Governor signs campaign disclosure law, which may face legal tests

SACRAMENTO — A controversial political reform bill will become law, thanks to Gov. Jerry Brown’s signature on the bill known as the California Disclose Act.

AB 249 passed despite concerns raised by the head of the agency now assigned to enforce it.

In fact, a prominent Republican law firm has warned the bill is a “litigation target.” Meanwhile, the bill’s author, Assemblyman Kevin Mullin, D-South San Francisco, has said he is willing to carry legislation to fix AB 249 if the bill creates legal conflicts.

Mullin was ebullient in a press release that followed Brown’s signing of the legislation on Saturday.

“No more fine print,” Mullin said. “California voters will now be able to make informed decisions, based on honest information about who the true funders are of campaign ads.”

Mullin’s comment refers to the text viewers will see at the end of commercials for ballot initiatives next year. Campaigns will need to clearly disclose their top three funders above $50,000.

The bill was sponsored by the California Clean Money Campaign, which has been attempting to pass similar legislation for several years.

“Every single good government group in California and nationally has been strongly in support of AB 249, including the principal author [of] the California Political Reform Act of 1974, Bob Stern,” said Trent Lange, executive director of the Clean Money Campaign.

But the bill faced growing resistance after a series of amendments were added in August. Key among these was an exemption from disclosure requirements for “membership organizations” that receive donations of under $500.

The Howard Jarvis Taxpayers Association then circulated a letter saying the provision amounted to a carve-out designed to protect labor unions.

The agency in charge of enforcing AB 249 is the Fair Political Practices Commission. The FPPC did not vote to take an official position on the bill at its Sept. 21 meeting, even after members grilled Lange for over an hour on the bill.

But the FPPC’s chair, Jodi Remke, did issue a warning about AB 249.

“There are some devils in these details,” Remke said.

This followed an FPPC staff report recommending the agency oppose the bill unless it was amended. The report cited the exemption for membership organizations, as well as potential unintended consequences such as limiting the situations in which the agency can fine political advertisers.

It also warned, “There is a potential risk of litigation” if the measure passed.

The staff report then cited points also raised in a September letter to the FPPC from Charles H. Bell Jr., a partner at the Sacramento Republican campaign law firm Bell, McAndrews & Hiltachk LLP.

“The Commission … is likely to become one litigation target if the bill becomes law,” Bell wrote. “AB 249 contains provisions the FPPC is currently enjoined to enforce due to their unconstitutionality.”

Bell went on to note that the bill extends disclaimer provisions and potentially serious penalties to “general purpose committees, including political party committees.” This runs afoul of case law, he said.

Bell cited ACLU of Northern Nevada v. Heller, 01-CV15462 (9th Cir. 2004), which overturned a campaign disclosure law on First Amendment grounds, as well as subsequent decisions.

The Clean Money Campaign’s Lange noted that the letter was marked as being from Bell, and not from the firm or from a potential plaintiff. He also said seven legislative Republicans ended up voting for AB 249 despite knowing of the issues raised by opponents.

“There is literally no organization at all beside Howard Jarvis that opposes AB 249 or has agreed with the opposition’s legal and constitutional analysis,” Lange said.

Meanwhile, Mullin’s chief of staff, Hugh Bower, said they have been in touch with Brown’s office, and stand ready to pass another bill if AB 249 does need changes to pass constitutional muster. This could be done through an urgency bill that would take effect immediately and be in place for the 2018 elections, he added.

“If there is language within AB 249 that can be clarified, we are happy to look at that and do it early next year,” Bower said.