Sen. Patricia Bates Introduces Bill to Close Loophole Highlighted by Leland Yee Case

Bill Would Impose Limits on Candidate-Controlled Ballot Measure Committees
Wednesday, February 24, 2016

Senator Patricia Bates (R – Laguna Niguel) has introduced Senate Bill 1467, which would close a major loophole that allows elected officials and candidates to avoid contribution limits. Bates authored her bill in response to the case of former State Senator Leland Yee, who mentioned the loophole when soliciting bribe money from an undercover FBI agent. Yee will be sentenced today in a federal court for pleading guilty on one count of felony racketeering.

“Today’s sentencing of a former elected official underscores the need to close campaign finance loopholes wherever they exist,” said Bates. “We can help strengthen existing law by applying the same limits on candidate-controlled ballot measure committees as we do to personal campaign accounts. My bill will help restore the spirit of the Political Reform Act of 1974 that sought to end the culture of corruption that many believe is pervasive in politics.

SB 1467 would subject candidate-controlled ballot measure committees to the same contribution limits currently imposed on candidates for state office.

Proposition 34 (2000), which was overwhelmingly approved by California voters, placed limits on the amount donors could give to state candidates’ and elected officials’ campaigns. However, politicians, candidates and special interest groups quickly learned that they could get around these limits through a loophole that allows unlimited contributions into candidate-controlled ballot measure committees.

In a 2009 Fair Political Practices Commission (FPPC) report titled “The Billion Dollar Money Train,” the FPPC found that donations to candidate-controlled ballot measure committees shot up a staggering 200,000 percent in the five-year period after Proposition 34 was passed (page 4). By allowing special interest groups to continue giving huge amounts to candidates, this loophole has perpetuated the belief that money can buy influence in the California political system. It has also created an uneven playing field when it comes to state elections, because it allows some candidates to receive unlimited amounts of money from special interest groups, while those without separate ballot measure committees are left at a severe disadvantage. 

Currently, candidates are not required to state which ballot measure their committees are formed to support, giving the appearance, at least, that donors are giving to the politicians rather than particular causes. While the FPPC has not taken a position on SB 1467, “The Billion Dollar Money Train” report (page 6) once asked, “Is it logical to limit the size of contributions to an officeholder’s committee… and yet allow the same special interests to contribute vastly greater committees controlled by the same officeholders?”

The money raised into candidate-controlled ballot measure committees can be used to benefit candidates and their campaigns, very much like the money in actual campaign accounts. Appropriations from candidate-controlled committees have included thank-you gifts to donors, ads favorably portraying candidates, legal fees, campaign consulting fees, extravagant out-of-state fundraisers and even a lawmaker’s tuition. At best, these expenditures often have a very tenuous link to ballot measures.

Speaking for California Common Cause in 2013 to the Sacramento Bee, a former representative once called the ballot measure committees “political slush funds.” The representative said these committees “can’t continue the way they are because they’re just being abused by some elected officials.” California Common Cause has not taken a position on SB 1467.

“Senate Bill 1467 is a common sense solution to help restore the voters’ faith in their elected officials, prevent real corruption and also prevent the appearance of corruption,” said Bates. “It’s time for the Legislature to do right by the people of California and close the loophole.”

SB 1467 is currently pending in the Senate Rules Committee, which will likely refer it to the Senate Elections and Constitutional Amendments Committee for its consideration. Senators Tom Berryhill, Sharon Runner and Jeff Stone are co-authors of Bates’ bill.