1. Lynda Cassady, Division Chief Technical Assistance Division Note: The slides presented today do not have the force of law. California Fair Political Practices Commission Overview State Controller's Conference with County Auditors : 1 Presented May 2015

2. Objectives Gain a basic understanding on: FPPC’s regulatory authority Reporting personal financial interests: Form 700 Conflicts of interests & revolving door rules Mass mailing restrictions Campaign rules Enforcement efforts 2

3. 3 CAMPAIGN REPORTING SEI/FORM 700 CONFLICTS OF INTEREST (Including G.C. 1090) AGENCY GIFTS, TICKETS & TRAVEL AGENCY‘S MASS MAILINGS STATE LOBBYING REVOLVING DOOR HONORARIA INDEPENDENT EXPENDITURE ADS FPPC Regulates

4. BROWN ACT CONDUCT OF ELECTIONS QUALIFYING FOR THE BALLOT USE OF GOVT FUNDS FPPC does not Regulate 4 4

5. Overview of Form 700 and Agency Reports Statements of Economic Interests 5

6. Who Files Form 700? Any officer, employee, member, or consultant of your agency whose position is designated in your agency’s conflict of interest code. These positions are deemed to make or participate in making government decisions. Conflict of interest code may limit disclosure Note: Nearly 50% of counties E-file. 6

7. 7 Conflict of Interest Code Know Your Disclosure Categories Category 1: Interests in real property, and all investments, business positions in business entities, and income, including receipt of gifts, loans, and travel payments. Category 2: Investments, business positions in business entities, and income, including receipt of gifts, loans, and travel payments, from sources of the type that provides services, goods, products in the telecommunications and information technology fields. Designated PositionAssigned Disclosure Category Auditor1 Assistant Auditor1 I.T. Manager 2 SAMPLE

8. Common Reportable Financial Interests 8 Stocks Spouse’s employer (non-government) Rental property The name of the individual who purchases your home/car Source of gifts from entities that do business with the agency (e.g., vendors).

9. Common Non-Reportable Interests 9 Investments in mutual funds Meals paid by a personal friend who has no relationship with your job. Your spouse’s salary as a public school teacher. Your home, unless a business is conducted.

10. Schedule D – Gifts 10 Non-Reportable Gifts:Reportable Gifts : Gifts from family members and pre-existing personal relationships (e.g., college friend, co-worker) Gifts returned unused within 30 days Gifts exchanged on birthdays, holidays, or similar occasions and home hospitality Gifts from other sources (e.g. vendors) such as meals, tickets to sporting or entertainment events A list of gift exceptions is in FPPC Regulation 18942.

11. What is a “Gift”? A payment providing a personal benefit for which you do not provide payment or services of equal or greater value. $460 gift limit from a single source in a calendar year Enforcement: Recently only 38 of 500 school officials properly reported gifts. Average fine was $200. 11

12. Travel Travel payments from your own agency and other governmental agencies are not reportable Travel payments from nonprofits may be reportable but not limited Travel payments in connection with speeches reportable but not limited Third party travel for official agency business : Form 700 or Form 801 12

13. Travel for Speeches 13 Transportation (airfare, mileage, cabs, etc.) Lodging (day before, day of speech, day after) Subsistence expenses not provided to all event attendees Reportable travel:Travel that is not reportable: Transportation paid by a local, state, or federal government agency Meals provided to you and all conference attendees and nominal items

14. Travel Example Auditor serves on the board of directors of an Association – Nonprofit 501(c)6. The association pays for the travel expenses (airfare, meals and lodging) so that he may participate and work at board meetings. 14 These payments are reportable as income if $500 or more. Not subject to limits.

15. Travel Example Auditor serves on the board of directors of an Nonprofit 501(c)6 Association. After the board meeting a sales representative hosts a cocktail party and takes several board members to dinner. 15 These payments are gifts. Reporting: $50/yr; Limit: $460/yr.

16. Reporting Review Questions Do you report the following: 16 Spouse’s salary as a public school teacher? Rental condo in San Diego? Vanguard security fund similar to mutual fund? Personal residence? Name of source who purchased home/car? Stock in Starbucks? Your co-worker who bought lunch on your birthday? Dinner provided by a sales representative? Airline tickets to New York City provided by your college roommate for a personal visit?

17.  Gifts to an Agency (Form 801)  Ceremonial Role Events and Ticket/Admission Distributions (Form 802)  Behested Payments (Form 803) Entertainment events & ceremonial roles Generally, travel payments “Featured” elected officials: $5,000 or more funding to charities 17 Agency Reports 17

18. Agency Payment Reports Your Department is offered the use of a software program on a trial basis. (Official agency use – no personal benefit.) Form 801 is not triggered as there is no personal benefit for department personnel. Agency is procuring a new software program. Potential vendors offer to send an employee to NYC to observe how it is used in another agency. Form 801 or Form 700 reporting is required as there is a personal benefit for department personnel. 18

19. Sample Form 801 19

20. Ceremonial Role & Ticket Report Agencies must report tickets the agency either distributes or uses for its staff Agencies must adopt a ticket policy that provides the public purposes Common reportable tickets include: A fair board distributing tickets to the county fair An official receiving tickets to perform a ceremonial role at an event Tickets to an event as a morale or recognition reward 20

21. Reporting on Form 802 An auditor is awarded the County’s Employee of the Year Award, which includes two tickets to a San Francisco Giants game. Since there is a benefit to the official, a Form 802 is required. 21

22. Behested Payment Report An elected official must complete Form 803 if the official solicits funds of $5,000 or more for a charitable or governmental purpose. Auditor signs a letter asking for donations to a local charity and a donor donates $5,000 or more. 22

23. How can the FPPC help? Conflicts of Interest 23

24. Conflicts of Interest 24 The FPPC provides free advice via email for basic questions. Most questions will require specific facts that must be addressed through a formal advice letter. Advice is offered on the Act’s conflict of interest rules and “1090” rules. Advice letters: Rules have recently changed; suggest reviewing advice letters written in 2015.

25. Common Questions 25 Would this contract affect my spouse’s employer? Did I receive gifts of $460 from a potential vendor? Do I own stock in companies supplying products or services? Is a decision going to affect the property value of my personal residence?

26. If You're Elected… 26 Other Applicable Rules

27. More than 200 pieces sent through mail No “featuring” (photos, signatures, multiple pronouns of elected officials) Permissible: letterhead, rosters, meeting announcements, emails, websites Mass Mailings with Public Funds 27

28. Revolving Door Provisions- Leaving Government Work FPPC only provides written advice One year ban - appearing before former agency for compensation to influence Ban on influencing prospective employers 28

29. Campaign Rules Return contributions within 60 days if you do not have a person’s address, occupation, and employer. Don’t accept cash/money orders of $100+ Watch for signs of campaign money laundering (e.g., employees being reimbursed by employers). Report subvendors, not just your political consultant’s fees. File campaign finance reports on time. 29

30. Campaign Issues You have a campaign report due when your name is listed on a ballot. Most candidates must file the following FPPC forms: Form 501 – before you raise $$ Form 410 – to receive an FPPC ID # Form 497 – identifies donors of $1,000 or more to your committee Form 460 – public disclosure report of all money in/out of your campaign 30

31. Enforcement History Warning Letters Related to Auditors: Auditor’s campaign committee did not keep proper records. Auditor failed to file Form 700 on time 31

32. When in Doubt… If you have questions, research or ask! www.fppc.ca.gov Toll Free Advice Line: 866-275-3772 (AM hours) Email advice: advice@fppc.ca.gov 32