Under existing law, an individual or entity that receives compensation to influence legislative or administrative action, as specified, is required to register as a lobbyist or lobbying firm.

This bill would require an individual who engages in certain certain individuals who engage in specified activities related to influencing legislative or administrative action to register as an agent of a foreign principal and to file periodic reports with the Secretary of State, pursuant to procedures set forth in, and subject to enforcement under, the Political Reform Act of 1974. A violation of the Political Reform Act of 1974 is punishable as a misdemeanor. By expanding the scope of existing crimes, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the acts purposes upon a ²/₃ vote of each house of the Legislature and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

Under existing law, an individual or entity that receives compensation to influence legislative or administrative action, as specified, is required to register as a lobbyist or lobbying firm.

This bill would require an individual who engages in certain specified activities related to influencing legislative or administrative action to register as an agent of a foreign principal and to file periodic reports with the Secretary of State, pursuant to procedures set forth in, and subject to enforcement under, the Political Reform Act of 1974. A violation of the Political Reform Act of 1974 is punishable as a misdemeanor. By expanding the scope of existing crimes, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the acts purposes upon a ²/₃ vote of each house of the Legislature and compliance with specified procedural requirements.

This bill would declare that it furthers the purposes of the act.

Date of Hearing: August 7, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

SBPCA Bill Id:SB 1151

Author:(Hurtado) – As Amended Ver:June 17, 2024

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires an individual engaging in certain activities related to influencing legislative or administrative action to register as an agent of a foreign principal.

Specifically, this bill:

1. Defines a “foreign principal,” which includes: (a) a government of a foreign country, (b) a foreign political party, (c) certain persons outside the United States, (d) a partnership, association, corporation, organization, or other combination of persons organized under the laws of, or having its principal place of business in, a foreign country, and (e) a domestic subsidiary of a foreign corporation if decisions are made by a non-United States officer.
2. Requires an individual acting as an agent of a foreign principal to register with the Secretary of State (SOS) in the same manner, frequency, and content as required for a lobbyist. The SOS must post received registration statements on its website and, within one year of certifying a new online filing and disclosure system, make agent registration available online.
3. Requires an agent of a foreign principal to file periodic reports with the SOS in the same manner, frequency, and content as required for a lobbyist.
4. Provides that an agent of a foreign principal under federal law who is also a registered lobbyist under federal law, and thus exempt from the federal Foreign Agents Registration Act (FARA) registration requirement, is not exempt from the state registration requirement.

FISCAL EFFECT:

1. Costs of approximately $377,000 in the first year and $363,000 annually thereafter to the Fair Political Practices Commission (FPPC) to administer foreign agent registration and reporting requirements similar to the existing system for lobbyists (General Fund (GF)). Although the number of individuals who would qualify as foreign agents is unknown, the FPPC estimates needing two additional attorneys: one in the Legal Division for increased advice requests and developing informational materials, and one in the Enforcement Division to handle a potential increase in complaints and cases.
2. Costs of an unknown, but potentially significant, amount to modify the SOS’s new online filing and disclosure system to include foreign agent registration (GF).

According to the Legislative Analyst’s Office, the GF faces a structural deficit in the tens of billions of dollars over the next several fiscal years.

COMMENTS:

1. Purpose. According to the author:

California has the duty and responsibility to protect the integrity of its legislative processes and shed light on threats of any form of corruption. Currently under [FARA], individuals acting on behalf of foreign principles as foreign agents to influence our democratic systems must disclose who they are representing. However, there is a severe lack of awareness amongst foreign agents’ responsibility to disclose their influencing activities under FARA.

1. Support and Opposition. This bill is supported by California Common Cause, which argues, “While there are already registration requirements at the federal level, this complementary state framework would further improve transparency of potential foreign influence at the state and local level and improve enforcement by adding oversight of these actors by the [FPPC].”

There is no registered opposition to this bill. However, the Pacific Merchant Shipping Association “suggests clean-up language amendments” to “ensure that it is not the intent of the legislature to create a new, unique test or definition of a ‘foreign agent’ to be asserted under state law that are inconsistent with federal FARA tests and definitions.”

1. FARA. FARA requires the registration of, and disclosures by, an agent of a foreign principal who: (a) engages in political activities on behalf of a foreign principal, (b) acts as a foreign principal’s public relations counsel, information-service employee, or political consultant, (c) solicits, collects, or disburses contributions, loans, money, or other things of value in the interest of a foreign principal, or (d) represents the interest of the foreign principal before an agency or official of the federal government. As of June 13, 2024, there are 719 active registrants under FARA. This bill creates a state-level FARA by requiring an agent representing a foreign interest before state government to register and file disclosure statements with the SOS, with enforcement by the FPPC, similar to the state lobbyist registration system.

FARA exempts an agent registered under federal lobbying laws from FARA registration requirements. However, this bill does not include a similar exception and would require an agent already registered under state lobbying laws to provide duplicative filings. As noted in the Assembly Elections Committee’s analysis of this bill, “This could lead to confusion and an agent for a foreign principal could inadvertently violate the new state registration and filings requirements in this bill.” The analysis also states that “the author has not provided the committee with any specific examples that demonstrate the need for this bill.”

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: June 26, 2024

ASSEMBLY COMMITTEE ON ELECTIONS

Gail Pellerin, Chair

SBPCA Bill Id:SB 1151

Author:(Hurtado) – As Amended Ver:June 17, 2024

SENATE VOTE: 37-0

SUBJECT: Political Reform Act of 1974: foreign agents.

SUMMARY: Requires certain individuals who engage in specified activities related to influencing legislative and administrative action on behalf of a foreign principal to register with the Secretary of State (SOS) as an agent of a foreign principal, as defined, and file periodic disclosure reports. Specifically, this bill:

1. Requires any individual acting as an agent of a foreign principal to register with the SOS as an agent of a foreign principal in the same manner, with the same frequency, and with the same content as are required for a lobbyist and lobbying firm under the Political Reform Act (PRA).
2. Requires the registration of an agent of a foreign principal, in addition to the information required under the PRA for lobbyist and lobbying firm registration, to also include disclosure of any compensation received, contracted, or otherwise promised to the agent by each foreign principal.
3. Requires an agent of a foreign principal that qualifies as a lobbyist or lobbying firm under the PRA to also register with the SOS in accordance with existing law.
   
4. Requires the SOS, on the registration form for an agent of a foreign principal, to include a statement noting the existence of the federal Foreign Agents Registration Act of 1938 (FARA), and that registration with the state does not excuse an individual or entity from also registering with the federal government if their activities require such registration under federal law.
5. Requires an agent of a foreign principal to complete the ethics course required to be completed by a lobbyist in the same manner required of lobbyists, and requires an agent of a foreign principal to pay the same fee as required of lobbyists.
   
6. Codifies exemptions specified in FARA and provides that following persons are not required to register with the SOS as an agent of a foreign principal: diplomatic or consular officers; officials of a foreign government; staff members of diplomatic or consular officers; persons engaged in private and nonpolitical activities and activities that solicit funds; persons engaged in religious, scholastic, or scientific pursuits; persons engaged in the defense of a foreign government vital to the United States (US); and persons qualified to practice law who are representing a foreign principal before a court of law or the US government, as specified. Provides that an agent of a foreign principal that is registered under the federal Lobbying Disclosure Act of 1995 is not exempt from the registration requirements of this bill.
   
7. Requires the registration of a foreign principal’s agent to be filed by email with the SOS and to be signed using a secure electronic signature. Requires the SOS to post all registration statements received on its internet website within five business days or, if the SOS receives the registration during the 16 days before the election, within 48 hours. Requires these provisions to become inoperative on the date the SOS makes the registration of a foreign principal’s agent available for filing using the SOS’s new online filing and disclosure system (also known as the Cal-Access Replacement System or CARS).
   
8. Requires the SOS, within one year of the SOS certifying the new CARS online filing and disclosure system, to make the registration of a foreign principal’s agent available for filing using that online filing and disclosure system. Requires the registration of a foreign principal’s agent to be filed online or electronically with the SOS, and requires the SOS to make a registration statement filed available to the public in the online filing and disclosure system. Requires these provisions to become operative on the date the SOS makes the registration of a foreign principal’s agent available for filing using the SOS’s new CARS online filing and disclosure system.
   
9. Requires an agent of a foreign principal to file periodic reports with the SOS in the same manner, with the same frequency, and with the same content as are required of lobbyists and lobbying firms under the PRA, as specified.
   
10. Prohibits an FPPC commissioner from being an agent of a foreign principal during the person’s tenure on the FPPC.
11. Requires the FPPC to investigate possible violations of the PRA relating to an agent of a foreign principal, as specified.
12. Defines various terms, for the purposes of this bill.
    
13. Provides that the provisions of this bill are severable.
    
14. Provides that the provisions of this bill shall not be applied in a manner inconsistent with any provision of any treaty between the US and another country.

EXISTING LAW:

1. Establishes the federal FARA, and requires individuals engaging in political or advocacy work on behalf of foreign entity in the US to register with the Department of Justice and to disclose their relationship, activities, receipts, and disbursements in support of their activities, as specified. (22 U.S.C. §611 et seq.)
   
2. Creates the Fair Political Practices Commission (FPPC), and makes it responsible for the impartial, effective administration and implementation of the PRA. (Government Code §§83100, 83111)
   
3. Makes violations of the PRA subject to administrative, civil, and criminal penalties. (Government Code §§83116, 91000-91005.5)
   
4. Requires each member of the FPPC to be an elector. Prohibits a member of the FPPC, during the member’s tenure, from holding any other public office, serving as an officer of any political party or partisan organization, participating in or contributing to an election campaign, or employing or being employed as a lobbyist nor, during the member’s term of appointment, seeking election to any other public office. (Government Code §83105)
   
5. Requires the FPPC, upon the sworn complaint of any person or on its own initiative, to investigate possible violations of the PRA relating to any agency, official, election, lobbyist, or legislative or administrative action, as specified. (Government Code §83115)
   
6. Prohibits a foreign government or foreign principal, as defined, from making, directly or through any other person, a contribution, expenditure, or independent expenditure in connection with the qualification or support of, or opposition to, a state or local ballot measure or in connection with the election of a candidate to state or local office. Prohibits a person or a committee from soliciting or accepting a contribution from a foreign government or a foreign principal in connection with the qualification or support of, or opposition to, any state or local ballot measure or in connection with the election of a candidate to state or local office. (Government Code §85320)
   
7. Defines a lobbyist as any person paid $2,000 or more in a calendar month, or whose principal duties as an employee are, to communicate with state public officials for the purpose of influencing legislative or administrative actions. (Government Code §82039, California Code of Regulations §18239)
8. Requires lobbying firms and lobbyist employers that employ lobbyists (but not lobbyist employers that contract with lobbying firms) to register with the SOS. (Government Code §86100 et seq.)
9. Requires a lobbyist to prepare a lobbyist certification to be filed with the SOS as part of the registration of the lobbying firm in which the lobbyist is an employee, or as a part of the registration of the lobbyist employer by which the lobbyist is employed. (Government Code §86103)
10. Requires the registration of a lobbying firm to contain, among other items, the name, address, and telephone number of each person with whom the firm contracts to provide lobbying services, information sufficient to identify the nature and interests of each such person, and a list of the state agencies whose legislative or administrative actions the lobbying firm will attempt to influence for the person. (Government Code §86104)
11. Requires the appropriate legislative ethics committees to conduct at least semiannually an orientation course of the relevant statutes and regulations governing official conduct, as specified. Provides that the committees shall conduct at least semiannually an orientation course on the relevant ethical issues and laws relating to lobbying, in consultation with the FPPC, as specified. Requires the course to include information on each house of the Legislature’s policies against harassment, including sexual harassment, in connection with lobbying activities. Requires the committees to impose fees on lobbyists for attending the course on the relevant ethical issues and laws relating to lobbying, as specified. (Government Code §8956)
12. Requires a state lobbyist to attend an ethics course as a condition of registering as a lobbyist, as specified. (Government Code §86103)
13. Requires the SOS, in consultation with the FPPC, to provide online and electronic filing processes for use by specified political committees, lobbyists, lobbying firms, and lobbyist employers pursuant to the PRA. This online reporting and disclosure system is commonly referred to as the Cal-Access system. (Government Code §84602(a)(1))
14. Requires the SOS, in consultation with the FPPC, to develop and certify a new online filing and disclosure system for public use that provides public disclosure of campaign finance and lobbying information in a user-friendly, easily understandable format, as specified. This system is commonly referred to as CARS. (Government Code §84602(b)(1))

FISCAL EFFECT: According to the Senate Appropriations Committee:

• The FPPC indicates that it would incur first-year costs of $377,000, and $363,000 annually thereafter, to implement its provisions of the bill (General Fund).
• SOS would incur unknown General Fund information technology costs to include the bill’s requirements in its Cal-Access Replacement System.

COMMENTS:

1. Purpose of the Bill: According to the author:

Corruption is not some remote concept that exists in a faraway land. Corruption and abuses are on the rise not just abroad, but also here at home. Bad actors are employing both new and traditional schemes to influence our policies and political systems. California has the duty and responsibility to protect the integrity of its legislative processes and shed light on threats of any form of corruption. Currently under the federal Foreign Agents Registration Act (FARA), individuals acting on behalf of foreign principles as foreign agents to influence our democratic systems must disclose who they are representing. However, there is a severe lack of awareness amongst foreign agents’ responsibility to disclose their influencing activities under FARA.

SB 1151 is a simple disclosure bill pushing for further transparency in our State’s legislative and [regulatory] processes by requiring any person acting as a foreign agent within the state of California to disclose their affiliations to any foreign [principal]. By shedding light on the origins of political influence we can harness public trust in our political systems and ensure that we are legislating in with integrity. SB 1151 also incorporates an education piece by requiring the Secretary of State to include a statement on filing forms to educate any person acting as a foreign agent about their responsibilities under the United States Foreign Agent Registration Act. Only then can we repair any public mistrust in our legislative and regulatory processes.

1. Foreign Agents Registration Act (FARA): The central purpose of FARA is to promote transparency with respect to foreign influence within the US by ensuring that the US government and the public know the source of certain information from foreign agents intended to influence American public opinion, policy, and laws, thereby facilitating informed evaluation of that information. FARA requires the registration of, and disclosures by, an agent of a foreign principal who, either directly or through another person, within the US: (1) engages in political activities on behalf of a foreign principal; (2) acts as a foreign principal’s public relations counsel, publicity agent, information-service employee, or political consultant; (3) solicits, collects, disburses, or dispenses contributions, loans, money, or other things of value for or in the interest of a foreign principal; or (4) represents the interests of the foreign principal before any agency or official of the US government. In addition, FARA requires agents to conspicuously label informational materials transmitted in the US for or in the interest of a foreign principal. There are some exemptions to FARA’s registration and labeling requirements for specified categories of agents and activities.
   
   The FARA Unit is part of the National Security Division of the Department of Justice, and is responsible for administering and enforcing FARA. The FARA Unit provides support, guidance, and assistance to registrants and potential registrants and processes registration filings and informational materials to make those materials available to the public. Additionally, the FARA Unit identifies FARA violations, reviews filings for deficiencies, and inspects registrants’ books and records. The FARA Unit makes registration information and disclosures available to the public to inform the public about the activities of foreign agents within the United States. As of June 13, 2024, there are 719 active registrants under FARA.
   
   This bill seeks to codify provisions of FARA into state law.
   
2. Duplicative Filings: Under current law if an agent of a foreign principal is engaged in lobbying activity sufficient for that person to be classified as a lobbyist under existing law, all provisions of state law that apply to lobbyists would be applicable to that person. Under the provisions of this bill, an agent of a foreign principal could be required to register as a lobbyist as well as an agent for a foreign principal. In other words, there could be situations in which an agent of a foreign principal would be required to provide duplicative filings. The author may wish to consider amending this bill to exempt an agent of a foreign principal who is engaged in lobbying activity sufficient for that person to be classified as a lobbyist under existing law, and thereby already required to register and file periodic reports with the SOS, from the filing requirements and ethics training course requirements in the bill. Instead, such individuals could identify themselves as an agent for a foreign principal within their required lobbying filings, and disclose any compensation received, contracted, or otherwise promised to the agent by each foreign principal on those filings.
   
3. Exemptions: Under federal law, FARA allows an agent of a foreign principal to be exempted from FARA’s registration obligations if the agent’s activities fall within one of the following exemptions:
   

• Diplomatic officers and diplomatic staff
• Certain registered foreign officials who are not US citizens and are not public-relations counsels, publicity agents, or information-service employees
• Bona fide commercial activity and other activity not serving predominantly a foreign interest
• Humanitarian fundraising
• Religious, scholastic, academic, fine arts, or scientific pursuits
• Certain activities relating to the defense of foreign governments vital to the US defense
• Legal representation of a disclosed foreign principal before any court or law or agency of the US government
• Properly registered parties under the Lobbying Disclosure Act

This bill codifies all but one FARA exemption. FARA exempts an agent registered under the federal Lobbying Disclosure Act from FARA registration requirements. This bill does not include that same exemption. This could lead to confusion and an agent for a foreign principal could inadvertently violate the new state registration and filings requirements in this bill.

1. Need for the Bill: According to the author’s office, there are deficiencies in current law that necessitate the need for this bill. First, despite the increasing sophistication of foreign influence campaigns, the existing framework of FARA lacks teeth in enforcing compliance and ensuring comprehensive disclosure. This deficiency allows hidden actors to operate within our democratic processes without accountability, potentially undermining the integrity of our elections, policies, and public discourse. Additionally, there is a general lack of awareness among both the public and agents engaging in lobbying or advocacy activities about the requirements and implications of FARA. This contributes to a state of vulnerability where foreign entities can operate covertly, exploiting loopholes in the law to advance their agendas without scrutiny.

Notwithstanding the author’s stated concerns, the author has not provided the committee with any specific examples that demonstrate the need for this bill.

1. Cal-Access Replacement Project: In 1997, the Legislature passed and Governor Pete Wilson signed SB 49 (Karnette), Chapter 866, Statutes of 1997, which amended the PRA and established the Online Disclosure Act of 1997. SB 49 required the SOS, in consultation with the FPPC, to develop and implement, by the year 2000, an online filing and disclosure system for reports and statements required to be filed under the PRA, as specified. As a result, the SOS created and deployed a system called the California Automated Lobby Activity and Campaign Contribution and Expenditure Search System, commonly referred to as Cal-Access. Cal-Access is 25 years old, and the SOS reports that components of the system are no longer supported by their vendor. As a result, the system has periodically crashed and denied public access. Given the limitations of the existing Cal-Access system, the Legislature has taken steps to replace that system. In 2016, the Legislature approved and the Governor signed SB 1349 (Hertzberg), Chapter 845, Statutes of 2016, which requires the SOS, in consultation with the FPPC, to develop and certify for public use a new online filing and disclosure system for statements and reports that provide public disclosure of campaign finance and lobbying information in a user-friendly, easily understandable format, as specified. The new system is intended to be data driven, rather than form-based, and is intended to permit future compatibility with local campaign finance data. This system is commonly referred to as CARS.
2. CARS Project Further Delayed: According to the SOS, in July 2021, it partnered with the California Department of Technology to conduct an independent assessment of CARS and it was determined that CARS was not ready for a system launch. Consequently the SOS began planning for a CARS project restart. As a result, it is unlikely that the CARS system will be fully deployed until late 2026 at the earliest. Adding additional requirements to the new CARS system—as this bill proposes to do—could further delay the development of the system and possibly increase costs.
3. Arguments in Support: In support of a prior version of this bill, California Common Cause wrote:

Undue foreign influence on American politics and government has been a primary concern since the Country’s founding. In this vein, Congress passed the Foreign Agents Registration Act (FARA) of 1938 (22 U.S.C. § 611 et seq.). FARA requires the registration of, and disclosures by, an “agent of a foreign principal” who, either directly or through another person, engages in political activity and government lobbying in the U.S. for the benefit of the foreign principal. Similarly, the Federal Election Campaign Act prohibits political spending by foreign nationals at the federal, state, and local levels, but excludes ballot measures and foreign-owned U.S. subsidiaries that do not coordinate with parent companies. California, has implemented stricter prohibitions on direct and independent political spending by foreign-owned U.S. subsidiaries, including on ballot measure campaigns.

Concern about foreign influence in U.S. elections, politics, and government has increased over the last ten years. Technology, political dark money, and shell companies have made it increasingly easy for foreign principals to engage in electioneering and influence-peddling of government officials without true accountability or public scrutiny.

SB 1151 would require an individual who engages in certain specified activities related to influencing legislative or administrative action to register as an agent of a foreign principal and file periodic reports with the Secretary of State in substantially the same manner as is required for a lobbyist and lobbying firm. While there are already registration requirements at the federal level, this complementary state framework would further improve transparency of potential foreign influence at the state and local level and improve enforcement by adding oversight of these actors by the Fair Political Practices Commission.

1. Political Reform Act of 1974: California voters passed an initiative, Proposition 9, in 1974 that created the FPPC and codified significant restrictions and prohibitions on candidates, officeholders, and lobbyists. That initiative is commonly known as the PRA. Amendments to the PRA that are not submitted to the voters, such as those contained in this bill, must further the purposes of the initiative and require a two-thirds vote of both houses of the Legislature.

REGISTERED SUPPORT / OPPOSITION:

Support

California Common Cause (prior version)

Opposition

None on file.

Analysis Prepared by: Nichole Becker / ELECTIONS / (916) 319-2094

 THIRD READING  

Bill No: SB 1151

Author: Hurtado (D)

Introduced: 2/14/24

Vote: 27

SENATE ELECTIONS & C.A. COMMITTEE: 7-0, 4/16/24

AYES: Blakespear, Nguyen, Allen, Menjivar, Newman, Portantino, Umberg

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/16/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

SUBJECT: Political Reform Act of 1974: foreign agents

SOURCE: Author

DIGEST:

This bill requires any individual acting as an agent of a foreign principal to register with the Secretary of State (SOS) as an agent of a foreign principal and file periodic reports in the same manner, with the same frequency, and with the same content as are required for a lobbyist and lobbying firm.

ANALYSIS:

Existing law:

1. Establishes the Federal Election Commission (FEC), and makes it responsible for the administration and enforcement of the Federal Election Campaign Act, including restrictions on federal, state, and local campaign contributions and expenditures by foreign nationals, as described below.
2. Requires, pursuant to the federal Foreign Agents Registration Act of 1938 (FARA), individuals doing political or advocacy work on behalf of foreign entities in the United States to register with the Department of Justice and to disclose their relationship, activities, receipts, and disbursements in support of their activities, as specified.
3. Creates the Fair Political Practices Commission (FPPC), and makes it responsible for the impartial, effective administration and implementation of the Political Reform Act of 1974.
4. Provides, upon the sworn complaint of any person or on its own initiative, the commission shall investigate possible violations of this title relating to any agency, official, election, lobbyist, or legislative or administrative action.
5. Prohibits a foreign government or foreign principal from making, directly or through any other person, a contribution, expenditure, or independent expenditure in connection with the qualification or support of, or opposition to, any state or local ballot measure or in connection with the election of a candidate to state or local office.
6. Prohibits a person or a committee from soliciting or accepting a contribution from a foreign government or foreign principal in connection with the qualification or support of, or opposition to, any state or local ballot measure or in connection with the election of a candidate to state or local office.
7. Provides that the provisions in 5) and 6) does not prohibit a contribution, expenditure, or independent expenditure made by a lawfully admitted permanent resident. Provides that any person who violates the provisions in 5) and 6) shall be guilty of a misdemeanor and shall be fined an amount equal to the amount contributed or expended.
8. Requires the appropriate legislative ethics committees to conduct at least semiannually an orientation course of the relevant statutes and regulations governing official conduct, as specified. Provides that the committees shall conduct at least semiannually an orientation course on the relevant ethical issues and laws relating to lobbying, in consultation with the FPPC, as specified. Requires the course to include information on each house of the Legislature’s policies against harassment, including sexual harassment, in connection with lobbying activities. Requires the committees to impose fees on lobbyists for attending the course on the relevant ethical issues and laws relating to lobbying, as specified.

This bill:

1. Requires any individual acting as an agent of a foreign principal to register with the SOS as an agent of a foreign principal and file periodic reports in the same manner, with the same frequency, and with the same content as are required for a lobbyist and lobbying firm, as specified.
2. Requires the registration for an agent of a foreign principal to include the disclosure of any compensation received, contracted, or otherwise promised to the agent by each foreign principal.
3. Requires the SOS, on the registration form for an agent of a foreign principal, to include a statement noting the existence of the FARA, and how registration with the state does not excuse an individual or entity from also registering with the federal government if their activities require such registration under federal law.
4. Requires agents of a foreign principal to complete the ethic’s course on the relevant ethical issues and laws relating to lobbying, as specified, and requires agents of a foreign principal to pay the same fee as required of lobbyists to take this course.
5. Prohibits an FPPC commissioner from being an agent of a foreign principal during the commissioner’s tenure.
6. Requires the FPPC to investigate possible violations relating to any agency, official, election, lobbyist, agent of a foreign principal, or legislative or administrative action upon the sworn complaint of any person or on its own initiative.
7. Contains a severability clause.

Background

Foreign Agents Registration Act of 1938. Federal law prohibits foreign nationals from making contributions in connection with federal, state, and local elections. The Foreign Agents Registration Act of 1938 (as amended, 22 U.S.C. § 611 et seq.) requires the registration of, and disclosures by, an “agent of a foreign principal” who, either directly or through another person, within the United States (1) engages in “political activities” on behalf of a foreign principal, (2) acts as a foreign principal’s public relations counsel, publicity agent, information-service employee, or political consultant, (3) solicits, collects, disburses, or dispenses contributions, loans, money, or other things of value for or in the interest of a foreign principal, or (4) represents the interests of the foreign principal before any agency or official of the United States government. FARA also requires agents to conspicuously label “informational materials” transmitted in the United States for or in the interest of a foreign principal unless other requirements are met. According to information from the FEC, the goal of the FARA was to minimize foreign intervention in US elections by establishing a series of limitations on foreign nationals. As of March 29, 2024, there are 515 active registrants under FARA.

Comments

1. According to the author: Corruption is not some remote concept that exists in a faraway land. Corruption and abuses are on the rise not just abroad, but also here at home. Bad actors are employing both new and traditional schemes to influence our policies and political systems. California has the duty and responsibility to protect the integrity of its legislative processes and shed light on threats of any form of corruption. Currently under FARA, individuals acting on behalf of foreign principles as foreign agents to influence our democratic systems must disclose who they are representing. However, there is a severe lack of awareness amongst foreign agents’ responsibility to disclose their influencing activities under FARA.

SB 1151 is a simple disclosure bill pushing for further transparency in our State’s legislative and regularity processes by requiring any person acting as a foreign agent within the State of California to disclose their affiliations to any foreign principle. By shedding light on the origins of political influence we can harness public trust in our political systems and ensure that we are legislating in with integrity. SB 1151 also incorporates an education piece by requiring the Secretary of State to include a statement on filing forms to educate any person acting as a foreign agent about their responsibilities under FARA. Only then can we repair any public mistrust in our legislative and regulatory processes.

1. Need for the Bill. According to the author’s office, there are three problems that this bill seeks to address. First, despite the increasing sophistication of foreign influence campaigns, the existing framework of FARA lacks teeth in enforcing compliance and ensuring comprehensive disclosure. This deficiency allows hidden actors to operate within our democratic processes without accountability, potentially undermining the integrity of our elections, policies, and public discourse.

Second, the rapid evolution of technology has provided foreign actors with new avenues for manipulation and misinformation, further exacerbating the problem. As our political and legislative processes become more intertwined with digital platforms, the need for robust regulations to address foreign influence becomes even more critical.

Third, there is a general lack of awareness among both the public and agents engaging in lobbying or advocacy activities about the requirements and implications of FARA. This contributes to a state of vulnerability where foreign entities can operate covertly, exploiting loopholes in the law to advance their agendas without scrutiny.

Finally, the authors notes that the affected parties encompass not only policymakers and legislators but also the broader American public whose trust in the democratic process is eroded by opaque foreign influence. Additionally, the integrity of California’s legislative and regulatory processes is compromised.

Related/Prior Legislation

SB 319 (Valladares, Chapter 313, Statutes of 2021) prohibited contributions, expenditures, and independent expenditures by foreign governments and foreign principals in connection with state and local candidate elections.

SB 109 (Kopp, Chapter 67, Statutes of 1997) prohibited foreign governments or foreign principals from making contributions, expenditures, or independent expenditures in connection with state or local ballot measures.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee,

• • • • The Fair Political Practices Commission (FPPC) indicates that it would incur first-year costs of $377,000, and $363,000 annually thereafter, to implement its provisions of the bill (General Fund).
• SOS would incur unknown General Fund information technology costs to include the bill’s requirements

SUPPORT: (Verified 5/16/24)

California Common Cause

OPPOSITION: (Verified 5/16/24)

None received

Prepared by: Scott Matsumoto / E. & C.A. / (916) 651-4106

5/17/24 17:19:22

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

SB 1151 (Hurtado) - Political Reform Act of 1974: foreign agents

Bill Summary:

SB 1151 would require any individual acting as an agent of a foreign principal to (1) register with the Secretary of State (SOS), and (2) file periodic reports in the same manner, with the same frequency, and with the same content as are required for a lobbyist and lobbying firm.

Fiscal Impact:

• The Fair Political Practices Commission (FPPC) indicates that it would incur first-year costs of $377,000, and $363,000 annually thereafter, to implement its provisions of the bill (General Fund).
• SOS would incur unknown General Fund information technology costs to include the bill’s requirements in its CAL ACCESS Replacement System (See Staff Comments).

Background:

Federal law prohibits foreign nationals from making contributions in connection with federal, state, and local elections. The Foreign Agents Registration Act (FARA) of 1938 requires the registration of, and disclosures by, an “agent of a foreign principal” who, either directly or through another person, within the United States (1) engages in “political activities” on behalf of a foreign principal, (2) acts as a foreign principal’s public relations counsel, publicity agent, information-service employee, or political consultant, (3) solicits, collects, disburses, or dispenses contributions, loans, money, or other things of value for or in the interest of a foreign principal, or (4) represents the interests of the foreign principal before any agency or official of the U.S. government. FARA also requires agents to conspicuously label “informational materials” transmitted in the United States for or in the interest of a foreign principal unless other requirements are met. According to information from the Federal Elections Commission, the goal of the FARA was to minimize foreign intervention in US elections by establishing a series of limitations on foreign nationals. Currently, there are 515 active registrants under FARA.

In 1997, the Legislature and Governor Wilson enacted SB 109 (Kopp), to prohibit foreign governments or foreign principals from making contributions, expenditures, or independent expenditures in connection with state or local ballot measures. Foreign spending in connection with ballot measure elections, was not covered by federal law.

State and federal election law differ in one other key respect. While federal law restricts contributions and expenditures by foreign nationals, state law does not restrict contributions or expenditures by a foreign national who is an individual and who is legally present in the U.S. The initial version of SB 109 would have restricted contributions by foreign nationals who were legally present in the United States, but that provisions was not included in the final version of the bill.

Proposed Law:

This bill would, among other things, do the following:

• Require any individual acting as an agent of a foreign principal, as defined, to register with SOS as an agent of a foreign principal and file periodic reports in the same manner, with the same frequency, and with the same content as are required for a lobbyist and lobbying firm.
• Require the registration for an agent of a foreign principal, as defined, to include the disclosure of any compensation received, contracted, or otherwise promised to the agent by each foreign principal.
• Require SOS, on the registration form for an agent of a foreign principal, to include a statement noting the existence of the FARA, and how registration with the state does not excuse an individual or entity from also registering with the federal government if their activities require such registration under federal law.
• Require agents of a foreign principal to complete the ethic’s course on the relevant ethical issues and laws relating to lobbying, as specified, and requires agents of a foreign principal to pay the same fee as required of lobbyists to take this course.
• Prohibit an FPPC commissioner from being an agent of a foreign principal during the commissioner’s tenure.
• Require FPPC to investigate possible violations relating to any agency, official, election, lobbyist, agent of a foreign principal, or legislative or administrative action upon the sworn complaint of any person or on its own initiative.

Related Legislation:

• SB 319 (Valladares, Chapter 313, Statutes of 2021) prohibited contributions, expenditures, and independent expenditures by foreign governments and foreign principals in connection with state and local candidate elections.
• SB 109 (Kopp, Chapter 67, Statutes of 1997) prohibited foreign governments or foreign principals from making contributions, expenditures, or independent expenditures in connection with state or local ballot measures.

Staff Comments:

FPPC indicates that the number of individuals who would qualify as foreign agents and be subject to the bill’s reporting requirements is unknown. The Commission anticipates increased workload for increased advice requests, educational materials, and an increased number of complaints.

The California Automated Lobbyist and Campaign Contribution and Expenditure Search System (CAL-ACCESS) was developed to respond to the objectives of the Online Disclosure Act, added to the Political Reform Act in 1997. This IT system is operated and maintained by SOS. CAL-ACCESS is the public’s window into California’s campaign disclosure and lobbying financial activity, providing financial information supplied by state candidates, donors, lobbyists, lobbyist employers, and others.

The CAL-ACCESS Replacement System (CARS) Project is currently in progress, and will implement a new data driven system replacing the existing forms driven system. This bill would require programming modifications to CARS; SOS indicates that the resulting costs cannot be determined until a specific vendor is acquired and provides its estimates for the development and implementation activities.

Any local government costs resulting from the mandate in this measure are not state-reimbursable because the mandate only involves the definition of a crime or the penalty for conviction of a crime.

-- END --

SENATE COMMITTEE ON

ELECTIONS AND CONSTITUTIONAL AMENDMENTS

Senator Catherine Blakespear, Chair

2023 - 2024 Regular

Bill No: SB Hearing Date: 4/16/24

Subject: Political Reform Act of 1974: foreign agents

DIGEST

Requires any individual acting as an agent of a foreign principal to register with the Secretary of State (SOS) as an agent of a foreign principal and file periodic reports in the same manner, with the same frequency, and with the same content as are required for a lobbyist and lobbying firm.

ANALYSIS

Existing law:

1. Establishes the Federal Election Commission (FEC), and makes it responsible for the administration and enforcement of the Federal Election Campaign Act (FECA), including restrictions on federal, state, and local campaign contributions and expenditures by foreign nationals, as described below.
2. Requires, pursuant to the federal Foreign Agents Registration Act of 1938 (FARA), individuals doing political or advocacy work on behalf of foreign entities in the United States to register with the Department of Justice and to disclose their relationship, activities, receipts, and disbursements in support of their activities, as specified.
3. Creates the Fair Political Practices Commission (FPPC), and makes it responsible for the impartial, effective administration and implementation of the Political Reform Act (PRA).
4. Requires each member of the FPPC to be an elector. Provides that an FPPC member, during the member’s tenure, shall not hold any other public office, serve as an officer of any political party or partisan organization, participate in or contribute to an election campaign, or employ or be employed as a lobbyist nor, during the member’s term of appointment, seek election to any other public office, as specified.
5. Provides, upon the sworn complaint of any person or on its own initiative, the commission shall investigate possible violations of this title relating to any agency, official, election, lobbyist, or legislative or administrative action.
6. Prohibits a foreign government or foreign principal from making, directly or through any other person, a contribution, expenditure, or independent expenditure in connection with the qualification or support of, or opposition to, any state or local ballot measure or in connection with the election of a candidate to state or local office.
7. Prohibits a person or a committee from soliciting or accepting a contribution from a foreign government or foreign principal in connection with the qualification or support of, or opposition to, any state or local ballot measure or in connection with the election of a candidate to state or local office.
8. For the purposes of 6) and 7), a “foreign principal” includes the following:
   1. A foreign political party.
   2. A person outside the United States, unless either of the following is established:
      1. The person is an individual and a citizen of the United States.
      2. The person is not an individual and is organized under or created by the laws of the United States or of any state or other place subject to the jurisdiction of the United States and has its principal place of business within the United States.
   3. A partnership, association, corporation, organization, or other combination of persons organized under the laws of or having its principal place of business in a foreign country.
   4. A domestic subsidiary of a foreign corporation if the decision to contribute or expend funds is made by an officer, director, or management employee of the foreign corporation who is neither a citizen of the United States nor a lawfully admitted permanent resident of the United States.
9. Provides that the provisions in 6) and 7) does not prohibit a contribution, expenditure, or independent expenditure made by a lawfully admitted permanent resident.
10. Provides that any person who violates the provisions in 6) and 7) shall be guilty of a misdemeanor and shall be fined an amount equal to the amount contributed or expended.
11. Requires the appropriate legislative ethics committees to conduct at least semiannually an orientation course of the relevant statutes and regulations governing official conduct, as specified. Provides that the committees shall conduct at least semiannually an orientation course on the relevant ethical issues and laws relating to lobbying, in consultation with the FPPC, as specified. Requires the course to include information on each house of the Legislature’s policies against harassment, including sexual harassment, in connection with lobbying activities. Requires the committees to impose fees on lobbyists for attending the course on the relevant ethical issues and laws relating to lobbying, as specified.

This bill:

1. Requires any individual acting as an agent of a foreign principal to register with the SOS as an agent of a foreign principal and file periodic reports in the same manner, with the same frequency, and with the same content as are required for a lobbyist and lobbying firm.
2. Requires the registration for an agent of a foreign principal to include the disclosure of any compensation received, contracted, or otherwise promised to the agent by each foreign principal.
3. Requires the SOS, on the registration form for an agent of a foreign principal, to include a statement noting the existence of the FARA, and how registration with the state does not excuse an individual or entity from also registering with the federal government if their activities require such registration under federal law.
4. Requires agents of a foreign principal to complete the ethic’s course on the relevant ethical issues and laws relating to lobbying, as specified, and requires agents of a foreign principal to pay the same fee as required of lobbyists to take this course.
5. Defines the following terms:
   1. “Agent” or “agent of a foreign principal” to mean:
      1. Any person who acts as a representative, employee, or servant, or any person who acts in any other capacity at the order, request, or under the direction or control, of a foreign principal or of a person whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in major part by a foreign principal, and who directly or through any other person does any of the following:
         1. Communicates with any elective state official, agency official, or legislative official for the purpose of influencing legislative or administrative action for or in the interests of a foreign principal.
         2. Acts as a public-relations counsel, publicity agent, information-service employee or political consultant for or in the interests of such foreign principal for the purpose of influencing legislative or administrative action.
         3. Solicits, collects, disburses, or dispenses contributions, loans, money, or other things of value for the purpose of influencing legislative or administrative action for or in the interest of such foreign principal.
         4. Represents the interests of a foreign principal before any agency or official of the state.
      2. Any person who agrees, consents, assumes, or purports to act as, or who is or holds themselves out to be, whether or not pursuant to contractual relationship, an agent of a foreign principal, as specified.
   2. “Foreign political party” to include any organization or any other combination of individuals in a country other than the United States, or any unit or branch thereof, having for an aim or purpose, or which is engaged in any activity devoted in whole or in part to, the establishment, administration, control, or acquisition of administration or control, of a government of a foreign country or a subdivision thereof, or the furtherance or influencing of the political or public interests, policies, or relations of a government of a foreign country or a subdivision thereof.
   3. “Foreign principal” includes a government of a foreign country or any person or entity prescribed by existing law, as specified.
   4. “Government of a foreign country” includes both of the following:
      1. Any person or group of persons exercising sovereign de facto or de jure political jurisdiction over any country, other than the United States, or over any part of such country, any subdivision of any such group and any group or agency to which such sovereign de facto or de jure authority or functions are directly or indirectly delegated.
      2. Any faction or body of insurgents within a country purporting to exercise governmental authority whether such faction or body of insurgents has or has not been recognized by the United States.
   5. “Information-service employee” includes any person who is engaged in furnishing, disseminating, or publishing accounts, descriptions, information, or data with respect to the political, industrial, employment, economic, social, cultural, or other benefits, advantages, facts, or conditions of any country other than the United States or of any government of a foreign country or of a foreign political party or of a partnership, association, corporation, organization, or other combination of individuals organized under the laws of, or having its principal place of business in, a foreign country.
   6. “Public-relations counsel” includes any person who engages directly or indirectly in informing, advising, or in any way representing a principal in any public relations matter pertaining to political or public interests, policies, or relations of such principal.
   7. “Publicity agent” includes any person who engages directly or indirectly in the publication or dissemination of oral, visual, graphic, written, or pictorial information or matter of any kind, including publication by means of advertising, books, periodicals, newspapers, lectures, broadcasts, motion pictures, or otherwise.
6. Provides that the provisions prescribed by this bill are severable. Provides that if any provision or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. Prohibits the provisions of this bill to not be applied in a manner inconsistent with any provision of any treaty between the United States and another country.
7. Prohibits an FPPC commissioner from being an agent of a foreign principal during the commissioner’s tenure.
8. Requires the FPPC to investigate possible violations relating to any agency, official, election, lobbyist, agent of a foreign principal, or legislative or administrative action upon the sworn complaint of any person or on its own initiative.

BACKGROUND

Political Reform Act of 1974. In 1974, California voters passed Proposition 9, an initiative commonly known as the PRA. Proposition 9 created the FPPC and codified significant restrictions and prohibitions on candidates, officeholders, and lobbyists. The Legislature is permitted to amend the PRA, but the amendments must further the purposes of the PRA and requires a two-thirds vote of both houses of the Legislature.

Foreign Agents Registration Act of 1938. Federal law prohibits foreign nationals from making contributions in connection with federal, state, and local elections. The Foreign Agents Registration Act of 1938 (as amended, 22 U.S.C. § 611 et seq.) requires the registration of, and disclosures by, an “agent of a foreign principal” who, either directly or through another person, within the United States (1) engages in “political activities” on behalf of a foreign principal, (2) acts as a foreign principal’s public relations counsel, publicity agent, information-service employee, or political consultant, (3) solicits, collects, disburses, or dispenses contributions, loans, money, or other things of value for or in the interest of a foreign principal, or (4) represents the interests of the foreign principal before any agency or official of the U.S. government. FARA also requires agents to conspicuously label “informational materials” transmitted in the United States for or in the interest of a foreign principal unless other requirements are met. According to information from the FEC, the goal of the FARA was to minimize foreign intervention in US elections by establishing a series of limitations on foreign nationals.

As of March 29, 2024, there are 515 active registrants under FARA.

State Action. In 1997, the Legislature approved and Governor Wilson signed SB 109 (Kopp), Chapter 67, Statutes of 1997, to prohibit foreign governments or foreign principals from making contributions, expenditures, or independent expenditures in connection with state or local ballot measures. The legislative history suggests that SB 109 did not seek to regulate foreign contributions made in connection with elections for office because such contributions were already restricted by federal law. SB 109 was limited to foreign spending in connection with ballot measure elections, thereby restricting foreign spending that was not covered by federal law.

Aside from the fact that state law is limited to foreign spending made in connection with ballot measures, state and federal law differ in one other important respect. While federal law restricts contributions and expenditures by foreign nationals, state law does not restrict contributions or expenditures by a foreign national who is an individual and who is legally present in the U.S. The initial version of SB 109 would have restricted contributions by foreign nationals who were legally present in the U.S., but that restriction was amended out of the bill to address opposition.

More recently, in 2021, the Legislature passed and Governor Newsom signed SB 319 (Valladares), Chapter 313, Statutes of 2021. SB 319 prohibited contributions, expenditures, and independent expenditures by foreign governments and foreign principals in connection with state and local candidate elections.

COMMENTS

1. According to the author: Corruption is not some remote concept that exists in a faraway land. Corruption and abuses are on the rise not just abroad, but also here at home. Bad actors are employing both new and traditional schemes to influence our policies and political systems. California has the duty and responsibility to protect the integrity of its legislative processes and shed light on threats of any form of corruption. Currently under FARA, individuals acting on behalf of foreign principles as foreign agents to influence our democratic systems must disclose who they are representing. However, there is a severe lack of awareness amongst foreign agents’ responsibility to disclose their influencing activities under FARA.

SB 1151 is a simple disclosure bill pushing for further transparency in our State’s legislative and regularity processes by requiring any person acting as a foreign agent within the State of California to disclose their affiliations to any foreign principle. By shedding light on the origins of political influence we can harness public trust in our political systems and ensure that we are legislating in with integrity. SB 1151 also incorporates an education piece by requiring the Secretary of State to include a statement on filing forms to educate any person acting as a foreign agent about their responsibilities under FARA. Only then can we repair any public mistrust in our legislative and regulatory processes.

1. Need for the Bill. According to the author’s office, there are three problems that SB 1151 seeks to address. First, despite the increasing sophistication of foreign influence campaigns, the existing framework of FARA lacks teeth in enforcing compliance and ensuring comprehensive disclosure. This deficiency allows hidden actors to operate within our democratic processes without accountability, potentially undermining the integrity of our elections, policies, and public discourse.

Second, the rapid evolution of technology has provided foreign actors with new avenues for manipulation and misinformation, further exacerbating the problem. As our political and legislative processes become more intertwined with digital platforms, the need for robust regulations to address foreign influence becomes even more critical.

Third, there is a general lack of awareness among both the public and agents engaging in lobbying or advocacy activities about the requirements and implications of FARA. This contributes to a state of vulnerability where foreign entities can operate covertly, exploiting loopholes in the law to advance their agendas without scrutiny.

Finally, the authors notes that the affected parties encompass not only policymakers and legislators but also the broader American public whose trust in the democratic process is eroded by opaque foreign influence. Additionally, the integrity of California’s legislative and regulatory processes is compromised.

RELATED/PRIOR LEGISLATION

SB 319 (Valladares), Chapter 313, Statutes of 2021, prohibited contributions, expenditures, and independent expenditures by foreign governments and foreign principals in connection with state and local candidate elections.

SB 109 (Kopp), Chapter 67, Statutes of 1997, prohibited foreign governments or foreign principals from making contributions, expenditures, or independent expenditures in connection with state or local ballot measures.

POSITIONS

Sponsor: Author

Support: None received

Oppose: None received

-- END --

SENATE COMMITTEE ON

ELECTIONS AND CONSTITUTIONAL AMENDMENTS

Senator Catherine Blakespear, Chair

2023 - 2024 Regular

Bill No: SB Hearing Date: 4/2/24

Subject: Political Reform Act of 1974: foreign agents

DIGEST

Requires any individual acting as an agent of a foreign principal to register with the Secretary of State (SOS) as an agent of a foreign principal and file periodic reports in the same manner, with the same frequency, and with the same content as are required for a lobbyist and lobbying firm.

ANALYSIS

Existing law:

1. Establishes the Federal Election Commission (FEC), and makes it responsible for the administration and enforcement of the Federal Election Campaign Act (FECA), including restrictions on federal, state, and local campaign contributions and expenditures by foreign nationals, as described below.
2. Requires, pursuant to the federal Foreign Agents Registration Act of 1938 (FARA), individuals doing political or advocacy work on behalf of foreign entities in the United States to register with the Department of Justice and to disclose their relationship, activities, receipts, and disbursements in support of their activities, as specified.
3. Creates the Fair Political Practices Commission (FPPC), and makes it responsible for the impartial, effective administration and implementation of the Political Reform Act (PRA).
4. Requires each member of the FPPC to be an elector. Provides that an FPPC member, during the member’s tenure, shall not hold any other public office, serve as an officer of any political party or partisan organization, participate in or contribute to an election campaign, or employ or be employed as a lobbyist nor, during the member’s term of appointment, seek election to any other public office, as specified.
5. Provides, upon the sworn complaint of any person or on its own initiative, the commission shall investigate possible violations of this title relating to any agency, official, election, lobbyist, or legislative or administrative action.
6. Prohibits a foreign government or foreign principal from making, directly or through any other person, a contribution, expenditure, or independent expenditure in connection with the qualification or support of, or opposition to, any state or local ballot measure or in connection with the election of a candidate to state or local office.
7. Prohibits a person or a committee from soliciting or accepting a contribution from a foreign government or foreign principal in connection with the qualification or support of, or opposition to, any state or local ballot measure or in connection with the election of a candidate to state or local office.
8. For the purposes of 6) and 7), a “foreign principal” includes the following:
   1. A foreign political party.
   2. A person outside the United States, unless either of the following is established:
      1. The person is an individual and a citizen of the United States.
      2. The person is not an individual and is organized under or created by the laws of the United States or of any state or other place subject to the jurisdiction of the United States and has its principal place of business within the United States.
   3. A partnership, association, corporation, organization, or other combination of persons organized under the laws of or having its principal place of business in a foreign country.
   4. A domestic subsidiary of a foreign corporation if the decision to contribute or expend funds is made by an officer, director, or management employee of the foreign corporation who is neither a citizen of the United States nor a lawfully admitted permanent resident of the United States.
9. Provides that the provisions in 6) and 7) does not prohibit a contribution, expenditure, or independent expenditure made by a lawfully admitted permanent resident.
10. Provides that any person who violates the provisions in 6) and 7) shall be guilty of a misdemeanor and shall be fined an amount equal to the amount contributed or expended.
11. Requires the appropriate legislative ethics committees to conduct at least semiannually an orientation course of the relevant statutes and regulations governing official conduct, as specified. Provides that the committees shall conduct at least semiannually an orientation course on the relevant ethical issues and laws relating to lobbying, in consultation with the FPPC, as specified. Requires the course to include information on each house of the Legislature’s policies against harassment, including sexual harassment, in connection with lobbying activities. Requires the committees to impose fees on lobbyists for attending the course on the relevant ethical issues and laws relating to lobbying, as specified.

This bill:

1. Requires any individual acting as an agent of a foreign principal to register with the SOS as an agent of a foreign principal and file periodic reports in the same manner, with the same frequency, and with the same content as are required for a lobbyist and lobbying firm.
2. Requires the registration for an agent of a foreign principal to include the disclosure of any compensation received, contracted, or otherwise promised to the agent by each foreign principal.
3. Requires the SOS, on the registration form for an agent of a foreign principal, to include a statement noting the existence of the FARA, and how registration with the state does not excuse an individual or entity from also registering with the federal government if their activities require such registration under federal law.
4. Requires agents of a foreign principal to complete the ethic’s course on the relevant ethical issues and laws relating to lobbying, as specified, and requires agents of a foreign principal to pay the same fee as required of lobbyists to take this course.
5. Defines the following terms:
   1. “Agent” or “agent of a foreign principal” to mean:
      1. Any person who acts as a representative, employee, or servant, or any person who acts in any other capacity at the order, request, or under the direction or control, of a foreign principal or of a person whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in major part by a foreign principal, and who directly or through any other person does any of the following:
         1. Communicates with any elective state official, agency official, or legislative official for the purpose of influencing legislative or administrative action for or in the interests of a foreign principal.
         2. Acts as a public-relations counsel, publicity agent, information-service employee or political consultant for or in the interests of such foreign principal for the purpose of influencing legislative or administrative action.
         3. Solicits, collects, disburses, or dispenses contributions, loans, money, or other things of value for the purpose of influencing legislative or administrative action for or in the interest of such foreign principal.
         4. Represents the interests of a foreign principal before any agency or official of the state.
      2. Any person who agrees, consents, assumes, or purports to act as, or who is or holds themselves out to be, whether or not pursuant to contractual relationship, an agent of a foreign principal, as specified.
   2. “Foreign political party” to include any organization or any other combination of individuals in a country other than the United States, or any unit or branch thereof, having for an aim or purpose, or which is engaged in any activity devoted in whole or in part to, the establishment, administration, control, or acquisition of administration or control, of a government of a foreign country or a subdivision thereof, or the furtherance or influencing of the political or public interests, policies, or relations of a government of a foreign country or a subdivision thereof.
   3. “Foreign principal” includes a government of a foreign country or any person or entity prescribed by existing law, as specified.
   4. “Government of a foreign country” includes both of the following:
      1. Any person or group of persons exercising sovereign de facto or de jure political jurisdiction over any country, other than the United States, or over any part of such country, any subdivision of any such group and any group or agency to which such sovereign de facto or de jure authority or functions are directly or indirectly delegated.
      2. Any faction or body of insurgents within a country purporting to exercise governmental authority whether such faction or body of insurgents has or has not been recognized by the United States.
   5. “Information-service employee” includes any person who is engaged in furnishing, disseminating, or publishing accounts, descriptions, information, or data with respect to the political, industrial, employment, economic, social, cultural, or other benefits, advantages, facts, or conditions of any country other than the United States or of any government of a foreign country or of a foreign political party or of a partnership, association, corporation, organization, or other combination of individuals organized under the laws of, or having its principal place of business in, a foreign country.
   6. “Public-relations counsel” includes any person who engages directly or indirectly in informing, advising, or in any way representing a principal in any public relations matter pertaining to political or public interests, policies, or relations of such principal.
   7. “Publicity agent” includes any person who engages directly or indirectly in the publication or dissemination of oral, visual, graphic, written, or pictorial information or matter of any kind, including publication by means of advertising, books, periodicals, newspapers, lectures, broadcasts, motion pictures, or otherwise.
6. Provides that the provisions prescribed by this bill are severable. Provides that if any provision or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application. Prohibits the provisions of this bill to not be applied in a manner inconsistent with any provision of any treaty between the United States and another country.
7. Prohibits an FPPC commissioner from being an agent of a foreign principal during the commissioner’s tenure.
8. Requires the FPPC to investigate possible violations relating to any agency, official, election, lobbyist, agent of a foreign principal, or legislative or administrative action upon the sworn complaint of any person or on its own initiative.

BACKGROUND

Political Reform Act of 1974. In 1974, California voters passed Proposition 9, an initiative commonly known as the PRA. Proposition 9 created the FPPC and codified significant restrictions and prohibitions on candidates, officeholders, and lobbyists. The Legislature is permitted to amend the PRA, but the amendments must further the purposes of the PRA and requires a two-thirds vote of both houses of the Legislature.

Foreign Agents Registration Act of 1938. Federal law prohibits foreign nationals from making contributions in connection with federal, state, and local elections. The Foreign Agents Registration Act of 1938 (as amended, 22 U.S.C. § 611 et seq.) requires the registration of, and disclosures by, an “agent of a foreign principal” who, either directly or through another person, within the United States (1) engages in “political activities” on behalf of a foreign principal, (2) acts as a foreign principal’s public relations counsel, publicity agent, information-service employee, or political consultant, (3) solicits, collects, disburses, or dispenses contributions, loans, money, or other things of value for or in the interest of a foreign principal, or (4) represents the interests of the foreign principal before any agency or official of the U.S. government. FARA also requires agents to conspicuously label “informational materials” transmitted in the United States for or in the interest of a foreign principal unless other requirements are met. According to information from the FEC, the goal of the FARA was to minimize foreign intervention in US elections by establishing a series of limitations on foreign nationals.

As of March 29, 2024, there are 515 active registrants under FARA.

State Action. In 1997, the Legislature approved and Governor Wilson signed SB 109 (Kopp), Chapter 67, Statutes of 1997, to prohibit foreign governments or foreign principals from making contributions, expenditures, or independent expenditures in connection with state or local ballot measures. The legislative history suggests that SB 109 did not seek to regulate foreign contributions made in connection with elections for office because such contributions were already restricted by federal law. SB 109 was limited to foreign spending in connection with ballot measure elections, thereby restricting foreign spending that was not covered by federal law.

Aside from the fact that state law is limited to foreign spending made in connection with ballot measures, state and federal law differ in one other important respect. While federal law restricts contributions and expenditures by foreign nationals, state law does not restrict contributions or expenditures by a foreign national who is an individual and who is legally present in the U.S. The initial version of SB 109 would have restricted contributions by foreign nationals who were legally present in the U.S., but that restriction was amended out of the bill to address opposition.

More recently, in 2021, the Legislature passed and Governor Newsom signed SB 319 (Valladares), Chapter 313, Statutes of 2021. SB 319 prohibited contributions, expenditures, and independent expenditures by foreign governments and foreign principals in connection with state and local candidate elections.

COMMENTS

1. According to the author: Corruption is not some remote concept that exists in a faraway land. Corruption and abuses are on the rise not just abroad, but also here at home. Bad actors are employing both new and traditional schemes to influence our policies and political systems. California has the duty and responsibility to protect the integrity of its legislative processes and shed light on threats of any form of corruption. Currently under FARA, individuals acting on behalf of foreign principles as foreign agents to influence our democratic systems must disclose who they are representing. However, there is a severe lack of awareness amongst foreign agents’ responsibility to disclose their influencing activities under FARA.

SB 1151 is a simple disclosure bill pushing for further transparency in our State’s legislative and regularity processes by requiring any person acting as a foreign agent within the State of California to disclose their affiliations to any foreign principle. By shedding light on the origins of political influence we can harness public trust in our political systems and ensure that we are legislating in with integrity. SB 1151 also incorporates an education piece by requiring the Secretary of State to include a statement on filing forms to educate any person acting as a foreign agent about their responsibilities under FARA. Only then can we repair any public mistrust in our legislative and regulatory processes.

1. Need for the Bill. According to the author’s office, there are three problems that SB 1151 seeks to address. First, despite the increasing sophistication of foreign influence campaigns, the existing framework of FARA lacks teeth in enforcing compliance and ensuring comprehensive disclosure. This deficiency allows hidden actors to operate within our democratic processes without accountability, potentially undermining the integrity of our elections, policies, and public discourse.

Second, the rapid evolution of technology has provided foreign actors with new avenues for manipulation and misinformation, further exacerbating the problem. As our political and legislative processes become more intertwined with digital platforms, the need for robust regulations to address foreign influence becomes even more critical.

Third, there is a general lack of awareness among both the public and agents engaging in lobbying or advocacy activities about the requirements and implications of FARA. This contributes to a state of vulnerability where foreign entities can operate covertly, exploiting loopholes in the law to advance their agendas without scrutiny.

Finally, the authors notes that the affected parties encompass not only policymakers and legislators but also the broader American public whose trust in the democratic process is eroded by opaque foreign influence. Additionally, the integrity of California’s legislative and regulatory processes is compromised.

RELATED/PRIOR LEGISLATION

SB 319 (Valladares), Chapter 313, Statutes of 2021, prohibited contributions, expenditures, and independent expenditures by foreign governments and foreign principals in connection with state and local candidate elections.

SB 109 (Kopp), Chapter 67, Statutes of 1997, prohibited foreign governments or foreign principals from making contributions, expenditures, or independent expenditures in connection with state or local ballot measures.

POSITIONS

Sponsor: Author

Support: None received

Oppose: None received

-- END --