John Diaz: Sacramento crafting bill in secret to require transparency

The tortuous course of one of the most important political-transparency bills of the session underscores why the California Legislature cannot be trusted with reform. Its Democratic leaders don’t really want meaningful reform, and they have abundant tools at their disposal to kill or weaken it.

The Disclose Act, AB700, would require advertising for ballot measures to reveal the real identities of the three top funders. It would put an end to all those ads with donors hiding behind fuzzily or deceptively named front groups such as Californians for Cute Puppies and Lower Taxes. It cleared the Assembly 60-15, and the state Senate Elections and Constitutional Amendments Committee, 4-1.

But the legion of good-government advocates of AB700 had good reason to be nervous when the bill reached the Senate Appropriations Committee, which can be a mysterious hall of horrors for legislation opposed by powerful special interests. Bills can be left to die there, without a vote, at leadership’s orders. And it was no secret that organized labor, which has outsize influence in Sacramento, was not thrilled about the Disclose Act.

Knowing the risk of a quiet death of AB700, the Clean Money Campaign went to work with an email and social media blitz aimed at Senate leadership.

“This bill has been two years in the making,” said Assemblyman Marc Levine, D-San Rafael, a co-author. “It’s not a surprise to me there are interests getting in the way of increased transparency and disclosure for the voters.”

On Aug. 11, the bill emerged from the Appropriations Committee, and advanced to the Senate on a 5-2 vote. But there were changes. Phillip Ung of the state’s Fair Political Practices Commission said the amendments were written “with almost surgical provision” by a lawyer obviously familiar with the nuances of campaign finance law.

“We came to the conclusion that the amendments were coming from someone outside the building who was highly connected,” said Ung, the director of legislative and external affairs.

The commission’s attorneys also concluded that the changes were designed to undermine the act’s intent of forthright disclosure of major donors. They were especially alarmed by a provision dealing with the hiding of the true source of a contribution.

It’s an arcane area of law, but here’s the upshot: Under one amendment, if Dick gives Jane $100,000 to fund a campaign while concealing his involvement, the FPPC would be required to find evidence of “express consent” to make that payment on behalf of a particular cause.

As Ung noted, that’s not the way it works in politics. People trying to launder donations through others do so with “a nudge and a wink” and no paper trail.

“There are two types of people who use express consent: people who want to get caught — and stupid people,” Ung said. “It really ties our hands (for enforcement) and lays out a road map for sending untraceable money.”

Ung also pointed to an exemption on contributions from the dues of “membership organizations” to suggest that labor’s fingerprints were clearly on the amendments.

The authors of AB700 and attorneys for the good-government groups disagree with the FPPC interpretation.

“The good guys prevailed,” said Levine, noting that he and co-author Assemblyman Jimmy Gomez, D-Los Angeles, fought off earlier amendments that would have thoroughly gutted the bill.

I checked in with Bob Stern, co-author of the 1974 Political Reform Act and an impeccably nonpartisan and scrupulous arbiter of campaign finance law, to get his assessment of the FPPC criticisms of the revised AB700. He was satisfied that other provisions of the bill were sufficient to prevent such laundering.

“It helps as opposed to hurts,” Stern said of the final version of AB700. “That’s my bottom line.”

If loopholes do become apparent, vowed Trent Lange, president of the Clean Money Campaign, “We would be back in a second.”

AB700, which comes up for final passage at the end of the month, remains a significant step forward in political disclosure. But the irony that the transparency bill of the year was altered in the dark recesses of the State Capitol by the forces it was designed to regulate should not be lost on Californians.

“It’s beyond surreal that so much of government decision-making operates outside of public view,” said Jay Costa, director of the Berkeley campaign-finance reform group CounterPAC.

Neither Levine nor Lange has been told exactly who tinkered with their AB700 behind the scenes.

“It was almost like a secret hearing,” said Stern.

And a clarion call for the next legislative reform.