California is already home to some of the most complicated and searching political regulations in the country, especially in its efforts to expose “dark money” and other undisclosed political spending.  A newly-amended lobbying regulation and proposed campaign finance law will enhance that reputation.  The practical effect of each is to invite deeper scrutiny of not only the regulated entity,  but also of its donors, employees, consultants, and other affiliates, all of whom face much greater exposure under the new laws.

First, the state’s Fair Political Practices Commission recently voted to amend regulation 18616.  The amendments are specifically designed to target and expose payments for “shadow lobbying” and grassroots campaigns.  Effective July 1, if a lobbyist employer pays over $2,500 in a quarter to a person to influence lawmaking, it must disclose the recipient, amount, and purpose of those payments.  This could include payments for, among other purposes:

  • salaries for non-lobbyist employees who spend 10% or more of their time in a month lobbying or supporting lobbying;
  • directly billed lobbyist expenses;
  • government relations consulting, strategic advice, and other “shadow lobbying” legislative services;
  • grassroots campaigns;
  • advertising and media campaigns; and
  • polling and other research.

Second, the Assembly has passed, and the Senate has taken up, AB-700, the “California DISCLOSE Act.”  The Act would require many political advertisements to prominently display or announce the names of the ad sponsor’s top donors of $50,000 or more.  Adding another layer of disclosure, the bill also makes clear that efforts to hide contributions using middleman organizations or earmarked funds are impermissible — the true source of funds must be disclosed.  While the bill could be killed or amended before passage, this is a major broadening of California’s current on-advertisement disclosure laws and another blow at undisclosed funders.