The Fair Political Practices Commission has initiated a proactive approach to auditing and investigating reporting violations, some focused on school district officials. Rather than waiting for a violation to be brought to its attention, the FPPC conducts “proactive investigations” in which the Enforcement Division contacts entities known to host events of the type that public officials are likely to attend and where public officials might receive gifts or meals that would be reportable on their Statement of Economic Interests. SEIs serve a dual purpose of making a filer aware of personal economic interests, including gifts, which might relate to, and cause a conflict of interest, with respect to a governmental decision, and disclosing interests to the public to promote transparency in government.
Once the Enforcement Division identifies an entity known to have held such a qualifying event, it requests a list of attendees for that event and information as to the value of any meals and/or gifts provided to attendees. If the value of the meal and/or gifts provided meets or exceeds the reportable amount ($50 from same source in a reporting period - limited to $440 from a single source in a calendar year under Title 2, Div. 6, Cal. Code of Regs., secs. 18940 et seq.), the Enforcement Division then cross checks the public official’s SEI Form 700 filing for the reporting period to determine if that reportable gift was in fact reported. If not, the FPPC will have cause to believe a violation has occurred and will likely contact the official. If a violation is established, the FPPC can impose a fine (up to a maximum of $5,000, although normally, first time offenders are fined in the area of $200 per violation) and the FPPC will publish the name of the public official in its public filings. A “knowing” failure to report can be prosecuted as a misdemeanor offense carrying a $10,000 fine.
Recently, the FPPC appears to be auditing school district officials by investigating events such as dinner receptions hosted at the California School Board Association annual conference. The FPPC Enforcement Division’s agenda reads as a cautionary tale, spelling out current violations, identifying violators, and imposing penalties. These failures to report soon become “teachable moments” where a school board member learns there truly is no such thing as “a free lunch.”
So how does a public official navigate this regulatory hop-scotch court without fouling out? Know the course. Knowledge of gift reporting requirements and gift acceptance limits is the key element in properly reporting one’s economic interests.
AB 1234 mandates ethics training for public officials (Gov. Code, sec. 53235). However, school districts are not included in this requirement, and many school districts officials often miss the opportunity to learn the reporting requirements and limitations imposed by the Political Reform Act. Without the training and knowledge to identify reportable financial interests, such as gifts, the limitations on the acceptance of gifts, and the disqualifying conflicts which can arise from accepting gifts, violations are par for the course.
