HomeMy WebLinkAboutB-02 - FPPC Candidates & Campaign CommitteesCalifornia
Fair Political Practices Commission
Candidates and Campaign Committees
The FAQs listed below are selected from FPPC Campaign Disclosure Manuals. Because
campaign activity varies among persons and committees, the FPPC manuals, regulations, and
fact sheets (including one on electronic media) should be reviewed. All efforts have been made
to provide helpful, easy to understand answers to questions regarding common campaign
events. However, persons may only receive immunity from an enforcement action by
requesting written advice.
New Sender Identification Rule
Effective April 6, 2011, all campaign committees, including candidate, ballot measure, general
purpose, major donor and independent expenditure committees, must provide the words "Paid
for by" when the committee sends a mass mailing. This identification must be presented in the
same size and color as the committee name - -no less than 6 point type and in a color or print
that contrasts with the background and is easily legible. The words "Paid for by" shall be
immediately adjacent to and above or immediately adjacent to and in front of the committee
name and address. (FPPC Regulation 18435)
Examples:
Paid for by Committee to Elect Johnson to City Council 2012, 1010 Main Street, Sacramento,
CA 95555
Paid for by:
Committee for Green Technology sponsored by the Northern California Technology Association,
918 Banner Ave., Sacramento, CA 95555.
Frequently Asked Campaign Questions
Getting Started
1. Q. We would like to get our committee ID number as soon as possible. Must we wait until
we have raised $1,000 before filing the Statement of Organization, Form 410?
A. No. The Secretary of State will issue you a committee ID number upon receipt of the
Form 410, even if you have not raised $1,000, which is the threshold for committee
qualification. Keep this in mind:
• If you file before you qualify as a committee, check the box "Not Yet Qualified."
• Once you have reached the $1,000 threshold, file an amendment to the Form 410
reporting the date the committee qualified.
• Make sure you have accurately completed the form; the Secretary of State's office
will not issue an ID number if the statement is incomplete or has errors.
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Fair Political Practices Commission
Candidates and Campaign Committees
To obtain your committee's ID number, after filing the Form 410, go to www.sos.ca.gov,
click onto "Campaign Finance" under "Political Reform." In the "Cal- Access Search" box
in the upper left corner, type in the name of the committee and then click on "GO."
2. Q. Are there any specific accounting qualifications for someone to be able to serve as
treasurer or any conditions that would disqualify someone from being able to serve as
treasurer, such as the candidate of a controlled committee?
A. No.
3. Q. Who must be identified on the Statement of Organization, Form 410?
A. The name and contact information of the treasurer and principal officers, if any, must be
provided, in addition to any candidate controlling the committee. If you choose someone
to be the assistant treasurer, you must provide this person's name and contact
information, as well.
4. Q. What are the requirements for the name of the committee?
A. For a candidate's campaign committee, at a minimum, the committee's name must
include the candidate's last name, office sought, and year of the election. For example,
"Wallace for Supervisor 2012" or "Re -elect Rosa in 2012 for Water Board" would meet
the naming requirements; the name of the jurisdiction, such as the city or county, and
• district number are not required.
For a primarily formed ballot measure committee, the committee's name must include:
• The measure's designation (Proposition 124; Measure BB);
The committee's position, support or oppose, on the measure;
If sponsored, the name(s) of the sponsor(s);
• If a recall committee, the name of the officeholder subject to the recall and whether
the committee supports or opposes the recall;
• If the committee has received $50,000 or more cumulatively from a major donor, a
name or phrase that identifies the economic or other special interest of the major
donor;
• If a committee has received $50,000 or more from major donors with a common
employer, the name of the employer of the major donors;
• If a committee has received $50,000 or more from a major donor who is a candidate
or a candidate's controlled committee, the name of the candidate or the candidate's
controlled committee.
See Form 410 instructions for more naming requirements.
5. Q. Are committee records and source documentation required to be kept on paper, or may
the committee use an electronic recordkeeping system?
A. Electronic records are permitted, provided that all of the required information is collected
and recorded in a timely and uniform manner that ensures the accuracy and reliability of
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Candidates and Campaign Committees
the information. Committees are responsible for ensuring that electronic records can be
read and /or printed for auditing purposes during the applicable retention period — four
years from the date the campaign statement was filed.
Fundraising
6. Q. We received two contributions of $99 from one contributor. Is this contributor now
itemized on Form 460, Schedule A?
A. Yes. When a person's contributions aggregate to $100 or more during the same
calendar year, the contributor must be itemized.
7. Q. We are charging $100 per plate for a dinner fundraiser for our committee. The actual
cost of the event to our committee will be $25 per person. What amount is considered
as the contribution received?
A. The entire cost of the ticket for the fundraiser is the amount of the contribution. Report
$100 as the contribution; do not subtract the $25 per person cost of the fundraiser.
8. Q. At our next fundraiser, we intend to charge $50 per person. Mayan attendee pay with a
$100 bill?
A. No. You may not accept $100 in cash, even if you immediately provide change.
® Campaigns may not accept cash of $100 or more from a single source. You may,
however, accept personal checks, debit cards, or credit card payments.
9. Q. Is volunteer work provided by some people considered a nonmonetary contribution
because of the volunteer's profession, such as free legal advice provided by a lawyer or
bookkeeping done by a CPA?
A. No. Volunteer personal services, regardless of the profession of the individual providing
them, are not reportable; you are not required to determine the value of their services or
keep records regarding how long they volunteered. Volunteers paid by a third party for
the services do not meet this exception.
10. Q. Janice is hosting a gathering in her home for me to meet some of her neighbors. She
will spend $425 to provide tea, coffee, wine, cheese, and fruit. Is the amount she pays
for the event considered a nonmonetary contribution to my campaign?
A. This event meets the home /office fundraiser exception to a contribution. As long as
Janice does not spend more than $500 on any one event held in her home or office, you
are not required to report receipt of a contribution for her costs to host the event.
11. Q. May we use a private service, such as PayPal, to collect contributions electronically?
A. Yes, as long as the service you employ is able to provide all the information you need to
meet the recordkeeping requirements, such as the name, address, occupation, and
employer of individual contributors of $100 or more. The entire amount of the
contribution is disclosed. The amount charged by the private service is reported as an
expenditure.
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Candidates and Campaign Committees
12.Q. We received a check for $100, but the individual has not provided us with her occupation
and employer. What should we do?
A. Contact the contributor and request the information. If you have not received it by the
time you must report receipt of the contribution, indicate that you have requested the
information and amend your statement when the information is received. However, if
you have not received the information within 60 days of receipt of the contribution, you
must return the contribution.
13. Q. We received a contribution of $5, 000 from an individual. Are there any special reporting
or noticing requirements?
A. Yes. Within two weeks of receipt, you must notify the contributor in writing that he or she
may need to file a major donor report. Language for the notice is found in the manual.
An individual qualifies as a major donor if their contributions to state and local
candidates and committees total $10,000 or more in a calendar year.
Expenditures
14. Q. The campaign credit card was used to buy $600 worth of printing. How is this reported?
A. On Schedule E or F of the Form 460, list the name and address of the credit card's
financial institution, plus the amount spent. Underneath this, provide the name and
® address of the vendor and the amount spent on the printing.
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15. Q. Is it permissible to have an agreement with an independent contractor (e.g., the
committee fundraiser) to pay additional money if we surpass our fundraising goals?
A. Yes, under the Political Reform Act, you may make contingency agreements that the
committee will not pay a contractor unless a particular outcome is achieved in
fundraising or campaign results, or that a bonus will be paid depending upon an
outcome. The arrangement should be made part of the written contract.
Candidates Only
16. Q. Do I have any reporting obligations if a blogger or other individual endorses my
candidacy in their internet communications?
A. No. The Commission does not regulate an individual sending or forwarding email or
linking to a website. An individual's use of their personal computer and personal email
list does not trigger reporting.
17. Q. Are emails sent by my campaign required to have a disclosure statement such as `paid
for by Candidate Jones "?
A. A disclosure statement is not currently required on bulk emails sent by a campaign but is
encouraged.
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Candidates and Campaign Committees
18. Q. When may I begin to solicit and raise funds for my election?
A. You must file Form 501 before any contributions are solicited or received. Form 501 is
considered filed as soon as you have personally submitted the Form 501, or placed it in
the mail, to your filing officer.
19. Q. Am I required to file Form 501 when I run for reelection to the same office?
A. Yes. You must file a separate Form 501 for each election, including reelection to the
same office, prior to raising or spending any money for the new election.
20. Q. I do not intend to raise any funds from others and will not be spending any money other
than my personal funds for the filing fee and ballot statement fee. Do 1 need to open a
campaign bank account?
M04
21. Q. 1 do not intend to raise funds from others, although I will be spending $1,000 or more of
my personal funds on my campaign, other than for the filing fee and ballot statement fee.
Do 1 need to open a bank account?
A. Yes. Since you plan to spend $1,000 or more for your campaign, you will qualify as a
committee. As a result, you will need to open a bank account and must disclose the
• bank account information on the Statement of Organization (Form 410). To obtain a
federal tax ID number, go to the IRS website.
22. Q. What is the rule regarding spending my own money on my campaign for local office?
A. Except for payments for the filing fee and ballot statement fee, you must deposit
personal funds into the campaign bank account before making campaign expenditures,
even if you do not expect to be reimbursed. You may categorize the funds for your
campaign as loans or monetary contributions. You may not make direct campaign
expenditures from your personal account or comingle campaign funds with personal
funds.
23. Q. What are the contribution limits for local elections?
A. The state does not impose contribution limits on local elections. However, you should
ask the city clerk or county registrar of voters whether the jurisdiction of the office you
seek has any limits.
24. Q. I understand that as the candidate, any personal funds 1 want to spend on my campaign
must be placed into the campaign bank account before being spent, but may campaign
workers make campaign expenditures with personal funds and be reimbursed at a later
date by the committee?
A. Yes. Anyone other than the candidate may use personal funds to make campaign
expenditures, such as purchasing printing, and be reimbursed after providing a receipt or
® invoice to the campaign. However, if the campaign does not reimburse the individual
who made the expenditure within 45 days, the committee must report the amount
expended as a nonmonetary contribution received.
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Candidates and Campaign Committees
25. Q. As a candidate, I use my personal car to attend campaign events and to meet with the
voters. Likewise, 1 make long- distance calls using my home phone to request support
from organizations statewide. Even if I do not want to be reimbursed for the use of my
car, must I report mileage as a reportable contribution, and how may I have the
committee pay for the portion of my home phone bill associated with the campaign?
A. Incidental use of your personal car for campaign purposes is not considered a
contribution or expenditure and is not reportable. However, if additional charges are
added to your home phone bill, calculate the portion that is campaign related when the
bill arrives. Have the committee write a check for that portion directly to the phone
company; do not pay the bill out of personal funds and get reimbursed.
26. Q. 1 lost my local election and have funds remaining. May I use my excess funds to run
again in the next local election?
A. If you wish to use funds left over from an unsuccessful race for a future election to the
same office, file a new Form 501 and amend your existing Form 410 before the end of
the post - election reporting period, which is:
June 30 for elections held between January 1 and June 30;
December 31 for elections held between July 1 and December 31.
If you plan to run for a different office, file a new Form 501, open a new campaign bank
account and transfer the funds into it. You must also file a new Form 410 for the new
committee. If you do not meet the deadline, the campaign funds will become "surplus" at
the end of the post - election reporting period and may not be used to run for office.
27. Q. What committee ID requirements must be included with communications that my
candidate controlled committee pays for and produces?
A. If your candidate committee pays to:
• Send out more than 200 pieces of the same mailer in a calendar month, identification
on the outside of the mailer must state "paid for by" as reviewed on page one of this
fact sheet. The outside of the mailer must also include the name and the address of
the committee and the type can be no less than six -point type, and must be in a color
that contrasts with the background (e.g., no white on white);
• Make 500 or more phone calls through a phone bank in support of the candidate, or
in support or opposition to a ballot measure, the committee's name must be
disclosed during the phone call.
The FPPC recommends that a committee place its name on all campaign materials.
However, there are no specific identification requirements under the Political Reform Act
on certain types of communications paid for by a candidate's committee for their own
election. such as:
• Lawn signs
• Buttons or bumper stickers
• Billboards
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Fair Political Practices Commission
Candidates and Campaign Committees
• Radio or TV advertisements
• Emails, faxes, or websites
• Campaign literature not delivered through the mail, such as door hangers or
handouts
• Phone calls made by volunteers, the candidate, or campaign manager
28. Q. 1 am a law enforcement officer, and I am running for city council. May I wear my uniform
at campaign events or when I appear in political advertisements for my campaign?
A. The FPPC imposes no restrictions on wearing your uniform; however, you should
contact your City Attorney or District Attorney concerning other laws that may pertain to
this activity.
Ballot Measure Committees Only
29.Q. We have raised $1,000 or more to circulate petitions for a ballot measure. When do we
have reporting obligations?
A. Reporting obligations begin when proponents start gathering signatures (initiative) or
when a legislative body acts to place the proposal on the ballot (referendum). (Notice:
Groups may need to maintain records before this period. Refer to Campaign Manual 3
for details.)
30. Q. May a candidate control a ballot measure committee? Must the candidate file a Form
501 (Candidate Intention) for the committee?
A. A candidate may control a ballot measure committee as long as the committee's funds
are not used to support the candidate's election or to support or oppose other
candidates. A Form 501 is not required.
31. Q. Ten days before an election, a primarily formed ballot measure committee for Measure A
made a $10, 000 contribution to another primarily formed ballot measure committee for
Measure A. Does this contribution trigger the filing of a Form 497?
A. Yes, the report is required even if both committees are formed for the same ballot
measure.
32. Q. During the last 16 days before the election, our supporters will be paying for phone
banks and, therefore, we will receive more than one nonmonetary late contribution from
the same source. Rather than file several reports, may our committee file one late
contribution report estimating the value of all nonmonetary contributions anticipated to
be received from this source during the late contribution reporting period?
A. Yes. The committee may make a good faith estimate of the value that will be
contributed during the period. File the late contribution report within 48 hours of the first
$1,000 in nonmonetary contributions received. If the actual value differs from the
estimated amount by 20 percent or more, amend the estimated report within 24 hours
from the time you determine the correct amount.
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Candidates and Campaign Committees
33. Q. What ID disclosure requirements exist for advertisements for which we pay that support
our position on the ballot measure?
A. When your committee pays for an advertisement in which you are supporting or
opposing the ballot measure for which you are primarily formed, the advertisement must
include the statement "paid for by" and:
• The name of the committee, and
• Identification of the top contributors of $50,000 or more. Certain ads require the top
two contributors and other ads require only the highest contributor. (See Manual 3
for clarification.)
• The name of any individual paid $5,000 or more to appear in the ad.
Communications by General Purpose Committees
34. Q. Must the committee's identification number appear on a mass mailing?
A. While the committee ID number is not required anywhere on any mailing, if more than
200 pieces of the same or similar mail is sent in a calendar month, the name and
address of the committee paying for the mailing must appear somewhere on the outside
of the mailing in no less than six -point type and in a color that contrasts with the
background (e.g., no white on white). Effective April 6, 2011, the words "paid for by'
must also appear as reviewed on page one of this fact sheet.
35. Q. What information must be on a committee's mass mailing if it is sent as an independent
expenditure to oppose a candidate?
A. The mailing must include a disclosure statement that contains the following:
• A statement that the mailer was not authorized by a candidate or a committee
controlled by a candidate.
• The outside of the envelope must include "paid for by" along with the name and
address of the committee that paid for the mailing (no less than 6 point type and in a
color contrast). See page one of this fact sheet for an example.
Penalties
36. Q. If we file a statement late, what are the consequences?
A. The filing officer with whom you file your statement may assess a fine of up to $10 for
each day that the statement is late. Failure to file campaign statements may also result
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Candidates and Campaign Committees
in an enforcement referral to the FPPC; you may be fined by the FPPC up to $5,000 per
violation.
This FAQ fact sheet is not a final decision of the FPPC and does not constitute
legal advice or alter any legal right or liability. This fact sheet is not a rule,
regulation, or statement binding on the agency.
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New Rules on Reporting Accrued Expenses
• WHAT'S NEW WITH "ACCRUED"
FPPC Form 460 - Schedule F
Previously, when you would report an expense which you accrued in one
reporting period but paid in another, that expense would only be reported during
the period it was accrued and you would not itemize that expense again. Now,
you must continue to itemize that accrued expense through each reporting period
until it is paid in full.
Example: During the first six months of 1999, you ordered and received literature from a printer
at a cost of $2,500, but had yet to pay the printer by June 30. Report the $2,500 unpaid bill as an
accrued expense on Schedule F of the semi - annual statement. After that reporting period, you
paid the $2,500 bill in full. On your next statement, itemize the accrued expense again on
Schedule F and report a beginning balance of $2,500, a payment of $2,500, and a balance owed
of $0. You would not report this accrued expense again.
Another Example: Perhaps the payment made to the printer was only $1,000, leaving a
balance owed of $1,500. On your statement, you will again itemize the accrued expense ano
report a beginning balance of $2,500, a payment of $1,000 and a balance owed of $1,500. You
will continue to report this accrued expense on subsequent statements until the obligation is paid.
If you incurred additional expenses to this printer during the period, you would report that amount
as well.
Each time you make a payment, that payment will also be reported on Schedule
E as expenditure.
HOW TO REPORT ACCRUED EXPENSES ON YOUR FIRST FORM 460
If you have an accrued expense of $100 or more outstanding from the previous period,
itemize the name and address of the payee /creditor and the appropriate code describing the
expenditure on Schedule F. Report the outstanding balance as of the beginning of the
reporting period, any additional amounts incurred to this vendor, any payments made
against the debt during the reporting period and the outstanding balance as of the end of the
reporting period. (It is not necessary to re- itemize sub - vendor payments that have been
itemized on a previous statement.)
Remember!! Continue to report the accrued expense on subsequent statements until it is
paid in full.
REPORTING ADMINISTRATIVE EXPENSES:
There are certain expenses that may carry over from one reporting period to
another that you do not have to report as accrued expenses. These expenses
include regularly recurring administrative overhead such as rent, utilities, phones,
campaign workers' salaries, etc., if the payment due date has not occurred at
the end of the reporting period. Campaign workers' salaries only include
payments to those individuals for whom the committee is paying federal and
state employment taxes.
Consultant contracts and contracts with independent contractors are not
considered regularly occurring administrative overhead of a committee.
ANSWERING YOUR QUESTIONS:
Q: When are unpaid bills reportable as accrued expenses?
A: The basic rule is that you must report an accrued expense any time you have
received goods or services but have not paid for them by the end of the reporting period.
Q: What if I haven't received an invoice from the vendor yet?
A: If you have received the goods or services, you must report the accrued expense
even if you have not received an invoice. If you do not know the exact amount, you may
estimate the amount of the expense. When reporting an estimate, note that fact on
Schedule F.
Q: We have a contract to pay our campaign consultant $1,000 per month. If the closing
date of the campaign statement falls during the middle of the month, say March 17, must
we report an accrued expense for the period March 1 through March 17?
A: No. When you have agreed in writing to pay a contractor a set amount at regular
intervals, it is not necessary to prorate the amount owed to the contractor if the reporting
period closes before the end of the contract period.
• Q: We reported an estimated accrued expense of $5,000 to a printer. The actual amount
owed was $4,500. What do we do?
A: You can amend the statement on which you reported the $5,000, or you can correct
the amount on a subsequent statement by doing the following:
On Schedule F, column (a), report an outstanding accrued expense of $5,000. In column
(b), the amount incurred this period, report a negative $500. If you made any payments
on the accrued expense during the period, report that amount in column (c) and the
outstanding balance in column (d).
If you paid more than the estimated amount, report the $5,000 in column (a), the amount
over the estimate in column (b) as a new accrued expense, any amounts paid in column
(c), and the outstanding balance in column (d).
Be sure to make the correction on the next statement filed after determining the correct
amount. Also be sure to note on Schedule F when you are correcting estimates.
Q: When an accrued expense is owed and there are subvendor payments, when are the
subvendors reported? For example, if we report an accrued expense owed on a credit
card and list the subvendors, must we re- itemize the subvendors again on Schedules E
and F when the accrued expense is paid?
A: No. It is not necessary to re- itemize subvendors when payments are made on
accrued expenses, or if an accrued expense is reported on more than one statement. In
this example, the subvendors must be reported on the first statement disclosing the
• accrued expense owed to the credit card company. On subsequent statements, only the
credit card company must be itemized.
California Fair Political Practices Commission
Frequently Asked Questions:
Form 700 Disclosure
General ............ Page 1 Income .................. Page 2 Investments ............. Page 3
Real Property.... Page 3 Enforcement .......... Page 4 Gifts /Travel............ Page 4
Tickets to Non - Profit and Political Fundraising Events ........................ ...........................Page 7
The FAQs listed below are selected from questions often asked about the Statement of Economic
Interests (Form 700). Because it is not possible to address all of the unique variables and
circumstances related to disclosure, individuals are encouraged to contact the FPPC with specific facts.
Most officials must also consult their agency's conflict of interest code to determine their disclosure
level and their reportable interests. The Form 700 is a public document. Form 700s filed by State
Legislators and Judges, members of the FPPC, County Supervisors, and City Council Members are
available on the FPPC's website.
General Questions
1. Q. Do all officials have the same disclosure requirements for Form 700 reporting?
A. No. The majority of individuals that file the Form 700 must do so by following the rules set forth
• in their agency's conflict of interest code ( "designated employees "). Before completing the Form
700, an official should be familiar with the disclosure category for his or her position. For
example, since job duties differ from agency to agency and even unit to unit within the same
agency, an analyst for one agency, or unit of that agency, may not have the same reporting
requirements as an analyst from another agency, or even another unit of the same agency.
11
Officials listed in Government Code Section 87200 (e.g., boards of supervisors, city council
members, planning commissioners, elected state officials, etc.) must report all sources of gifts,
as well as sources of income, and investments and business positions in business entities,
doing business within, and real property interests located within, their agency's jurisdiction. For
local officials, real property located within 2 miles of the boundaries of the jurisdiction or any real
property that the agency has an interest in is deemed to be "within the jurisdiction."
2. Q. Is it necessary to read all of the information before completing the Form 700?
A. Each individual must verify the Form 700's content under penalty of perjury. Therefore, every
effort must be made to understand what is required by the form. When necessary, you may
contact the FPPC for specific, personal guidance. You may only obtain immunity from an
enforcement action when you receive formal written advice.
3. Q. Where are the Form 700s filed?
A. Most state and local officials file with their agency. In most instances, the agency is required to
forward the originals for specified high -level officials to the FPPC. Only retired judges serving
on assignment and legislative staff file the Form 700 directly with the FPPC.
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Frequently Asked Questions: Form 700 Disclosure
4. Q. If the Form 700 is postmarked by the due date, is it considered filed on time?
A. Yes.
5. Q. If an official holds various positions for which the Form 700 is required, is a statement required
for each position?
A. Yes. However, one expanded statement covering the disclosure requirements for all positions
may be completed as long as an originally signed statement is filed with each filing officer.
6. Q. Do individuals need to file a complete Form 700 when they leave office?
A. Yes. The same requirements apply for the assuming office, the annual, and the leaving office
filings.
7. Q. An individual is hired into a newly created management position in her agency's Information
Technology Department. How does she complete the Form 700?
A. Because it is a newly created position, the law requires that economic interests are reported
under the broadest disclosure category in the agency's conflict of interest code unless the
agency sets interim disclosure that is tailored to the limited range of duties of the position.
Generally, the Form 700 must be filed with the agency within 30 days of the date of hire. An
individual may request that the agency complete the Form 804 (Agency Report of New
Positions) to tailor the disclosure category to the job duties of the new position.
8. Q. Must board members of a non - profit public benefit corporation that operates California charter
schools file Form 700?
A. Yes. Members of charter schools are public officials and must file the Form 700.
Income Questions
9. Q. Must an official report a spouse's or registered domestic partner's salary?
A. Generally an official is required to report 50% of his or her spouse's or registered domestic
partner's salary. The disclosure lists the employer's name as the source of income on Schedule
C of the Form 700. If the spouse or registered domestic partner is self - employed, the business
entity is reported on Schedule A -2. Officials should check their disclosure category, if
applicable, to determine if the income is reportable. A spouse or registered domestic partner's
government salary is not reportable (e.g., spouse is a teacher at a public school).
10.Q. If an official owns a business in which he has received income of $10,000 or more from a client,
is the official required to disclose the client's name on Schedule A -2, Part 3?
A. Yes, except for under rare circumstances where disclosure of the identity would violate a legally
recognized privilege under California or federal law. In these cases, the FPPC may authorize
an exemption. (Regulation 18740)
11. Q. When an official purchases a new car and trades in the old car as credit toward the purchase
price, is the trade -in allowance considered reportable income on the Form 700?
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A. No. A trade -in allowance is not considered income and is not reportable on an official's Form
700.
Investment Questions
12. Q. An official holds various stocks through an account managed by an investment firm. The
account manager decides which stocks to purchase with no input from the official. Are the
stocks subject to disclosure?
A. Yes. Unless the stocks are in a diversified mutual fund registered with the SEC or in a fund
similar to a diversified mutual fund (e.g., exchange traded fund (ETF)) if the similar fund meets
requirements specified in Regulation 18237. Any investments worth $2,000 or more in a
business entity located in or doing business in the jurisdiction must be disclosed on Schedule A-
1 or A -2 if the official's disclosure category requires that the investments be reported.
13. Q. Are funds invested in a retirement account required to be disclosed?
A. Investments held in a government defined - benefit pension program plan (i.e., CalPERS) are not
reportable. Investments held in a fund such as a defined contribution plan 401(k) or exchange
traded fund (EFT) are not required to be disclosed if the fund meets specified requirements.
(Regulation 18237). An official may need to contact his or her account manager for assistance
in determining what assets are held in the account.
14. Q. If an official reported stocks that were acquired last year on his or her annual Form 700, must
the stocks be listed again on the official's next Form 700?
A. Yes. Stocks that are worth $2,000 or more during the reporting period must be reported every
year that they are held. The "acquired" and "disposed" dates are only required if the stocks
were acquired or disposed of during the period covered by the Form 700.
15. Q. How are interests in a living trust reported if the trust includes: (1) rental property in the official's
jurisdiction; (2) a primary residence; and (3) investments in diversified mutual funds? Are there
different disclosure rules?
A. The name of the trust is reported, along with the rental property and its income, on Schedule A-
2. The official's primary residence, if used exclusively as a personal residence, and investments
in diversified mutual funds registered with the SEC, are not reportable. (For secondary
residences, see Question 17.) Although the official's primary residence is not required to be
disclosed on the Form 700, it is still considered an economic interest for conflict of interest
purposes. (See Question 16.)
Real Property Questions
16. Q. Is an official's personal residence reportable?
A. Generally, any personal residence occupied by an official or his or her family is not reportable if
used exclusively as a personal residence. However, a residence for which a business
deduction is claimed is reportable if the portion claimed as a tax deduction is valued at $2,000
• or more. In addition, any residence for which an official receives rental income is reportable if it
is located in the jurisdiction.
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17. Q. When an official is required to report interests in real property, is a secondary residence
reportable?
A. It depends. First, the residence must be located in the official's jurisdiction. If the secondary
residence is located in the official's jurisdiction and rental income is received (including from a
family member), the residence is reportable. However, if the residence is used exclusively for
personal purposes and no rental income is received, it is not reportable. Although the
secondary residence may not be reportable, it is still considered an economic interest for conflict
of interest purposes.
18. Q. If a primary or secondary personal residence is required to be reported, is the street address
required to be disclosed?
A. No. The assessor's parcel number may be listed instead of the street address.
Enforcement Question
19. Q. What is the penalty for not filing the Form 700 on time or not reporting all required economic
interests?
A. A late fine of $10 per day up to a $100 may be assessed. In addition, if a matter is referred to
the FPPC Enforcement Division for failure to file or failure to include all required economic
interests, the fine may be substantially higher. In 2014, the FPPC collected over $81,000 in
fines for late statements and non - disclosure of economic interests. If an individual does not pay
a fine, the matter may be referred to the Franchise Tax Board for collection.
Gift/Travel Questions
20.Q. What is the gift limit for 2015 -2016?
A. $460: This means that gifts from a single, reportable source, other than a lobbyist or lobbying
firm (see below), may not exceed $460 in a calendar year. For officials and employees who file
the Form 700 under an agency's conflict of interest code ( "designated employees'), this limit
applies only if the official or employee would be required to report income or gifts from that
source on the Form 700, as outlined in the "disclosure category" portion of the agency's conflict
of interest code. For conflict of interest purposes, the gift must be under $460 to avoid
consideration under the conflict rules.
State Lobbyist & Lobbying Firm Limit:
$10: State candidates, state elected officers, and state legislative officials may not accept gifts
aggregating more than $10 in a calendar month that are made or arranged by a registered
state lobbyist or lobbying firm. The same rule applies to state agency officials, including
members of state boards and commissions, if the lobbyist or firm is registered to lobby, or
should be registered to lobby, the official's or employee's agency.
21. Q. During the year, an official received several gifts of meals from the same reportable source.
Each meal was approximately $35. Is the source reportable?
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A. Yes. Gifts from the same reportable source are aggregated, and the official must disclose the
source when the total value of all meals reaches $50.
22. Q. Does a gift source have to be reported if it is not doing business in the jurisdiction but is of the
type that would need to be reported if it were?
A. Yes. While income reporting has a jurisdictional limitation under the Act, gift reporting does not.
Therefore, gifts from sources located anywhere in the world are reportable if they are of the type
that do business with the employee's agency such that the employee is required to report
sources of that type.
23. Q. How does an individual return a gift so that it is not reportable?
A. Unused gifts that are returned to the donor or reimbursed within 30 days of receipt are not
reportable. The recipient may also donate the unused item to a charity or governmental agency
within 30 days of receipt or acceptance so long as the donation is not claimed as a tax
deduction.
24. Q. Two people typically exchange gifts of similar value on birthdays. Are these items reportable?
A. No. Gift exchanges with individuals, other than lobbyists, on birthdays, holidays, or similar
occasions, are not reportable or subject to gift limits. The gifts exchanged must be similar in
value.
25. Q. Must an official report gifts received from an individual whom the official is dating?
A. No. Gifts of a personal nature exchanged because the individuals are in a bona fide dating
relationship are not reportable or subject to gift limits. However, the official remains subject to
the conflict of interest rules and some matters may require recusal from voting.
26. Q. If an official makes a speech related to national public policy and his or her spouse attends the
dinner at the event, is the spouse's meal considered a gift to the official?
Yes. The official's meal is not a reportable gift; however, his or her spouse's meal is a gift and
reportable on the official's Form 700 if the value is $50 or more.
27. Q. A vendor that does business with the agency provided entertainment tickets to the spouse of
one of the agency members. Must the member report the tickets as gifts?
A. Yes. Unless an exception applies, the tickets are a reportable gift. A gift to an official's spouse
is a gift to the official when there is no established working, social, or similar relationship
between the donor /vendor and the spouse or there is evidence to suggest that the donor had a
purpose to influence the official.
28. Q. An agency received two free tickets to a concert from a local vendor. The agency has a policy
governing the reporting of tickets and passes distributed to persons for use in ceremonial roles
or other agency related activities. The agency had discretion to determine who in the agency
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received the tickets. Each ticket was valued at $140. If the agency director used the tickets,
how are they reported?
A. The tickets worth $280 are reportable by the agency on the Form 802 (Agency Report of
Ceremonial Role Events and Ticket/Pass Distributions), which is a public record that is filed with
the FPPC and posted on its website. The director does not report the tickets on the Form 700,
and the value of the tickets is not subject to the gift limit.
29. Q. An agency received a large box of chocolates as a holiday gift from a local merchant. It was
addressed to the agency and not to a particular employee. Is there a reporting requirement?
A. No, so long as no agency employee receives $50 or more in benefits from the gift. There is no
reporting requirement if the value received by each agency employee is less than $50.
30. Q. An agency official receives a gift basket specifically addressed to the official worth more than
$50 from a local merchant. Is there a reporting requirement?
A. The official may have to report the gift if it is from a source covered by the official's disclosure
category and he or she consumes the contents of the gift basket, or directs and controls who
receives the gift. For instance, the official must still report the gift even if he or she shares the
gift with other agency employees.
® 31. Q. Do prizes donated to a governmental agency by an outside source constitute gifts under the Act
if they were received by city employees in a drawing conducted by the city for all city employees
participating in the city's charitable food drive?
A. Yes. The prizes are gifts if donated by an outside source and subject to the Act's limits and
reporting requirements.
32. Q. Is a ticket provided to an official for his or her admission to an event at which the official
performs a ceremonial role or function on behalf of his or her agency reportable on the official's
Form 700?
A. No, so long as the organization holding the event provides the ticket and so long as the official's
agency completes the Form 802 (Agency Report of Ceremonial Role Events and Ticket/Pass
Distributions). The form will identify the official's name and explain the ceremonial function.
(See Regulation 18942.3 for the definition of "ceremonial role. ")
33.Q. Are frequent flyer miles reportable?
A. No. Discounts received under an airline's frequent flyer program that are available to all
members of the public are not required to be disclosed.
IMPORTANT NOTE: See Regulation 18950.1 for additional information on reporting travel
payments. In some circumstances the agency may report the travel in lieu of the official
® reporting the travel.
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34. Q. If a non - profit organization pays for an official to travel to a conference after receiving the funds
to pay for the travel from corporate sponsors, specifically for the purpose of paying for the
official's travel, is the non - profit organization or the corporate sponsors the source of the gift?
A. The corporate sponsors are the source of the gift if the corporate sponsors donated funds
specifically for the purpose of the official's travel. Thus, the benefit of the gift received by the
official would be pro -rated among the donors. Each reportable donor would be subject to the
gift limit and identified on the official's Form 700. The FPPC should be contacted for specific
guidance to determine the true source of the travel payment.
35. Q. May an official accept travel, lodging and subsistence from a foreign sister city while
representing the official's home city?
A. Yes. If the travel and related lodging and subsistence is paid by a foreign government and is
reasonably related to a legislative or governmental purpose, it is not subject to the gift limit.
However, the payments must be disclosed as gifts on the Form 700 for this exception to apply.
While in the foreign country, any personal excursions not paid for by the official must also be
disclosed and are subject to the gift limit. If private entities make payments to the foreign
government to cover the travel expenses, the gift limit will apply and travel payments will likely
be prohibited. Please contact the FPPC for more information.
36. Q. An analyst for a state or local agency attends a training seminar on the new federal standards
•
related to the agency's regulatory authority. If the analyst's travel payments are paid by the
federal agency, must the analyst report the payment on the Form 700?
A. No. A payment for travel and related per diem received from a government agency for
education, training, or other inter - agency programs or purposes, is not considered a gift or
income to the official who uses the payment.
37. Q. A state legislator and a planning commissioner were guest speakers at an association's event.
Travel expenses were paid by the association, and the event was held in the United States. Is
this reportable?
A. Yes. The payment is reportable, but not subject to the gift limits. In general, an exception
applies to payments for travel within the United States that are provided to attend a function
where the official makes a speech. These payments are not limited, but are reportable as gifts.
The rules require that the speech be reasonably related to a legislative or governmental
purpose, or to an issue of state, national, or international public policy; and the travel payment
must be limited to actual transportation and related lodging and subsistence the day
immediately preceding, the day of, and the day immediately following the speech. (See
Government Code Section 89506. Other rules may be applicable if this exception is not used.)
Tickets to Non - Profit and Political Fundraisers Questions
38. Q. An official is offered a ticket from a 501(c)(3) charitable organization to attend its fundraising
® event. The face value (price) of the ticket is $500, and the ticket states that the tax deductible
portion is $350. If the official accepts the ticket, what must be reported?
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A. Nothing is required to be reported on the Form 700 so long as the ticket is provided directly by
the 501(c)(3) organization for its own fundraising event and is used for the official's own
attendance at the fundraiser. In this case, the ticket is deemed to have no value. The official
may also accept a second ticket provided directly by the 501(c)(3) organization for his or her
guest attending the event, without a reporting obligation by either the official or the guest.
39. Q. What if someone purchases a table at a non - profit fundraiser and offers an official a seat at the
table?
A. If another person or entity provides a ticket, it is a gift and subject to the gift limit. The value is
the non - deductible portion on the ticket. If there is no declared face value, then the value is the
pro -rata share of the food, catering service, entertainment, and any additional item provided as
part of the event. The "no value" exception only applies if the official receives no more than two
tickets for his or her own use directly from the 501(c)(3) organization and it is for the
organization's fundraising event.
40. Q. A 501(c)(3) organization provides a ticket to an official for its fundraising event. The
organization seats the official at a table purchased by a business entity. Does the official have
to report the ticket?
A. No. So long as the ticket is provided directly by the 501(c)(3) organization and is used for the
official's own attendance at the fundraiser, the ticket is not reportable regardless of where the
official is seated.
41. Q. An agency employee who holds a position designated in the conflict of interest code receives a
ticket to a fundraiser from a person not "of the type" listed in the agency's code. Is the agency
employee required to report the value?
A. No. A ticket or any other gift may be accepted under these circumstances without limit or
reporting obligations. Agencies must ensure the conflict of interest code adequately addresses
potential conflicts of interests but not be so overbroad as to include sources that are not related
to the employee's official duties.
42. Q. An official receives a ticket to attend a political fundraiser held in Washington D.C. from a
federal committee. Is the official required to disclose the ticket as a gift, and is it subject to the
gift limit?
A. No. The value of the ticket is not a gift so long as the ticket is provided to the official directly by
the committee holding the fundraiser and the official personally uses the ticket. (Regulation
18946.4.) Separate rules apply for travel provided to attend the fundraiser. Regulation 18950.3
covers issues on travel paid by or for a campaign committee.
43. Q. A political party committee is holding a political fundraiser at a golf course and a round of golf is
included. If the committee provides an elected official a ticket, is the ticket reportable by the
official?
A. No, so long as the official uses the ticket for his or her own use. If someone other than the
political party provides a ticket, the full cost of the ticket is a gift. The political party must report
the total amount spent on the fundraiser on its campaign statement.
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44. Q. If a business entity offers an official a ticket or a seat at a table that was purchased for a politica
fundraiser, what is the value?
A. Because the ticket was not offered by the campaign committee holding the fundraiser, it is a gift
to the official. The value is either the face value of the ticket or the pro -rata share of the food,
catering services, entertainment, and any additional benefits provided to attendees.
45.0. If an official attends an event that serves only appetizers and drinks, does the "drop -in"
exception apply no matter how long the official stays or how many appetizers or drinks are
consumed?
A. No. The focus of the food and beverages "drop -in" exception is not on the nature of the event
as a whole, but rather on the particular official's brief attendance and limited consumption. If an
official attends an event that serves only appetizers and drinks, the "drop -in" exception would
only apply if the official just "drops in" for a few minutes and consumes only a "de minimis"
amount of appetizers and drinks. However, the "drop -in" exception does not automatically apply
just because the event does not serve more than appetizers and drinks.
46. Q. An organization, which is not a 501(c)(3) organization, is holding a fundraiser at a professional
sporting event. Tickets to this sporting event are sold out and it appears that tickets are only
available at a substantially higher price than the stated face value amount of the ticket provided
to the official by the organization. If the official attends the event, what is the value of the gift?
A. The value is the face value amount stated on the ticket to the sporting event. This valuation rule
applies to all tickets to such events that are not covered by a separate valuation exception, such
as non - profit and political party fundraisers.
47. Q. An official receives a ticket to a fundraiser, and if accepted, the ticket will result in a reportable
gift or a gift over the current gift limit. What are the options?
A. The official may reimburse the entity or organization that provided the ticket for the amount over
the gift limit (or pay down the value to under the $50 gift reporting threshold if the official does
not want to disclose the ticket). Reimbursement must occur within 30 days of receipt of the
ticket. A candidate or elected official may use campaign funds to make the reimbursement if the
official's attendance at the event is directly related to a political, legislative, or governmental
purpose for the payment. A ticket that is not used and not given to another person is not
considered a gift to the official.
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Conflicts of Interest / Form 700 / COI Codes
Assets and income of public officials which may be materially affected by their
official actions should be disclosed and in appropriate circumstances the officials
should be disqualified from acting in order that conflicts of interest may be
avoided." Gov. Code section 81002(c)
"No public official at any level of state or local government shall make, participate
in making or in any way attempt to use his official position to influence a
governmental decision in which he knows or has reason to know he has a
financial interest." Gov. Code Section 87100
The Political Reform Act prevents conflicts of interest in two ways -- disclosure
and disqualification. (See Gov. Code Sections 87100 - 87350.)
Disclosure
The purpose of financial disclosure is to alert public officials to personal interests
that might be affected while they are performing their official duties, i.e., making
governmental decisions. Disclosure also helps inform the public about potential
conflicts of interest.
Public officials at every level of state and local government must disclose their
personal financial interests. Elected officials, judges, and high- ranking appointed
officials generally have the most comprehensive disclosure requirements. (Gov.
Code Section 87200.) These include disclosure of:
® . Investments in business entities (e.g., stock holdings, owning a business,
a partnership)
Interests in real estate (real property)
Sources of personal income, including gifts, loans and travel payments
Positions of management or employment with business entities
For most other officials, including employees of state and local government
agencies, it is up to the agencies that employ them to decide what their
disclosure requirements are. Each state and local agency must adopt a conflict
of interest code tailoring the disclosure requirements for each position within the
agency to the types of governmental decisions a person holding that position
would make. For example, an employee who approves contracts for goods or
services purchased by her agency should not be required to disclose real estate
interests, but should be required to disclose investments in and income from
individuals and entities that supply equipment, materials, or services to the
agency. (Gov. Code Sections 87301 and 87302.)
Unpaid members of boards and commissions and consultants to state and local
government agencies also may be required to disclose their personal financial
interests if they make or participate in making governmental decisions that could
affect their private financial interests.
® Disclosure is made on a form called a "statement of economic interests" (Form
700). The form must be filed each year. Filed forms are public documents that
must be made available to anyone who requests them.
Disqualification
If a public official has a conflict of interest, the official may be required to
disqualify himself or herself from making or participating in a governmental
® decision, or using his or her official position to influence or attempt to influence a
governmental decision.
See the fact sheet, Can I Vote? Conflicts of Interest Overview.
To determine whether an official has a conflict of interest many factors must be
analyzed. For example, is it reasonably foreseeable that the official's interest will
be affected by a particular decision? Will the decision have a significant
monetary impact on the financial interest or is the impact minimal? Will the
decision affect the official's interest differently than members of the general
public? Is the official even making a governmental decision?
In many cases, an official will need guidance from the Commission or an
attorney to determine whether disqualification is required.
Note: Although they are required to file statements of economic interests, judges
and court commissioners are not subject to the Act's disqualification provisions.
See the fact sheet, C
and Commissioners.
In most cases, the receipt of campaign contributions is not the basis for
disqualification by a public official. However, certain public officials who make
decisions in proceedings involving licenses, permits, or other entitlements for use
(e.g., planning commissioners, board members of joint powers authorities and
other regional governing or planning agencies, and members of other state and
local boards and commissions) are subject to the restrictions of Gov. Code
Section 84308. Section 84308 prohibits solicitation or receipt of campaign
contributions from parties, participants, or their agents, in proceedings involving
licenses, permits, or other entitlements for use. The law also requires an official's
disqualification in those proceedings if the official has received campaign
contributions of more than $250 from a parry or participant within the 12 months
preceding the decision. Finally, Section 84308 requires disclosure of such
campaign contributions.
Elected state officers, judges, and members of local government agencies who
are directly elected by the voters (e.g., board of supervisors, city council, school
board) are exempt from Section 84308 when they are acting as members of the
agency to which they are elected. However, if one of these individuals is also a
voting member of another nonexempt body, such as a joint powers agency or
regional planning agency, he or she is covered by the law with respect to license,
permit or other entitlement for use proceedings before the nonexempt body. For
example, if three city councilmembers and two county supervisors sit on a city-
county joint powers authority, Section 84308 applies to the license, permit or
other entitlement for use proceedings before the joint powers authority because
the officials were not elected directly to the authority. It does not apply to the
officials when they are voting on matters before the city council or board of
supervisors. (Revised 5/03)
Conflicts of Interest Rules
Under the Act, a public official has a disqualifying conflict of interest in a governmental
decision if it is foreseeable that the decision will have a financial impact on his or her
personal finances or other financial interests. In such cases, there is a risk of biased
decision - making that could sacrifice the public's interest in favor of the official's private
financial interests. To avoid actual bias or the appearance of possible improprieties, the
public official is prohibited from participating in the decision.
Disqualifying Financial Interests
There are five types of interests that may result in disqualification:
• Business Entity. A business entity in which the official has an investment of
$2,000 or more in which he or she is a director, officer, partner, trustee,
employee, or manager.
• Real Property. Real property in which the official has an interest of $2,000 or
more including leaseholds. (However, month -to -month leases are not
considered real property interests.)
• Income. An individual or an entity from whom the official has received income or
promised income aggregating to $500 or more in the previous 12 months,
including the official's community property interest in the income of his or her
spouse or registered domestic partner.
• Gifts. An individual or an entity from whom the official has received gifts
aggregating to $460 or more in the previous 12 months.
• Personal Finances.The official's personal finances including his or her
expenses, income, assets, or liabilities, as well as those of his or her immediate
family.
Disqualifying Financial Impact or Effect
If a decision may have a financial impact or effect on any of the foregoing interests, an
official is disqualified from governmental decision if the following two conditions are met:
The financial impactor effect is foreseeable, and
The financial impact or effect is significant enough to be considered material.
•
Generally, a financial impact or effect is presumed to be both foreseeable and material
if the financial interest is "explicitly" or directly involved in the decision. A financial
interest is explicitly involved in the decision whenever the interest is a named party in, or
the subject of, a governmental decision before the official or the official's agency.
If the interest is "not explicitly involved" in the decision, a financial impact or effect is
reasonably foreseeable if the effect can be recognized as a realistic possibility and
more than hypothetical or theoretical. A financial effect need not be likely to occur to be
considered reasonably foreseeable.
However, for interests "not explicitly involved" in the decision, different standards apply
to determine whether a foreseeable effect on an interest will be material depending on
the nature of the interest. The FPPC has adopted rules for deciding what kinds of
financial effects are important enough to trigger a conflict of interest. These rules
are called "materiality standards," that is, they are the standards that should be used for
judging what kind of financial impacts resulting from governmental decisions are
considered material or important.
There are too many materiality standards to adequately review all of them here.
To determine the applicable materiality standard, or to obtain more detailed information
on conflicts, an official may consult the FPPC's guide to Recognizing Conflicts of
Interest. Alternatively, the official should seek assistance from agency counsel or the
FPPC anytime the official has reason to believe a decision may have a financial impact
• or effect on his or her personal finances or other financial interests.
Exceptions
Not all conflicts of interest prevent a public official from lawfully taking part
in the government decision. There are two limited exceptions to the conflict of
interest rules:
• The Public Generally Exception. A public official is not disqualified from a
decision if the effect on the official's interests is indistinguishable from the effect
on the public.
• Legally Required to Participate. In certain rare circumstances, a public official
may be randomly selected to take part in a decision if a quorum cannot be
reached because too many officials are disqualified under the Act.
Exceptions must be considered with care. A public official should contact agency
counsel or the FPPC to determine if an exception applies.
Recusal Requirements
An official with a disqualifying conflict of interest may not make, participate in making, or
use his or her position to influence a governmental decision. When appearing before his
or her own agency or an agency subject to the authority or budgetary control of his or
A her agency, an official is making, participating in making, or using his or her position to
influence a decision any time the official takes any action to influence the decision
including directing a decision, voting, providing information or a recommendation, or
contacting or appearing before any other agency official. When appearing before any
other agency, the official must not act or purport to act in his or her official capacity or
on behalf of his or her agency.
Certain officials (including city council members, planning commissioners, and
members of the boards of supervisors) have a mandated manner in which they
must disqualify from decisions made at a public meeting (including closed
session decisions) and must publicly identify a conflict of interest and leave the
room before the item is discussed.
While there are limited exceptions that allow a public official to participate as a member
of the public and speak to the press, the exceptions are interpreted narrowly and may
require advice from your agency's counsel or the FPPC.
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