HOUSE OF REPRESENTATIVES

                      Olympia, Washington

Bill Analysis      Bill No.  HB 1427

Adjusting penalties for violations

of public disclosure laws.

Brief Title                               Hearing Date: 2/5/99

Reps. Miloscia, Romero                     Staff: Steve Lundin

Sponsor(s)                          State Government Committee

                                              Phone:  786-7127

BACKGROUND:

State voters approved Initiative 276 in 1972.  Initiative 276 prohibited the use of public facilities in a campaign, required campaign expenditures to be reported, required public officials to report their financial affairs, required persons lobbying the Legislature or state agencies to register and report their expenditures, required public records to be open for public inspection and copying, and created the public disclosure commission (PDC) as the agency to receive these reports and enforce these provisions.  All of these provisions were codified into a single chapter of laws.

Additional provisions were later added to this chapter of laws, including Initiative Measure 134, which was approved by state voters in 1992, that restricted political advertising and campaign contributions.

1. Public Disclosure Commission.

The PDC receives these campaign, financial, and lobbying reports, investigates whether any violations of the public disclosure laws have occurred, enforces the public disclosure laws, and prepares annual reports on the effectiveness of the public disclosure laws and any resulting action taken by law enforcement agencies.

If the PDC determines that an apparent violation of the public disclosure laws has occurred it may either:

oReport the apparent violation to the Attorney General or other appropriate law enforcement authorities; or

oInvestigate the apparent violation and if it determines that a violation has occurred, the PDC may issue an order directing that a person cease and desist from certain actions or may issue civil fines of not to exceed $1000 for a single violation or not to exceed $2,500 if multiple violations have occurred.

An order issued by the PDC may be appealed to superior court.

If a court determines that a violation of the public disclosure laws has occurred, it may impose a civil penalty of not to exceed $10,000 for each violation.  Where a violation of limitations on campaign contributions has occurred, the maximum civil penalty is the greater of either $10,000 or three times the amount of the contribution.

2. Enforcement actions.

Public disclosure laws may be enforced by government action of PDC, attorney general, or a prosecuting attorney, or may be enforced by private actions.

a. Government enforcement.

The attorney general or the Aprosecuting authority of political subdivisions@ may bring a civil action against violations of public disclosure laws.  In addition, any person may bring an action to enforce the public disclosure laws.

The attorney general and a prosecuting authority of a political subdivision may investigate a person if there is Areason to believe@ that the person is violating the public disclosure laws and issue an order requiring a person to appear and give information under oath and produce documents relevant to the investigation.  An order has the same force and effect as a subpoena.  The superior court enforces the orders.

The court may award the state all costs of investigation and trial, including a reasonable attorney=s fee.  If the violation is found to be intentional, the amount of the judgement may be trebled as punitive damages.  If the defendant prevails, the defendant shall be awarded all trial costs and may be awarded a reasonable attorney=s fee.

2. Private enforcement.

Any person may notify the attorney general, or local county prosecuting attorney, that they believe a violation of the public disclosure laws is or has occurred.  The person may bring an enforcement action superior court if the attorney general or prosecuting attorney fails to bring an enforcement action in superior court within 45 days of the notice being filed.

If the action prevails, the judgement award escheats to the state but the person bringing the action is paid for costs and attorney=s fees by the state.  If the action is dismissed, and the court finds that the action was brought without reasonable cause, the court may order the person who brought the action to pay trial costs and reasonable attorney=s fees to the defendant.

SUMMARY:

Penalties for violating public disclosure laws are increased and certain activities are limited if a person or entity fails to comply with an order relating to public disclosure laws.

1. Fines.

The maximum fine that a superior court may impose for a violation of the public disclosure laws is increased from $10,000 to $40,000.  The maximum fine that a superior court may impose for a violation of contribution limitations is increased from the greater of $10,000 or three times the contribution to the greater of $40,000 or three times the contribution.  A candidate or officer of an authorized committee or political committee may be ordered to pay a fine from personal funds.

The maximum fine that the PDC may impose is increase from $1,000 to $4,000 for a signal violation and from $2,500 to $10,000 for multiple violations.

2. Restrictions on activities.

A candidate who fails to comply with an order issued by the PDC or a superior court may not solicit or accept contributions or make expenditures until the candidate has complied with the order.

A political committee that has not complied with an order issued by the PDC or a superior court may not solicit or accept contributions or make expenditures until the candidate has complied with the order.  These restrictions also apply to a political committee with a majority of the same officers as the committee that is subject to the order.

If an officer or prior officer of a political committee has not complied with an order issued by the PDC or a superior court, the political committee shall not solicit contributions or make expenditures until the officer or prior officer has complied with the order.

A person who has not complied with an order issued by the PDC or a superior court may not register as a lobbyist, receive compensation as a lobbyist, or make expenditures as a lobbyist until he or she has complied with the order.  The PDC may revoke the registration of a lobbyist who fails to comply with such an order.

A sponsor of a grass roots lobbying organization who has not complied with an order issued by the PDC or a superior court may not compensation or make expenditures as a grass roots lobbyist until he or she has complied with the order.

3. Private enforcement.

The process for private enforcement of public disclosure laws is altered by: (a) Requiring notification of the PDC of the alleged violation; (b) extending the time after notification has been made before the private party may maintain an enforcement action from 45 days to 120 days; and (c) providing that a defendant who loses in such an enforcement action must pay the costs and attorney=s fees of the prevailing party.

4. Type of mail by which an order is sent.

An order issued by the attorney general, or a prosecuting attorney, under the public disclosure laws for a person to appear and give information under oath and produce documents, must be sent by certified mail rather than registered mail.

FISCAL NOTE:  Not requested.

EFFECTIVE DATE:  Ninety days after adjournment of session in which bill is passed.