposed ordinance are constitutional . Further , we believe that the enact- ment of such an ordinance is also authorized by Government Code Section 81013 , which allows local agencies to impose additional requirements. on individuals involved with political activities . Also, Article 3 appears to be consistent with the purposes of the Political Reform Act in general and especially those stated in Sec- tion 81002(c) : "The activities of lobbyists should be regulated and their finances disclosed in order that improper influences will not be directed at public officials ." There is also a legal issue of whether a limitation can be imposed on the amounts lobbyists (i. e. , County Influence Brokers) can contribute to members of the Board of Supervisors . Elections Code Section 22004 states that : "A county may by ordinance or resolution limit campaign . contributions in county elections . " This section provides authorization for the limitation of campaign contributions by lobbyists . The United States Supreme Court in BUckley v. Valeo (1976) , 424 U. S. 1 , upheld the constitutionality Of provisions in the Federal Election Campaign Act imposing limi- Memo to Honorable Thomas F. Riley Page 11 October 24, 1977 tations on contributions by an individual to 'a particular candidate. We believe that the contribution limitation contained in the pro- posed ordinance would probably be upheld under the Buckley case. But there is a question of whether imposing the contribution limitation on just one class of people , County Influence Brokers , instead of all people would be a violation of the equal protection clause contained in the Fourteenth Amendment to the United States - Constitution. A statute, such as Section 1-6-13 of the ordinance, which treats certain classes of people differently from others , is not necessarily unconstitutional ; the statute will be upheld if there is a compelling state interest in making the differentiation. Weber v. City Council (1973) , 9 Cal. 3d 950, 958 . Based on the recognition given by the courts to state interest in assuring independent, honest , and impartial government and the regulation of political activities by cases such as MacMillen, Carmel and Buckley, we believe the application of constitutional imitations to just lobbyists would probably be upheld. ARTICLE 4 (VIOL'ATIONS AND AMENDMENTS) Section 1-6-16 _would provide that the violation of certain sections of the ordinance would constitute a misdemeanor and Sec- tion 1-6-17 would provide that a vote of a member of the Board of Supervisors in violation of Section 1-6-4 is void. There is a legal question as to whether making violations of the sections listed in Section 1-6-17 a misdemeanor is valid to the extent that the activities sought to be prohibited and regu- 'lated take place in incorporated portions of Orange County. The regulation by the County of political activities eminates , in at least part , from the police power granted to counties by California Constitution, Article XI , Section 7 . Basically, the exercise of a police power is limited to the territorial limits of a county. It could even be argued that the authority to regulate County politi- cal activities does not even extend to County-owned or leased facil- ities , such as the County Administration Building where meetings of the Board of Supervisors are held, - which are located in incor- porated areas . With respect to Article 3 of the proposed ordinance , the Leg- islature by the Enactment of Government Code Section 25207 . 1 has specifically empowered counties to adopt ordinances regulating lobbyist activities directed at County government where those ac- tivities take place in incorporated parts of the County. There is still a question of whether violations of Article 2 which take place in incorporated areas could be held to constitute misdemeanors . Memo to Honorable Thomas F. Riley Page 12 October 24, 1977 We believe that if such a challenge was made in a prosecution for an alleged violation of Section 1-6-4 of the ordinance , the ap- plication of Article 2 to activities which take place in incorporated parts of the County would be upheld. We believe a Court would find that a County had the power to regulate its own political activities no matter whether they take place in incorporated or unincorporated areas . We believe this would especially be true where the alleged violations take place in County-owned or leased facilities . We know of no Court decisions which consider the effect of a County statute such as Article 2 in incorporated parts of a County. Be- ,.cause of this and because of the basic rule that a county' s police , power is limited to unincorporated areas , a Court could reject the application of Section 1-6-4 to activities that take place in in- ..''eorporated areas, even activities in County facilities . CONCLUSION _ . In reviewing the proposed Orange County Reform Campaign Ordi- nance, we have attempted t,o identify and comment on the areas which we believe raise constitutional or other legal questions . It is our conclusion that the provisions of the ordinance are legal and that the ordinance, at least on its face; is constitutional even though there is the potential that it may be unconstitutionally . applied in certain situations . In coming to this conclusion, as indicated above, we are cognizant that there are a number of po- tential constitutional and other legal objections that may be made to various provisions of the ordinance . We .are especially concerned about Section 1-6-4(b) of Article 2 , which provides that a member ... of the Board of Supervisors has a financial interest in a decision if it will have a material financial effect on a campaign contribu- tor of his and, thus , forces members of the Board of Supervisors to ascertain what effect their actions will have on their campaign contributors . . Thus , we believe that we must indicate that although we believe the proposed ordinance is valid, if it or portions of it are judicially challenged, a Court could come to a contrary conclu- sion. Also, in your memorandum of October 12 , 1977 , to us you asked that we consider the feasibility of the proposed ordinance. It is our opinion that the various reporting and disclosure requirements subject to the legal issues discussed above could , as a practical matter, be put into operation. We believe that they would impose no implementation or maintenance problem any more onerous than those imposed by the various requirements contained in the Political Reform Act of 1974 or the County' s existing lobbyist ordinance. There is one other area upon which we believe comment should be made . Some of the sections of the proposed ordinance , as is true of practically any statute , could be subject to different interpretations . We could identify no interpretation problems Lemo to Honorable Thomas F. Riley age 13 October 24, 1977 �oxher than those previously discussed which would bear on the ques- .._Jion of the constitutionality or legality of the proposed ordinance. :-Di4t. we foresee that if the proposed ordinance is enacted , that there --_YiU be interpretation problems that will have to be resolved at the- time they occur. - Since the proposed ordinance would make the violation of certain Hof—its provisions a misdemeanor , we suggest that you consider re- _=Ierr.ing the ordinance to the District Attorney for his review and coMents , if any. Also, since the ordinance would require the Coun- _;�:-CI.erk to compile, maintain and distribute certain lists and state- -�ents , in addition to those already required by existing statutes , .zvg_-=stiggest that the effect on the Clerk' s Office that would be AUsed by this ordinance be considered, and that the ordinance be referred to him for any comments he may have.