State Legislation to Close 'Pay-to-Play Loophole' for Local Officials and Contractors Is Up for Vote
Update as of March 28, 2022: Legislation to close a campaign finance loophole was approved 5-0 by the California Senate's Elections and Constitutional Amendments committee Monday, March 28, and will go next to the appropriations committee. At the committee hearing, no one opposed SB 1439 and lawmakers and others voiced support, including representatives of California Common Cause, California League of Women Voters and California Clean Money campaign.
State politicians in California are generally barred from accepting campaign contributions of more than $250 from pending government contractors.
But elected officials at the local level are exempt from the law, leading to what some say is undue influence from major donors.
Some state residents, activists and lawmakers hope to see that loophole closed and have proposed legislation to do just that. SB 1439 will get a hearing Monday before the California Senate Elections and Constitutional Amendments committee.
"Californians deserve to know that their elected officials are making decisions that benefit the voters, not special interests," Jonathan Mehta Stein, executive director of California Common Cause, said in a statement about the bill. "Closing California’s local government pay-to-play loophole ensures elected officials’ votes are not influenced by contributions for their next re-election campaign."
The statement from Common Cause,a nonpartisan, nonprofit government accountability group that is the main supporter of the bill, quotes a KCET story that ran last year. The reporting found that $38,000, or over 30 percent of the roughly $125,000 in campaign contributions to city of Huntington Park council members between 2018 and 2020, came from eight companies and their executives that were identified as city contractors at some point during that time. The city doled out more than $11 million combined to four big contractors that donated gifts and campaign contributions during that period.
Californians deserve to know that their elected officials are making decisions that benefit the voters, not special interests.Jonathan Mehta Stein, Executive Director, California Common Cause
"That's corruption and, unfortunately, our laws have not been clear enough about that," said Democratic Senator Steve Glazer, who represents the 7th District and proposed the bill. "That's why I'm advancing SB 1439 to make it a bright line, making it very clear that it would be considered corruption and that they should be prosecuted, to the full extent of the law."
"Most, if not all, of the contributions in question in the KCET investigation would not have been allowed if SB 1439 were already law," added Stein, in a letter of support this week.
A state law informally called the Levine Act bars anyone seeking a contract, permit or license from the government from making a campaign contribution of more than $250 to officials responsible for decision-making while the contract, permit or license is pending and three months after.
But local elected officials are exempt from that law. Glazer’s legislation would eliminate that exemption and expand the time someone seeking a contract is barred from donating to 12 months.
"Our democracy survives on confidence in the government, that the people that we elect to do our work are going to do it honestly and without favor to those who have power or money or any kind of special access," Glazer said, adding that he would have also liked the bill to remove an exemption for state legislators but he doesn’t think it would be approved. A bill Glazer proposed last year to require greater transparency from LLCs that donate to campaigns was signed into law, making it more difficult for companies to donate anonymously through affiliates.
Baldo Balderas, who has lived in Huntington Park seven years and worked in agriculture before retiring, said he supports the idea of requiring companies with pending contracts to wait one year to donate. He said the money saved from requiring frequent, competitive bidding on city contracts could allow local leaders to spend more on other community services that are needed.
"It would be ideal to use that money for public services instead...transportation for seniors, daycares, food and housing assistance," Balderas said in an interview at the Huntington Park Library.
The bill is co-authored by Senate Republican Leader Scott Wilk, who said in a statement that the bill would "ensure decisions by local officials regarding approval of licenses, contracts, or permits are for the public’s benefit and not for their own personal gain."
States such as New Jersey, New Mexico, Hawaii and South Carolina have laws restricting bidder or contractor donations to local decision-makers around the time the contract is pending or approved, according to Common Cause California. And cities in California with some form of existing restrictions include Alhambra, Claremont, Costa Mesa, Culver City, Claremont, Glendale, Los Angeles, Malibu, Oakland, Pasadena and San Francisco.
