Eight trade associations and two Sacramento County politicians are suing to stop a new anti-pay-to-play law that prevents elected officials from voting on matters involving the people and companies who contribute to their campaigns.
Senate Bill 1439, in effect since Jan. 1, requires public officeholders — from city councils to school boards, water boards and county supervisors — to recuse themselves from votes and discussions if the official has received more than $250 within 12 months from someone with a financial interest in the decision. Supporters argued the new law, signed by Gov. Gavin Newsom in September, ends blatant, but until now legal, influence peddling across the state.
But the newly filed litigation against the state’s Fair Political Practices Commission, the agency tasked with enforcing it, alleges the law is overly broad, improperly alters the state’s Political Reform Act and infringes on constitutional free speech protections related to the right to petition governments.
“For decades, our courts have held that the making and receiving of campaign contributions is an exercise of this constitutional right,” wrote attorney Thomas Hiltachk in a petition asking the Sacramento County Superior Court to intercede.
The Political Reform Act, passed by voters in 1974, already established similar rules for appointed officers, such as members of boards or commissions, but excluded elected officials from local government agencies. The new law removes that exception.
An amendment to the Political Reform Act requires a two-thirds vote of each house of the Legislature and must align with the act’s “purpose.” SB 1439 allegedly conflicts with that purpose by attempting to regulate campaign contributions in a way that was not originally intended, according to the lawsuit.
The plaintiffs behind the lawsuit include the Family Business Association of California, California Restaurant Association, California Retailers Association, California Building Industry Association, California Business Properties Association, California Business Roundtable, Sacramento Regional Builders Exchange, California Manufacturers & Technology Association, Rancho Cordova City Councilmember Garrett Gatewood and Sacramento County Supervisor Pat Hume.
SB 1439 passed through the Legislature without a no vote or any formal opposition. The bipartisan bill was co-authored by state Sen. Steve Glazer, D-Orinda and Sen. Scott Wilk, R-Victorville.
‘Influence-peddling pipeline’
Glazer said he isn’t surprised that “power interests want to maintain the pay-to-play influence-peddling pipeline.” He accused the plaintiffs of waiting to file the lawsuit to avoid attention from the public.
“They were silent during the legislative process,” he said. “They’re trying to protect the financial interests that are attempting to influence these specific local governmental decisions, which this bill stopped.”
The law does not harm anyone’s right to contribute to a politician, Glazer said.
“It is directed toward the local government officials and their conduct when they take the money from a specific financial interest that will benefit from their decisions,” he said.
It is a misdemeanor to violate the law. But anyone who is unknowingly in violation can cure it by returning the money within a certain time period.
FPPC disappointed in lawsuit
In a statement, Fair Politics Practice Commission Chair Richard C. Miadich similarly criticized the delayed filing of the lawsuit and said the FPPC would continue to enforce the law “unless and until a court ruling says otherwise.”
“We’re disappointed to learn a lawsuit has been filed regarding SB 1439 after the Commission voted unanimously to support it and months after it unanimously passed the legislature and was signed by the Governor,” Miadich stated. “It also comes months after we’ve begun issuing guidance, gather public input and crafting regulations to implement the law.”
Opponent was unaware of bill
Robert Rivinius, executive director of the Family Business Association of California, said his association and others were not aware of the bill until it became a law and would have challenged it earlier if they had known.
“We always have the courage to oppose bad legislation,” he said. “It somehow got past us and we didn’t realize the severity of what would happen.”
The association’s members, which include family-run businesses across the state, fear the law will prevent their involvement in local politics and their support of good governance. Rivinius imagined a scenario in which an employee, potentially considered an “agent” of a company under the new law, donates to a majority on a city council and creates a conflict.
“Eight months later, their business has an issue before the board and the folks can’t vote on it because of that,” he said. “It is an overreach, it is something that should be left to local governments.”
‘Working against our democracy’
California Common Cause, a nonprofit focused on good governance, announced its opposition to the lawsuit Feb. 23, saying the plaintiffs want to continue “rigging the system in their favor over upholding the will of the people.”
“Californians need to know that the representatives they’ve elected are serving the public interest, not special interests,” said Sean McMorris, California Common Cause’s Transparency, Ethics, and Accountability Program Manager. “SB 1439 is pro-democracy reform that restores trust in local government — those working against it are working against our democracy.”
Glazer, who describes the law as one of the most significant reforms of California’s conflict-of-interest law in the past 50 years, said it is too early to tell how the courts might view the lawsuit.
“Just as the law itself has incredibly important consequences, an invalidation by the court would have equally important consequences, so we’ll wait and see,” Glazer said.