Ethics Commission Meeting: December 9, 2022 – Agenda Item 9 – Discussion and possible action on legislation to amend campaign finance disclaimer requirements to comply with court order

Print packet containing memo and attachments

Date: December 2, 2022
To: Members of the Ethics Commission
From: Michael Canning, Senior Policy Analyst
Re: AGENDA ITEM 09 – Discussion and possible action on legislation to amend campaign finance disclaimer requirements to comply with court order.

Summary and Action Requested

This memo provides background on the City’s campaign finance disclaimer requirements and analysis of the recently introduced legislation that is currently before the Board of Supervisors and the Ethics Commission to amend these rules to comply with a court order. Staff recommends the Commission consider the proposed legislation presented in Attachment 1 and vote to approve the ordinance as drafted.

Background

In 2019, voters approved Proposition F, which amended the Campaign and Governmental Conduct Code (C&GCC) in several ways, including changes to the City’s disclosure requirments for primarily formed independent expenditure committees. Prior to the passage of Proposition F, these committees were required to disclose their top three contributors of $10,000 or more on advertisements paid for by the committee. Proposition F lowered the dollar amount in this disclaimer requirement to $5,000 and established a new requirement that these committees also disclose their “secondary contributors.”

Per Section 1.161 of the C&GCC, the secondary contributors disclosure rule now requires that “if any of the top three major contributors is a committee, the disclaimer must also disclose both the name of and the dollar amount contributed by each of the top two major contributors of $5,000 or more to that committee.”

In January 2020, a group of plaintiffs challenged the requirement to disclose secondary contributors established through Proposition F. The plaintiff’s request for a preliminary injunction was granted in part and denied in part, by the Honorable Charles R. Breyer, District Court Judge for the Northern District of California; a copy of the court order is included below as Attachment 2. The court granted the preliminary injunction with respect to the disclosure of secondary contributors on print advertisements that are “5″ by 5″ newspaper advertisements, smaller “ear” advertisements, and spoken disclaimers on digital or audio advertisements of thirty seconds or less.” The court upheld the other disclaimer requirements enacted through Proposition F.

The court order has prevented the City from enforcing the secondary disclaimer requirement on print advertisements that are 5″ by 5″ and on audio and video advertisements that are 30 seconds or less, since February 2020.

Proposed Legislative Amendments

On November 15, 2022, Supervisor Mar introduced legislation (File # 221161) that would amend Section 1.161 of the C&GCC to align with Judge Breyer’s order. The proposed legislation would insert the following two exceptions into Section 1.161(a)(1):

  • (A) Exception – small print advertisements.  The requirement in subsection (a)(1) to disclose the top two major contributors of $5,000 or more to committees that are major contributors shall not apply to a print advertisement that is 25 square inches or smaller.
  • (B) Exception – short audio and video advertisements.  The requirement in subsection (a)(1) to disclose the top two major contributors of $5,000 or more to committees that are major contributors shall not apply to a spoken disclaimer in an audio or video advertisement that is 30 seconds or less.

The proposed legislation makes no other changes to the disclaimer rules and only codifies the limitations already established by Judge Breyer’s order. A copy of the legislation is included as Attachment 1 and a copy of the legislative digest for the legislation is included as Attachment 3.

Per Section 1.103, Article I, Chapter 1 of the Campaign and Governmental Conduct Code can only be amended by the Board of Supervisors if “the Ethics Commission approves the proposed amendment in advance by at least a four-fifths vote of all its members.” In order for the Board of Supervisors to approve the proposed legislation that would amend the City’s disclaimer requirements, the Ethics Commission must first approve the legislation by a four-fifths vote.

Recommended Next Steps

Considering the limited scope of this legislation and that it is only codifying what has already been established through court order, Staff recommends the Commission vote to approve the legislation as drafted, so that the Board of Supervisors can move forward.

Attachments:   

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