The Political Reform Act: Disclosure, Conflicts & Campaign Finance
What Is the Political Reform Act?
The Political Reform Act of 1974 (Government Code §§ 81000–91014) is California's comprehensive ethics and transparency law. Enacted by voter initiative (Proposition 9), it created the Fair Political Practices Commission (FPPC) and established four pillars of government accountability:
- Campaign finance disclosure — Who gives money to candidates and how it's spent
- Lobbying regulation — Who is trying to influence government decisions
- Conflict of interest rules — Preventing officials from using their position for personal gain
- Governmental ethics — Standards of conduct for public officials
Form 700: Statement of Economic Interests
Who Must File?
Every elected official and public employee who makes or influences governmental decisions must file a Statement of Economic Interests (Form 700). This includes:
- All elected state and local officials
- Candidates for elective office
- Appointed members of boards and commissions
- Designated employees identified in their agency's Conflict of Interest Code
- Consultants who make governmental decisions
What Must Be Disclosed?
| Schedule | Disclosure Category | Details |
|---|---|---|
| A-1 | Investments | Stocks, bonds, interests in businesses (>$2,000) |
| A-2 | Business positions and investments in business entities | Investments and positions in businesses |
| B | Real property interests | Real property in the jurisdiction (>$2,000) |
| C | Income | Income received (>$500) |
| D | Gifts | Gifts received (>$50) |
| E | Travel payments | Travel, lodging, and food payments |
Filing Deadlines
| Filing Type | Deadline |
|---|---|
| Annual statement | April 1 each year |
| Assuming office | Within 30 days of assuming office |
| Leaving office | Within 30 days of leaving office |
| Candidate statement | With declaration of candidacy |
Gift Limits
The FPPC sets a biennial gift limit. For 2025-2026, the limit is $590 from a single source per calendar year. Gifts include meals, tickets, travel, and anything of value.
Conflict of Interest Rules
The Disqualification Standard
Under the Act, a public official must disqualify (recuse) themselves from participating in a governmental decision if it is reasonably foreseeable that the decision will have a material financial effect on:
- Any of the official's economic interests (investments, real property, income sources)
- The official's personal finances
The Eight-Step Analysis
The FPPC uses an eight-step analysis to determine if disqualification is required:
- Is the person a public official?
- Is the official making, participating in, or influencing a governmental decision?
- Does the official have an economic interest that could be affected?
- Is it reasonably foreseeable the decision will affect the interest?
- Will the effect be material (using FPPC's materiality standards)?
- Is the effect distinguishable from the effect on the public generally?
- Has the official's participation been legally required?
- Does the "rule of necessity" apply?
Materiality Standards
The FPPC has established specific materiality thresholds:
- Business entities: A financial effect of $1,000 or more, or a 5% change in assets/liabilities
- Real property: Located within 500 feet of the project boundary, or a change of $10,000+ in value
- Income sources: An effect of $500 or more in income or expenses
Campaign Finance
Contribution Limits
California sets contribution limits for state candidates:
| Office | Per Election |
|---|---|
| Governor | $36,400 |
| Other statewide offices | $9,100 |
| State Senate | $5,500 |
| State Assembly | $5,500 |
| Local offices | Varies by jurisdiction |
Disclosure Requirements
All campaign committees must file periodic reports disclosing:
- All contributions of $100 or more (with contributor name, address, occupation, employer)
- All expenditures of $100 or more
- Late contributions of $1,000 or more within 90 days of an election (24-hour reporting)
FPPC Enforcement
The FPPC has authority to:
- Investigate complaints and conduct audits
- Issue warning letters for minor violations
- Impose administrative penalties up to $5,000 per violation
- Refer cases to the Attorney General or District Attorney for criminal prosecution
Criminal Penalties
Knowing or willful violations of the Act can result in:
- Misdemeanor: Up to 6 months in jail and/or $1,000 fine
- Felony (for certain violations): Up to 3 years in state prison
How It Connects to the Levine Act
The Levine Act (§ 84308) is actually a section within the Political Reform Act. While the broader Act covers all conflicts of interest based on financial interests, the Levine Act specifically addresses the intersection of campaign contributions and quasi-judicial proceedings (permits, licenses, contracts, entitlements).
| Feature | Political Reform Act (General) | Levine Act (§ 84308) |
|---|---|---|
| Trigger | Any financial interest | Campaign contributions specifically |
| Decision type | All governmental decisions | Quasi-judicial proceedings only |
| Threshold | Materiality standards | $500 contribution threshold |
| Remedy | Disqualification | Disclosure + recusal + return |
Resources
- FPPC Official Website
- Form 700 Filing Information
- Conflict of Interest Rules
- Campaign Finance Disclosure
- FPPC Advice Line: 1-866-ASK-FPPC (866-275-3772)