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New California pay-to-play law taken to court

A San Mateo city council meeting at City Hall in San Mateo on Dec. 12, 2022.
Jane Tyska
Bay Area News Group
A San Mateo city council meeting at City Hall in San Mateo on Dec. 12, 2022.

For a bill described by its author as “the most significant political reform of the last 50 years,”Senate Bill 1439 sure didn’t get much attention when it was working its way through the Legislature last year.

The law, authored by Sen. Steve Glazer, passed without a single “no” vote. It was co-authored by an ideology-spanning group of Democrats and a Republican. No big spending lobbyists came out against it.

But now some people are finally starting to take notice of SB 1439. And they’re taking it to court.

On Wednesday, a coalition of business groups — including those representing the building industry, restaurateurs and major retailers — sued the state’s campaign finance regulator, arguing that the law violates campaign finance rules and freedom of speech rights of local elected officials and the interest groups who want to contribute to them.

The list of plaintiffs also included two local elected officials in the Sacramento area: County Supervisor Pat Hume and Rancho Cordova City Councilmember Garrett Gatewood.

Glazer, a Democrat from Walnut Creek, told CalMatters he isn’t surprised by the backlash, even if it took a little while to materialize.

  • Glazer: “I think it underscores how much of a political earthquake (the law) has caused within the broader interest-peddling community.”

Since the early 1980s, appointees to public boards and commissions have been restricted from accepting campaign contributions from the people or groups with business before them. The new law extends those restrictions to include elected officials as well, including city council members and county supervisors.

Since the law took effect on Jan. 1, any local elected official who receives more than $250 from, for instance, a trash collection company seeking a contract, a contractor seeking a building permit or a restaurant owner in search of a new license either has to recuse themselves from voting on those applications for the next year or give the money back.

Though Glazer’s bill got no formal opposition, it was enthusiastically backed by government transparency groups including California Common Cause.

  • California Common Cause Executive Director Jonathan Mehta Stein: “It’s kind of an obvious pay-to-play limitation.”

As a cautionary tale, Stein pointed to the example of Lynwood in southeast L.A. County, where a local cannabis business association donated heavily to local city council members, evenasking some to sign pledge cards to vote in favor of the group’s policy goals.

The industry groups suing argue that the law goes too far, creating a new legal obstacle course that will be hard for many businesses to navigate. They also say it will make it more difficult for local candidates to run for office.

  • Robert Rivinius, executive director of the Family Business Association of California: “Somebody could contribute to a local official, not even realizing that eight months later they’ll need a permit and all of a sudden the people they need a vote from aren’t able to vote.”
  • Rachel Michelin, California Retailers Association president: “We have a hard enough time, I think, getting really good people to run for office, particularly local office.”

Michelin also pointed out what she called a double standard in the law: The “pay-to-play” restrictions don’t apply to state lawmakers.

Glazer acknowledged that point, but said the Legislature generally isn’t in the business of approving permits or contracts for individuals.

  • Glazer: “Ninety nine percent of the proposed laws that come before the state Legislature are not specific to an individual financial interest. Would I like to close that gap? Yes. Absolutely. But I felt that a 99% solution was the right step.“

CalMatters is a nonprofit, nonpartisan media venture explaining California policies and politics.