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HomeMy WebLinkAboutAgenda Statement 1989/10/03 Item 9 COUNCIL AGENDA STATEMENT Item -11r 9 Meeting Date 9/26 "r /0 31 j' ITEM TITLE: Ordinance 3 31J Z 'Amending Sections 2.52.040, 2.52.050 and 2.52.060 and Adding Sections 2.52.105, and 2.52.165 to the Chula Vista Municipal Code Relating to Campaign Contribution Disqualification and Disclosure SUBMITTED BY: City Attorne '..---P (4/5ths Vote: Yes No X ) The proposed ordinance would: 1. Prohibit campaign contributions prior to .January 1 of an election year; 2. Aggregate contributions from officers and agents of an organization and require abstention if they total more than $2,500; 3. Extend the period during which a councilmember must abstain when the aggregated contribution exceeds $2,500 to the councilmember's entire term in office; 4. Require notice when a candidate contributes $5,000 or more of personal funds to the campaign; 5. Clarify and emphasize the prohibition against "coerced" contributions. 6. Define "agent" consistent with the definition in the California Administrative Code (Section 18438.3) . 7. Clarify that when a candidate is running for reelection or another city office, the candidate may seek contributions from people who contributed to his or her prior campaign. RECOMMENDATION: Reduce the notice period for candidates' contributions to their own campaign to 21 days and place the ordinance on its first reading BOARDS/COMMISSIONS RECOMMENDATION: The Charter Review Committee approved the proposal to aggregate contributions (4-1), the proposal to extend the disqualification period to the full term of office (3-2) and the proposal to require notice when a candidate contributes personal funds in excess of $5,000 (5-0) . Agenda Item No. 12- J Meeting Date: 9/_26-/Z /0/3/81 81 Page 2 DISCUSSION: At its joint meeting with the Charter Review Committee on August 24, 1989, the City Council discussed the proposed amendments and directed staff to come back with revisions. The latest revisions are underlined in the attached ordinance. CONTRIBUTIONS MAY ONLY BE MADE IN AN ELECTION YEAR (CVMC §2.52.050A) At Council's direction, this new section has been added which prohibits contributions in any year but an election year. The language is similar to the language in Proposition 68. Candidates will not be able to accept contributions until January 1 of the election year. This will essentially cut the fund raising period to ten months. AGGREGATE CONTRIBUTIONS - ABSTENTION WHEN MORE THAN $2,500 (CVMC §2.52.165 A,B,D) Council did not make a final decision on whether_to require abstention when aggregated contributions exceed a certain amount. For purposes of consideration, Council did direct that the amount in question be increased from $250 to $2,500. The reason this amount was increased was because $250 was felt to be too restrictive. The example given was if 25 members of the Chamber of Commerce gave more than $10 each to a councilmember, that councilmember would have to abstain on matters affecting the Chamber. The proposed ordinance would require councilmembers to abstain if they have received in aggregate $2,500 from a party, participant or their agents or officers. Parties and participants would have a duty to disclose this on the record. THE ABSTENTION PERIOD INCLUDES THE ENTIRE TERM OF OFFICE (CVMC §2.52.040F and §2.52.165B) Since Council did not make a final decision on whether to aggregate contributions, there was also no final decision on how long the period of abstention will be when aggregated contributions exceed $2,500. Under the proposal before the City Council, councilmembers would be required to abstain during their entire term of office. The Charter Review Committee voted 3-2 in favor of this proposal. Generally, the Political Reform Act requires an official to abstain for 12 months. The problem with this approach is that it might not deter contributors from seeking to purchase influence with councilmembers when they know that the councilmember is going to be participating in important decisions affecting their interest later on in the councilmember's term of office. Agenda Item No. k2 0 Meeting Date: 9l /0 .2-6/T9-- Page 3 SIXTY DAYS NOTICE WHEN A CANDIDATE CONTRIBUTES $5,000 OR MORE IN PERSONAL FUNDS TO CAMPAIGN (CVMC §2.52.105A) At the joint meeting, Council opted for the Charter Review Committee's recommendation requiring notice over staff's recommendation that would have suspended contribution limits for rival candidates. The proposed ordinance would now require a candidate to give 24 hours notice of a contribution to his or her own campaign fund if the amount is more than $5,000. This part is similar to state law. See Gov. Code §§84203 and 84204. The potentially controversial aspect of this new regulation is that the notice must be given at least 60 days before the election. If the candidate fails to give timely notice, this section works as a prohibition of the contribution. A candidate wishing to challenge this provision would characterize it as a prohibition upon the right to expend his or her own funds. The candidate might argue that he or she didn't have reason to know that the contribution was necessary until after the notice period had elapsed and that the restriction is, therefore, unreasonable. Buckley _v. Valeo (1976) 424 U.S.1; 46 L.Ed.2d 659, held that government may not limit the amount of money a candidate contributes to his or her own campaign. The Buckley case has resulted in wealthy candidates being given a distinct advantage in campaigns. This runs directly counter to our own goals of creating a "level playing field" and reducing the influence of money in city elections. There is no question now that political expression lies at the core of First Amendment values. Buckley, supra. Nevertheless, in other areas dealing with First Amendment expression, the courts have upheld reasonable "time, place and manner" restrictions on First Amendment rights. (See Ward v. Rock Against Racism (1989) U.S. , 57 U.S.L. Week 4879). Our proposed regulation does not prohibit a candidate _from contributing to his or her own campaign, but merely puts a time and manner restriction on this contribution. Last month, Justice Benke, writing for the Fourth District Court of Appeal in Sundance Saloon, Inc. v. San Diego 89 D.A.R. 11078, discussed the standard for time, place and manner restrictions and stated: Perhaps the classic statement as to when time, place and manner restrictions on protected speech are proper was made by Justice Warren in United States v. O'Brien (1968) 391 U.S. 367, 377 (88 S.Ct. 1673) : "A government regulation is sufficiently justified if it is within the constitutional power of the government; if it furthers an important or substantial governmental interest; if the governmental interest is unrelated to the suppression of free speech; and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest." Agenda Item No. - q 013/n Meeting Date: 90 Page 4 The City does have a substantial interest in assuring that public office is open to anyone and that personal wealth is not the determinative factor in who gets elected. The purpose of the regulation is not to "suppress the free expression" of the wealthy candidate, but rather to give all candidates a reasonable time to react to the infusion of one candidate's personal wealth into the campaign. The regulation is as narrowly drawn as is practicable. If candidates don't have at least sixty days to react, there will be insufficient time to raise "combating" contributions and prepare a response prior to the election. This regulation is an innovative approach to the problem associated with wealthy candidates and we have no assurance that the courts are going to uphold its validity. Courts do not show the same deference to legislative actions when First Amendment rights are involved as they do in less sensitive areas. Spiritual Psychic Science Church v. City of Azusa (1985) 39 Cal.3d 501, 514, 217 Cal.Rptr. 225. The "safe" approach would be to delete this regulation from the ordinance or to reduce the amount of notice required from 60 days to some lesser time. Much depends on what-our theory is for requiring this notice. If the theory is that the rival candidates will now have a reasonable chance to raise "combating" funds, it would be difficult to make this work without 60 days notice. If the theory is that the candidates will be able to raise this issue at candidate forums and with the media, then three weeks may be sufficient time. It's going to come down to a balancing test between the City's interest in limiting the influence of money on its elections and the candidate's right to express support for his or her own candidacy by using his or her own funds. The scale is going to be tilted against the City because this is a highly protected right. Given the constitutional constraints, it would be my recommendation that we reduce the notice period to 21 days and rely primarily on candidate's forums and the media to remedy the problem. EXPENDITURES OF $5,000 OR MORE BY INDEPENDENT COMMITTEES (CVMC §2.52.106) At the conclusion of the joint meeting, Council directed staff to draft a provision dealing with independent expenditures similar to the provision dealing with contributions by a candidate to his or her own campaign. The proposed amendment is attached as Exhibit "A" to this report, but is not included in the ordinance. The notice requirement creates a different problem when applied to independent expenditures as opposed to contributions to one own's candidacy. A candidate knows at least 88 days before the election that he is she is running for office because that is when the candidate must file for the office. (Ca. Election Code §22302.5) . A person who might wish to make an independent Agenda Item No. 112' q 0 1316'7 Meeting Date: 9/ Page 5 expenditure might not receive very much information about the candidates for a local office until the last month prior to the election. Typically, that is when campaigns for local office heat up and the general public starts to see flyers, debates, candidate forums and press coverage. The campaign itself is an educational process for the voters and they might not make up their minds until just before the election after they have had an opportunity to consider the information that comes out of this process. At that point, if the person wanted to make an independent expenditure our ordinance would prohibit it because the person failed to give the proper notice. The person wishing to make the independent expenditure would be able to make a strong argument that our ordinance is actually a prohibition against independent expenditures. By the time a person reasonably could be informed about the candidates and could make a decision as to whom to support, our ordinance would prohibit the independent expenditure. It is clear that the court considers independent expenditures to be constitutionally protected expression. FEC v. National Conservative Political Action Committee (1985) 470 U.S. 480; 105 S.Ct. 1459; 84 L.Ed2d 455. This protection of independent expenditures has created a loophole which politically sophisticated individuals and organizations will undoubtedly exploit. While our proposed regulation would help to deter the resulting unfairness, it could also result in the de facto prohibition of legitimate independent expenditures in violation of First Amendment rights. In FEC v. Nat. Conservative Political Action Committee, the court found that no countervailing governmental interest was sufficiently strong enough to justify a $1,000 limitation on independent expenditures by political action committees. Given the lack of deference to legislative action in this sensitive area, there would be considerable risk that this regulation would be found to be invalid. "COERCED" CONTRIBUTIONS PROHIBITED (CVMC §2.52.060B) The proposed amendment emphasizes and strengthens the prohibition against contributions which are "financed, maintained or controlled" by anyone other than the person making the contribution. "AGENT" DEFINED PER STATE LAW (CVMC §2.52.040A) The definition of "agent" used in the Political Reform Act (see Admin. Code §l8438.3) is now included in the City Code. "Agent" includes anyone who represents a party or participant in connection with a proceeding involving a license, permit or other entitlement for use. If the agent is also acting as an employee or member of a law, architectural, engineering or consulting firm, both the individual and the firm are "agents". CONTRIBUTIONS IN SUBSEQUENT ELECTIONS (CVMC §2.52.050C) Council directed that the ordinance be clarified so that when a councilmember is running for reelection, the Councilmember may go back to a contributor to their prior election and seek another contribution for the reelection Agenda Item No. 1,2- ' / Meeting Date: 9/2 -& /Vi 3( e� Page 6 campaign. This same logic would apply to a councilmember running for the Mayor's office or for a Mayor running for a Council seat. Section 2.52.050C specifically allows this. FISCAL IMPACT: There could be some additional enforcement costs associated with aggregated contributions. It would be difficult to predict how much this would be at this time. 6198a Item 1-2" EXHIBIT "A" Sec. 2. 52 .106 Independent Campaign Expenditures or Contributions . A. No individual or committee shall expend or contribute more than $5,000 in support of a City candidate unless and until the following conditions are met: (1) Written notice of the individual or organization ' s intent to expend in excess of $5,000 shall be provided to the City Clerk. The notice shall be delivered personally or sent by registered mail and shall specify the amount to be expended or contributed; and ( 2) The required notice shall be given no later than twenty-four ( 24) hours after the date of the expenditure or sixty ( 60) days prior to the election, whichever occurs first. '4 • by the City Coun 91 of Chula Vista, California Dated 9-° g COUNCIL AGENDA STATEMENT Item 9 Meeting Date 10/3/89 ITEM TITLE: Ordinance 2334 - Amending Sections 2 . 52. 040 , 2. 52. 040 & 2. 52. 060 and Adding Sections 2. 52. 105 and 2. 52. 165 to the Municipal Code Relating to Campaign ontribution Disqualification and Disclosure SUBMITTED BY: City Attorney gik (4/5ths Vote: Yes No X ) AO The ordinance has been revised pursuant to Council direction at its September 26, 1989 meeting to limit the notice period of personal contributions to 21 days and set at $1, 000 the limit on aggregate contributions before abstention is required. RECOMMENDATION: Place ordinance .on second reading and adoption. beerCei /Padeht. by the City Council of Chula Vista, California 14 -5-842 Dated • Form A-113 (Rev. 11/79) j 1 r I � 1 . _J DISPOSAL CORPORATION 6670 Federal Boulevard Lemon Grove,California 92045(619)287-7555: Mayor Greg Cox and City Council Members City of Chula Vista 276 Fourth Avenue Chula Vista, Ca. 92010 August 31 , 1989 Dear Mayor Cox, Pursuant to the letter received from Assistant City Attorney D. Richard Rudolf regarding matters arising from Edco Disposal Corporation' s contractual agreement with the State of California School Systems , namely the Sweetwater Union Hiah Schooll District. We would like to apply for a franchise per Mr. Rudolf ' s instruct- ions . Whereby we will provide trash removal service to those school sites located within the City of Chula Vista. We understand that the necessary documents are being prepared for signture . Please keep us informed . Thank you. Very truely yours , EDCO DISPOSAL CORPORATION cc. D. Richard Rudolf Assistant City Attorney Eugene Asmus Assistant City Manager