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1 California is known throughout the world as a leader in the use of citizen initiative and referendum. Polls consistently show that Californians overwhelmingly support their right to petition state laws, constitutional amendments, and acts of the Legislature onto the ballot. However, citizens from across the political spectrum believe the process could be reformedd to better serve the people. On July 15, 2011, the California Assembly passed Senate Bill 168 and sent it to Governor Jerry Brown s desk. According to the bill summary prepared by the California Legislative Counsel, the bill would provide that it is a misdemeanor for a person to pay or to receive money or any other thing of value based on the number of signaturess obtained on a state or local initiative,, referendum, or recall petition and would prescribe penalties for doing so. By creating a new crime, the bill would impose a statemandatedd local program. According to the Legislative Counsel a new crime is created by the bill, with fines as high as $25,000 and imprisonment of up to one year in a county jail or both for those found guilty of paying by the signature. Anyone found guilty of accepting per signature payment would be subject to a fine of up to $1,000 and imprisonment of up to six months in a county jail or both. Supporters of SB 168 argue that the bill is aimed at preventing fraud, and that payment based on the productivity of petition circulators encourages fraudulent conduct. Opponents counter that theree is no evidence indicating that payment to people circulating petitions based on the number of signatures obtained increases or contributes to fraudulent behavior and they pointt to a federal court decision in Colorado recently blocking enforcement of a similar, though less severe law, on constitutional grounds. Legislators relied on testimony from Secretary of State Debra Bowen and her office that efforts of the state Elections Fraud Investigation Unit (EFIU) had resultedd in 33 convictions for falsifying petitions between 1994 and For months Citizens in Charge Foundation has been seeking more detailed information on these convictions from the Secretary of State under California s Public Records Act. So far, the documents obtained indicate that the conviction data provided by the Secretary of State may not be accurate. Less Than 33 Fact Checking California s Secretary of State: An Analysis of the Evidence Presented for Senate Bill 168 Through documents obtained from Bowen s office thus far,, it appears that a significant percentage of the people counted in the 33 alleged petition fraud convictions were found guilty of offenses not related to initiative, referendum or recall petitions. On May 23, 2011, in responsee to our request for information on the 33 cited convictions, the Secretary of State provided copies of 21 pages of press releases containing informationn about a total of 19 individuals. The Secretary indicated that the press releases

2 were used in counting 33 cases of falsifying petitions, meaning that presumably the records covered 19 of the 33 cases. On May 27, 2011 the Secretary s office provided additional information, writing: Of those 33 cases, 18 case records have been destroyed because they are over ten years old, in accordance with our retention policy. Of the 15 remaining case files, only five contain court documents that identify convictions. Two of the individuals already identified from the press releases were included in the five additional documents. One of these two individuals was a person convicted of a non initiative petition related crime. A further analysis of the press releases provided by the Secretary of State s office shows that five of the nineteen cases weren t actually related to falsifying petitions: Two people were convicted of forgery on nominating petitions, which are governed by a different section of the Elections Code and not addressed by SB 168 at all. One person was convicted of casting two ballots during the 1996 general election something not related to petitioning of any kind. One person was convicted of voter registration fraud again unrelated to petitioning and not covered by SB 168. One individual was convicted of misusing petition information after he used a petition signer s information to ask her for a date. No falsification or fraud was alleged. Adding It Up In testifying before the Legislature, California Secretary of State Debra Bowen and her office cited 33 convictions for falsifying petitions over a 16 year period as justification for passage of Senate Bill 168, which regulates the circulating of petitions for initiative, referendum, and recall campaigns. To date, the Secretary s office has provided documentation that appears to cover 22 of the 33 alleged convictions. The records provided show that at least five of those 22 convictions were for crimes not addressed by Senate Bill 168 because its provisions don t affect people circulating petitions to nominate candidates for the legislature or other elected positions. The resulting error rate among the 22 documented cases is 23 percent. In other words, roughly one quarter of the documented cases were of crimes completely unrelated to the legislation they were cited to support. If cases for which some record is available (in the form of press releases) were counted incorrectly, it draws into serious question whether the 11 cases, for which there appear to be no records, were in fact related to initiative, referendum or recall petitions and, therefore, relevant to Senate Bill 168. Even if all of the 11 remaining cases, for which no documents have been provided, were related to initiative and referendum petitions, the resulting rate of fraud is still surprisingly low. Assuming that no more than five cases were unrelated, that leaves a fraud rate of 1.75 cases per year ( ). Put in perspective, the Secretary s office has indicated that state officials verified at least 26,541,044 signatures just over 4.4 million per year between 2003 and 2008 alone. Taking into account the rate

3 of 1.75 cases of fraud per year, approximately 2.3 million signatures are collected for every one instance of fraud. In terms of crime rate statistics, the fraud rate since 1994 is just over per 100,000. Fraud Drops Sharply All of the fraud convictions are the work of the Election Fraud Investigation Unit, which began its operation in According to the Secretary of State, the bulk of the 33 alleged convictions were prosecuted in the early years of the state s new investigation and prosecution program. In fact, in the seven years from 1994 to 2000, there were 23 convictions for fraud in petitions for initiatives, referendums and recalls: an average of 3.3 convictions a year. In the decade that followed, from 2001 to 2010, there were only five total convictions related to fraud in initiative, referendum and recall petitioning, or one conviction every two years. Over time, the rate of convictions has declined quite significantly. For the last decade, the yearly rate of convictions dropped by a whopping 85 percent from what it measured from 1994 to Assuming the Secretary of State s office has exercised a relatively consistent level of diligence in investigating and prosecuting petition related offenses since 1994, it suggests that the decline in convictions for fraud is a result of the success of earlier prosecutions and convictions. The enforcement of longstanding petition laws appears to have already provided significant and effective deterrence against breaking petition rules. Investigation Ongoing Citizens in Charge Foundation is now working to obtain additional records from Secretary of State Bowen s office but, based on what has been released so far, the actual number of fraud prosecutions in California is significantly lower than the number presented to the legislature by the Secretary of State in support of SB 168: lower by 23 percent. Additionally, the statistics released by Secretary Bowen s office concerning fraud convictions involving initiative, referendum and recall petitions strongly suggest that a new law is simply not needed, because prosecutions and convictions won in the 1990s may be responsible for a dramatic 85 percent reduction in instances of verified fraud.

4 Appendices A. Copy of the enrolled version of Senate Bill 168 as sent to Governor Jerry Brown B. Copy of the final floor analysis for Senate Bill 168 C. The documents produced by Secretary of State Debra Bowen s office in support of the claim indicated in the legislative analysis that there were 33 convictions for falsifying petitions between 1994 and 2010.

5 Senate Bill No. 168 Passed the Senate May 9, 2011 Secretary of the Senate Passed the Assembly July 14, 2011 Chief Clerk of the Assembly This bill was received by the Governor this day of, 2011, at o clock m. Private Secretary of the Governor

6 SB CHAPTER An act to add Section to the Elections Code, relating to petitions. legislative counsel s digest SB 168, Corbett. Petitions: compensation for signatures. Under existing law, a person who is a voter or is qualified to register to vote in this state may circulate an initiative or referendum petition, and a person who is a voter may circulate a recall petition. This bill would provide that it is a misdemeanor for a person to pay or to receive money or any other thing of value based on the number of signatures obtained on a state or local initiative, referendum, or recall petition and would prescribe penalties for doing so. By creating a new crime, the 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 people of the State of California do enact as follows: SECTION 1. Section is added to the Elections Code, to read: (a) It shall be unlawful for a person to pay or to receive money or any other thing of value based on the number of signatures obtained on a state or local initiative, referendum, or recall petition. (b) Violation of this section shall be a misdemeanor, as follows: (1) A person or organization who pays a person based on the number of signatures obtained on a state or local initiative, referendum, or recall petition shall be punished by a fine not to exceed twenty-five thousand dollars ($25,000), or by imprisonment 98

7 3 SB 168 in a county jail not to exceed one year, or by both that fine and imprisonment. (2) A person who is paid based on the number of signatures obtained on a state or local initiative, referendum, or recall petition shall be punished by a fine not to exceed one thousand dollars ($1,000), or by imprisonment in a county jail not to exceed six months, or by both that fine and imprisonment. (c) Nothing in this section prohibits the payment for signature gathering not based, either directly or indirectly, on the number of signatures obtained on a state or local initiative, referendum, or recall petition. SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution. 98

8 Approved, 2011 Governor

9 BILL ANALYSIS SB 168 Page 1 SENATE THIRD READING SB 168 (Corbett) As Introduced February 3, 2011 Majority vote SENATE VOTE :23-15 ELECTIONS 5-2 APPROPRIATIONS Ayes: Fong, Bonilla, Hall, Ayes: Fuentes, Bradford, Mendoza, Swanson Charles Calderon, Campos, Gatto, Hall, Hill, Lara, Mitchell, Solorio Nays: Logue, Valadao Nays: Harkey, Donnelly, Nielsen, Norby, Wagner SUMMARY : Prohibits a person from paying another person or being paid based on the number of signatures obtained on an initiative, referendum, or recall petition. Specifically, this bill : 1)Makes it unlawful for a person to pay or to receive money or any other thing of value based on the number of signatures obtained on a state or local initiative, referendum, or recall petition. 2)Provides that a violation of this bill is a misdemeanor subject to the following penalties: a) For a person or organization that pays someone based on the number of signatures collected, a fine of up to $25,000 and/or imprisonment in a county jail for up to one year; and, b) For a person paid based on the number of signatures collected, a fine of up to $1,000 and/or imprisonment in a county jail for up to six months. 3)Provides that nothing in this bill prohibits the payment for signature gathering that is not based, either directly or SB 168 Page 2 indirectly, on the number of signatures collected on a petition. FISCAL EFFECT : According to the Assembly Appropriations Committee, unknown, likely minor non-reimbursable costs to cities and counties for prosecution and incarceration, offset to some extent by fine revenues. COMMENTS : According to the author, "Some signature gathering firms compensate circulators based on the number of signatures they collect. Some circulators reach the deadline to qualify initiatives by illegally misinforming voters and forging names. Others have forged signatures onto their petitions by copying names they chose from a phonebook. Lastly, some have inserted carbon paper and a second petition behind the original one in order to collect signatures." In 1999, the United States Supreme Court examined a Colorado law that imposed a number of restrictions on the signature collection process for ballot initiatives. In that case the court ruled that there must be a compelling state interest to justify any restrictions on initiative petition circulation. Buckley v. American Constitutional Law Foundation (1999), 525 U.S Although the United States Supreme Court has not ruled on the constitutionality of prohibiting payment for signature

10 collection on a per-signature basis, a number of federal courts have considered challenges to such laws, with the courts reaching different conclusions. Federal appellate courts in the Second, Eighth, and Ninth Circuits upheld laws that prohibited payments for signature collection on election petitions on a per-signature basis, while the Sixth Circuit Court of Appeals struck down a similar law in Ohio. Additionally, a number of federal district courts have struck down bans on per-signature payments in other states. In light of the differing opinions reached by various federal courts on the constitutionality of laws that prohibit payments on a per-signature basis for signature gathering on petitions, it is unclear whether a court challenge to this bill, if enacted, would be successful. According to the Secretary of State's Election Fraud Investigation Unit (EFIU), between 1994 and 2010, the EFIU opened 240 cases for falsifying petitions, of which 46 were sent SB 168 Page 3 to district attorneys for prosecution, resulting in 33 convictions. Since the EFIU was created in 1994, a larger number of convictions have been obtained for falsified petitions than for any other election crime except fraudulent voter registration. This bill prohibits the payment of individuals on a per-signature basis for collecting signatures on petitions. Typically, in California, individuals who are paid to circulate petitions or register voters on a per-signature or per-piece basis are independent contractors. However, to the extent that this bill forces individuals who are paid to circulate petitions or register voters to be paid an hourly wage, this bill could also result in these individuals being considered employees under California law. As such, the individual, corporation, or group paying individuals to circulate petitions may be required to pay minimum wage, provide workers' compensation insurance and unemployment insurance for its employees, and maintain a payroll system. This may result in higher costs to groups that pay individuals to circulate petitions. In addition, prohibiting payment of individuals on a per-signature basis could increase costs because it may become more difficult to measure the work product of petition circulators. Potential increased costs may be partially offset if, by reducing the incentive to submit fraudulently-obtained signatures, this legislation results in paid circulators submitting fewer such signatures. Supporters of this bill contend that paying signature gatherers on a per-signature basis encourages fraud, because a circulator who collects more signatures will earn more, and is more likely to forge signatures or misrepresent the content of a petition in order to encourage people to sign. Opponents of this bill contend that outlawing payment for signature collection on a per signature basis will "make it prohibitively expensive to do an initiative or a recall and next to impossible to do a referendum," and argue that there is little evidence that per-signature payment methods are more prone to fraud than other methods. This bill is identical to SB 34 (Corbett) of 2009, which was vetoed. In his veto message, Governor Schwarzenegger expressed concern that prohibiting per-signature payments could "make it more difficult for grassroots organizations to gather the necessary signatures and qualify measures for the ballot." SB 168 Page 4 Please see the policy committee analysis for a full discussion of this bill. Analysis Prepared by : Ethan Jones / E. & R. / (916) FN:

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47 A Truth in Governancee report from Citizens in Charge Foundation Copyright 2011, Citizens in Charge Foundationn Citizens in Charge Foundation is the only national transpartisan voter rights group dedicated to protecting and expanding the ballot initiative and referendum process. For more information visit: CitizensInChargeFoundation.org