1 Prohibited Political Activities Of Government Agencies ____________________________ Presentation to the SACRS Symposium March 20, 2009 David L. Muir Chief Counsel LACERA

2 Politicking at Taxpayer’s Expense Prohibited Basic Rule: Public funds cannot be used to influence the electorate. Note the word influence. It’s okay to educate. Courts have emphasized that educational material must be fair and balanced. Note the word electorate. It’s okay to lobby the legislature. But it is not okay to urge the electorate to lobby the Legislature. Practice Tip: Keep your eye on the audience: »Members of the state legislature - - okay »Voters and members of the public - - not okay

3 Key California Case Stanson v. Mott (1976) 17 Cal.3d 206 –Mott was the Director, California Department of Parks and Recreation. –Spent $5,000 to promote passage of a State park lands bonds –The plaintiff sought judgment holding Mott personally liable

4 Supreme Court’s ruling in Stanson v. Mott: 1. Can’t spend public funds to promote a partisan position in an election campaign unless there is “clear and explicit legislative authorization.” “A fundamental precept of this nation’s democratic electoral process is that the government may not “take sides” in election contests or bestow an unfair advantage on one of several competing factions. A principle danger feared by our country’s founders lay in the possibility that the holders of governmental authority would use official power improperly to perpetuate themselves, or their allies, in office [citations]. The selective use of public funds in election campaigns, of course, raises the specter of just such an improper distortion of the democratic electoral process.”

5 Okay to spend money to provide education: A fair presentation of the facts will necessarily include all consequences, good and bad, of the proposal. Educational material must provide a “fair presentation of the facts.” No hard and fast rules. Factors to consider include: Style and tenor Timing

6 It’s okay to lobby members of the legislature: “Since the legislative process contemplates that interested parties will attend legislative hearings to explain the potential benefits or detriments of proposed legislation, public agency lobbying, in no way undermines or distorts the legislative process.”

7 Avoid Personal Liability No personal liability if you use due care. Courts have considered the following: »Was the impropriety obvious? »Was the official alerted to the possible impropriety? »Did the official rely on legal advice? Practice Tip: Get yourself a good attorney to review and approve what you want to do. This will be evidence that you exercised due care. Opinion of retirement system counsel will be viewed with jaundiced eye because of the obvious self interest of the attorney.

8 Avoid Going to Jail Penal Code Section 424 Every person charged with the receipt, safekeeping, transfer or disbursement of public monies... Who uses the same for any purpose not authorized by law... Is punishable by imprisonment in the state prison for two, three, or four years, and is disqualified from holding any office in this state. Government Code Section 8314 It is unlawful for any state or local appointee or employee to use public resources for a campaign activity. “Campaign activity” includes an expenditure as defined in Section FPPS Reg defines this to include communications directed to the voters “about a measure.” FPPC Regulation includes within its scope measures that have not yet qualified to be placed on the ballot.

9 Avoid Paying a Fine FPPC Regulation –If a state or local government agency makes expenditures for a political purpose it must file campaign statements if the agency qualifies as a “committee” under Government Code Section –Agency is a “committee” if it makes an expenditure for political purposes in excess of $1,000. –Fine for failing to file a campaign statement is up to $5,000 plus $10 per day. NEW FPPC Regulation (Effective 02/09/09) A payment of public monies by a state or local government agency for communications directed to the voters is considered an expenditure for political purposes “unless the information provided about the measure in the communication constitutes a fair and impartial presentation of facts relating to the measure.”