Court Opinion

ID: 4128202
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:36:54.9295+00
Date Added: 2024-06-11T14:31:21.730961
License: Public Domain

TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                         OFFICE OF THE ATTORNEY GENERAL
                                                   State of California

                                                 DANIEL E. LUNGREN
                                                    Attorney General
                                        ______________________________________

                                     OPINION               :
                                                           :        No. 96-505
                                      of                   :
                                                           :        March 20, 1997
                            DANIEL E. LUNGREN              :
                               Attorney General            :
                                                           :
                           ANTHONY S. SUMMERS              :
                            Deputy Attorney General        :
                                                           :
                    ______________________________________________________________________

                       THE HONORABLE PHILLIP S. CRONIN, COUNTY COUNSEL, COUNTY OF
         FRESNO, has requested an opinion on the following questions:

                          1. May a member of a county board of supervisors or an elected county treasurer contribute
         personal funds to his or her own reelection campaign while serving as a member of a county treasury
         oversight committee?

                           2. May a member of a county board of supervisors or an elected county treasurer raise
         funds for his or her own reelection campaign while serving as a member of a county treasury oversight
         committee?

                           3. May a member of a county board of supervisors or an elected county treasurer contribute
         to the other's reelection campaign while serving as a member of a county treasury oversight committee?

                          4. May a member of a county board of supervisors or an elected county treasurer raise
         funds for the other's reelection campaign while serving as a member of a county treasury oversight
         committee?

                          5. May a member of a county board of supervisors or an elected county treasurer endorse
         the candidacy of the other or attend or speak at a public campaign event in support of his or her own
         candidacy or in support of the other's candidacy for reelection while serving as a member of a county treasury
         oversight committee?

                           6. May a member of a county board of supervisors become a member of a county treasury
         oversight committee if he or she has been employed by a family-owned business which has contributed to his
         or her reelection campaign or to the reelection campaign of the elected county treasurer?

                                                       CONCLUSIONS

                         1. A member of a county board of supervisors or an elected county treasurer may

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                                                   y             p                          y            y
         contribute personal funds to his or her own reelection campaign while serving as a member of a county
         treasury oversight committee.

                           2. A member of a county board of supervisors or an elected county treasurer may raise
         funds for his or her own reelection campaign while serving as a member of a county treasury oversight
         committee.

                           3. A member of a county board of supervisors or an elected county treasurer may
         contribute to the other's reelection campaign while serving as a member of a county treasury oversight
         committee.

                          4. A member of a county board of supervisors or an elected county treasurer may not raise
         funds for the other's reelection campaign while serving as a member of a county treasury oversight
         committee.

                          5. A member of a county board of supervisors or an elected county treasurer may endorse
         the candidacy of the other or attend or speak at a public campaign event in support of his or her own
         candidacy or in support of the other's candidacy for reelection while serving as a member of a county treasury
         oversight committee.

                          6. A member of a county board of supervisors may not become a member of a county
         treasury oversight committee if he or she has been employed by a family-owned business which has made
         contributions to his or her reelection campaign or to the reelection campaign of the elected county treasurer.

                                                           ANALYSIS

                          In late 1994, Orange County and the Orange County Investment Pool filed petitions for
         bankruptcy protection under Chapter 9 of the federal Bankruptcy Code. (11 U.S.C.
         §§ 901-946.) Following legislative committee hearings into the causes of the bankruptcy, the Legislature
         enacted several laws governing the investment of funds belonging to local government agencies. Included
         among the new laws were provisions establishing county treasury oversight committees. (Gov. Code, §§
         27130-27137.) Foontnote No. 1 The six questions presented for resolution concern the statutory requirements
         for membership on such committees and whether these statutory requirements are constitutional.

                          A county treasury oversight committee is established under the terms of section 27131:

                          "The board of supervisors in each county or city and county shall, if the county or
               city and county is investing surplus funds, establish a county treasury oversight committee. The
               board of supervisors, in consultation with the county treasurer, shall determine the exact size of
               the committee, which shall consist of from 3 to 11 members, and the categories from which the
               members shall be represented, as specified in subdivisions (a) to (g), inclusive, of Section 27132.
               Members shall be nominated by the treasurer and confirmed by the board of supervisors."

         Section 27132 in turn provides:

                        "The county treasury oversight committee, pursuant to Section 27131, shall consist of
               members appointed from the following:

                          "(a) The county treasurer.

                          "(b) The county auditor, auditor-controller, or finance director, as the case may be.

                          "( ) A            i          i   db   h        b    d f        i

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                            "(c) A representative appointed by the county board of supervisors.

                            "(d) The county superintendent of schools or his or her designee.

                           "(e) A representative selected by a majority of the presiding officers of the governing
               bodies of the school districts and community college districts in the county.

                           "(f) A representative selected by a majority of the presiding officers of the legislative
               bodies of the special districts in the county that are required or authorized to deposit funds in the
               county treasury.

                            "(g) Up to five other members of the public.

                         "(1) A majority of the other public members shall have expertise in, or an academic
               background in, public finance.

                           "(2) The other public members shall be economically diverse and bipartisan in
               political registration."

         Sections 27131 and 27132 allow each county to determine, within certain limitations, the size of the county
         treasury oversight committee and its composition. A county may choose to have a committee comprised
         solely of members of the general public, solely of government officials, or a combination of both. Pursuant to
         Section 27131, these choices are made by the board of supervisors in consultation with the county treasurer.
         Footnote No. 2

                         The Legislature has required in section 27133 that a county treasury oversight committee
         annually prepare an investment policy which must contain the following elements:

                            ". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

                           "(c) The criteria for selecting security brokers and dealers from, to, or through whom
               the county treasury may purchase or sell securities or other instruments. The criteria shall
               prohibit the selection of any broker, brokerage, dealer, or securities firm that has, within any
               consecutive 48-month period following January 1, 1996, made a political contribution in an
               amount exceeding the limitations contained in Rule G-37 of the Municipal Securities
               Rulemaking Board, to the local treasurer, any member of the governing board of the local
               agency, or any candidate for those offices.

                          "(d) Limits on the receipt of honoraria, gifts, and gratuities from advisors, brokers,
               dealers, bankers, or other persons with whom the county treasury conducts business by any
               member of the county treasury oversight committee. These limits may be in addition to the limits
               set by a committee member's own agency, by state law, or by the Fair Political Practices
               Commission."
                          ". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ."

         While the forgoing statute is aimed at insuring independence of county treasury oversight committee
         members from the "investment industry," independence from political influence is the target of sections
         27132.1 and 27132.2. These two statutes are the focus of the six questions to be resolved. Section 27132.1
         provides:

                          "A member may not be employed by an entity that has (a) contributed to the
               campaign of a candidate for the office of local treasurer, or (b) contributed to the campaign of a
               candidate to be a member of a legislative body of any local agency that has deposited funds in
               the county treasury in the previous three years or during the period that the employee is a

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               the county treasury, in the previous three years or during the period that the employee is a
               member of the committee."

         Section 27132.2 states:

                           "A member may not directly or indirectly raise money for a candidate for local
               treasurer or a member of the governing board of any local agency that has deposited funds in the
               county treasury while a member of the committee."

         The questions posed are based upon the assumptions that a member of a board of supervisors and an elected
         county treasurer are members of a county treasury oversight committee and that each is also a candidate for
         reelection. We have been asked whether sections 27132.1 and 27132.2 are applicable to certain political
         activities of these members.

                    1. Contributing to One's Own Campaign

                          The first question is whether a member of a board of supervisors or an elected county
         treasurer serving as a member of a county treasury oversight committee may contribute to his or her own
         reelection campaign.

                           There is nothing in the language of sections 27132.1 or 27132.2 that governs, much less
         prohibits, the making of campaign contributions. Section 27132.1 relates to employment by entities that make
         certain contributions. Section 27132.2 deals with raising campaign funds, which is not the same as
         contributing funds. Fund raising involves the solicitation of contributions.

                         We conclude that a member of a county board of supervisors or an elected county treasurer
         serving as a member of a county treasury oversight committee may contribute to his or her own reelection
         campaign.

                    2. Raising Funds for One's Own Campaign

                          We next consider whether a supervisor or an elected treasurer serving as a member of a
         county treasury oversight committee may raise funds for his or her own reelection campaign.

                          Section 27132.2 prohibits any member of a county treasury oversight committee from
         raising funds directly or indirectly for a candidate for the office of treasurer, or a candidate who is "a member
         of the governing board of a local agency that has deposited funds in the county treasury . . . ." The latter
         phrase includes a supervisor serving on a county treasury oversight committee who is a candidate for
         reelection.

                          When "statutory language is . . . clear and unambiguous there is no need for construction,
         and courts should not indulge in it." (Rojo v. Kliger (1990) 52 Cal. 3d 65, 73.) The plain meaning of section
         27132.2 applies the prohibition to any member of a county treasury oversight committee, including a
         supervisor or elected treasurer who is running for reelection.

                          However, prohibiting a supervisor or treasurer from raising funds for his or her own
         reelection campaign raises serious constitutional issues. "In California, the right to hold public office has
         long been recognized as a valuable right of citizenship." (Helena Rubenstein Internat. v. Younger (1977) 71
Cal. App. 3d 406, 418; see Clements v. Fashing (1982) 457 U.S. 957, 963-966.) The right to run for office
         necessarily includes the right to campaign and to raise funds for that campaign.

                           In Buckley v. Valeo (1976) 424 U.S. 1, 14, the court noted that political campaign
         contribution and expenditure limitations "operate in an area of the most fundamental First Amendment
         activities " (See also Citizens Against Rent Control v Berkeley (1981) 454 U S 290 294 ) In Planning &

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         activities. (See also Citizens Against Rent Control v. Berkeley (1981) 454 U.S. 290, 294.) In Planning &
         Conservation League, Inc. v. Lungren (1995) 38 Cal. App. 4th 497, 505, the Court of Appeal stated:

                           "The First Amendment to the United States Constitution prohibits any law `abridging
               the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to
               petition the government for a redress of grievances.' This prohibition is applicable to the states
               by virtue of the Fourteenth Amendment. [Citation.]

               "The First Amendment protects not only the rights of speech and petition but also the right to
               contribute financial and other support to a political candidate or a ballot measure. [Citation.] In
               addition, the freedom to speak or to petition the government could hardly be protected from
               Government interference without a correlative associational freedom to engage in group effort
               toward these ends. [Citations.]

                           ". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

                           "Those categories of speech and association related to campaigns for political office
               or issue-based elections reside at the core of the First Amendment. [Citations.] `When a law
               burdens core political speech, we apply `exacting scrutiny,' and we uphold the restriction only if
               it is narrowly tailored to serve an overriding state interest. [Citation.]' [Citation.]" (Italics added,
               fn. omitted.)

         Buckley v. Valeo, supra, 424 U.S. at 23, held that limits on campaign expenditures impose significantly more
         severe restrictions on protected freedoms of political expression and association than do limitations on
         financial contributions. The court found unconstitutional that portion of the Federal Election Campaign Act
         of 1971 (2 U.S.C. § 431 et seq.) which imposed limits on expenditures.

                            It follows from these First Amendment principles that a candidate may not be prohibited by
         statute from raising funds for his or her own campaign, either personally or through a campaign committee. If
         there is a right to expend funds without limit on a political campaign, there must also be a right to raise funds
         for that campaign, since the former would be meaningless without the latter.

                           We conclude that section 27132.2 may not be applied so as to prevent a supervisor or
         elected treasurer who serves on a county treasury oversight committee from raising funds for his or her own
         campaign.

                    3. Contributing to the Campaign of Another

                           The third question we are asked to address is whether, if a supervisor and elected treasurer
         are both serving on a county treasury oversight committee, may either contribute to the campaign of the
         other. As with our analysis of the first question, we find nothing in section 27132.1 or section 27132.2 that
         prohibits the making of contributions. Rather, the prohibition is on fund raising, which involves the
         solicitation of contributions. Each member may contribute to the campaign of the other, subject to any limits
         on contributions established by other laws. (See, e.g., §§ 85301-85313.)

                    4. Raising Funds for the Campaign of Another

                        Next we are asked whether a supervisor or elected treasurer serving on a county treasury
         oversight committee may raise funds for the reelection campaign of the other.

                          Preliminarily we note that the Legislature has not defined the particular activities that are
         encompassed by the phrase: "A member may not directly or indirectly raise money for a candidate . . ."
         contained in section 27132.2. To "raise" in this context generally means "to bring together: collect, gather,
         levy (the government raised large sums for highway construction by a tax on gasoline sales) (the budget

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         levy (the government raised large sums for highway construction by a tax on gasoline sales) (the budget . . .
         is raised by registration fees, ticket sales, and grants . . . ." (Webster's Third New Internat. Dict. (1971) p.
         1877.) Specifically with respect to raising funds for charitable purposes, the Legislature has identified three
         different aspects to fund raising activities: solicitation, receipt, and control of funds, assets, or property. (§
         12599, subd. (a).) While the Legislature has used the term "indirectly" in section 27132.2, we believe that the
         activities must nonetheless involve the solicitation, receipt, or control of campaign funds by the committee
         member. Such activities as giving political campaign speeches or making endorsements would thus not be
         covered, if a solicitation is not made by the committee member, even though the activities might have the
         incidental effect of producing political contributions.

                           Section 27132.2 explicitly prohibits a committee member from raising funds for a candidate
         for treasurer or for a member of the governing board of a local agency that has deposited funds in the county
         treasury. Therefore neither the treasurer nor the supervisor serving on the committee may raise funds for the
         campaign of the other unless there is some constitutional impediment precluding application of section
         27132.1 in such circumstances.

                           It may at first appear that this question must necessarily be answered in the same manner as
         the second question above dealing with fund raising for one's own campaign. Certainly there are common
         considerations. The First Amendment and associational rights of every person would seem to allow fund
         raising for a political campaign. The court in Buckley v. Valeo, supra, 424 U.S. at 65-66, noted:

                            "As we have seen, group association is protected because it enhances `[e]ffective
               advocacy.' [Citation.] The right to join together `for the advancement of beliefs and ideas,'
               [citation], is diluted if it does not include the right to pool money through contributions, for
               funds are often essential if `advocacy' is to be truly or optimally `effective.'"

                           Nevertheless, there are significant differences between prohibiting the raising of funds for
         oneself and prohibiting a very limited number of people from engaging in fund raising for another's campaign
         for certain specified offices. In the first place, the right to run for political office would be severely impacted
         if a candidate could not personally engage in fund raising for his or her own campaign. No such effect would
         be likely from the limitations contained in section 27132.2, which would limit the right of at most 10 people
         in each county to act as fund raisers for another person. Moreover, allowing committee members to raise
         money for the campaigns of other persons who are responsible for depositing funds in the treasury or
         determining investment policy would permit the type of relationship which the Legislature sought to avoid in
         enacting this statutory scheme. (See § 27133.) It would lead, at least, to the appearance of a lack of
         independence on the part of the committee members, a danger not present when a member is raising funds for
         his or her own campaign.

                         The strictures on fund raising found in section 27132.2 appear no more onerous than those
         imposed upon judges by the California Code of Judicial Ethics adopted by the Supreme Court, which
         provides in Canon 5:

                           "Judges are entitled to entertain their personal views on political questions. They are
               not required to surrender their rights or opinions as citizens. They shall, however, avoid political
               activity that may create the appearance of political bias or impropriety. Judicial independence
               and impartiality should dictate the conduct of judges and candidates for judicial office.

               "A. Political Organizations

               "Judges and candidates for judicial office shall not

                           "(1) act as leaders or hold any office in a political organization;

                           "(2)     k        h   f       liti l       i ti          did t f        j di i l ffi

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                    "(2) make speeches for a political organization or candidate for nonjudicial office or
         publicly endorse or publicly oppose a candidate for nonjudicial office;

                     "(3) personally solicit funds for a political organization or nonjudicial candidate; or
         make contributions to a political party or political organization or to a nonjudicial candidate in
         excess of five hundred dollars in any calendar year per political party or political organization or
         candidate, or in excess of an aggregate of one thousand dollars in any calendar year for all
         political parties or political organizations or nonjudicial candidates." (Italics added.)

         The Supreme Court has thus established an ethical standard for judges that precludes fund
         raising for any non-judicial candidate. Section 27132.2, on the other hand, limits fund raising by
         members of a county treasury oversight committee only for specified offices.

                          Section 27132.2 is also more narrowly circumscribed in its limitations than the
         federal rules applicable to the political activities of federal employees. The federal limitations
         were upheld by the court in CSC v. Letter Carriers (1973) 413 U.S. 548. While section 27132.2
         infringes upon the right of a committee member to engage in certain political activities, its ban
         upon fund raising for others is a legitimate method of achieving the Legislature's goals of
         assuring the political and financial independence of each committee member.

                          We conclude that section 27132.2's ban on fund raising for others does not
         unconstitutionally infringe upon the rights of a county supervisor or elected treasurer serving on
         a county treasury oversight committee. The statutory fund raising prohibition precludes each
         from soliciting funds for the other.

                    5. Non-financial Support for a Candidate

                          We next consider whether a member of a county board of supervisors or an
         elected county treasurer, while serving as a member of a county treasury oversight committee,
         may endorse the other's candidacy or attend or speak at a public campaign event in support of his
         or her own candidacy or in support of the other's candidacy for reelection.

                          Since nothing in the language of sections 27132.1 or 27132.2 makes reference
         to non-financial support, whether by way of endorsement, attending campaign events, or making
         speeches, there is no prohibition on these activities. As we explained in answer to the fourth
         question, "indirect" fund raising is prohibited where the committee member solicits, receives, or
         controls the funds in some manner. Speeches without soliciting funds by the committee member
         are not proscribed.

                    6. Employment By Entity That Has Made Campaign Contributions

                          The final question we address focuses upon section 27132.1. We are asked
         whether a member of a county board of supervisors may become a member of a county treasury
         oversight committee if he or she has been employed by a family-owned business that has
         contributed to his or her reelection campaign or to the reelection campaign of the elected county
         treasurer. Section 27132.1 precludes a committee member from employment by an entity which
         has contributed to the campaign of the treasurer or the campaign of a candidate for the governing
         board (e.g., board of supervisors) which has deposited funds in the county treasury. The plain
         language of the statute would preclude membership on the county treasury oversight committee
         in the circumstances set forth. We consider whether it may be constitutionally applied.

                         The question assumes that an employing entity has made a contribution of the
         type described and that the entity is a "family business." We take the term "family business" to

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               mean one owned by the immediate family of the candidate. May a contribution from family
               financial resources disqualify a person from membership on a county treasury oversight
               committee?

                                 Although Buckley v. Valeo, supra, 424 U.S. 1, noted that the Federal Election
               Campaign Act of 1971 (2 U.S.C. § 431 et seq.) limited the use of the candidate's personal funds
               and those of the candidate's immediate family, it found unconstitutional only the limits on the
               use of the candidate's personal funds. The court did not find that the "immediate family" had a
               constitutional right to use resources without regard to contribution limits. Indeed, we see no
               reason why the family of a candidate should be treated differently from other persons who are
               not themselves candidates in applying laws governing political contributions.

                                 Buckley v. Valeo, supra, 424 U.S. at 23-38, upheld the constitutionality of limits
               on campaign contributions. We are aware of no "family exemption" from those limits that would
               justify treating contributions by a "family business" differently from contributions by any other
               entity. Therefore, section 27231.1 is applicable when the contribution is from a "family
               business" rather than from the candidate's personal funds.

                                We also note that none of the considerations applicable to a candidate's use of
               personal funds for his or her own campaign are affected when one candidate contributes to
               another. Consequently, if a county treasury oversight committee member's employing "family
               business" is contributing to a candidate other than the one employed by the business, section
               27132.1 is clearly applicable.

                                                                 *****

         Footnote No. 1
         All undesignated section references hereafter are to the Government Code.
         Footnote No. 2
         The financial powers of a board of supervisors (§§ 25250-25265) include the authority to create funds and transfer money
         from one fund to another (§ 25252) and to examine the books and accounts of the treasurer (§§ 27100-27101); a county
         treasurer (§§ 27000-27101) receives and keeps all money belonging to the county (§ 27000) and may invest funds (§
         53565).

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