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