GOOD MORNING EVERYONE THE SENATE
COMMITTEE ON ELECTIONS AND
CONSTITUTIONAL AMENDMENTS WILL
COME TO ORDER- THE SENATE
CONTINUES TO WELCOME THE PUBLIC
AND HAS PROVIDED ACCESS TO BOTH
IN PERSON AND TELECONFERENCE BUT
DISSIPATION FOR PUBLIC COMMENT-
WE'RE GONNA HAVE THAT
OPPORTUNITY AT WE FINISHED WITH
OUR SPEAKERS THIS MORNING FOR
INDIVIDUALS WISHING TO PROVIDE
PUBLIC COMMENT VIA THE
TELECONFERENCE ORVIS THE
PARTICIPANT TOLL FREE NUMBER IS
EIGHT SEVEN SEVEN. TWO TWO SIX
EIGHT ONE SIX THREE AND THE
ACCESS CODE IS. SEVEN THREE SIX
TWO EIGHT THREE FOUR WE ALSO
HAVE ONE- REPRESENTATIVE BUT
DISSIPATING REMOTELY FOR OUR
REMOTE PARTICIPANT PLEASE MUTE
YOUR PHONE OR COMPUTER POLICE
SELECTOR ON MUTE BEFORE YOU
BEGIN SPEAKING OUR IT PERSONNEL
WILL PUT YOU BACK ON YOU WHEN
YOU ARE DONE. ONCE RECOGNIZED TO
SPEAK PLEASE MAKE SURE YOU CAN
BE SEEN ON THE SCREEN STATE YOUR
NAME AND THEN YOU'RE READY TO
ADDRESS THE COMMITTEE. FOR
TODAY'S HEARING WILL BE HEARING
ALL THE PANEL OF WITNESSES ON
THE AGENDA PRIOR TO TAKING ANY
PUBLIC COMMENT ONCE WE'VE HEARD
FROM ALL THE WITNESSES WILL HAVE
A PUBLIC COMMENT PERIOD. FOR
THOSE WHO WISH TO SHARE THEIR
VIEWS ON THE TOPICS ON TODAY'S
AGENDA. THIS MORNING'S- HEARING
WILL EXAMINE THE ON GOING
CHALLENGES AS IT RELATES TO THE
FRANCHISE TAX BOARD. AND THE
AUDITS THAT ARE REQUIRED OF BOTH
LOBBYING FIRMS AND THEIR
EMPLOYERS. THE FRANCHISE TAX
BOARD IS REQUIRED TO PERFORM
AUDITS OF TWENTY FIVE PERCENT.
OF LOBBYISTS AND LOBBYIST
EMPLOYERS. ACCORDING TO THE F.
T. V. BETWEEN TWO THOUSAND
SEVENTEEN TO TODAY. ONLY FOR
LOBBYING AUDITS WERE COMPLETED
AND SUBMITTED. THIS IS FAR BELOW
THE NUMBER REQUIRED BY THE
POLITICAL REFORM ACT. TODAY'S
HEARING WILL HOPEFULLY SHED
LIGHT. INTO THE CHALLENGES. AND
PROVIDE POTENTIAL SOLUTIONS TO
THIS ONGOING PROBLEM. BY
BRINGING TOGETHER STAKEHOLDERS
INVOLVED IN THIS AUDITING
PROCESS AS WELL AS OTHER
INTERESTED PARTIES- WE WELCOME
MAT MY VICE CHAIR HERE- SENATOR
WHEN IT IS CHECK AND SEE IF SHE
HAS ANY OPENING COMMENTS BEFORE
WE CALL THE FIRST WITNESS. OKAY
TERRIFIC OKAY. SO FIRST UP ON
THE AGENDA- IS. ROBERT STERN.
ROB BOB IS THE FORMER PRESIDENT
OF THE CENTER FOR GOVERNMENTAL
STUDIES. AND HE WAS THE
PRINCIPAL CO AUTHOR OF THE
POLITICAL REFORM ACT OF NINETEEN
SEVENTY FOUR. BOB FORTY NINE
YEARS OLD AND STILL KICK IN AND
YOU'RE LOOKING GOOD AND I KNOW
YOU'RE JOINING US REMOTELY. WE
WANT TO WELCOME YOU AND WE LOOK
FORWARD TO YOUR TESTIMONY. THANK
YOU VERY MUCH MR CHAIRMAN AND-
VICE CHAIR WITHIN- MY NAME IS
BUSTER I WAS THE PRINCIPAL CO
AUTHOR OF THE BOOK REFORM ACT.
IF BALLOT INITIATIVE WHICH WAS
WRITTEN IN NINETEEN SEVENTY
THREE. AND APPROVED BY 70% OF
CALIFORNIA'S VOTERS IN JUNE OF
NINETEEN SEVENTY FOUR. THANKS
FOR INVITING ME TO PARTICIPATE
IS HEREBY ZOOM. AND ALSO BY FAX
YOUR- ROOM FOR PROVIDING AN
EXCELLENT BACKGROUND LEVEL FOR
TODAY'S MEETING. WELL MY
BACKGROUND I WORK FOR THE
CALIFORNIA LEGISLATURE. AS A
COMMITTEE CONSULT YOUR
COUNTERPART IN THE ASSEMBLY.
WELL KNOWN AS THE ASSEMBLY
ELECTIONS AND REAPPORTIONMENT
COMMITTEE CHAIRED BY HENRY
WAXMAN. I WORK FOR THAT
COMMUNITY AND HENRY WAXMAN FOR
TWO YEARS. THEN I BECAME THE
ELECTIONS COUNSELORS OF STATE'S
OFFICE FOR TWO YEARS WHEN WORD
BROWN WAS SECRETARY STATE. IN
THAT CAPACITY I WILL ALSO WAS
THE LEGISLATIVE REPRESENTATIVE
FOR THE AGENCY ON ELECTION
RELATED BILLS. AFTER SERVING AS
LECTIONS COUNCIL SECRETARY STATE
I BECAME THE FIRST GENERAL
COUNSEL OF THE CALIFORNIA FAIR
POLITICAL PRACTICES COMMISSION.
WERE ALWAYS IT'S LEGISLATIVE
REPRESENTATIVE AND TIMES IT'S
PRESS SPOKESMAN AND ALSO
SUPERVISOR OF ITS ENFORCEMENT
DIVISION. I ALSO PERSONALLY
PERFORMED A CAMPAIGN AUDIT OF
THE STATE COMPTROLLER'S RACE FOR
NINETEEN SEVENTY EIGHT. SINCE
THE NPPC WAS REQUIRED TO DO SO
INSTEAD OF THE FRANCHISE TAX
BOARD AS YOU KNOW THE STATE
COMPTROLLER'S OTHER FRANCHISE
TAX BOARD IN THE US THE OF THE
PC WAS REQUIRED TO DO THE AUDIT
WHICH I DID. WELL I WAS AT THE
UP THE PC FOR NINE YEARS UNTIL
NINETEEN EIGHTY THREE. REMOVED
LOS ANGELES TO BECOME PRESIDENT
OF THE CENTER FOR GOVERNMENTAL
STUDIES. ABILITY BASED NONPROFIT
ORGANIZATION THE ROLE MODEL LAWS
IN THE FIELD OF CAMPAIGN
FINANCING. AFFECTS ANOTHER
GOVERNMENT REFORMS OF THEIR OWN
HELP RIGHT THE ONLY A CAMPAIGN
FINANCING- INDIVIDUAL. I WAS
WITH THE SENATE OF FOR DOUBLES
WHICH EIGHT YEARS TO RETIRE IN
TWO THOUSAND TWELVE OF THE
ORGANIZATION- SEES TO THE
OPERATIONS DUE TO LACK OF
FUNDING. I WAS VERY SURPRISED
AND I AM OUTRAGED LEARN
IMPORTANT PART. OF THE PUT IT
REFORM ACT THE AUDITING OF
LOBBYING STATEMENTS. AS WITH
NORD BY THE F. T. B. APPARENTLY
FOR SEVERAL YEARS. WHAT WE WROTE
THE NINETEEN SEVENTY FOUR RACK
WE WANTED TO ENSURE. A CERTAIN
NUMBER OF CAMPAIGN INVOLVING
STATEMENTS WERE NOT ONLY
REVIEWED OF THEIR FACE. BUT ALSO
THE STABLES AND SUPPORTING
FINANCIAL DOCUMENTS WERE
ACTUALLY AUDITED IN THE FIELD.
BECAUSE WE KNEW THE FRANCHISE
TAX BOARD WAS THE PRIMEROS
AUDITING AGENCY IN THE STATE. WE
GAVE THAT RESPONSIBILITY. AFTER
I BECAME GENERAL COUNSEL OF THE
F. B. B. C. I LEARNED WITHIN A
FEW YEARS. THE V. F. D. B. WAS
NOT FOR EXCITED ABOUT BEING
INVOLVED IN THE AUDITING. THEIR
SIDE THE LOWEST LEVEL STAFF TO
REFORM THE OFFICE. BUT WE KEPT
IN TOUCH WITH THEM AS FAR AS I
RECALL THE CONTINUE THE AUDITS.
HOWEVER IN RETROSPECT I THINK WE
MADE A MISTAKE IN NOT SPONSORING
LEGISLATION. TO TRANSFER THE
AUDITING FUNCTION TO THE
COMMISSION OR PERHAPS TO THE
STATE BOARD OF EQUALIZATION.
THAT IS MY RECOMMENDATION TODAY.
UNLESS THE F. T. BEACON ASSURE
YOU WILL RESUME THE AUDITING AS
REQUIRED BY LAW. AT THE TIME WE
WROTE THE ACT WE THOUGHT IT WAS
IMPORTANT. WHERE IS
RESPONSIBILITIES BE DIVIDED SO
THAT ONE AGENCY WAS DOING ALL
THE WORK IT GIVEN ALL THE
RESPONSIBILITIES UNDER THE ACT.
TODAY I STILL THINK IT'S
IMPORTANT THAT THE ATTORNEY
GENERAL LOCAL DISTRICT ATTORNEYS
HAVE CRIMINAL ENFORCEMENT
AUTHORITY. BUT I THINK IT'S TIME
TO TRANSFER THE AUDITING
FUNCTIONS WITH AGENCY THAT WILL
GIVE IT A HIGH PRIORITY. THE F.
PPC OR THE ALTAR OF THE STATE
BOARD OF EQUALIZATION UNLESS THE
F. P. BEACON ASSURE YOU THEY'LL
CONTINUE DOING THE AUDIT. IN
MEANTIME HOWEVER THE FTC OF TV
SHOULD BE YOUR IT'S BAD DAVID
WAS. OF ALL AND FEEL THE- F. AS
REQUIRED. BY GOVERNMENT CODE
SECTION NINE NINETY THOUSAND. IT
IS VIOLATING THE ACT BY NOT
DOING SO. I WANT TO COMMEND THIS
COMMITTEE PARTICULAR THE
CHAIRMAN CONDUCTED THIS
OVERSIGHT HEARING. WITHOUT IT
THE PUBLIC AND I WOULD NEVER
HAVE KNOWN THAT THIS STATE
AGENCY THE FTP HAS BEEN DERELICT
IS DUTY FOR SEVERAL YEARS. I
HOPE YOU WILL SCHEDULE A FOLLOW
UP HEARING FOR NEXT YEAR. TO SEE
WHAT PROGRESS HAS BEEN MADE
RECTIFYING THIS TERRIBLE
SITUATION. OF WHAT HAPPENED AS
YOU ANY QUESTIONS THANK YOU
AGAIN FOR THE FIRST OF. THANK
YOU. MR STERN FOR YOUR DIRECT
TESTIMONY- CERTAINLY THANK YOU
FOR THAT- YOUR HISTORICAL WORK
IN THIS AREA. OF POLITICAL
REFORM- AND IT'S HELPFUL I KNOW
TO ME IN THE COMMITTEE TO HEAR.
YOUR THINKING BEHIND THAT
MANDATORY AUDITS AND HOW
IMPORTANT IT HAS BEEN- AS WELL
AS THE BEGINNINGS AND THAT
CONCERNS THAT. YOU EXPRESSED
THAT MAYBE THEY WEREN'T SO
ENTHUSIASTIC. ONE INVITE MY
COLLEAGUES TO SEE IF THERE'S ANY
FOLLOW UP QUESTIONS WE'RE GONNA
BE HEARING FROM. THE FRANCHISE
TAX BOARD'S REPRESENTATIVE IN A
FEW MINUTES. AND I SO I
CERTAINLY WOULD INVITE YOU TO
LIST HANG ON WITH US IN HERE
THAT TOGETHER. THEIR EXPLANATION
AND IF YOU HAVE FURTHER COMMENTS
OR TESTIMONY. LATER IN THE
HEARING BOB WE WOULD CERTAINLY
WELCOME THAT AS WELL. YOU TURN
TO MIKE ARE THERE ANY QUESTIONS
HERE FOR MR STERN. WILL BE WILL
BE THROUGH THE HE'LL BE HERE
THROUGH THE COURSE OF THE NINETY
EIGHT I THINK THEY BOB YOU HANG
AROUND HERE TO UP TO. OKAY YEAH
I MEAN ALL I WELL I JUST WANTED
TO SAY HI TO YOU BOB AND I JUST
WANT TO. ECHO THE COMMENTS I
MADE ABOUT BOB'S IMPORTANT ROLE
IN HELPING TO. ACROSS THE
LAWSUIT IS REALLY MADE OUR
SYSTEM CLEANER AND WE NEED TO
KEEP WORKING IN THIS WITH
DIRECTION AND NOW OF COURSE
THESE AUDITS ARE REPORT PART
THAT PROCESS AND- JUST
APPRECIATE THEM THE WORK OF THE
COMMITTEE- TO DECIDE SOME LIGHT
ON THIS- ON THIS AS- AS- MR
STERN SAID MR ELECTION. SO
LOOKING FORWARD TO THE REST OF
THE HEARING. THANK YOU BOB THANK
YOU SENATOR ALAN CENTER WHEN
ANYTHING FURTHER. OKAY BOB IF
YOU'LL STAND BY WE'RE WE'RE NEXT
GOING TO HEAR FROM- JEANNIE
HERRIMAN. THE GENIE IS THE CHIEF
FINANCIAL OFFICER OF THE
FRANCHISE TAX BOARD. THE
FRANCHISE TAX BOARD AS WE HAVE
HEARD IS REQUIRED BY THE
POLITICAL REFORM ACT TO PERFORM.
THE LOBBYING AUDITS. AND- THE
SHERIN WELCOME TO THE COMMITTEE
AND WE LOOK FOR YOUR TESTIMONY.
GOOD MORNING THANK YOU SO MUCH
AS NOTED I AM JEANNIE HERMAN
WITH THE FRANCHISE TAX BOARD-
THANK YOU FOR INCLUDING TEN THIS
OVERSIGHT HEARING TODAY
REGARDING AN IMPORTANT MATTER UP
ON ITS- UNDER THE POLITICAL
REFORM ACT PARTICULARLY AUDIT
FOCUSED ON LOBBYIST FIRMS. AND
LOBBYIST EMPLOYERS. AS NOTED IN
THE MATERIAL SUPPORTING THE
HEARING AFTER B. HAS WORKED WITH
THE F. P. P. SINCE THE ADOPTION
OF THE POLITICAL REFORM ACT IN
NINETEEN SEVENTY FOUR. LET ME
JUST SAY OF TO BE HAS NEVER BEEN
WELL RESOURCE FOR THESE AUDITS.
UNDER IT SINCE NINETEEN SEVENTY
FOUR AND WITH THE RESOURCES THAT
WE HAVE WE HAVE ATTEMPTED TO DO
ALL AND EVERYTHING THAT WE ARE
ABLE TO DO. SKEWS ME. I WOULD
NOTE THE VOLUME AND COMPLEXITY
OF THE AUDIT OVER THE LAST
DECADE WITH MODIFICATIONS TO THE
POLITICAL REFORM ACT ITSELF. AS
WELL AS THE CHANGE IN THE
POLITICAL LANDSCAPE WITH
ADDITIONAL- NEW INDIVIDUALS
ENTERING INTO RACES ON SPECIAL
ELECTIONS AND A HANDFUL OF OTHER
THINGS THAT ARE COMMON TO BE
AUDITED UNDER POLITICAL FORMAT.
ALL HAVE INCREASED IN VOLUME AND
COMPLEXITY FURTHER STRESSING THE
RESOURCES THAT WE HAVE. A TO BE
CURRENTLY HAS THIRTEEN RESOURCES
AND THIS GOES BACK ALMOST TWENTY
YEARS WHEN WE LOOK IN A RECORD
JUST TO THE NUMBER OF RESOURCES
THAT WE HAVE AVAILABLE TO DO THE
THOUGHT IT. NINE PERFORM AUDITS.
TO PERFORM SUPPORT AND REVIEW OF
THOSE AUDITS AND ONE STAFF
MEMBER PERFORMS SUPPORT
NECESSARY TO CONDUCT THOSE AUDIT
AND FINALIZES AUDITS. AND IN
CERTAIN SITUATIONS DEPENDING ON
THE ACCUMBENS- KNOWLEDGE CAN
ALSO PERFORM SOME OF THE SIMPLER
TASK ASSOCIATED WITH AN AUDIT.
THAT'S TO BE RECRUIT STAFF FOR
THIS PROGRAM BOTH WITHIN AND
OUTSIDE OF OUR ORGANIZATION.
BECAUSE THE AUDITS ARE NOT
INCOME TAX RELATED AND INVOLVED
A SEPARATE BODY OF LAW. THE
AUDITORS RECEIVE THE SPECIALIZED
TRAINING WITHIN FGV INCLUDING
AUDIT TECHNIQUES AND POLICIES
AND PROCEDURES. AFTER THE
TRAINING THERE WELL QUALIFIED TO
EVALUATE COMPLIANCE WITH THE
POLITICAL REFORM ACT. AND TO
ASSIST THE POLITICAL ENTITIES AS
NECESSARY AND IMPROVING
DISCLOSURE AND RECORDKEEPING
PERFORMANCES. AS NOTED THE
ENTITIES TO BE HONORED ARE
RANDOMLY SELECTED BY THE F. PPC.
I PUBLIC JOINS AND OR MEET
CERTAIN THRESHOLD AMOUNTS. OF TV
THEN RECEIVES A LISTING OF CASES
FOR AUDIT. THESE AUDITS ARE
CONDUCTED IN ACCORDANCE WITH
GENERALLY ACCEPTED AUDITING
PROCEDURES AND INCLUDE
INTERVIEWING COMMITTEE STAFF.
PREPARING BANK ACCOUNT
RECONCILIATIONS EVALUATING
INTERNAL CONTROLS AND EXAMINING
DOCUMENTATIONS OF RECEIPTS AND
EXPENDITURES INCLUDING THIRD
PARTY INFORMATION. MANY OF THE
AUDITS ARE DONE AN AUDIT HOWEVER
SOME OF OUR STUFF DO YOU TRAVEL
THROUGHOUT THE STATE. THE SIZE
OF THE AUDIT VARY GREATLY
RANGING FROM HUNDREDS OF
MILLIONS OF DOLLARS UNDER
REVIEW. AND TAKING HUNDREDS OF
HOURS TO COMPLETE TO THE MORE
SIMPLER CASES WHERE THERE'S A
FEW THOUSAND DOLLARS BEING
REVIEWED AND TAKING IS JUST A
SMALL AMOUNT OF TIME. AT THE
CONCLUSION OF AN AUDIT EACH
ENTITY RECEIVES AN AUDIT REPORT
CONTAINING THE AUTHORS OPINION
OF ITS COMPLIANCE WITH THE
POLITICAL REFORM ACT. AND A
DESCRIPTION OF ANY MATERIAL
ISSUES. EXAMPLES OF MATERIAL
ISSUES ARE PERSONAL USE OF
CAMPAIGN FUNDS INADEQUATE
DISCLOSURE OF INFORMATION
REGARDING CONTRIBUTIONS AND
EXPENDITURES. MISSING DISCLOSURE
REPORTS AND THE FAILURE TO
MAINTAIN ADEQUATE RECORDS. WHAT
TODAY'S HEARING FOCUSED ON
LOBBYING RELATED AUDITS OF TV'S
DR ENGAGE IN POLITICAL REFORM
AUDITS FOR SEVENTEEN DIFFERENT
WORKLOADS NONE OF THESE PROGRAM
MANDATES ARE MUCH WITH THE
STAFFING LEVELS WE HAVE. OVER
THE LAST SIX FISCAL YEARS HAVE
TO BE ON IT FOR THESE WORKLOADS
HAVE GENERALLY BEEN TARGETED TO
OR APPROACHED BETWEEN 10250% OF
THE MANDATED LEVELS. A SCENE
FROM THE STATISTICS AND
SUPPORTING THE HEARING MATERIAL
TODAY THE LONGEST TYPE AUDITS
ARE 3% OR LESS IN ACTUALITY. OF
TO BE RECOGNIZED AS THE EXTREME
CHALLENGES WITH THE INABILITY.
TO MEET THESE MANDATES BUT LET
ME BE CLEAR WE HAVE NOT IGNORED
THE REQUIREMENT WE HAVE DONE
EVERYTHING WE CAN WITH THE
RESOURCES THAT WE HAVE BEEN
GRANTED TO ALLOW AND ACCOMMODATE
THIS PROGRAM. WE HAVE ENGAGE
WITH EXTERNAL STAKEHOLDERS
SEVERAL TIMES OVER THE LAST
DECADE TO DISCUSS THE
FEASIBILITY OF BEING AUTHORIZED
ADDITIONAL POSITIONS TO ALLOW US
TO MEET THESE MANDATES. WE ARE
CONTINUING THESE CONVERSATIONS
TODAY. AT THIS TIME I'M HAPPY TO
ANSWER ANY QUESTIONS YOU MAY
HAVE. THANK YOU AND THE SHERMAN
FOR BEING HERE AND FOR SHARING
YOUR- YOUR PERSPECTIVE. MAYBE I
COULD BEGIN WITH A FEW QUESTIONS
IN MY COLLEAGUES MAY HAVE SOME
AS WELL- IT YOU KNOW THE
COMPLEXITY OF- THESE AUDITS AND
A LOT OF YOUR TESTIMONY RELATED
TO CAMPAIGN NOT IT'S NOT. AUDITS
OF LOBBYING FIRMS AND THEIR
EMPLOYERS COULD YOU SPEAK TO THE
ISSUE OF. WHAT'S THE COMPLEXITY
OF- IT INVOLVED IN AND AUDITING
A LOBBYING FIRM. THANK THE
COMPLEXITY CAN NOT NECESSARILY
RELATED TO THE LOBBYIST FORMS
BUT IT CAN ALSO BE RELATED TO
THE OTHER TYPE WORKLOADS
CONTINUING CONSIDERING THE
STRUCTURE THAT'S BEHIND THE
SCENES OF THE POLITICAL ACTION
COMMITTEES AND THE OTHER
SPECIAL- ENTITIES THAT ARE THERE
SO LOBBYIST FIRMS. TYPICALLY
DON'T HAVE THOSE- SO MUCH
HOWEVER THEY'RE VERY DIVERSE AND
WHAT THEY DO- AS WELL- THEY'VE
MULTIPLIED AND NUMBERS THAT
CAMPAIGN CONTRIBUTIONS THAT THEY
TAKEN AND THAT THEY CONTRIBUTE
AS WELL- THAT ARE SUBJECT TO
MONITORING HAVE ALSO INCREASED
IN VOLUMES AS WELL AS- DOLLAR
AMOUNTS ALL OF WHICH ARE
SUBJECT. TO REVIEW DURING THE
AUDIT SENATE JUST TAKES IT IS
NOT TIME TO UNDERSTAND AND TO
DIVE INTO THOSE BANK ACCOUNTS
THE FINANCIAL STATEMENTS- THOSE
DISCLOSURE STATEMENTS THAT SAY
WHAT THEY'RE LOBBYING FOR WHO
THEY'RE LEVELING WITH EXCITEMENT
. RIGHT NOW IT'S- CORDY THIS
REPORT. OVER THE LAST TEN YEARS
THE NUMBER OF LOBBYING FIRMS AND
EMPLOYERS REALLY HASN'T CHANGED
MUCH. IT'S BEEN STAGNANT
STAGNANT LOW OVER TWELVE
HUNDRED. AND SO. IT SEEMS THAT
THERE HASN'T BEEN ANY GROWTH IN.
THOSE TARGETS FOR AUDITS SEEMS
LIKE IT'S BEEN PRETTY PRETTY
STABLE THERE. SO YOU CAN ALSO
AGREED SO I DON'T HAVE LESSEN
YOUR DATA BUT I HAVE THE LAST
SEVEN IN FRONT OF ME- AND YES I
CAN SEE THAT- HOWEVER THE
DOCUMENTS BEHIND IT AND THE
EMPLOYEES OF THAT FIRM- XCERRA
HAVE CHANGED- REQUIRING MORE
EXTENSIVE. DIVING INTO
UNDERSTANDING WHAT THOSE FIRMS
DO THAT HAVE THOSE EMPLOYEES ON
SITE- AS WELL THIS OTHER THING
SO THE VOLUME TIME PARTICULARLY
CHANGED BUT AGAIN. HOW THEY'RE
INTERACTING. WITH THEIR- WITH
THE LEGISLATURE HOW THEY'RE
INTERACTING WITH THEIR CLIENT
TOOK SEVERAL ALL HAVE- INCREASED
IN COMPLEXITY AND AGAIN. WITH
THE ON. WITH THE INCREASED
INTEREST AND POLITICAL ISSUES
TODAY AGAIN WE CONTINUE TO SEE
LOBBYIST PLAY AN IMPORTANT ROLE
IN THE HOT. AND YOU CAN SEE THAT
WHEN YOU START LOOKING BEHIND
THE BOOKS AND UNDERSTANDING WHAT
THAT LOBBYIST FIRM IS DOING AND
HOW. SO YOU MENTIONED- SO HOW DO
YOU PRIORITIZE MENTIONED THAT
THE STAFF. YOU HAVE BASICALLY
THIRTEEN POSITIONS THAT HE
CALLED THEM THIRTEEN RESOURCES
BUT THIRTEEN POSITIONS AND THEN
UNIT. NINE TO PERFORM THE AUDITS
SO HOW DO YOU PRIORITIZE THE
THEIR WORKLOAD BECAUSE OBVIOUSLY
BASED ON THE DATA IN THE STAFF
REPORT. IT SEEMS THAT THERE IT'S
THAT THE FEW OF THE AUDITS HAVE
BEEN DIRECTED TOWARDS LOBBYING
FIRMS. THAT WOULD BE A CORRECT
OBSERVATION RIGHT AGAIN OF THOSE
THIRTEEN NINE ARE ACTUALLY
ENGAGED ON AT WORK. THE OTHER
THREE OR IN SOME LEVEL OF
REVIEWS SUPPORT- XCERRA SAID
FOCUSING IN ON THE NINE. SO
AGAIN THIS THESE NINE HER PLAYED
ACROSS THE BOARD TO ALL
SEVENTEEN WORKLOADS NOT JUST THE
LOBBYIST. SO AS FAR AS HOW WE
SELECT TO WORK WE DO LOOK AT ALL
SEVENTEEN OF THE WORKLOADS
INCLUDING THE LOBBYIST WE LOOK
AT THE HOURS THAT WE HAVE WE
LOOK AT THE INVENTORY THAT
SHELLING INTO THE CURRENT YEAR
AND HOW MUCH TIME IT'S GOING TO
TAKE TO RESOLVE THE CASES. HOW
MUCH TIME WILL HAVE IN THIS
PARTICULAR AUDIT CYCLE AND THEN
WE DO OUR BEST TO TRY AND SELECT
AUDITS IN EACH CATEGORY SO THAT
THERE IS NO ONE CATEGORY THAT IS
ALWAYS IGNORED. AND DOT EVERY
CATEGORY HAS SOME LEVEL OF
PRESENCE OF AN AUDIT IN IT- EVEN
IF IT'S NOT AT THE DIRECTOR
LEVEL EXPECTED. THERE IS SOME
COVERAGE THERE TO ACCOMMODATE-
WHAT IT LOOKS LIKE WHEN YOU
START PULLING BACK THAT LAYER OF
THE ONION. SO WE HAVE BEEN ALSO
ALSO DO WE- CONTEMPLATE WHAT WE
DO BY- DOLLAR VALUE- NO WE DO
NOT. SELL WHAT WE HAVE FOUND IN
OUR NORMAL WORKLOADS WITH AUDIT
IS THE VALUE OF THE CASE. AS PER
DOLLARS IS IMPORTANT TO
UNDERSTAND BUT THE NON
COMPLIANCE CAN BE AT ANY LEVEL
SO WE TYPICALLY DO NOT SELECT
CASES JUST AT THE HIGHEST LEVEL.
WE DON'T IGNORE THEM BUT WE
DON'T LOOK AT AND QUANTIFY THE
CASES BY HIGHEST DOLLAR AMOUNT
AND THOSE ARE THE ONES THAT THE
AUDIT. WE TRY TO SPREAD THE-
RESOURCES THAT WE HAVE A COST
ALL ON ALL SPECTRUMS OF THAT THE
DOLLAR AMOUNTS SO I HEAR YOU AND
THIS YEAR AND THEN IN TERMS OF.
READING THE AUDITS ACROSS THE
SPECTRUM BUT IN. IN THE
200-017-2000 EIGHTEEN YEAR- EVEN
THOUGH YOU WERE MANDATED TO
PROVIDE TWENTY FIVE PERCENT. OF
THE LOBBYING FIRM AUDITS YOU
PROVE YOU PROVIDED ACTUALLY
ZERO. SO THERE WAS NO- IT WAS
NOT NOT A SINGLE TOUCH IN THE
LOBBY AREA. THE HOBBIT I'M
CONFUSED AS TO HOW THAT IS.
SPREADING YOUR STAFF OVER THE
WIDE ARRAY OF RESPONSIBILITIES.
SO ONCE AGAIN CAN YOU REFERENCE
THAT YOU'RE YOU'RE SPEAKING TO
TWO THOUSAND SEVENTEEN EIGHTEEN
THERE WERE TWELVE HUNDRED FORTY
THREE LOBBYING FIRMS AND
EMPLOYERS. THE AT 25%
REQUIREMENT IS OVER THREE
HUNDRED ODDS WERE TO BE
PERFORMED IN THAT. TWO YEAR
CYCLE AND ACCORDING TO THE
RECORDS HERE ZERO WERE PERFORMED
TO SET SET. CORRECT YES BUT IF I
CAN CLARIFY THAT A LITTLE BIT.
SO SIXTEEN SEVENTEEN WAS WHEN
THE DRAW OCCURRED AND WE GOT
THOSE THREE HUNDRED PLUS-
ENTITIES FOR AUDIT SELECTION. IT
IS CORRECT TO SAY THAT IN FISCAL
YEAR SIXTEEN SEVENTEEN WE DID
NOT AUDIT ANY OF THOSE LOBBYIST
FIRMS. HOWEVER IN THE SECOND
YEAR OF THE TWO YEAR CYCLE- NOT
A GRAND DUMBER BUT WE AUDITED
TWENTY SEVEN OF THOSE. SO THAT I
CAN SEE ON MY STATISTIC SHEET
THAT I HOP SO STILL DRAMATICALLY
LESS THAN THE EXPECTED NUMBER
FOR SURE. BUT THERE IS- AT LEAST
TWENTY SEVEN IN THAT FIELD. WELL
THAT DOESN'T MATCH UP WITH THE
STAFF WORK AND THE STAFF
COMMUNICATION WITH YOUR OFFICE.
LET'S GO TO THE TWENTY NINETEEN
AND- TWENTY TWENTY TWO YEARS
CYCLE. AGAIN BUT MY RECORD SHOWS
THAT THEY'RE ONLY FOR AUDITS
DONE- OF LOBBYING FIRMS IN I
ZERO OUT ITS DONE OF LOBBYING
EMPLOYERS. DURING THAT TWO YEAR
CYCLE AT THAT CORRECTOR PLEASE
CALL. ME NOT. THAT'S THAT'S NOT
CORRECT. SO OWNED. NUMBER OF IS
. M. HAVE MY RECORD SHOW THAT WE
TO. EMPLOYER AND TO LOBBY FIRMS
FOR TOLL OF FOUR. OF SO THIS
CAUSED TO MY QUESTION ORIGINALLY
WHICH IS THAT HOW DO YOU
PRIORITIZE ANY TALKED ABOUT. THE
WORKLOAD THAT YOU HAVE BUT WHY
ARE YOU PRIORITIZING- THE AUDITS
OF A LOBBYING FIRM SOLO I MEAN.
EVEN IF OUR NUMBERS ARE OFF BY
ONE OR TWO. OBVIOUSLY IT SHOWS
THAT WE'RE NOT EVEN CLOSE
MANDATE UNDER THE LAW SO. AND I
DON'T KNOW IN THAT PERIOD OF
TIME. THE AUDITS THAT YOU'VE
DONE OF CAMPAIGN WORKER THE
OTHER. RESPONSIBILITIES THAT YOU
HAVE THAT THIS UNIT HAS. BUT
CERTAINLY IT APPEARS THAT THE-
G. PRIORITIZED LOBBYING- REFUSES
. ALMOST BEEN THE LOWEST
PRIORITY. I CAN UNDERSTAND THE
OBSERVATION CERTAINLY AM WHEN
YOU LOOK AT COST ALL OF THE WORK
PLEDGING THAT WE'RE DOING THE
PERCENTAGES OF RECENT AUDITS IN
ALL YEARS. ARE ARE DRAMATICALLY
LOWER THAN PRIOR YEARS RIGHT
BECAUSE SOME OF THOSE NINE
RESOURCES THAT WE'VE HAD. ON THE
POSITIONS THAT WE HAVE ARE NOT
ALWAYS FILLED THEIR VACANT RIGHT
EVERYBODY ACROSS THIS SEEMS LIKE
THE NATIONS OF THE WORLD. IS
HAVING CHALLENGES HIRING RIGHT
NOW FTP IS NO EXCEPTION. I'M
THERE ARE RECRUITMENT AND
RETENTION ISSUES THAT WE SUFFER
WITH AND THE- THE WORKLOAD THAT
WE'RE TALKING ABOUT TODAY ACROSS
THE BOARD NOT JUST LOBBYIST BUT
ACROSS THE BOARD. RAY AND SO
WHILE THOSE NINE POSITIONS ARE
THERE THAT DOES NOT MEAN THEY'RE
ALWAYS FILLED AND THAT DOES NOT
MEAN THAT THEY ARE. EXPERTS AT
WHAT THEY DO YET BECAUSE OF THE
LEARNING CURVE. TO WANT TO HIRE
AN EMPLOYEE IS PROBABLY AT LEAST
A GOOD YEAR TO GET A FEEL FOR
WHAT THEY'RE DOING RIGHT AND SO
ALL OF THOSE ARE TAKEN INTO
CONSIDERATION SOME OF THE
CANDIDATES AUDITS THAT WE DO. OR
SOME OF THE NON CANDIDATE AUDITS
THAT WE DO COULD BE SIMPLER
COULD BE BETTER FOR TRAINING. ON
COULD BE QUICKER TO DO AND SO
AGAIN ALL OF THOSE FACTORS ARE
USED TO SUGGEST WHAT WORKLOADS
THAT WE ARE ABLE TO ACCOMMODATE.
ARM AND NEVER WITH THE
EXPECTATION THAT WE'RE IGNORING
A WORKLOAD OR THAT WE ARE
SUGGESTING THAT A WORKLOAD IS
LESS THAN ANOTHER- WE CONSIDER
ALL OF HIS WORKLOAD IMPORTANT
AND ALL OF THEM SHOULD BE-
ADEQUATELY RESOURCES WE'VE ASKED
FOR OVER THE PAST DECADE. ON TO
BE ADEQUATELY RESOURCE TO DO
THOSE BUT REGRETTABLY WE'VE NOT
YET HAD SUCCESS AND NOT EVEN
THOUGH WE CONTINUE THOSE
CONVERSATIONS AND I'M GONNA ASK
A FOLLOW UP QUESTION ON THE
RESOURCE ISSUE AND IN A MOMENT
BUT- YEAH THE DATA THAT WE HAVE
ON THE LACK OF AUDITING ISN'T.
ENOUGH A ONE OR TWO YEAR ISSUE
AND IT'S NOT BEEN A PANDEMIC
ISSUE IT GOES BACK HER ACT TEN
YEARS. AND IT SEEMS THAT THESE
THE TEN YEAR RECORD THAT I HAVE
IN FRONT OF ME SHOWS THAT- YET
THAT THE FTP IS NOT BEEN ABLE TO
PERFORM EVEN CLOSE. TO WHAT'S
REQUIRED. AND YEAH WE ALL STAFF
ISSUES CHALLENGES AND ARE. WORLD
I SENSITIVE TO THAT BUT IT SEEMS
LIKE IT'S THIS. PROBLEM THAT WAY
BEYOND THE ISSUE OF STAFFING.
LET ME GO TO THAT ISSUE OF
RESOURCES FOR A MOMENT- YOU
MENTIONED THAT THAT THAT AT
LEAST THE LAST TWENTY YEARS I
THINK THAT YOUR TESTIMONY WAS
THAT. HE HAD THIRTEEN RESOURCES
AND AGAIN I THINK THAT
REFERENCES THIRTEEN STAFF
POSITIONS IN THIS UNIT. OVER THE
LAST TWENTY YEARS. CAN YOU TELL
ME- YOU KNOW. YOU KNOW. WHAT'S
YOUR VIEW OF WHY. SO WHO WHO
WHERE YOU GO TO REQUEST FUNDING
THAT'S THIS PUT ON THE RECORD
SOME OF THE BASIC FACTS SO.
WHERE'S YOUR BUDGET COME FROM.
SO SO GOOD QUESTION I I'LL JUST
NINETY OBSERVATION THIS IS A
SYSTEMIC ISSUE ISN'T AS ACCURATE
RIGHT IT IS NOT RELATED TO
CALVET. SALE NGUYEN JUST LIKE
WITH ANY SITUATION WHEN WE OR
ANOTHER STATE ENTITY NEEDS
RESOURCES- WE START WITH WORKING
WITH DEPARTMENT OF FINANCE. TO
UNDERSTAND- YOU KNOW OF COURSE
HAVE TO BE SEEN WHAT WE NEED I
MEAN MANY CASES IN OUR PRIOR
CONVERSATIONS WE'VE- REQUESTED
AT LEAST DOUBLE. THE CURRENT
STAFFING LEVELS THAT WE HAVE NOW
TO BE ABLE TO EFFECTIVELY MANAGE
TO MANDATE WORKLOADS IN THIS
UNIT OR YOU'RE TALKING ABOUT
YOUR AGENCY AS A WHOLE IN THIS
UNIT IN THIS WITHIN THE ENTIRE-
POLITICAL REFORM ACT. BUT IT'S
NOT JUST THE LOBBYIST BUT WITHIN
THE ENTIRE WORKLOADS THE
SEVENTEEN WORKLOADS- WE'VE
ESTIMATED WHEN WE'VE- CRUNCH
THOSE NUMBERS THAT- WE LIKELY
NEED TO DOUBLE OUR STAFF IF NOT
MORE. I'M AND SO THEIR
DEPARTMENT OF FINANCE AGAIN IS
THAT THE- ENTITY WE APPROACH TO
SAY HERE'S WHAT WE'RE STRUGGLING
WITH. HERE'S WHAT OUR SOLUTION.
IS AND CONVERSATIONS GO FROM
THERE. SO IF TO BE IS ALSO A
BOARD- AS YOU KNOW. I AND WE
ALSO- WITH OUR- AND LET THEM
KNOW THOSE SAME STRUGGLES RIGHT
AND THEN THEY APPROVE IN A BOARD
MEETING TYPICALLY IN THE MONTH
OF SEPTEMBER THAT WE'RE MOVING
FORWARD WITH THE B. C. P. IF
THAT'S THE CASE- AND THEY
SUPPORT IT. SO THOSE ARE THE TWO
AVENUES WE WORK THROUGH SO YOUR
YOUR BUDGET AS AN AGENCY IS
OBVIOUSLY SUBSTANTIALLY LARGER
ARE YOU ALLOWED TO ARE YOU
ALLOWED TO IT TO MOVE. RESOURCES
INTO AND- POSITIONS AROUND
WITHIN YOUR OPERATION TO. FOCUS
ON PRIORITY AREAS. YES SIR- SO
THAT'S IT THAT'S A GREAT
QUESTION AND A VERY COMPLEX
CENTER SO LET ME ON SOMETHING
THEY THE GROUNDWORK TO DO THAT
SO- FRANCHISE TAX BOARD. HAS A-
PROVISION AND ARE BUDGETS CALL
PROVISION ONE. THAT SAYS THAT
HAVE TO BE MAY NOT MOVE REVENUE
GENERATING RESOURCES AROUND
WITHOUT APPROVAL FROM DEPARTMENT
OF FINANCE AND WITHOUT APPROVAL
FROM THE JOINT LEGISLATIVE
BUDGET COMMITTEE. SO I'M ALMOST
A 6065% OF FTP RESOURCES ARE
ASSOCIATED WITH THAT- PROVISION
WINE CLASSIFICATION. SO ALL OF
THOSE OF COURSE ARE OFF OF THE
TABLE FROM MOVING HERE BECAUSE
THIS IS NOT CONSIDERED A
PROVISION ONE BOOKLET. DEMANDER
THE RESOURCES OF TV DOES LOOK ON
THE THROUGHOUT THE YEAR
THROUGHOUT THE DAY THE- ISSUES
THAT PERCENT. AND REGARDS TO
MOVING RESOURCES AROUND- HOWEVER
THERE ARE MANY WORKLOADS THAT
HAVE TO BE THAT ARE COMPROMISED
OR NOT ABLE TO BE DONE AS
NECESSARY AND HAVE NOT BEEN ABLE
TO GET THOSE RESOURCES SO. THERE
IS THE EVALUATION WITHIN- WITHIN
FRANCHISE TAX BOARD AS TO WHERE
THE GREATEST PRIORITY IS WHETHER
IT'S CUSTOMER SERVICE WHETHER
IT'S COLLECTING ACCOUNTS WHETHER
IT'S UPDATING A WEBSITE WHETHER
IT'S CONDUCTING ON IT CETERA. SO
IT'S NOT AS EASY AS ONE MIGHT
THINK TO MOVE THINGS AROUND
BECAUSE THERE IS A TRADE OFF
THAT OCCURS WITH EVERYTHING. BUT
BUT ARE ARE YOU. SAYING THAT YOU
NEED THE PERMISSION OF THE JOINT
LEGISLATIVE AUDIT COMMITTEE IN
THE DEPARTMENT OF FINANCE TO
ENHANCE THE RESOURCES INTO THIS
UNIT. IF WE WERE TO MOVE
PROVISION ONE RESOURCES THERE
YES THAT IS AN ABSOLUTELY HAVE
YOU MADE ANY REQUESTED IN THIS
CASE THE JOINT LEGISLATIVE.
BUDGET COMMITTEE TO MOVE
RESOURCES INTO THIS AREA. WE
HAVE NOT TAKEN THAT ROUTE- WE
HAVE NOT FOUND THE ABILITY TO
READ OVER WHAT PROVISION ONE
RESOURCES WE COULD AND SHOULD
REDIRECT TO THIS PROGRAM AS IT
BEING THE HIGHEST PRIORITY. SO
THAT QUESTION HASN'T REALLY-
CAME UP IN FRONT OF A TV. WE
HAVE BEEN INSTEAD PURSUING THE
ADDITIONAL RESOURCES- THE OTHER
BUDGET CHANNELS I SEE AND SO WHO
WHO- AT THE DEPARTMENT OF
FINANCE IS YOUR DIRECT REPORT
FOR. YOUR BUDGET REQUESTS
CORRECT. WHO WHO IS IT IN THE
DEPARTMENT- WHO I THINK. YEAH
STILL- CHRIS HILL UNDER
EXCELLENCE. OUR OUR BUDGET
CONSULTANTS. AND THEY'RE UNDER
CHRIS COOK- CHRIS AND DERRICK
SIMMONS. AND THEY'RE UNDER. THE
LAST PERSON IS A CHRIS COOK.
CHRIS COOKIES THE HEAD OF THE
UNIT. AND OF COURSE THE
DEPARTMENT OF FINANCE IS A IS A
IS AN AGENCY THAT. EYES AS IN
ESSENCE THE GOVERNOR IS THAT
CORRECT. IT IS ANOTHER'S BUDGET
DEPARTMENT OF THE ANSWER IS
THEIR- FISCAL AGENT TO. YES IS
THE GOVERNOR BUT- SO ON ONE HAND
YOU HAVE PEOPLE WITHIN THE PART
IN A FINANCE ARE THERE THERE'S
SOMEBODY IN THE GOVERNOR'S
OFFICE THAT YOU WORK WITH ON
YOUR BUDGET THAT- THEY
ULTIMATELY MAKE THESE DECISIONS.
THIS IS SEVERAL- I'M A JUNKIE
ROBERTS AT THE GOVERNOR'S
OFFICE- IS SOMETIMES INVOLVED IN
DISCUSSIONS ON F. T. V.'S
BUDGET. ARM I DO NOT KNOW THE
FULL EXTENT BECAUSE A LOT OF
THAT IS HIDDEN BUT I DO ENGAGE
IN DISCUSSIONS WITH HER ON IT SO
I KNOW THAT SHE'S INFORMED X.
CETERA. SO- YEAH I'LL JUST LEAVE
IT AT THE OKAY SO HILL DIRKS.
CHRIS COOKE AND JACKIE ROBERTS
ARE THE PEOPLE THAT YOU DEAL
WITH IN THE GOVERNOR'S OFFICE
COMMITMENTS FINANCE AND SO.
THOSE ARE THE ONES THAT ARE
THERE TODAY YOU MENTIONED THAT
YOU'VE BEEN UNDER RESOURCE FOR
THE LAST TEN. PLUS YEARS COULD
BE EVEN LONGER THAN THAT. TO GET
US IN THIS CORRECTION SOMEWHERE
IN. OKAY ALL RIGHT I WANT TO
TURN MY COLLEAGUES AND SEE IF
THERE'S SOME FOLLOW UP QUESTIONS
THAT THEY MAY HAVE HERE. MEMBERS
ANY ANY FOLLOW UP QUESTIONS WITH
THE- WITH THAT. MISTER CHAIRMAN
. I GUESS MY QUESTION FUTURE
WHAT WOULD YOUR ALLEN AND THE
TERMS OF. IN TERMS OF OVERSIGHT
FOLLOW UP WITH WITH THE WITH THE
BOARD AND WE WILL SEE YOU HERE
AND- A LOT OF CHALLENGES THEY
HAVE INCLUDE BUDGETARY AND
OTHERS- WE- SERVE DESERVE. ARE
YOU THINKING ABOUT. KIND OF
CRAFTING A STRATEGY FOR WORKING
WITH THE BOARD GOING FORWARD ON.
WELL I THINK PART OF WHAT WE'RE
TRYING TO UNDERSTAND IS THE
PROBLEM THE EXTENT OF THE
PROBLEM AND WHETHER THERE ARE
ALTERNATIVES THERE MIGHT BE FOR-
FOR ADDRESSING IT. I MEAN I'LL
I'LL- IN RESPONSE ALASKA DIRECT
QUESTION TO MISS HEARING HIM
PLEASE YOU DO THINK THAT THIS
RESPONSIBILITY SHOULD REMAIN IN
THE FRANCHISE TAX BOARD SHOULD
GO TO- AT. THE FAIR POLITICAL
PRACTICES COMMISSION MR STERN
TESTIFIED EARLIER ABOUT MAYBE
DIRECTING THAT WAS
RESPONSIBILITIES TO THE BOARD OF
EQUALIZATION GIVEN AN OPINION
ABOUT THAT. IS I AGREE BASICALLY
SAY WHAT EVER THIS WORKLOAD IS
DONE AND REALLY THAT'S NOT M. R.
ABILITY TO ENGAGE IN THOSE
CONVERSATIONS WE SUPPORT THAT
PPC. HOWEVER RESOURCES TO DO
THESE AUDITS NEED TO BE IN PLACE
FOR EVER THE WORK IS. IF THE
WORK REMAINS AT F. T. B. WE NEED
RESOURCES TO DO IT. PPC IS NOT
RESOURCE TO DO THESE AUDITS
EITHER IF WE WERE TO LOCK STOCK
AND BARREL MOVE OUR RESOURCES
ARE WORKED OVER THERE. NEITHER
IS CELESTE THERE ISN'T ANYBODY
THAT IS RESOURCE TO DO THIS WORK
AND TO ME THAT'S THE CRUX OF THE
ISSUE. NOT NECESSARILY- A LOCK
STOCK AND BARREL CONVERSATION
NECESSARY TO HELP WITH WHO DOES
THE AUDIT IT'S WHETHER OR NOT
THESE. RESOURCES ARE AVAILABLE
TO CONDUCT THESE MANDATED
WORKLOADS CENTER ALLEN I GUESS
MY RESPONSE TO THAT. I HOPE THAT
THAT THE DISCLOSURE THAT HEARING
TODAY. WILL- ENERGIZED. MEMBERS
OF THE COMMITTEE OR OTHERS TO
SEE WHETHER WE SHOULD FIND A
BETTER. WAY OF DOING THIS I'M
CERTAINLY CONCERNED THAT. THIS
UNIT IN F. T. V. IS LIKE A SMALL
PART OF A VERY GIANT OPERATION.
AND IT CAN GET LOST IN A CAN
BECOME- AT AND NOT A PRIORITY
CERTAINLY. AT THE SHAMEFUL
NATURE OF THE- OF THE FACTS FOR
US HERE INDICATE THAT- IT IS NOT
BEEN A HIGH PRIORITY AND PART OF
THE QUESTION IS WHETHER OR NOT
THIS SHOULD BE. SOMETHING THAT
WE MOVE THOSE RESPONSIBILITIES
TO A PLACE WHERE IT BECOMES A
MORE SERIOUS PRIORITY. TO BRING
IT TO OUR ATTENTION I DON'T I'M
NOT AWARE IS MY EIGHTH YEAR IN
THE SENATE I'M NOT AWARE. OF
FIVE EFFORTS THAT HAVE BEEN
BROUGHT TO US TO SAY THIS IS AN
UNDER RESOURCE- DEPARTMENT AT
DURING OUR BUDGET REVIEW. THAT
SAYS WE NEED TO DIRECT RESOURCES
THAT WE'RE HEARING ABOUT IT. NOW
I DON'T KNOW IF DURING YOUR
CHAIRMANSHIP OF THE HEARD ABOUT
THIS. IN THE PAST EITHER SO- WE
HAVE HEARD FROM- THAT FIT THAT
WE'RE GONNA HEAR FROM THE FAIR
POLITICAL PRACTICES COMMISSION A
FEW MINUTES. MY RECOLLECTION IS
THAT THERE HAVE BEEN. PROPOSALS
ON THE TABLE TO MOVE THE
CAMPAIGN AUDITS. AGAIN PART OF
THIS UNIT BUT DIFFERENT THAN THE
LOBBY NOTS THE CAMPAIGN AUDITS-
TO THE FEC IS A BETTER AVENUE
FOR. MORE RESPONSIVE AND
ENGAGED. WORK IN THAT SPACE NOW
THAT'S A LITTLE DIFFERENT AT
WHAT'S ON THE TABLE TODAY. BUT
IT'S PART OF THIS BROADER
CONVERSATION. CENTER WENT. I
JUST THIS. QUESTION MIGHT BE FOR
MR STERN. I'M JUST CURIOUS WHAT
WAS THE INTENT. BACK THEN WHEN
THEY- GAVE IT TO. F. T. B.
INSTEAD F. PPC I'M JUST CURIOUS
WHY IT WHAT WAS THAT INTENTION I
MEAN WHAT WAS THE BLESSING BY MR
STERN TO JOIN US AGAIN IN THIS
CONVERSATION BOBBY THERE. YES
THANK YOU. ON THE INTERNET. AT
THE TIME. THIS WAS FIFTY YEARS
AGO. WAS WE ARE VERY CONCERNED
ABOUT PUTTING ALL THE EGGS IN
ONE BASKET ABOUT HAVING. ONE
AGENCY IN CHARGE OF DOING ALL
THE WORK. WE SAW AT THE FEDERAL
LEVEL THIS IS DURING WATERGATE
OBVIOUSLY. THAT THE DEPARTMENT
JUSTICE WAS REFUSING TO TAKE ANY
ACTION AND NOBODY ELSE WAS THERE
TO DO ANYTHING. SO THE IDEA WAS
TO DIVIDE UP THE
RESPONSIBILITIES. SO THAT. IF
SEVERAL AGENCIES ROLL DOWN ON
THEIR JOB WAS JUST ONE AGENCY
YOU BABY THAT COULD DO
SOMETHING. LOOKING BACK ON IT I
THINK WE MADE A MISTAKE. IN
TERMS OF CERTAINLY THE AUDITING
OF FUNCTIONS WE SHOULD HAVE
GIVEN IT TO THE UP THE PC TO DO.
BUT THAT'S LOOKING BACK OUT AT
THIS POINT- CLEARLY- THE
FRANCHISE TAX BOARD IS GIVEN THE
RESPONSIBILITY TO DO IT AND I'M
STILL PUZZLED. WHY THEY HAVE
ASKED FOR MORE RESOURCES OR EVEN
WITH THE RESOURCES THEY HAVE
WELL THEY HAVEN'T DONE THE WORK.
WE. SOME OF THE WORK THAT THE
REQUIRED TO DO. I MEAN AND THIS
BE A QUESTION FOR F. B. WHEN
THEY COME UP IS THAT. DO THEY
HAVE ENOUGH RESOURCES TO TAKE ON
THIS TASK. BECAUSE IT SOUNDS
LIKE I MEAN WHETHER. THE
RESOURCES QUESTION HAS BEEN NOT
NOT BEEN ASKED OF US. IN THE
PAST- WE ARE WHERE WE ARE TODAY
WE'RE LOOKING AT THIS IT SOUNDS
LIKE. REGARD WHO DOES IT. OF
RESOURCES WE NEED TO BE PUT IN
PLACE BECAUSE I CAN'T IMAGINE
FEC'S BECAUSE COME UP OR GO A
WILL TAKE IT OVER AND WE DON'T
NEED MORE STAFFING FOR IT. OF
THEIR REYES SECOND HEADS. I I'M
JUST I MEAN THE IDEA. TO CHANGE
IN THE MIDDLE AND I KNOW IT'S
BEEN FIFTY YEARS BUT- TO HAVE TO
START IN A NEW. SETTING
SOMETHING THIS IMPORTANT TO AND
NOW THE AGENCY. AND HAVING TO
START OVER. I THINK WILL ALSO
NOW WILL CONTACT POTENTIAL
DELAY. AS WELL SO IF IT IS
RESOURCES I THINK WE SHOULD.
TALK MORE ABOUT RESOURCES THAN.
THAN WHERE IT OUGHT TO BE THAT'S
JUST MY TWO CENTS OKAY. RIGHT
ANY OTHER QUESTIONS OR COMMENTS
FROM MEMBERS. SO MISTER CHAIRMAN
I WOULD LIKE TO INVITE YOU TO
STAY HERE AT THE WITNESS TABLE
IF YOU WILL. TURKISH EIGHT YEAR-
YOU KNOW BEEN PUT ON THE SPOT
HERE I KNOW THAT'S UNCOMFORTABLE
BUT YOU'VE- HANDLED IT QUITE
WELL AND- DOESN'T MEAN THAT
WE'RE HAPPY WITH THE
CIRCUMSTANCE WE FIND OURSELVES
I'M NOT EITHER. I THINK I GOT
IT. I WANT TO INVITE THE NEXT
ONE IS TO COME UP BUT IF YOU
WANT TO MOVED OUT A CHAIR. AND
CONTINUE THIS CONVERSATION THAT
WE'RE HAVING BECAUSE I I'M
HOPING THAT. OUT OF IT- SOME
SUGGESTIONS WE MADE ABOUT HOW WE
CAN DO THIS WORK BETTER BECAUSE
OBVIOUSLY NONE OF US ARE
SATISFIED. I DON'T BELIEVE WITH
THE HOW IT'S BEEN HANDLED UP
UNTIL NOW. SO LET ME AT THE NEXT
INVITE UP- LIVES IN A CONDO-
SHE'S THE SENIOR LEGISLATIVE
COUNSEL FOR THE FAIR POLITICAL.
PRACTICES COMMISSION- AT THAT
FOR THOSE WHO ARE- LISTENING THE
FAIR POLITICAL PRACTICES
COMMISSION IS A FIVE MEMBER
INDEPENDENT NON PARTISAN
COMMISSION. THAT HAS PRIMARY
RESPONSIBILITY. FOR THE
IMPARTIAL AND EFFECTIVE AND
EFFECTIVE ADMINISTRATION OF THE
POLITICAL REFORM ACT. THE FTTC
AIMS TO ENSURE THAT PUBLIC
OFFICIALS ACT IN A FAIR AND
UNBIASED MANNER. IN THE
GOVERNMENTAL DECISION MAKING
PROCESS. THE PROMOTE
TRANSPARENCY IN GOVERNMENT. AT
AND OBVIOUSLY TO- THE VERY
IMPORTANT. A GOAL OF FOSTERING
PUBLIC TRUST IN THE POLITICAL
SYSTEM. SO- MISS AT THE CONDO WE
WELCOME YOU HERE AND THE FOR
YOUR TESTIMONY. THANK YOU AND
GOOD MORNING AGAIN I'M WINS IN
THE CONDO SENIOR LEGISLATIVE
COUNCIL WITH THE FAIR POLITICAL
PRACTICES COMMISSION- I'D LIKE
TO HIGHLIGHT NOW BRIEFLY THE
RELEVANT LEGAL REQUIREMENTS FOR
LOVING AUDITS- THE AUDIT NUMBERS
AS WE KNOW THEM. AND THE F.
PPC'S PERSPECTIVE ON AN
ASSESSMENT OF. THE CURRENT STATE
OF THESE AUDITS INCLUDING
CHALLENGES AND POSSIBLE
SOLUTIONS. AS FOR THE LAW BOTH
THE FRANCHISE TAX BOARD AND THE
F. PPC HAVE. MANDATORY AUDIT
DUTIES UNDER THE ACT FTV IS
RESPONSIBLE FOR THE MANDATORY
LOBBYIST AUDITS AND MOST
CAMPAIGN AUDITS. AND THE OF PPC
IS RESPONSIBLE FOR A SMALL
PORTION OF THE CAMPAIGN AUDITS.
THE F. B. B. C. ALSO HAS BROAD
DISCRETIONARY AUTHORITY TO
CONDUCT AUDITS OF ANY REPORTS OR
STATEMENTS UNDER THE POLITICAL
REFORM ACT INCLUDING AUDITS OF
LOBBYIST ENTITIES. UNDER THAT
DISCRETIONARY AUTHORITY THE F.
PPC'S AUDIT DIVISION HAS
CONDUCTED FOR LOBBYING AUDITS IN
THE LAST YEAR WHICH I WILL TALK
A BIT MORE ABOUT LATER. AS YOU
KNOW THE PERRY MANDATES THAT 25%
OF LOBBYING FIRMS AND EMPLOYERS
BE SELECTED FOR AUDIT FOLLOWING
EVERY TWO YEAR ELECTION CYCLE.
THE COMMISSION IS REQUIRED TO
SELECT ENTITIES SUBJECT TO THESE
MANDATORY AUDITS BY RANDOM DRAW
WHICH OCCURS. IN FEBRUARY OF
EVERY ODD YEAR. FOR THE LAST
FOUR TWO YEAR AUDIT PERIODS
COVERING TWENTY THIRTEEN TO
TWENTY TWENTY THE ACT AS
MANDATED THAT MORE THAN TWELVE
HUNDRED LOBBYING FIRMS AND
LOBBYIST EMPLOYERS TOTAL. BE
AUDITED FOR THAT EIGHT YEAR
PERIOD. BASED ON THE DATA
PROVIDED BY FTP TO THIS
COMMITTEE A SIXTY SEVEN OUT OF
TOTAL WERE COMPLETED BY F. TV
FOR THAT PERIOD. SIXTY SEVEN OUT
OF ABOUT TWELVE HUNDRED THAT'S
ABOUT 5% OF THE REQUIRED AUDITS
THAT WERE COMPLETED A FOR THAT
EIGHT YEAR PERIOD. THE OF PPC
BELIEVES THAT THESE AUDITS ARE
CRUCIAL FOR TRANSPARENCY AND
ACCOUNTABILITY AUDITS OPERATE TO
MONITOR COMPLIANCE WITH THE ACT
AND ARE THE MAIN AND MOST
CONSISTENT VEHICLES. FOR
DISCOVERING LOBBYING VIOLATIONS
AT THESE VIOLATIONS CAN INCLUDE
FAILURE TO FILE OR TIMELY FILE
LOBBYING REPORTS FAILURE TO
ACCURATELY REPORT EXPENSES OR
PAYMENTS OR OMITTING EXPENSES OR
PAYMENTS ON A PARTS-
IMPERMISSIBLY GIVING GIFTS OR
CONTRIBUTIONS TO OFFICIALS ARE
CANDIDATES. AND RECORDKEEPING
VIOLATIONS. IN FACT THAT
COMMISSION STAFF LOOKED OVER ITS
RECORDS OF VIOLATIONS AND
COVERED DUE TO THESE AUDITS. AND
FOUND THAT BETWEEN THE YEARS TWO
THOUSAND AND TWO THOUSAND
SEVENTEEN THE COMMISSION HAD
SIXTY ONE ENFORCEMENT ACTIONS
BASED ON AUTO REPORTS. THAT
CONDUCTED BY FTP AND DEADLY THIS
NUMBER WILL BE HIGHER HAD MORE
AUTO REPORTS BEEN COMPLETED. OF
THOSE THAT WERE COMPLETED
ROUGHLY ONE IN TEN OF THE AUDITS
RESULTED IN EITHER A WARNING
LETTER WARNING MINISTRY TO
PENALTY. WHILE WARNING LETTERS
DON'T CARRY A FINE THEY SERVE
THE IMPORTANT FUNCTIONS OF
PUTTING ENTITIES ON ON NOTICE OF
THEIR VIOLATIONS. AND THEY SERVE
TO CREATE TRANSPARENCY TO THE
PUBLIC ABOUT VIOLATIONS THAT
WOULD OTHERWISE LIKELY GO
UNKNOWN. FOR THOSE AUDIT THAT
RESULTED IN ADMINISTRATIVE
PENALTIES MANY OF THESE
UNCOVERED SERIOUS VIOLATIONS
THAT LIKELY WOULD NOT HAVE BEEN
FOUND ABSENT THESE AUDITS. FOR
EXAMPLE THE YEAR TWO THOUSAND A
LOBBYING FIRM WAS FOUND OF
FAILED IF A TIMELY FILED ELEVEN
REPORTS ARE ABOUT THREE YEARS
WORTH OF QUARTERLY STATEMENTS.
RESULTING IN A FOURTEEN THOUSAND
DOLLAR FINE. IN TWENTY TWELVE A
LOBBYIST IS FIND MORE THAN A
HUNDRED AND THIRTY THREE
THOUSAND DOLLARS FOR MAKING
ILLEGAL CAMPAIGN CONTRIBUTIONS.
AND ARRANGING FOR GIFTS AND
GIVING GIFTS TO STATE
LEGISLATORS THAT WERE OVER THE
LIMIT. AND THIS WAS DISCOVERED
DUE TO AN AUDIT. MORE RECENTLY
IN TWENTY SIXTEEN AND AUDIT
UNCOVERED A LOBBYING FIRM FAILED
TO REPORT IT ANOTHER GIFT TO
SENATOR RESULTING IN A FOUR
THOUSAND DOLLAR FINE. THE
POLITICAL REFORM ACT AS IT WAS
ORIGINALLY PASSED BY THE VOTERS
AND AS IT CURRENTLY READS
INCLUDES IN ITS CORE PURPOSES
THAT THE ACTIVITIES OF LOBBYIST
SHOULD BE REGULATED. AND THEIR
FINANCES DISCLOSED IN ORDER THAT
IMPROPER INFLUENCES WILL NOT BE
DIRECTED PUBLIC OFFICIALS. AND
THAT ADEQUATE ENFORCEMENT
MECHANISMS SHOULD BE PROVIDED IN
ORDER THAT THE STYLE TITLE WILL
BE VIGOROUSLY ENFORCED. BASED ON
OUR RECORDS FROM MORE THAN
TWENTY YEARS. WE SEE THAT AUDIT
SERVING NECESSARY AND
IRREPLACEABLE ROLE IN THE
ENFORCEMENT OF THE PR A-
REDUCTION IN AUDITS HAS HINDERED
THE ABILITY OF THE COMMISSION TO
VIGOROUSLY ENFORCE THE RULES.
RELATING TO LOBBYING. BECAUSE
VIOLATIONS ARE GOING
UNDISCOVERED. AND WE'VE SEEN A
DECLINE IN LOVING ENFORCEMENT
ACTIONS IN RECENT YEARS. THE BBC
UNDERSTANDS THAT THE MAIN REASON
THESE AUDITS ARE NOT OCCURRING
IS DUE TO WORKLOAD AND RESOURCE
ISSUES. AND THE COMMISSION WOULD
BE SUPPORTIVE OF SOLUTIONS THAT
ADDRESS THOSE WORKLOAD AND
RESOURCE ISSUES WITH AN FTP. THE
COMMISSION WOULD ALSO BE ALSO BE
SUPPORTIVE OF ON ALTERNATIVE
SOLUTION ALSO SUGGESTED BY MR
STERN. TO TRANSFER THE MANDATORY
LOVING AUDIT DUTY TO THE
COMMISSION. AND TO ANSWER
SENATOR ONCE QUESTION OF THIS
WOULD BE IN CONJUNCTION WITH
ADDITIONAL RESOURCES.
APPROPRIATE TO COMPLETE THAT
AUDIT DUTY. AS I MENTIONED
BEFORE THE COMMISSION'S AUDIT
DIVISION RECENTLY EXERCISED ITS
DISCRETIONARY AUTHORITY TO
COMPLETE. FOR LOBBING AUDITS
FROM THE LIST OF LOVING ENTITIES
THAT WERE SELECTED IN THE TWENTY
TWENTY ONE RANDOM DRAW. AND THE
QUESTIONS AUDIT DIVISION WOULD
BE CAPABLE OF EXPANDING GIVEN
APPROPRIATE RESOURCES.
ADDITIONALLY OF THE COMMISSION
WOULD BE OPEN TO FURTHER
DISCUSSIONS ABOUT OTHER WAYS TO
IMPROVE THE LOBBYING AUDIT. A
LOVING ON A PROGRAM SUCH AS BY
TIGHTENING RULES TO IMPROVE
FINANCIAL TRANSPARENCY AND
RECORD KEEPING. THANK YOU AGAIN
FOR THE OPPORTUNITY TO SPEAK
TODAY I'M AVAILABLE FOR
QUESTIONS. THANK YOU MISTER
CONDO- YOUR TESTIMONY- A POINT
OF CLARIFICATION YOU SAID SIXTY
ONE ACTIONS AND YOU GAVE THE
TIME PERIOD FOR THOSE ACTIONS
WHAT WAS THAT AGAIN. HIS WITH
BROADER THAN WHAT THE COMMITTEE
LOOKED AT IN ITS MATERIALS IT
WAS TWO THOUSAND TO TWO THOUSAND
SEVENTEEN. SO FROM TWO THOUSAND
TO TWO THOUSAND SEVENTEEN. EVEN
GIVEN THE LIMITED AUDITS THAT
WERE BEING CONDUCTED. HE TOOK
SIXTY ONE ACTIONS OF SOME SORT
OF VIOLATION EITHER THROUGH A
WARNING LETTER OF PENALTY.
THAT'S CORRECT. AND THOSE ONLY
CAME ABOUT BECAUSE OF THE AUDITS
THEMSELVES YES- SO IN SUMMARY
YOU THINK THIS AUDIT FUNCTION IS
PRETTY IMPORTANT. YES WE THINK
IT IS CRUCIAL TO THE ENFORCEMENT
OF THE ACT AND THERE REALLY IS
NO REPLACEMENT. OKAY ALL RIGHT
OF MEMBERS QUESTIONS FOR US-
DISNEY THE CONDO ANY QUESTION
SENATOR NEWMAN CENTER ALLEN-
SENATOR ANGELA NICE TO SEE YOU
THANK YOU FOR JOINING THE
COMMITTEE SENATOR WIN ANY
QUESTIONS- WELL I KNOW THIS
CONVERSATION IS GOING TO
CONTINUE I WANT TO. GIVE AN
OPPORTUNITY TO MISS HERRIMAN
FROM THE FRANCHISE TAX BOARD TO.
SHARE ANY THOUGHTS REFLECTIONS
ON THE TESTIMONY FROM THIS TO
KIND OF ANY ANYTHING ANY
THOUGHTS THERE. I'M I WOULD JUST
REITERATE THAT I DO BELIEVE
THESE AUDITS ARE NECESSARY- AS
INDICATED TO SUPPORT THE
AUTHENTICITY AND THE VERACITY OF
THE PROGRAM AND IT IS VERY
IMPORTANT TO DO- AND I ALSO
AGAIN WILL REPEAT THAT JUST OF
RESOURCES SEEM TO BE THE PROBLEM
HERE- WHETHER OR NOT THERE'S
ANOTHER ENTITY TO DO IT CAN
CERTAINLY BE DISCUSSED BUT
RESOURCES REALLY SEEMED TO POINT
B. THE CRUX OF THE PROBLEM THAT
WE'RE FACING HERE- FTV IS HAPPY
TO BE RESOURCE FOR IT AND HAVE
TO BE IS OF COURSE HAPPY TO
SUPPORT- ANY RECOMMENDATIONS BY
THE F. PPC IF. WORKLOADS OR TO
BE. MOVED OVER- I WOULD AGAIN
CONTINUE TO WATCH IT FROM THE
PERSPECTIVE OF THE GLOBAL
PROGRAM IF THE LOBBYIST AUDITS I
MOVED OVER TO F. PPC. WE ARE
STILL UNDER RESOURCE TO ADDRESS
THE REMAINDER WORKLOADS THAT WE
ARE WORKING ON WHICH ARE ALSO
VERY IMPORTANT. TO MANAGE AS
WELL. THANK YOU MISTER CHAIRMAN
I WOULD. NOTE THOUGH AT YOU KNOW
THAT. I THAT- YOU KNOW THIS
CONCERNED ABOUT RESOURCES BUT
LOOK WE HAD A BILLION WE HAD A
HUNDRED. BILLION DOLLAR SURPLUS.
LAST YEAR. AND YOU KNOW WE HAVE
WE HAD TOUGH TIMES IN THE STATE
WE CERTAINLY HAVE. BUT I AND I
AM NOT VERY I DON'T FIND IT THAT
COMPETITIVE VERY COMPELLING. TO
SAY THAT WE'RE WE HAVE WE'RE
SPENDING SO MUCH MONEY IN SO
MANY PLACES. TO SAY THAT THIS
FUNCTION OF. OF OF THE
MONITORING AND DISCLOSURE OF
THIS HUGE ENTERPRISE OF
LOBBYISTS AND LOBBYING FIRMS.
SOMEHOW THAT UNDERPINS- THE
TRUST IN OUR DEMOCRACY THAT
SOMEHOW THAT THAT. IS A LOW
PRIORITY IT DOESN'T IT DOESN'T
COMPUTE FOR ME- AND SO IT'S TOO
CONFUSING FOR THAT. THAT WE
WOULD SAY THAT THAT'S THE
PROBLEM OF THE LAST DECADE AND
IN TRYING TO MAKE SURE THAT. THE
UNDER UNDERPINNINGS OF OUR
DEMOCRACY OR NOT- PROPERLY
REVIEWED AND MONITORED- AT AT
EVERY LEVEL SO I AM I APPRECIATE
HEARING. THAT THAT FEEDBACK BUT
AT IT'S NOT COMPELLING TO ME
BECAUSE THERE ARE A LOT OF
RESOURCES OUT THERE. AND CHOICES
ARE BEING MADE OKAY WITH THAT
I'M GONNA GO TO OUR NEXT SPEAKER
UNLESS THERE'S FURTHER COMMENTS
OR QUESTIONS. ADMIT MR STERN DO
YOU HAVE ANYTHING WANTED TO SAY
ON THIS. A LAST TESTIMONY WANT
TO MAKE SURE YOU GIVE YOU A
CHANCE IF YOU WANNA. MAKE ANY
COMMENTS. HI BRIAN SECOND YOUR
USING YOUR- IS RICHER. ALL RIGHT
OKAY. SO I WON AGAIN INVITE THE
SPEAKERS TO STAY IF THEY WANT
THAT THE TESTIMONY TABLE. AND
LET'S INVITE UP OUR NEXT SPEAKER
IT'S KERA RASMUSSEN. ACURA IS
THE COMPLIANCE MANAGER IN THE
SECRETARY OF STATE'S POLITICAL
REFORM DIVISION. THE SECRETARY
OF STATE HANDLES THE FILING FOR
LOBBYING FORMS. AND POST THE
AUDIT REPORTS. COMPLETED BY THE
FRANCHISE TAX BOARD. AND AS A
MISS RASMUSSEN GET SETTLED I
WOULD NOTE THAT IN THE- STAFF
REPORT FOR THIS HEARING TODAY.
THE IT'S NOTED THAT. THAT THESE
AUDIT REPORTS HAVE NOT BEEN TO
IF THEY'VE BEEN DONE THEY HAVE
BEEN POSTED- A OVER THE LAST
MANY YEARS AND I HOPE THAT YOUR
TESTIMONY WILL PROVIDE. SOME
ELIMINATION TO THAT- CONCERNING
FACTOIDS OF DISTRESSED NEWTON
THANK YOU FOR JOINING US WE WILL
WELCOME YOUR TESTIMONY. THANK
YOU- AND THANK YOU FOR THE
OPPORTUNITY TO BE HERE- SO AS
YOU DESCRIBED OUR ROLE HERE. IS
AS THE FILING OFFICER- TO
RECEIVE FILE AND DISCLOSE THE.
AUDITS THAT WE DO RECEIVE FROM
THE FTV. I'M THOSE REPORTS RISK.
ON ADDRESS. THE MY YOU. YOU
BROUGHT UP AND THAT IS THAT- WE
DO. RECEIVE THE REPORTS TOGETHER
CAMPAIGN AND LOBBYING AUDIT
REPORTS TOGETHER AND THEY'RE
POSTED FOR PUBLIC DISCLOSURE ON
OUR WEBSITE BELIEVE WE CURRENTLY
HAVE THE LAST TEN YEARS
AVAILABLE. THERE WE WERE ASKED
TO PROVIDE THE NUMBER OF
LOBBYING. AUDITS SEPARATE FROM
CAMPAIGN AND OUR STAFF DID. A
MANUAL REVIEW I'M BECAUSE IT'S A
SINGLE PDF FOR THE YEAR
CUMULATIVE. AND YOU'RE CORRECT
WE DID RECEIVE OUR- WE HAVE
RECORD OF RECEDING. THERE ARE
PARTS OF THAT TIME THAT YOU
MENTIONED. AND THE- HAVE YOU
BEEN IN TOUCH WITH THE FAIR FOR
THE FRANCHISE TAX BOARD ASK. AS
OF. SINCE THEY ARE BROUGHT TO
OUR ATTENTION IN THIS HEARING NO
. ALL RIGHT WILL LET ME ASK THIS
HERRIMAN SINCE SHE'S HERE YEAH-
THIS POSTING REQUIREMENT I MEAN
E. DO THE AUDITS THAT'S GOOD
THAT'S GREAT AND OBVIOUSLY
THERE'S A DEFICIENCY THERE BUT-
AT A MINIMUM THERE'S SUPPOSED TO
BE DISCLOSURE. SO EVERYBODY CAN
SEE THE WORK THAT'S BEEN DONE-
YOU KNOW THAT THERE HAVE BEEN
SOME AUDITS OVER THE LAST FOUR
FIVE YEARS BUT THEY DON'T SEEM
TO BE POSTED YOU KNOW WHY. I'M I
DO NOT OFF THE TOP OF MY HEAD TO
MY KNOWLEDGE WHEN WE COMPLETE
THE AUDITS WE DO FOLLOW THE
PROTOCOL BUT I CAN CERTAINLY
TAKE THAT AS AN ACTION ITEM. AND
GET BACK TO YOU WITH THAT
INFORMATION YES I'M NOT AWARE
THAT THAT IS NOT HAPPENING. OKAY
ALL RIGHT. ANYTHING FURTHER THAT
YOU LACK. OUTSIDE TO SAY THAT I
DO FEEL CONFIDENT THAT WE POSTED
EVERYTHING WE HAVE RECEIVED BUT
SINCE IT WAS A MANUAL SEPARATION
OF LOBBYING AND CAMPAIGN
ENTITIES IT SOUNDS LIKE THERE'S
AN OPPORTUNITY FOR
RECONCILIATION. HERE IF THERE'S
A DISCREPANCY OKAY WELL FOR FIVE
YEARS OF NO POSTING SEEMS TO BE
A- PERHAPS A MORE THAN A
DISCREPANCY BUT A HUGE VOID IN
OUR REQUIREMENTS TO NALLEY
CONDUCT THE AUDITS BUT TO MAKE
SURE THE PUBLIC HAS ACCESS TO
THE FINDINGS. SO COMMITTEE
MEMBERS ANY FOLLOW UP QUESTIONS
WITH THE SECRETARY OF STATE'S
REPRESENTATIVE. OKAY THANK YOU
FOR YOUR TESTIMONY THANK YOU.
ALL RIGHT NEXT UP I WANT TO
INVITE TOM HILL TACK. MISTER
HILL TACK IS REPRESENTING THE
INSTITUTE OF GOVERNMENTAL
ADVOCATES- TO PROVIDE THE-
LOBBYIST PERSPECTIVE ON THIS
WHOLE ISSUE OF LOBBYING AUDITS
STILL TECH WELCOME TO THE
COMMITTEE WE WELCOME YOUR
TESTIMONY. THANK YOU MR CHAIRMAN
AND MEMBERS- PADS ON THIRTY- ON
BEHALF OF I. GA- AYE I COMMEND
THE WORK OF THE- THE- COMMITTEE
TO LOOK INTO THIS ISSUE. I J.
BELIEVES THAT THE AUDIT PROGRAM
THAT HAS BEEN IN EXISTENCE SINCE
THE- FORMATION OF THE POLITICAL
FROM ACT IS AN IMPORTANT ELEMENT
OF. A MATURING COMPLIANCE AND
ACCURACY REPORTING BY LOBBYING
FIRMS A LOBBYIST EMPLOYERS.
BILLS AS WELL AS ALL OF THOSE
ALL OF US IN GAUGE IN THE
POLITICAL PROCESS HERE IN
CALIFORNIA. AND WILL DO WHATEVER
WE CAN TO HELP THE COMMITTEE AND
THE F. T. B. COME TO A
RESOLUTION TO SOLVE THIS PROBLEM
THAT FRANKLY WE WERE NOT AWARE
OF AS WELL- AND IN THE THINK
THAT IS VERY IMPORTANT THAT.
THAT THAT JUST. FROM GET CORRECT
. DO YOU HAVE ANY OF ANY
RECOMMENDATIONS AT THIS POINT IN
TERMS OF- WHERE THAT AUDIT
FUNCTION SHOULD BE DO YOU THINK
IT SHOULD TO REMAIN IN THE F.
FRANCHISE TAX BORDER WE SHOULD
EXAMINE ALTERNATE SO WE DID A
BRIEF SURVEY OF. OF THE BOARD OF
I. GA- AND I HAVE PERSONAL
EXPERIENCE WITH THE FRANCHISE
TAX BOARD IN THEIR AUDIT PROGRAM
NOT JUST WITH RESPECT TO
LOBBYIST BUT WITH RESPECT TO ALL
ENTITIES ENGAGED IN POLITICAL
ACTIVITY. THEY'RE VERY.
PROFESSIONAL THEY'RE VERY SMART
THEY'RE VERY GOOD THEY'RE VERY
THOROUGH. AND I HAVE NO DOUBT
THAT THAT THE PROGRAM SHOULD
REMAIN WITH THEM BECAUSE THEY
HAVE. FORTY NINE YEARS OF
EXPERIENCE DOING THAT'S WHAT
THEY HAVE IS A PROBLEM. MAKING
SURE THEY'RE GETTING THROUGH THE
WORKLOAD- I'LL NOTE THAT'S NOT
REALLY BEEN DISCUSSED YET THAT
THE STATUTE THAT REQUIRES THIS
HONOR PROGRAMS. DIVIDES THE
POLITICAL PLAYERS INTO SORT OF
TWO PARTS. THE FIRST PART IS
MANDATORY AUDITS WHERE THERE IS
REALLY NO DISCRETION ON THE PART
OF THE FDB THOSE ARE PRINCIPALLY
STATEWIDE CAMPAIGNS ALL THE
PEOPLE RUNNING FOR STATEWIDE
OFFICE. THE STATEWIDE BALLOT
MEASURES OF WHICH THERE ARE FROM
SOMETIMES FOUR OR FIVE ON THE
BALLOT SOMETIMES ARE TWENTY
FIVE. ON THE BALLOT SOMETIMES
THOSE CAMPAIGNS ARE. RELATIVELY
SMALL A FEW MILLION DOLLARS
SOMETIMES THOSE CAMPAIGNS ARE
ENORMOUS HUNDREDS OF MILLIONS OF
DOLLARS- SO WITH RESPECT TO. TO
LOOKING AT WAYS TO SOLVE THIS
PROBLEM FOR THE F. T. B. I THINK
ONE THING YOU MIGHT CONSIDER IS
LOOKING AT THE THRESHOLD FOR THE
MANDATORY AUDITS- FOR EXAMPLE.
IF YOU'RE RUNNING IF YOU DECIDE
TO RUN FOR GOVERNOR IN THE
PRIMARY OR MAYBE IN THE RECALL
ELECTION WHERE WE HAD. WHAT WE
HAVE SIXTY CANDIDATES RUNNING
FOR GOVERNOR ALL THOSE ARE
SUBJECT TO MANDATORY AUDIT. SOME
OF THOSE CAMPAIGNS REYES ALMOST
NO MONEY- AND SO COULD WORKLOAD
BE. BE RESOLVED BY MAYBE LOOKING
AT THE MANDATORY AUDIT LAST IN
CHANGING SOME OF THOSE
THRESHOLDS. THAT MIGHT BE
SOMETHING YOU WANT TO LOOK AT-
BUT AGAIN ON BEHALF OF I. GA WE
SUPPORT YOU KNOW ANY SOLUTION
THAT WOULD ALLOW. FTP DO TO
REGAIN CONTROL OVER THIS ISSUE
AND GET ALL OF. ALL PARTIES
INVOLVED IN THE PROCESS AUDITED
TO ENSURE COMPLIANCE WITH THE
CLERK REFORM ACT. THANK YOU AND
AT TELL ME IF YOU KNOW THE
ANSWER TO THIS- ARE LOBBYING
FIRMS WHEN THEY REGISTER ARE
THEY ASSESSED ANY TYPE OF THE
FEE- UPON REGISTRATION IS A
DANIEL. BAR BY ANNUAL
REGISTRATION FEE FOR LOBBYIST
WHICH ACTUALLY WAS A- THE
PROPOSAL BY THE LOBBYING
COMMUNITY TO HELP THE SECRETARY
STATES OFFICE. IN GETTING THE
CAL ACCESS PROGRAM UP AND
RUNNING WHICH HAD BEEN. LONG
DELAYED IN IS STILL DELAYED AND
WHAT WHAT IS THAT FEE I BELIEVE
IT'S FIFTY DOLLARS. FIFTY
DOLLARS AND THAT'S FOR A TWO
YEAR PERIOD RESULT OF ONE YEAR
PERIOD THAT'S A- SPOT
REGISTRATION. WELL DONE AND
LOBBYIST TO BE REGISTER FOR IT
THE TWO YEARS. I SEE SO- UP
POLITICAL ACTION COMMITTEES WHEN
THEY FILE A FORM FOR TEN WHICH
IS A STATEMENT OF AUTHORIZATION
ALSO PAY A FIFTY DOLLAR FEE.
OKAY ESCHEN SAID THE CENTER
WENT. WITH A FIFTY DOLLARS FOR
THE CANDIDATE IS. PER YEAR
CORRECT WELL IT'S WHEN YOU
REGISTER AS A COMMITTEE CORRECT
. THEN ANNUAL YEAH THERE'S AN
ANNUAL FEE CARRILLO. THAT'S
RIGHT- I GUESS MIKE MY QUESTION
IS. IF WE DON'T GO WITH KEEPING
IT AT THE FRANCHISE TAX BOARD.
WHAT CONSEQUENCES DO YOU SEE
THAT CAN POTENTIALLY HURT OR
DELAY. THIS EVEN FURTHER.
WITHOUT GETTING AND I THINK I
AGREE THAT THE RESOURCES PROBLEM
WILL JUST CARRY OVER TO A
DIFFERENT AGENCY. WHETHER THAT'S
THE BOARD OF EQUALIZATION. OR
WHETHER IT'S THE F. PPC AT LEAST
WITH RESPECT TO THE F. B. B. C.
THEY HAVE SOME EXPERTISE I DON'T
KNOW. THE BOARD OF EQUALIZATION
REALLY HAS ANY EXPERTISE IN THIS
AREA AT ALL- THE F. PPC HAS ITS
OWN STAFFING ISSUES WITH THE
WORKLOAD HAS NOW- ENFORCEMENT
CASES DRAG ON FOR YEARS AND
YEARS AND YEARS- AND- AND SO I
DON'T KNOW IF. YOU JUST SORT OF
KICKING THE CAN OVER TO ANOTHER
SENSE OF PLAYING FIELD I'M NOT
SURE YOU REALLY SOLVE THE
PROBLEM- I THINK FRANCHISE TAX
BOARD. HAS AN EXCELLENT TRACK
RECORD OF DOING A VERY GOOD JOB
THEY'RE VERY SMART THEY JUST
NEED MORE PEOPLE WHERE THEY
NEED. THE SYSTEM TO MAKE. DO
MAKE SURE WHATEVER DECISION
MAKING THEY'RE MAKING AMONGST A
LIMITED RESOURCE CLASS THAT THAT
EVERYBODY'S GETTING COVERED THAT
EVERYBODY HAS AN OPPORTUNITY. TO
BE TO. BE DRAWN FOR NOT IT.
THANK YOU. I CAN'T HELP IT TO
BRING A POINT OF HUMOR TO THIS-
SERIOUS SUBJECT IN THE AND- NOTE
THAT MAYBE THE FRANCHISE TAX
BOARD NEEDS TO HIRE A LOBBYIST.
YES I'M SURE I CAN FIND ONE FOR
THEM I KNEW THAT I WOULD GET A
LAUGH AND- ISRAEL TECH THANK YOU
FOR YOUR TESTIMONY FLOODING. ALL
RIGHT NEXT ON OUR AGENDA OUR
FINAL SPEAKER IS- LARA BROAD-
BROAD THEN SKI- LARA IS THE
LEGISLATIVE DIRECTOR FOR
CALIFORNIA COMMON CAUSE. AND- WE
WELCOME YOU THANK YOU FOR
CREATING A SPACE- WE WELCOME YOU
TODAY AND LOOK FORWARD TO YOUR
TESTIMONY. THANK YOU CHEN
MEMBERS. AT THE CLOSE ARE
ESSENTIAL TO A WELL FUNCTIONING
DEMOCRACY. THE POLITICAL REFORM
ACT WAS CHAMPIONED BY COMMON
CAUSE THE BENCHMARK ETHICS LAW
REGULATING CAMPAIGN FINANCE
LOBBYING ACTIVITY AND CONFLICTS
OF INTEREST. IN ORDER TO PREVENT
CORRUPTION AND INCREASED PUBLIC
TRANSPARENCY. THE PERRY WAS
CREATED WITH ROBUST ENFORCEMENT
STATUTES AND A SOLID INDEPENDENT
ENFORCEMENT BODY IN F. PPC. AS
WELL AS OVERSIGHT WITH FTP. THE
AUDITS ARE THE ESSENTIAL DUE
PROCESS AND EFFECTIVE
ENFORCEMENT OF THE PRSA.
RANDOMIZED AUDITS IN PARTICULAR
ARE NECESSARY TO EFFECTUATE THE
INTENT AND PURPOSE OF THE PRSA.
WHICH IS ACCOUNTABILITY OF THE
POWERFUL AND TRUST IN THE
DEMOCRATIC SYSTEM. AND THE
GOVERNMENT CODE EVEN
SPECIFICALLY STATES THAT THE P.
R. A. SHELBY VIGOROUSLY
ENFORCED. AUDITS CAN CATCH
ANYTHING FROM RAMPANT
INTENTIONAL CORRUPTION TO
UNINTENTIONAL MISTAKES DUE TO
CONFUSION ABOUT THE LAW OR
FILING FORMS. AND IT'S REALLY
IMPORTANT TO NOTE THAT IN
ADDITION TO ACTUALLY CATCHING
MISTAKES I WHICH THE OF PPC HAS
TESTIFIED TO. AUDITS CAN
ACTUALLY HELP PREVENT- MISTAKES
IN THE BEGINNING- IN OTHER
CONTEXTS SUCH AS WITH TAX
FILINGS IN THE US. THE
PERCEPTION OF ROBUST CONSISTENT
CHANCE OF AN AUDIT HAS BEEN
SHOWN IN ACADEMIC RESEARCH TO
INCREASE FILERS COMPLIANCE WITH
THE LAW AND HONESTY. HOWEVER
LIKE MANY POLICIES ETHICS LAWS
ARE ONLY AS GOOD AS THEIR
ENFORCEMENT. WITHOUT CONSISTENT
RANDOMIZED AUDITS OF LOBBYING
ACTIVITY THE STATE'S LOBBYING
LAWS ARE LESS EFFECTIVE AT
PREVENTING BOTH THE BAD ACTORS
AND UNINTENTIONAL MISTAKES. MOST
LOBBYING IS DONE OUTSIDE OF THE
PUBLIC PURVIEW. UNLIKE CAMPAIGN
FINANCE REPORTS AND STATEMENTS
OF ECONOMIC INTEREST THAT ARE
EASILY MONITORED AND SCRUTINIZED
BY THE PRESS AND THE PUBLIC WHO
CAN EXPOSE POTENTIAL VIOLATIONS.
LOBBYING REPORTS ARE LESS
DISPUTABLE ON THEIR FACE. FOR
THIS REASON LOBBYING ACTIVITY
REQUIRES GREATER INSTITUTIONAL
OVERSIGHT BY BODIES WITH
EXPERTISE THROUGH REGULAR
RANDOMIZED AUDITS TO KEEP THE
PAID LOBBYING COMMUNITY HONEST
AND ACCOUNTABLE. A WITHOUT
ROBUST AUDITING WE JUST DON'T
KNOW HOW MANY MORE VIOLATIONS
ARE GOING UNNOTICED EVEN IF
UNINTENDED LOBBYIST EMPLOYERS IN
FIRMS MAY BE LED TO BELIEVE THAT
BECAUSE THEY FILED SOMETHING ONE
WAY. AND NO ONE HAS EVER NOTICED
THAT IT'S CORRECT. IT'S CRUCIAL
THAT SUCH OVERSIGHT BE
CONSISTENT AND VIGOROUS TO
ENGENDER TRUST IN GOVERNMENT AND
FOSTER THE DEMOCRATIC IDEAL.
THANK YOU. THANK YOU THANK YOU
VERY MUCH FOR YOUR TESTIMONY AS
WELL AS YOUR- ENGAGEMENT IN THIS
WHOLE AREA OF- OPEN AND
TRANSPARENT GOVERNMENT
APPRECIATE THAT VERY MUCH
COLLEAGUES ANY QUESTIONS FOR THE
REPRESENT OF COMMON CAUSE CENTER
ALAN. YEAH THANK YOU ARE I'M
YEAH WE WERE HAVING THE A CHILD
HERE AND- I GUESS WHAT WHAT I
WOULD LOVE TO. GET A SENSE
SERVICE IS BAD. WHERE THIS FALLS
ON THE LIST OF PROBLEMS WITH
PEER ENFORCEMENT- AND JUST GOOD
GOVERNMENT FORSMAN IN GENERAL-
WE ALL WORK HARD WE WORKED HARD
TOGETHER TO TRY TO GET STRONGER
RULES IN PLACE. AND IT OFTEN AND
IT'S A REALLY A PILL BOTTLES
YOU'RE FIGHTING AGAINST. PEOPLE
WHO DON'T WANT TO HAVE MORE
TRANSPARENCY. I OF COURSE WE ALL
WANNA MAKE SURE THAT THE RULES
THAT I'VE BEEN PASTOR WELL IN
FORCED IN THAT THERE'S MEET AND
REAL TEETH TO THEM- WHERE DOES
THIS FIT ON THE. I MEAN EITHER
WAY I GUESS I'M TRYING THIS IS
WHERE THIS FITS ON THE LIST OF-
OF AREAS OF. OF ENFORCEMENT ARE
PERHAPS LACKING. IN VARIOUS
ASPECTS OF TRANSPARENCY LAW.
YEAH I THINK THE CONCERN ABOUT
NOT DOING ROBUST AUDITING IS AS
WE'VE HEARD EVEN FROM THE
LIMITED AUDITING THAT F. P. C.
OR F. F. T. B. ARE DOING THEY
ARE CATCHING NUMEROUS
VIOLATIONS. AND SO THAT WOULD
IMPLY THAT THERE ARE GOING TO BE
MORE VIOLATIONS OUT THERE THAT
WE DON'T KNOW ABOUT- ESPECIALLY
DUE TO THE COMPLEXITY OF FILING.
ARE THAT IT'S VERY POSSIBLE THAT
THERE'S MORE VIOLATIONS- IN
TERMS OF THE- SCALE WITH
EVERYTHING ELSE I CAN'T REALLY
SPEAK TO THAT WE THINK
EVERYTHING IS- DESERVING OF THE
RESOURCE AND ENFORCEMENT. AND
THEN I HAVE A QUESTION FOR- FOR
MR HELTON HELL TAX. AT YOUR YOUR
INTERESTING PLACE BECAUSE I CAN
IMAGINE THAT YOUR MEMBERS YOU
GOT A REAL MIX OF PERSPECTIVES
ON THIS TOPIC RIGHT THERE ARE
SOME MEMBERS WHO PROBABLY
ASSIDUOUS ABOUT THEIR FILINGS.
VERY CAREFUL OF YOU WOULD MEAN
WE COULD WE COULD SPEND HOURS
AND HOURS AUDITING THEM THAT
WHATEVER GONNA FIND A THING- AND
THEN THERE'S OTHERS THAT ARE YOU
KNOW SABIR. RIGHT I MEAN YOU
KNOW IT AND THEN SEND IN INDIA
MAY BE SMALL BUT BUT BUT VERY
PROBLEMATIC PORTION THAT ARE.
OPENLY TRYING TO- HI BEHAVIOR
THAT THIS LEGISLATION SOUGHT TO
SHED LIGHT ON. ARM WHAT WE'RE
WORD WHAT'S THE DYNAMICS WITHIN
WITHIN AN ORGANIZATION LIKE I G.
ON A TOPIC LIKE THIS PRESUMABLY
THERE MEMBERS THAT ACTUALLY WANT
REALLY ROBUST ENFORCEMENT
BECAUSE THEY GET A COMPETITIVE
DISADVANTAGE WHEN THEY'RE
THEY'RE- THEY'RE DOING ALL THE
WORK NECESSARY AND THERE ARE
OTHERS THAT ARE KIND OF SKATING
UNDER THE RADAR- AND- YOU KNOW
AT. THE SAME TIME WE ALSO DON'T
WANT TO BE KIND OF CREATING MAKE
WORK- THAT THE THAT'S NOT
MEANINGFUL FOR FURTHER
TRANSPARENCY GOALS OF APPEARING
IN AND OUR OTHER RELATED
LEGISLATION LOVE TO GET A SENSE
FROM YOU AS TO THE DYNAMICS.
WITHIN THE ORGANIZATION. AS YOU
TRY TO. TO CRAFTED BY A LAB A
POSITION ON THIS TOPIC. SO IF
YOU DECIDED TO BECOME A MEMBER
OF I. G. A. YOU NOT ONLY. ARE
RECOGNIZING YOURSELF AS A
PROFESSIONAL YOU ARE. ACTUALLY
CITING AN ETHICS PLEDGE- AMONGST
YOUR- CO. WORKERS YOUR CALL
PROFESSIONALS. TO ENGAGE
UNETHICAL ACTIVITIES AND THAT
WOULD INCLUDE COMPLIANCE WITH
PLATFORM ACCEL I WOULD SAY THAT
EVERYONE WHO IS A MEMBER BY GA.
SEEKS COMPLIANCE ONCE COMPLIANCE
AND DOES THE BEST THEY CAN TO
COMPLY WITH THE ACT- IN THE
FIELD OF LOBBYING THE LAW HAS
BEEN RELATIVELY STABLE. OVER THE
LAST DECADE OR SO- AND THAT IF
YOU ARE A GOOD RECORD KEEPER YOU
SHOULD HAVE A- GOOD OUTCOME FROM
AN AUDIT. NOW AUDITS CAN BE- I
WOULD SAY THAT IN THE FIELD OF
AUDITING- AGAIN BASED ON MY OWN
PERSONAL EXPERIENCE BECAUSE I'VE
ALSO REPRESENT A LOT OF.
COMMITTEES THAT ARE SUBJECT
AUDIT- THAT ALARMING OUT IS
ACTUALLY RELATIVELY EASY- AND IS
NOT AS TIME CONSUMING AS- A TWO
HUNDRED MILLION DOLLARS
STATEWIDE CAMPAIGN. SO I'VE HAD
FRANCHISE TAX BOARD PEOPLE IN MY
OFFICE TWO OR THREE OF THEM IN
MY OFFICE IN MY CONFERENCE ROOM
FOR TWO OR THREE STRAIGHT WEEKS
DOING A TWO HUNDRED MILLION
DOLLAR CAMPAIGN WHICH IS NOT
SURPRISING RIGHT THERE'S A LOT
OF ACTIVITY. THAT IS BIG WORK
BIG WORKLOAD. A LOBBYIST
EMPLOYER WHO HAS ONE EMPLOYEE
LOBBYIST WHO'D IS NOT VERY
ACTIVE POLITICALLY THAT LOBBYING
ON IT MIGHT TAKE TWO HOURS- A
LOBBYING FIRM THAT HAS. TEN OR
FIFTEEN CLIENTS- AND HAS GOOD
RECORDKEEPING THAT LOBBYING ON
IT MIGHT TAKE. FOUR OR FIVE OR
SIX HOURS. SO KIND OF THE
SPECTRUM OF ACTIVITY THAT THE
FRANCHISE TAX BOARD IS CHARGED
WITH UNDERTAKING IT IS IT IS A-
BIG JOB. THERE ARE A LOT OF
PEOPLE INVOLVED TWENTY FIVE
PERCENT. OF TWELVE HUNDRED
LOBBYIST IS A LOT OF ACTIVITY-
THAT NUMBER CHANGE ACTUALLY
DRAMATICALLY ABOUT TEN OR
FIFTEEN YEARS AGO WHEN THE
LEGISLATURE DECIDED THE
PLACEMENT AGENTS HAD TO REGISTER
AS A LOBBYIST- SO WHAT USED TO
BE PROBABLY ABOUT A FOUR OR FIVE
HUNDRED NUMBER- SO 25% OF THAT.
WAS ONE WHEN WE ADDED PLACEMENT
AGENTS WE ADDED A WHOLE SLEW OF
FOLKS TO THE LOBBYING COMMUNITY
THAT ARE NOW SUBJECT TO THE 25%
ON IT- THOSE AUDITS I THINK
WOULD BE A- OF THE- OF THE TYPE
THAT I DESCRIBE THAT ARE.
PROBABLY DONE IN THE COMING
WEALTHIEST NATIONS ARE PEOPLE
WHO HELPED CALPERS CENTERS- THE
UC RETIREMENT SYSTEM. SO
PLACEMENT AGENTS- IT WAS A BIG
TO DO- CALPERS A NUMBER OF YEARS
AGO MAYBE BEFORE SOME OF YOUR
EVEN UP HERE- IN WHICH- FOLKS
WERE WERE IN. ENGAGE WITH
CALPERS AND STIRRERS. AND WERE
TRYING TO GET- FIND FUND
MANAGEMENT CONTRACTS FROM
HELPERS. AND THE LEGISLATURE
DECIDED THAT IN THOSE WERE
TYPICALLY CONTINGENCY FEE BASED
ARRANGEMENTS. AND THE
LEGISLATURE DECIDE ONE WAY TO
SOLVE THAT PROBLEM WAS TO
DECLARE THEM ALL LOBBYISTS.
BECAUSE YOU CANNOT HAVE A
CONTINGENT FEE BASIS. PAYMENT
BASIS AS A LOBBYIST. SO WE-
BASICALLY DOUBLED THE NUMBER OF
LOBBYISTS WHEN WE ADDED
PLACEMENT AGENTS. I THINK THAT
WAS ABOUT TWELVE OR FIFTEEN
YEARS AGO- AT B. C. MIGHT BE
ABLE TO HELP ME ON THAT- SO IN
TERMS OF. THE LAW THE LAW HASN'T
REALLY CHANGED MUCH IN THE
LOBBYING SPACE- BUT THE NUMBERS
CHANGE QUITE A BIT WAY BACK
THEN- SO INTENT AGAIN IN TERMS
OF. PRIORITIZING I THINK THERE
ARE A LOT OF DIFFERENT WAYS TO
SORT OF GET TO WHERE I THINK
YOU'LL WANT TO GO WHICH IS TO
GET THE HAVE TO BE BACK IN THE
BUSINESS OF GETTING TO
EVERYBODY- AND- THEN THERE ARE
WAYS TO LOOK AT THAT AND MAYBE
EVEN WITHIN THE LOBBYING SPACE
TO COULD BE THRESHOLDS RIGHT SO.
A LOT OF LOBBYING FIRMS OR
LOBBYIST EMPLOYERS IN PARTICULAR
MAY FILE ZERO REPORTS RIGHT THEY
HAVE MADE NO PAYMENTS THEY WERE
NOT LOBBYING ANYTHING THERE WAS
NOTHING OF INTEREST HERE BUT
THEY WERE REGISTERED AS A
LOBBYIST. DURING TWO YEAR
SESSION BUT THE REPORT SAYS ZERO
AND IT SAYS ZERO FOR FOUR
CONSECUTIVE CALENDAR QUARTERS-
BUT THEY'RE STILL IN THE DRAW.
AND IF THEY'RE DRAWN THEN THE
FTP WOULD AUDIT REPORT THIS IS
ZERO NOW. CONFIRMING THAT IT'S
ACTUALLY ZERO IS IMPORTANT AS
WELL- BUT- BUT A MONETARY
THRESHOLD MIGHT BE ANOTHER WAY.
TO CHANGE THE WORKLOAD AND
CHANGE THE PRIORITIES OF THE FTP
. CENTER NEWMAN. DAVID CHIU CHOI
QUESTION FOR MS PRESIDENCY SO
YOU YOU KNOW WE'VE HAD. OUR
WE'VE HEARD FROM SOME THE OTHER
WITNESSES AS TO WHETHER OR NOT
THE STB OR THE F. T. P. SEARS
SOME OF THAT IS THE RIGHT PLACE
TO HOUSE. THESE FUNCTIONS HAD
BEEN SHOULD YOUR VIEWS. AND MORE
OVERLOOKED WHAT CHANGES MIGHT
YOU SUGGEST TO GET AT A- DELI
MORE TRANSPARENT AND MORE
EFFICIENT SYSTEM FOR. HI
CALIFORNIA COMMON CAUSE HASN'T
HAD A CHANCE TO DO A DEEP DIVE
ON WHAT DEPARTMENT OR AGENCY MAY
BE THE MOST APPROPRIATE- IN
TERMS OF MOVING AT- SO I CAN'T
REALLY SPEAK TO US. WHAT WE
WOULD SUGGEST INSTEAD OF FTP
OKAY THANK YOU. ALL RIGHT WE'RE
GONNA NOW- MOVED TO PUBLIC
COMMENTS AND AT FOLLOWING THAT
WILL HAVE SOME WRAP UP COMMENTS
FROM THE PANEL AND- FROM ABOUT
MEMBERS AND- ON THIS HEARING THE
LET ME LET ME AT FIRST NOW-
INVITE THE PUBLIC WHO WISHES TO
PARTICIPATE TO CALL IN NOW- THE-
TOLL FREE NUMBER AS I MENTIONED
AT THE START IS EIGHT SEVEN
SEVEN. TWO TWO SIX. EIGHT ONE
SIX THREE AND WHEN PROMPTED
PLEASE USE THIS ACCESS CODE
SEVEN THREE SIX. TWO EIGHT THREE
FOUR I DON'T KNOW HOW MANY FOLKS
ARE GONNA BE PROVIDING TESTIMONY
ON THE PUBLIC LIABILITY ASK.
EACH PERSON TO- TO LIMIT THEIR
COMMENTS TO A MINUTE- SO WE CAN
ACCOMMODATE ALL THAT WE SHOULD
TESTIFY. MODERATOR YOU ON THE
LINE. YES OUR STRUCTURE. OKAY-
DO WE HAVE ANYBODY FROM THE
PUBLIC WAITING TO TESTIFY. AT
THIS TIME WE HAVE NO COMMENT IN
Q. OKAY SO AS WE'RE WRAPPING UP
HERE- MODERATOR LET ME KNOW IF
THEY- IF THEY'RE HAVE FOLKS WHO
ARE NOW STILL CALLING IN. BUT
LET ME MAYBE FOR A CLOSING
COMMENT I ALWAYS LIKE TO
RECOGNIZE- WISDOM FROM OUR
ELDERS AND BOB STERN I'M SURE
YOU'RE NOT GONNA BE HAPPY WITH
ME CALLING YOU AN ELDER. BUT
WE'VE ALWAYS APPRECIATED YOUR
WISDOM AND PERSPECTIVE YOU'VE
NOW HEARD FROM. THE FULL ARRAY
OF PANELISTS- HERE THIS MORNING
AGAIN THANK YOU FOR
PARTICIPATING IN THAT FOR STAND
ON WITH US BUT ANY ANY FINAL
CLOSING COMMENTS YOU HAVE. YES
THANK YOU VERY MUCH I DON'T.
MIND BEING ELDER THIS PORT I
GUESS BUT- OTHER TROUBLES. WHAT
WAS YOUR HEALTH VERY USEFUL- I
AGREE WITH ALL OF THAT THE
THRESHOLDS NEED TO BE REVIEWED.
AND PROBABLY INCREASE FOR THE
CAMPAIGN FILINGS. THAT ALSO I
THINK HE'S A REALLY INTERESTING
SUGGESTION ABOUT MAKING A
THRESHOLD FOR LOBBYING
ORGANIZATIONS MAYBE A TWENTY
FIVE THOUSAND DOLLARS OR MORE.
OF THAT WOULD I THINK LIBERATE
THE SORT OF THE SMALL TICKY
TACKY OF ALL IS THE NEED TO BE
MADE AT THIS POINT. BUT YOU KNOW
ALL THIS IS NOT THE REASON FOR
THE LACK OF AUDITING OF ALL OF
THE GROUPS. THE FRANCHISE TAX
FOR THE LAST TWO YEARS WHICH NOT
WHAT OTHER PEOPLE. OF SO I FOR.
OF NEED TO PUT PRESSURE ON THE
F. T. V. TO MAKE IT MORE BUT- AT
THEIR AGENCY. WITHOUT THAT
PRESSURE THE F. B. AS CONTINUE
TO MAKE THESE ALL IT'S LOWEST
PRIORITY. I AGREE. ON HIS MORE.
WE'LL FIND PROBLEM. WELL IF I
FELT THAT LOBBYIST MORE LIKE BE
A- WITH NEED TO HAVE. ALL AND
THE OF THE OR SOME NEEDS TO THE
- SO WHAT COMMEND YOU AGAIN THE
TICKET WAS. COULD THIS. HEARING
THE ONE. I HOPE YOU IS YOU'LL-
IF UP FOR NEXT YEAR BECAUSE
WITHOUT YOUR PER. BEING ON THE
T. B. NOTHING GONNA HAPPEN.
THANK YOU STERN HERE TO TODAY
AND- FOR YOUR- LONG STAND
WORKING THIS- IN THIS YEAR- I'M
REMIND BY THE CAN. HERE IN THE
CAN THAT PUBLIC IS ALL.
AVAILABLE HERE IN OUR HEARING
ROOM. SO I DIDN'T MEAN TO
EXCLUDE ANYONE HERE WHO WISHES
TO PROVIDE PUBLIC COMMENT IF YOU
DO WOULD YOU COME UP TO THE
MICROPHONE. AT THIS POINT IN
TIME. THE COMMENT HE IN THE REAL
MODERATOR IS A CALL IN ON THE
PHONE LINES. THANK YOU MISTER WE
HAVE NO AND AT THE STATE GETS A
EXCITING TOPIC REALLY GOT PEOPLE
OF MORNING. ALL RIGHT I'M GONNA
MAKE THE FINAL CUT AS WE BUT I
TO MAKE SURE MY CALLER DON'T
HAVE TO I DO THOUGH. ALL RIGHT
LET ME THE FIRST THING ALL THE
WHO ARE GOING TO MOUNT COMMA.
BUT PRECIADO CHAIRS- SPENDING
TIME THIS AND I JUST I THINK ALL
THE GOING TO COME DOWN TO THE
LIST FOR A FUNCTION. INTO
RESPECT IT'S GONNA COME OUT OF
THIS COMMITTEE. I'M DOING FOLLOW
ON WORK ON TO TAKE ME ACTION
ENSURE THAT WERE PROVIDING THEM
SORT OF OVERSIGHT WE NEED TO
PROVIDE AYE I JUST HAVE GREATER
CONFIDENCE IN THE CHAIR THEY'LL
DO THAT AND I CERTAINLY STAND.
READY TO SUPPORT HIM IN HIS
EFFORTS AND THE AND THE STAFF'S
EFFORTS TO BECAUSE OF A LOT OF
ISSUES HAVE BEEN HIGHLIGHTED
THAT NEED TO BE. ADDRESSED AND-
SOME OF THEM BUDGETARY. AND
SWANA EXPRESS MY SUPPORT FOR THE
CHAIR AND IS THAT IT IS THE
EFFORTS AYE KNOW WHERE TO COME
ON THIS TOPIC. THE YOU THANK YOU
CENTER AND- I WILL AGAIN THANK
THE PANELISTS FOR COMING IN AND
PROVIDING TESTIMONY SOME OF IT
DIFFICULT TO. GIVE AND FOR US TO
HEAR BUT I APPRECIATE THE
PROFESSIONALISM OF EVERYONE WHO.
HAS STEPPED UP- LET ME MENTION.
ALONG THE LINES OF US SENATOR
ALLEN'S COMMENTS THAT. LET ME
THANK THE PRO TEN ATKINS. WHOSE
ENCOURAGE THIS CANADIAN OTHERS
TO DO THESE OVERSIGHT HEARINGS.
AND GIVE US THE TIME IN THE
SPACE TO BE ABLE TO DO THEM I
THINK THAT- IS- WORTHY OF FIVE.
OF APPRECIATION- BECAUSE WE KNOW
IT'S NOT JUST ABOUT CREATING NEW
LAWS. IT'S MAKING SURE THE LAWS
THAT WE HAVE. ARE BEING
PROPERLY. CARRIED OUT. THEY LOOK
AT FOR ME IT'S CLEAR THAT WE
HAVE A HUGE AND UNACCEPTABLE
BREAK DOWN HERE- IN AN IMPORTANT
LAW TO. ENSURE THAT OUR LOBBYING
FIRMS. AND THEIR EMPLOYERS ARE
PROPERLY AUDITED. AND THE
FAILURE TO AUDIT. LOBBYING FIRMS
IS AS A CORROSIVE IMPACT. ON THE
FUNCTIONING OF OUR OUR
DEMOCRACY. WE KNOW THAT AUDITS
HAVE. IMPORTANT IMPACTS ONE.
INFLUENCES PROPER CONDUCT. AND
NUMBER TWO THERE'S A
CONSEQUENCE. AS A CONSEQUENCE
FOR WRONGDOING. NOW THAT THE
FRANCHISE TAX BOARD MAY OR MAY
NOT BE UNDER RESOURCE- AND
THAT'S A MATTER OF DEBATE BUT
IT'S CLEAR TO ME THAT IT HAS NOT
BEEN A PRIORITY IT JUST SIMPLY
HAS NOT. BEEN A PRIORITY AND
THAT NEEDS TO CHANGE I AM OPEN.
TO INITIATIVES TO REMEDY THE
SITUATION THROUGH LEGISLATION OR
BUDGET. BUT IT'S CERTAINLY CLEAR
THAT THE POWERFUL INFLUENCES OF
LOBBYING WHICH ARE GENERAL
PUBLIC IS QUITE FAMILIAR WITH-
THAT THERE NEEDS TO HAVE THAT
OVERSIGHT FORTY NINE YEARS AGO
OF THE WISDOM OF THE POLITICAL
REFORM ACT. IT WAS MANDATED AND
IT IS SIMPLY NOT BEEN CARRIED
OUT AND IT'S OUR OBLIGATION TO
ENSURE THAT THE LAWS ARE
FOLLOWED AND HOPE. TO WORK WITH
ALL MEMBERS HERE ON THE PANEL-
AND WITH MY COLLEAGUES TO ENSURE
THAT THAT THAT DOES OCCUR. LET
ME CLOSE BY THANKING- THE
INDIVIDUALS HERE IN THE ROOM WHO
JOINED US I WOULDN'T HAVE
ANYBODY ON OUR TELECONFERENCE
LINE- BUT IT WILL CONTINUE
APPRECIATE ANY COMMENTS AND
SUGGESTIONS THAT YOU HAVE- GOING
FORWARD- AND THAT. THE COMMITTEE
ON ELECTIONS CONSTITUTIONAL. AS
A JUROR.