FPPC Enforcement Retrospective & Prospective Policy Meeting - - PowerPoint PPT Presentation

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FPPC Enforcement Retrospective & Prospective Policy Meeting - - PowerPoint PPT Presentation

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FPPC Enforcement Retrospective & Prospective Policy Meeting November 22, 2019 2019 Enforcement Trends Resource Allocation 2019/2020 Penalties 2019/2020 Streamline/WL Discussion Program Roadblocks to Enforcement Legislative Proposals

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FPPC Enforcement Retrospective & Prospective

Policy Meeting November 22, 2019

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Program

2019 Enforcement Trends Resource Allocation 2019/2020 Penalties 2019/2020 Streamline/WL Discussion Roadblocks to Enforcement Legislative Proposals Regulatory Proposals The year to come…

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Program

2019 Enforcement Trends

Resource Allocation 2019/2020 Penalties 2019/2020 Streamline/WL Discussion Roadblocks to Enforcement Legislative Proposals Regulatory Proposals The year to come…

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2019 Enforcement Trends

  • Referrals Not Slowing

Down

  • Laundered Campaign

Contributions

  • Personal Use of Campaign

Funds

  • Advertisements/Mass

mailers

  • Campaign Related

Communications at Public Expense

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Complaints and Referrals Received (As

As of f 11/1/19)

609 1180 564 1352 652 596 350 1616 1529 1591

500 1000 1500 2000 2500 3000 3500 2015 2016 2017 2018 2019

Complaints Referrals

27% 32% 42%

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Laundered Campaign Contributions & Personal Use of f Campaign Funds (C (Complaints Received)

22 20 35 29 9 16 39 8

10 20 30 40 50 60 70 80 2016 2017 2018 2019

Laundered Campaign Contributions Misuse of Campaign Funds

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Laundered Campaign Contributions & Personal Use of f Campaign Funds (C (Cases Opened)

15 6 10 7 8 4 7 6

5 10 15 20 25 2016 2017 2018 2019

Laundered Campaign Contributions Misuse of Campaign Funds

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Advertisements & Mass Mailings 2016 2016 - 2019 2019

Complaints Cases Opened

148 104 328 73

50 100 150 200 250 300 350

2016 2017 2018 2019 105 37 111 49 20 40 60 80 100 120 2016 2017 2018 2019 8

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Mass Mailings/Ads Sent at Public Expense

Number of Cases Opened Case Resolutions

18 2 2 1 8 2 3

2 4 6 8 10 12 14 16 18 20 Advisory Letter Stipulation Warning Letter No Action Closure Letter 18901.1 & 18420.1 89001 and 18901

1 22 16 22 3

5 10 15 20 25 2015 2016 2017 2018 2019

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Program

2019 Enforcement Trends

Resource Allocation 2019/2020

Penalties 2019/2020 Streamline/WL Discussion Roadblocks to Enforcement Legislative Proposals Regulatory Proposals The year to come…

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Resource Allocation 2019/2020 (Priorities)

  • What was

prioritized for 2019?

  • What should be

prioritized for 2020?

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Types of Cases Opened 2018 v. 2019

2018 – Election Year 2019 – Non-Election Year

918 419 226 Campaign (59%) SEI (27%) Other (14%) 432 923 160 Campaign (28%) SEI (61%) Other (11%) 12

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Drill Down – Campaign Cases Opened

2018 2019

255 112 30 8 7 20 683 107 63 21 10 34

Campaign Non-Filer Annual Fees Campaign Non- Reporter Campaign Contribution Limits Laundered Campaign Contributions Other Campaign

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Prioritizing Complaint Processing Complaints Received 2018 Days Opened (Median) 10

36% 64%

Complaints Received in 2018

Case Open (36%) Complaint Rejected (64%)

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Complaints Received 2019 Days Opened (M (Median) 6

35% 55% 10%

Complaints Received in 2019

Case Open (35%) Complaint Rejected (55%) Intake Review (10%)

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Referrals Received – 2018 v. 2019

2018 2019

93% 7% Case Open (93%)

Referral Rejected (7%)

84% 10% 6% Case Open (84%)

Referral Rejected (10%)

Intake Review (6%) 16

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Campaign Related Communications at Public Expense Personal Use of Campaign Funds Conflicts of Interest Advertisements and Mass Mailings (Disclose Act) Other areas Pursuing Nonfilers Behested Payments Contract Work Pursuing defaults and nonpayment

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Days Opened (Median) 105

448 414 367 347 233 220 216 208 202 151 109 73 50 100 150 200 250 300 350 400 450 500 Cash and In-Kind Contributions and/or Expenditures Campaign Bank Account Laundered Campaign Contributions Misuse of Campaign Funds Advertisements Conflict of Interests Campaign Contribution Limits Mass Mailings Lobbying Reporting Recordkeeping Campaign Non-Filer Statements of Economic Interest Non-Filer

Median Case Pendency (2016-2019 Cases)

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Program

2019 Enforcement Trends Resource Allocation 2019/2020

Penalties 2019/2020

Streamline/WL Discussion Roadblocks to Enforcement Legislative Proposals Regulatory Proposals The year to come…

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Penalties 2019/2020

Setting guidelines

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Penalties 2019/2020

  • General Criteria Applied
  • By Category:
  • Conflicts of Interest
  • Personal Use
  • Use of Cash
  • Campaign Late Filing
  • Unreported Lobbying Activity

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General Criteria Regulation 18361.5, subd. (d).

Consider all the surrounding circumstances including but not limited to: The seriousness of the violation; The presence or absence of any intention to conceal, deceive or mislead; Deliberate, negligent or inadvertent; Demonstrated good faith by consulting the Commission staff or any

  • ther government

agency; Isolated or part of a pattern; Prior record of violations of the Act or similar laws; and Voluntarily filed amendments to provide full disclosure. Comparable cases. Sophistication of the parties.

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Factors that Influence Penalties for Conflict of Interests Violations (Range $3,000 - $5,000)

Aggravating Factors = Higher Penalty

  • Interest Not Disclosed in SEIs/Interest Concealed
  • Large Personal Benefit Received
  • Official Worked Directly on the Project that was the Subject
  • f the Governmental Decision
  • Large Benefit to Official’s Economic Interest
  • Pattern of Violations

Mitigating Factors = Lesser Penalty

  • No Prior History of Conflict of Interest Violations
  • Cooperation with Enforcement
  • Interest Disclosed in SEIs
  • No Longer in Office
  • Requested Advice from Agency Attorney Before

Governmental Decision

  • Corrective Action Taken Before Complaint Filed
  • Official Did Not Work Directly on Project that was the

Subject of the Governmental Decision

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Personal Use of Campaign Funds – ($5,000 w. some exceptions)

  • Considerations:
  • Sophistication
  • Amount
  • Reimbursement
  • Frequency
  • Own Money

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Receipt of f Cash/Making Cash Expenditures ($ ($1,0 ,000 - $2,5 ,500)

  • Considerations:
  • Amount
  • Percentage
  • Recordkeeping
  • Personal Use
  • Level of Sophistication

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Program

2019 Enforcement Trends Resource Allocation 2019/2020 Penalties 2019/2020

Streamline/WL Discussion

Roadblocks to Enforcement Legislative Proposals Regulatory Proposals The year to come…

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Streamline & Warning Letter Discussion

Major Donor Committees Behested Payment What’s working? What needs some review?

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Streamline/WL Program

  • What’s working?
  • Extended categories – committee

naming, cash, ads, recordkeeping, gift limit violations

  • No surprises
  • What needs reviewed?
  • Level of detail – exclusions re: 24 hr

reports

  • Some of the percentages
  • Lobbying limit
  • Population exclusion bottom level
  • Add Major Donors and Behested

Payments

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Majo jor Donors Under $30k; No notice; Never filed before; Filed after contact; Business is terminated.

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Behested Payments

  • Filed before Enforcement contact;
  • Within 100 days of due date;
  • Filed with estimated amount;
  • # of payments or solicitations;
  • Prior history of filing (knowledge of

requirements);

  • Requested info from charity;
  • Amount of donation.

Exclusions – 1.Business before his/her agency; 2.Perceived or real personal benefit.

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Program

2019 Enforcement Trends Resource Allocation 2019/2020 Penalties 2019/2020 Streamline/WL Discussion

Roadblocks to Enforcement

Legislative Proposals Regulatory Proposals The year to come…

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Roadblocks to Enforcement

Subpoenas out of state LLCs Sworn officer access Advertisement rules

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Program

2019 Enforcement Trends Resource Allocation 2019/2020 Penalties 2019/2020 Streamline/WL Discussion Roadblocks to Enforcement

Legislative Proposals

Regulatory Proposals The year to come…

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Legislative Proposals

LLC Presumption FPPC Sworn Officer Out of State Subpoenas Public Agency Campaign Ads Bright Line Rule Advertisement Rules Lobbying Audits

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Program

2019 Enforcement Trends Resource Allocation 2019/2020 Penalties 2019/2020 Streamline/WL Discussion Roadblocks to Enforcement Legislative Proposals

Regulatory Proposals

The year to come…

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Regulatory ry Proposals

LLC recordkeeping Enforcement procedures regulations overhaul Cash + Recordkeeping = Presumption of Personal Use or Laundering

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Program

2019 Enforcement Trends Resource Allocation 2019/2020 Penalties 2019/2020 Streamline/WL Discussion Roadblocks to Enforcement Legislative Proposals Regulatory Proposals

The year to come…

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The year to come…

This Photo by Unknown Author is licensed under CC BY-NC-ND

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Questions?

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