FPPC Meeting in Oakland – January 20, 2019

The Fair Political Practices Commission (FPPC) held its first meeting of 2019 in Oakland, California, on January 20, 2019, from approximately 2:30 PM to after 2:30 PM (the meeting ran long). The meeting featured a presentation from the Oakland Ethics Commission, a contentious discussion on text message advertising disclaimers, and the adoption of major changes to the streamlined settlement program. Commissioners voted on several items, including a letter to the legislature regarding misuse of public funds for campaigns.

Consent Calendar

• The commission approved the December 2018 meeting minutes.
• The enforcement calendar (items 4 and 6 through 26) was adopted unanimously. (Item 5 had been pulled.)

Public Comments & Testimony

• Daniel Swain, CEO of Tosker (relay), argued that peer-to-peer text messages are person-to-person communications, not general advertisements, and that adding the “who funded this ad” disclaimer reduces response rates. He requested the commission grant an opinion exempting such messages from the full disclaimer requirement.
• Trent Lang, president of the California Clean Money Campaign, stated that the “who funded this ad” language is inappropriate for conversational texts. He suggested a legislative fix and argued that the disclosure should only apply to the first message in a thread, and that a simple link might suffice. He also urged the commission to allow some flexibility.
• Jim Sutton, a practicing political attorney, argued that the law on text message disclaimers is not clear, citing high legal bills to interpret it. He pointed to ambiguities in the definition of “advertisement” and which disclaimer applies, and encouraged the commission to take up an opinion rather than deny it.
• Stephen Kaufman, chair of the Enforcement Review Task Force, opposed three specific provisions in the streamlined settlement regulation that automatically exclude certain 24-hour report violations from the streamline program, arguing they eliminate needed flexibility. He provided examples of past cases that would have been excluded.
• Trent Lang (again) supported the streamlined regulation’s general approach but advocated for the three provisions to remain, noting that late 24-hour reports near an election cause significant public harm. He proposed a 48-hour grace period for inadvertent errors and a de minimis exception for small amounts relative to total campaign activity.

Discussion Items

• Oakland Ethics Commission Presentation: Whitney (executive director) presented an overview of the Oakland Ethics Commission, including its history, staffing, and enforcement of ethics, campaign finance, and sunshine laws. Highlights included a partnership with Code for America to create the open disclosure.io website, a review of city ticket policies for athletic events, and a public financing program for city council candidates. Commissioners praised the collaborative approach.
• Regulation 18702.2 (Conflict of Interest – Property): Staff proposed amendments to clarify that a property interest more than 1,000 feet from a decision site is presumed immaterial, rebuttable by clear and convincing evidence. The commission adopted the regulation after a brief discussion, including technical clarifications on the 500 and 1,000-foot thresholds.
• Request for Review of Denial Opinion (Text Message Ads): The commission considered whether to overturn the acting executive director’s denial of an opinion request from Tosker. After hearing from the applicant, stakeholders, and legal counsel, the commission decided to affirm the denial but committed to a broader rulemaking on digital advertising disclaimers. The chair noted the need to address emerging technologies before the 2020 election cycle.
• Streamlined Settlement Program (Regulations 18360.1 and 18360.2): Substantial debate centered on three provisions excluding late 24-hour reports from the streamline program. After a closed session, the parties reached a compromise that added a de minimis exception and increased penalties for late filings. The amendments were adopted unanimously, and the full regulation passed. The commission also debated the process for approving streamlined stipulations, ultimately voting to allow the chief of enforcement to execute them after a 10-day public notice period in an executive report, with the option for commissioners to flag concerns.
• Budget Update: The quarterly expenditure report for the second quarter of 2018-19 was presented. Staff added line items for the San Bernardino and Sacramento contracts. Current staffing is 82.5 FTEs, with five positions being recruited.
• Letter to Legislature re: Public Money for Campaigns: A motion to send a letter to legislative leaders asking for an amendment to the Political Reform Act to explicitly prohibit spending public money on campaign activities and give the FPPC enforcement authority was passed, but with an amendment to first bring back a draft letter with supporting documentation for full commission review at the next meeting.
• Legislative Delegation: The commission adopted a modified B+ option (B++), authorizing the executive director to delegate to the legislative director the authority to accept or refuse non-substantive amendments on sponsored legislation, with written notification to the commission. Substantive amendments require full commission approval, potentially via a special meeting.

Key Outcomes

• Regulation 18702.2 adopted with technical amendments (unanimous).
• Denial of Tosker opinion affirmed; staff to develop a broader regulation on digital ad disclaimers.
• Streamlined settlement regulations (18360.1 and 18360.2) adopted with the compromised amendments: late 24-hour reports are excluded from streamline unless the amount is de minimis relative to total campaign activity, and penalties for pre-election late filings are increased. The new process for streamlined stipulations moves them from the consent calendar to an executive report.
• Letter to legislature on public funds for campaigns: staff to draft letter with supporting documentation for approval at the February meeting.
• Legislative delegation for non-substantive amendments adopted (B++ option).
• The next FPPC meeting is scheduled for February 2019; the commission will also address the text message ad issue further.