Gilroy
– Developers and others looking to influence city government
will have a harder time filling the war chests of politicians under
updated campaign finance regulations.
Gilroy – Developers and others looking to influence city government will have a harder time filling the war chests of politicians under updated campaign finance regulations.
Gilroy City Council signed off last week on regulations that would make it illegal for an individual to use corporations or limited liability companies, among other entities, to steer multiple contributions to political candidates in excess of the $250 cap on individual contributions.
Though political spending in Gilroy pales in comparison to state and federal races, local candidates have found themselves spending more and more to mail glossy brochures and print lawn signs. In the 2005 election, City Councilman Dion Bracco spent more than $21,000 papering the city with his name and message, according to campaign finance statements.
First-place finisher Councilman Craig Gartman, who already had some name cachet from his first term on council, spent $16,464 on the election.
Gartman said it’s “incredibly tough” raising campaign funds by knocking on doors during election season. Still, he welcomed the new regulation as a way to plug a loophole.
“We’re trying to make sure there’s a clear delineation between people and organizations so we don’t have a violation of the spirit of the law, and that is to limit contributions to $250 from any one entity,” Gartman said. “You get checks in the mail from many different organizations, different companies, different individuals. You’d have to spend a lot of time to try and figure out who it is. I think it’s more important that once an impropriety has been revealed that the candidate corrects the problem and returns the money.”
That occurred during the last round of elections, when a Dispatch investigation pointed out that a local developer and an out-of-town developer steered multiple campaign contributions to several candidates. Former councilmen Bob Dillon and Charles Morales each returned checks for $250.
Had the newly approved regulation been in place in 2005, Dillon and Morales might have been on the hook for returning an additional $747 and $1,000 in developer money, respectively. The decision would have hinged on whether or not a single person “directed and controlled” the contributions for multiple business entities, regardless of whether or not he had a majority ownership stake in any of them.
Deciding how to tally contributions when enforcing spending limits involves “aggregating contributions,” a practice that has long been a thorny topic within the state Political Reform Act, according to Robert Stern, executive director of the Center for Governmental Studies, in Los Angeles.
Would all the contributions of a company have to be “aggregated” if a single chief executive officer steers contributions on behalf of the entire company? What if he executes the wishes of a board of directors or shareholders? Would the aggregation law apply to a developer who is the public face of numerous housing proposals and who decides on behalf of investors in those projects which elected leaders should receive campaign contributions?
It would fall to city and district attorneys, as well as the state’s Fair Political Practices Commission, to decide if such individuals “direct and control” contributions of an entity.
“Aggregation has always been a tough issue,” said Stern, who helped write the reform act. “What does it mean by controlling? So much of it depends on the facts.”
Stern’s nonprofit organization recommends that cities and counties sidestep the issue entirely and rely on the more easily pinpointed standard of majority ownership. Despite the gray area in state laws, Stern lauded the council decision to have Gilroy regulations mirror state campaign finance laws.
“(The laws) prevent somebody from hiding contributions that they control,” he said of the aggregation issue. “And if you have a contribution limit ordinance, it’s to prevent someone from exercising undue influence.”
If council gives final approval to the new regulations April 16, they would take effect in mid-May, in time for the fall campaign season.
