Report 98105 Summary - May 1998

Fair Political Practices Commission:

Although It Follows the Law, Improvements Are Needed in Enforcement and Technical Assistance

Results in Brief

Our review found several problems with the State's Fair Political Practices Commission (commission), particularly in its enforcement division.

While the commission reasonably interprets the Political Reform Act of 1974 (act)-a disclosure law for elected and appointed officials and lobbyists-the commission's enforcement division does not open and close cases strictly on the merit of the complaints.

We did not find any indications of bias in how cases are addressed. Nevertheless, the commission has left itself open to such charges because similar cases are often handled inconsistently; some are prosecuted while others go unaddressed.

The commission could improve customer service by learning more about the needs of individuals it regulates and by simplifying its forms and instructions. The commission's strategic plan also has few goals and performance measures allowing it to evaluate its effectiveness in enforcing the act.

Specifically, the commission's enforcement division often lets staff availability dictate whether it investigates certain complaints. When staff are not available (the enforcement division says it is often short of staff but has not documented this problem) the enforcement division will close or not assign some valid complaints and does not prosecute some violations equally. The enforcement division also has no way of prioritizing complaints based on severity and importance and it is not sufficiently documenting reasons for opening or not opening investigations of complaints and the actions taken during investigations.

We also noted that the enforcement division often delays referring complaints for investigation and delays conducting the investigations. These delays can result in loss of evidence and make enforcement impossible because a four-year statute of limitations has expired.

Further, we found that the commission did not follow up on approximately 600 instances when public officials failed to properly disclose 1997 financial interests. As a result, it cannot be determined if the public officials who filed these forms have conflicts of interest between their personal financial interests and their government positions.

The Franchise Tax Board (FTB) is responsible for auditing most political campaigns and lobbyists and refers substantiated act violations to the commission. But because of inaction by the enforcement division, which believes many violations found in the audits fail to rise to the level of prosecution, the FTB's efforts are not as cost-beneficial as they could be: The enforcement division only investigated 87 of 712 audits referred to it over a five-year period. The enforcement division closed an additional 259 audits while taking no action at all. If the division would have taken the initiative to better direct FTB's efforts, some of the $1.1 million spent on the 259 audits that were ultimately closed could have been avoided.

We also determined that another branch of the commission, the technical assistance division, is not monitoring the work of the vast majority of the state filing officers responsible for collecting disclosure statements.

However, we did find that through its regulations and advice letters, the commission's legal division's interpretations of the act are generally consistent with the law's intent (though the legal division lacks management tools to help it operate more efficiently). Furthermore, a substantial portion of the commission's recent regulations are the result of changes in the law.

Finally, the act itself has unrealistic limits. We found that the act's current dollar limits for disclosures and restrictions of public officials-some set as early as 1974-are low and may create unfair situations restricting normal and reasonable activities of public officials. These low dollar limits may also have another undesirable effect in that they allow unscrupulous third parties, for as little as $300, to manipulate conflict-of-interest laws to their benefit. As a result, opposing public officials can be disqualified from voting on matters that would benefit these third parties.

Recommendations

To help ensure the consistency of its enforcement activities, the Fair Political Practices Commission (commission) should decide whether to investigate complaints based only on merit and prioritize the complaints that it investigates. If the commission learns that it has insufficient staff to investigate complaints, it should use this information to request additional staff for the enforcement division.

To ensure that audits of campaigns, candidates, and lobbyists are cost-beneficial, the commission should work with the Franchise Tax Board to decide which violations and dollar levels warrant enforcement action. The commission should then vigorously pursue enforcement actions.

To improve the efficiency and consistency of its operations, the commission should develop general guidelines for investigative and enforcement actions. It should also develop a process to track the statute of limitations on the complaints it assigns for investigations.

The commission should obtain more customer feedback to ensure that its efforts to educate and assist customers are effective. By involving more users to review new and amended forms, the commission could obtain better insights on how to simplify its forms and instruction manuals.

To measure the effectiveness of its enforcement activities, education and outreach efforts, and legal analysis, the commission needs to develop meaningful goals, objectives, and performance measures.

The commission should propose legislation to establish higher, more reasonable dollar disclosure and restriction limits. In determining these limits, the commission should consider inflation and other factors that will result in more reasonable dollar limits.

Agency Comments

In its response, the commission generally concurs with our findings and recommendations, and believes that our audit was beneficial. However, it believes that the decision whether to investigate complaints must be based on staff availability, otherwise the commission may prevent private citizens from bringing their own civil suits against violators of the act. The commission also believes that it may not be able to implement some of our recommendations without increased funding.


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