Keeping Ahead of Our Friends At the Fair Political Practices Commission (FPPC) Association of California Healthcare Districts 2016 Leadership Development Program
Your presenter… • 20+ years advising healthcare clients as inside and outside counsel • Also certified in Healthcare Compliance • Teaching at California Western School of Law • Currently in private practice in San Diego
Beginning Feb. 4.. Deputy County Counsel, Riverside County representing Riverside County Regional Medical Center And Riverside University Health System
Today’s Agenda ~~~ Living within the Political Reform Act Campaign restrictions The biannual Ethics Act education requirement Being part of the Form 700 Club Gift and Honoraria limits Coping with Conflicts of Interest
Political Reform Act: It’s About Transparency
Political Reform Act: Background • Adopted by initiative in 1974 (Proposition 9) • Amended / revised frequently since • Required disclosure of $$$$ – During campaigns (state and local) – Ballot measures – Lobbying
Two “ agencies with jurisdiction ”: Fair Political Practices Political Reform Division, Commission Secretary of State’s office • Independent Agency • Registers campaign committees • Interprets and enforces the Act • Registers Lobbyists – Advice letters • Technical assistance to – Administrative hearings and both decisions • Runs Cal-Access website • Investigates complaints http://cal- • “Interested Persons” access.sos.ca.gov/ process • Publishes the Lobbying • Form 700s Directory
August 12, 2010 Tom Petersen Director, Government Relations Association of California Healthcare Districts 2969 Prospect Park Drive, Suite 260 Rancho Cordova, CA 95670 Re: Your Request for Advice Our File No. A-10-086 Dear Mr. Petersen: This letter is in response to your request for advice on behalf of the Association of California Healthcare Districts (“the Association”) regarding the lobbying provisions of the Political Reform Act (the “Act”). Please bear in mind that nothing in this letter should be construed as evaluation of any conduct which may already have taken place. This letter is based on the facts as they have been presented to us; the Commission does not act as the finder of fact in providing advice. ( In re Oglesby (1975) 1 FPPC Ops. 71.) QUESTIONS What are the reporting obligations if the in-house lobbyist for the Association also lobbies for its affiliated entity, the ALPHA Fund (“ALPHA”)? CONCLUSION ….
Cal-Access website http://cal-access.sos.ca.gov/ Lobbying Campaign Finance Activity
11/13/2014 11/13/2014
Campaign Requirements
Duties Campaign Statements • verifications • “detailed accounts, records, bills, and receipts” to back them up Separate Bank Account • May not “comingle” with personal funds • Put personal funds in there before spending on the campaign Know your limits
Do Nots • No cash contributions > $100 • Just say “check please” • No expenditure > $100 in cash • No anonymous donations > $100 • Send to the State • No hiring the candidate’s spouse or domestic partner
Lest You forget… • “Pending Proceedings” and contributions - During + 3 months - 12 months before • Mass mailings , telephone campaigns, Advertisement requirements
After the election’s over ….
Ethics Education
AB 1234 • Broader than the state • Free online version at agency ethics http://localethics.fppc.c requirements a.gov • Training must include • Also two low cost self- ethics laws, ethics study courses at the principles and agency Institute for Local rules Government website - http://www.ca- ilg.org/ethics-education- and-training-ab-1234
What’s required: • Each agency must train elected or appointed Agency must keep officials who are • completion certificates for 5 compensated for their years service or reimbursed for their expenses No penalty – but what about • the next public records • Minimum = 2 hours request…. every two years for each official Can impose penalties by local • agency rule or policy • “Ethics law” part must come from a knowledgeable CA attorney
The Form 700 Club
Form 700 – What is it? • “Statement of Economic Interests” • Periodic filing • Goals = – Public disclosure of certain economic facts about public officials and those that assist them in decision-making – Filer awareness of these interests and related limitations
Privacy Transparency Unwillingness to Serve
What Must Club Members Disclose? A. (1) Investments < 10% ownership + ( 2) > 10 % ownership B. Real Property C. Income, Loans and Business Positions D. Gifts E. Other Income, e.g. travel payments
“ Under penalty of perjury ”
What to do when: assuming Within office 30 days statement annual April 1 statements leaving Within office 30 days statement
What if you forgot ….. • No extensions • Amendments !
Form 700 Club: What’s New • E-filing – FPPC must approve your system • Travel Payments – If reportable as a gift, must disclose destination (trips after Jan. 1, 2016) ( SB 21 (Hill) Chapter 757, Statutes 2015)
Gifts and Honoraria
Gifts • “ anything of value for which you have not provided equal or greater consideration to the donor .” • Donor location / doing business = irrelevant • Current Acceptance limit = $460 • Reporting threshold = $50 or more • Food, beverages, tickets, passes = gifts
Some Gift Exceptions • Mutual value exchange • Bonafide intra-family gifts • Unused, returned items (30 days) • Unused items donated to charity without taking a deduction (30 days) • Neighborly hospitality / acts of compassion • Personalized plaques • BFF
Recent Gift Changes • No donating to charities in which you or a family member hold a position • “Home hospitality” is no longer unlimited • You can toast the bride and eat the cake • Dating is also permitted • “Typical” bereavement offerings • Informational tours • Valuation of wedding gifts, fundraiser tickets, charters
So for example: • A physician group that is negotiating for a contract as the pathology service provider at your hospital offers you tickets to its Christmas dinner and an overnight stay at the hotel where the dinner will be held. Acceptable? Reportable?
Another example: • A local charity sends you a ticket for its fundraising event. The face value (price) of the ticket is $500, and the ticket states that the tax deductible portion is $350. Acceptable? Reportable? • You give the ticket to your daughter to attend the event. Acceptable? Reportable?
Could it happen to you: • A different charity asks you to “drop in” at its fundraiser. There is no stated value for the event but dinner will be served. Acceptable? Reportable? • You meet an old friend at the event and end up staying for dinner and dessert. Acceptable? Reportable?
“Failure to comply with the laws related to gifts, honoraria, loans, and travel payments may result in monetary penalties of up to $5,000 per violation.” 2013 Local Gift “Proactive” Enforcement effort : - identified 221 gift recipients - 16 reported on Form 700s
Coping with Conflicts of Interest
What are they? • Arise from situations • Involve an action /decision that could be influenced by an improper financial or personal interest • Consequences for: – the improperly involved decision-maker – His / her agency
It’s the law … " Assets and income of public officials which may be materially affected by their official actions should be disclosed and in appropriate circumstances the officials should be disqualified from acting in order that conflicts of interest may be avoided. " Gov. Code section 81002(c) "No public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest ." Gov. Code Section 87100 The Political Reform Act prevents conflicts of interest in two ways -- disclosure and disqualification. (See Gov. Code Sections 87100-87350.)
3 Questions to Ask • Is it foreseeable that a decision will have a financial effect on any of your financial interests? Yes -> • Will that effect be material? Yes-> • Distinguishable from effect on the public generally? Yes -> Do not make, participate in or attempt to influence the decision
When to Seek Advice: • Source of $500 < Income in past 12 months • Other business relationship or employment • $2000 < interest in property or business involved • Gift giver “I recuse” • Prior loan source • Family • Campaign Contributer
Other Questions?
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