Friday, April 07, 2006

THE FPPC RESPONSE TO STOEN

The full text of the FPPC's response to Tim Stoen's letter regarding "Raising Funds for prosecution of District Attorney Lawsuit Against Pacific Lumber Company." is included here as the first comment on this post.

While you read this, and the other posts detailing Gallegos and Stoen's efforts to fund the PL lawsuit, think about the important programs in Gallegos' office that have gone begging. Think about the services that have been lost. Think about the people who have lost their jobs in the Victim Witness Unit. Think about the jobs that could have been saved if one iota of this effort went into seeking grant funding for those positions and programs.

Think about Gallegos' claim to be "doing more with less."

Think about that as you see Gallegos planning concerts to raise funds to go after one business, see Stoen asking if he can contribute personally to fund a lawsuit he is prosecuting.

Maybe you'll agree with me that Gallegos claims of impartiality are patently false.

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RELATED:
Read second - GALLEGOS' REQUEST FOR OPINION
The complete text of Paul Gallegos' REQUEST FOR OPINION, which he submitted to the Attorney General's Office

TIM STOEN'S LETTER TO THE FPPC
Paul Gallegos' and Tim Stoen's efforts to privately fund the PL lawsuit took many forms.

THE FPPC RESPONSE TO STOEN
The full text of the FPPC's response to Tim Stoen's letter regarding "Raising Funds for prosecution of District Attorney Lawsuit Against Pacific Lumber Company."

SUBMISSION TO THE ATTORNEY GENERAL'S OPINIONS DEPARTMENT regarding Gallegos' Request for Opinion and Salzman's Plan

1 comment:

  1. Available as a Public Records Act Request
    FPPC Advice Letter...File No. A-03-185

    Fair Political Practices Commission letterhead

    Page 1....

    Dated February 11, 2004

    Timothy O. Stoen
    County of Humboldt
    Office of the District Attorney
    825 5th Street
    Eureka, CA 95501

    Re: Your Request for Advice
    Our file No. A-03-185

    Dear Mr. Stoen:

    This letter is in response to your request for advice on your own behalf and that of District Attorney Paul Gallegos regarding the campaign provisions of the Political Reform Act (the "Act"). 1

    QUESTIONS

    1. May Mr. Gallegos solicit funds from individuals and organizations to pay a private law firm for costs incurred from a lawsuit brought by his office against the Pacific Lumber Company?

    2. May Mr. Gallegos solicit persons to put on concerts to raise such funds?

    3. For what types of expenses can funds raised into Mr. Gallegos's campaign account for this lawsuit be used?

    4. Do the Act's contribution limits apply to payments made to pay for the costs of the lawsuit?

    5. May you, as assistant district attorney, make a payment to Mr. Gallegos for the purpose of paying for costs of this litigation if you are prosecuting the case?

    ____________________________________________
    1 Government Code Sections 81000-91014. Commission regulations appear at Title 2, sections 18109-18997, of the California Code of Regulations.


    Page 2...

    File No. A-03-185
    Page No. 2

    CONCLUSIONS

    1. Yes. Mr Gallegos may solicit funds for this purpose under the campaign provisions of the Act. See the analysis for the manner in which payments should be reported.

    2. Mr. Gallegos may solicit persons to raise funds to pay for the costs of the lawsuit. See the analysis for the manner in which payments should be reported.

    3. Funds raised into Mr. Gallegos's campaign account may be used for any expense which is reasonably related to a political, legislative, or governmental purpose pursuant to section 89512. With regard to the lawsuit against the Pacific Lumber Company, Mr. Gallegos may raise funds, or solicit other persons to raise funds, for any expenses which constitute "costs in connection with administrative, civil or criminal litigation," (Section 89514.)

    4. No. The Act's provisions regarding contribution limits (sections 85300-85321) do not apply to local elections or candidates and therefore would not apply to Mr. Gallegos.

    5. Under the Act, you are not prohibited from making a payment to the district attorney as you have described, provided you both comply with any disclosure and reporting requirements of the Act that may apply. Please note that this advice is limited to provisions of the Act and does not address other areas of law.

    FACTS

    You are the assistant district attorney for Humboldt County. In February 2003, the Humboldt County District Attorney's office filed in the name of the People of the State of California as plaintiff, a civil action against the Pacific Lumber Company under section 17200 of the Business and Professions Code (the Unfair Competition Law). The board of supervisors has not given the district attorney's office any money to pay for the costs of prosecuting this action. You anticipate needing $20,000 to pay for necessary depositions as part of your office's discovery costs.

    The lack of county money to pay for necessary costs in prosecuting this action has caused the district attorney's office a major dilemma since your office cannot engage in this litigation unless money is raised from the citizens to pay for the necessary expenses of prosecuting such an action.

    To resolve this dilemma, Mr Gallegos proposes to solicit citizens and organizations to raise money toward these expenses. Mr. Gallegos has specifically inquired as to whether these funds may be used to retain a private law firm and has not raised money for this purpose to date pending our advice.


    Page three...

    File No. A-03-185
    Page No. 3

    ANALYSIS

    The Act imposes filing requirements with respect to the campaign activities of candidates for elective office and persons that qualify as "committees" under the Act. (Section 84200 et seq.)

    A "candidate" is defined as:

    "...an individual who is listed on the ballot or who has qualified to have write-in votes on his or her behalf counted by elections officials, for nomination for or election to any elective office, or who receives a contribution or makes an expenditure or gives his or her consent for any other person to receive a contribution or make an expenditure with a view to bringing about his or her nomination or election to any elective office, whether or not the specific elective office for which he or she will seek nomination or election is known at the time the contribution is received or the expenditure is made and whether or not he or she has announced his or her candidacy or filed a declaration of candidacy at such time. "Candidate" also includes any officeholder who is the subject of a recall election. An individual who becomes a candidate shall retain his or her status as a cnadidate until such time as that status is terminated pursuant to Section 84214. "Candidate" does not include any person within the meaning of Section 301(b) of the Federal Election Campaign Act of 1971." (Section 82007.)

    Additionally, in the Lui opinion, the Commission stated "all elected officeholders are "candidares," even during a non-election year." (In Lui (1987) 10 FPPC Ops. 10.) As District Attorney, Paul Gallegos is a candidate for purposes of the Act. Therefore he is subject to the Act's campaign disclosure rules. (Sections 84200 et seq.)

    Type of payment

    A "contribution" means a payment, 2 a forgiveness of a loan, a payment of a loan by a third party, or an enforceable promise to make a payment except to the extent that full and adequate consideration is received, unless it is clear from the surrounding

    ____________________________________

    2. Under the Act, a "payment" is "a Payment, distribution, transfer, loan, advance, deposit, gift or other rendering of money, property, services or anything else of value, whether tangible or intangible." (Section 82044.) Monetary amounts paid to a law firm for legal services are a "payment" under the Act. (See Sutton Advice Letter, No. A-00-226, and Roberti Advice Letter, No. I-91-292.)


    Page 4...

    File No. A-03-185
    Page No. 4

    circumstances that it is not made for political purposes." (Section 82015(a).) Regulation 18215 states that a payment is made for political purposes if, among other things, it is received by a candidate. (Regulation 18215(a)(2)(A).) Therefore, in general a payment received by Mr. Gallegos (or his committee) for political purposes will be a reportable contribution. 3

    In addition, a payment made by a person other than the candidate at the candidate's behest is also generally a contribution which must be reported as either a cash contribution or a non-monetary contribution. (Regulation 18215(a)(2)(A).)

    However, there are exceptions to this rule. Section 82015(b)(2)(B) provides that, under certain conditions, a payment made at the behest of a candidate is not a contribution if it is clear from the surrounding circumstances that "the payment was made for purposes unrelated to his or her candidacy for elective office."

    The following types of payments are presumed to be for purposes "unrelated" to a candidate's candidacy for elective office:

    "...(i) A Payment made principally for personal purposes, in which case it may be considered a gift under the provisions of Section 82028. Payments that are otherwise subject to the limits of Section 86203 are presumed to be principally for personal purposes.
    (ii) A payment made by a state, local or federal governmental agency or by a nonprofit organization that is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code.
    (iii) A payment not covered by clause (i), made principally for legislative, governmental or charitable purposes, in which case it is neither a gift nor a contribution. However, payments of this type that are made at the behest of a candidate who is an elected officer shall be reported within 30 days following the date on which the payment or payments equal or exceed five thousand dollars ($5,000) in the aggregate from the same source in the same calendar year in which they are made. The report shall be filed by the elected officer with the elected officer's agency and shall be a public record subject to inspection and copying pursuant to the provisions of subdivision (a) of section 81008. The report shall contain the following information: Name of payor, address of payor, amount of the payment, date or dates the payment or payments were made, the name and address of the payee, a brief description of the goods or services provided or purchased, if any, and a description of the

    _______________________________________
    3 See enclosed regulation 18421.1 for rules relating to the receipt of contributions.


    File No. A-03-185
    Page No. 5

    specific purpose or event for which the payment or payments were made. Once the five thousand dollars ($5,000) aggregate threshold from a single source has been reached for a calendar year, all payments for the calendar year made by that source must be disclosed within 30 days after the date the threshold was reached or the payment was made, whichever occurs later. Within 30 days after receipt of the report, state agencies shall forward a copy of these reports to the fair Political practices Commission, and local agencies shall forward a copy of these reports to the officer with whom the elected officers of that agency file their campaign statements..." (Section 82015(b)(2)(B).)

    The exemption of section (Section 82015(b)(2)(B)(iii) only pertains to payments made by other persons principally for legislative, governmental or charitable purposes. 4 The determination of whether a payment is made (by someone other than the candidate) principally for one of these enumerated purposes rather than some other purpose (e.g. a political purpose) is fact dependent. 5

    Based on the information you have provided, we conclude that payments made by citizens or organizations directly to the law firm at the behest of Mr. Gallegos would be made principally for governmental purposes, absent facts to the contrary. Such payments would then be governed by subdivision (iii) of Section 82015(b)(2)(B) and so would NOT be contributions under these circumstances.

    As emphasized, Mr. Gallegos may only invoke the exception of subdivision (iii) if payments are made by other persons directly to the law firm itself. Accordingly, he should not simultaneously have funds collected by his committee for that same purpose if he wishes to uses this exception. Such simultaneous activity could also raise question as to the principal purpose of the event.

    Also note that certain payments governed by ssection 82015(b)(2)(B)(iii) that are made at the behest of a candidate who is an elected officer must be reported in a specific manner if the payments equal or exceed $5,000. (See section 82015(b)(2)(B)(iii) above)

    Types of expenses

    The Act imposes conditions under which a candidate may spend campaign funds. Section 89512 states:

    _____________________________________
    4 A payment which is exempt from the definition of "contribution" because it is governed by subdivision (iii) of section 82015(b)(2)(B) is a payment which is made by a person other than the candidate. (See section 82015(b)(2)(B)(iii) and regulation 18225.7(b).)
    5 To the extent that the Totten Advice Letter, No A-03-130, is inconsistent with this advice, it is superceded.


    File No. A-03-185
    Page No. 6

    "An expenditure to seek office is within the lawful execution of the trust imposed by Section 89510 if it is reasonably related to political purpose. An expenditure associated with holding office is within the lawful execution of the trust imposed by Section 89510 if it is reasonably related to legislative or governmental purpose. Expenditures which confer a substantial personal benefit shall be directly related to a political, legislative, or governmental purpose."

    Section 89514 further specifies:

    "Expenditures of campaign funds for attorney's fees and other costs in connection with administrative, civil, or criminal litigation are not directly related to a political, legislative, or governmental purpose except where the litigation is directly related to activities of a committee that are consistent with its primary objectives or arises directly out of a committee's activities or out of a candidate's or elected officer's activities, duties, or status as a candidate or elected officer, including but not limited to, an action to enjoin defamation, defense of an action to enjoin defamation, defense of an action brought for a violation of state or local campaign, disclosure, or election laws, and an action arising from an election contest or recount."

    Consequently, expenditures of campaign funds for "costs in connection with administrative, civil, or criminal litigation" are permissible expenditures where the litigation arises directly out of the candidate's or elected officer's activities, duties, or directly out of Mr. Gallegos's duties as an elected officer, Mr. Gallegos may make payments for such expenses from campaign funds.

    Contribution limits

    You have also inquired as to whether or not the Act's contribution limits apply to payments made for the costs of the district attorney's lawsuit. The Act's provisions regarding contribution limits are found in sections 85300-85321 which do not apply to local elections or candidates and therefore would not apply to Mr. Gallegos. (See Pelham Advice Letter, No. I-02-137.) You should consult with your county counsel regarding the application of any local ordinance.


    File No. A-03-185
    Page No. 7

    In addition, you individually are not prohibited from making a contribution to Mr. Gallegos provided you comply with the Act's disclosure and reporting requirements. 6 Since the definition of "income" expressly excludes "campaign contributions required to be reported under Chapter 4 (commencing with Section 84100)," (section 82030(b)(1)) a contribution made by you to Mr. Gallegos will NOT be considered income, and a conflict of interest cannot arise from your contribution to Mr. Gallegos.

    If you have any other questions regarding this matter, please contact me at (916) 322-5660.

    Sincerely,

    Luisa Menchaca
    General Counsel

    By:
    Natalie Bocanegra
    Counsel, Legal Division

    Enclosure
    NB:jg
    I:/AdviceLtrs/o3-185



    __________________________________
    4 Please note that this advice is limited to provisions of the Act and does not address other areas of the law. You may wish to consult the State Bar regarding any other provisions possibly relating to this matter.


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