SB 1439 Restricts Pay-to-Play Campaign Financing

Three sitting or former Los Angeles City Council members were indicted in less than two years. Furthermore, a Mayor of Anaheim resigned after being indicted in connection with a sprawling corruption scheme involving Angels Stadium. Against this backdrop, in 2022, the California Legislature passed, and Governor Gavin Newsom signed, Senate Bill 1439 to amend the Political Reform Act of 1974. The bill dramatically restricts the extent to which parties seeking approvals from local governments can make campaign contributions to local elected officials. The bill’s author, Senator Steve Glazer (Democrat, 7th District), declared the legislation “could very well be the most significant political reform in the last 50 years.” Glazer contends that SB 1439 “would seriously curtail the current, legal pay to play activity,” and that there have “been criminal acts and other pay to play schemes that have passed the current legal test.”

As of January 1, 2023, Government Code Section 84308 prohibits parties and their agents from contributing $250 or more to most local officers (e.g., city councilmember, county supervisor) while a proceeding involving a license, permit, use entitlement, franchise, or, with some exceptions, other contract (Government Benefit) is pending before the officer’s agency, and for 12 months after a final decision. Parties also must disclose their contributions to a local officer within the past 12 months before they file their Government Benefit application. For contributions made while a Government Benefit application is pending, parties must disclose their contribution within 30 days of making the contribution or on the date they make an appearance before the agency, whichever is earlier.

In this Los Angeles Lawyer Magazine article authored by Loeb & Loeb Corporate associate Nick Warshaw, he discusses how SB 1439 closes gaps that once allowed “legal pay-to-play activity.” Nick also addresses the potential challenges associated with the new bill and analyzes illustrative scenarios of the regulations in practice.