AB 20: California’s Proposed Clean Money Act

On December 7, the first day of the California Legislature’s 2021-22 Session, Assembly Members Alex Lee and Ash Kalra introduced Assembly Bill 20, which would enact the Clean Money Act of 2021. AB 20 would do this by amending Section 85322 to the Government Code, which would be an amendment to the Political Reform Act of 1974 (which requires a two-third vote in each house of the Legislature for passage).

The proposed Clean Money Act of 2021 would prohibit a candidate for elective office from receiving a contribution from a business entity, and a business entity from making a contribution to a candidate for elective office. The authors state that California should follow the lead of the federal government and the laws of 22 other states that already ban corporate campaign contributions.

In addition, AB 20 states the intent of the Legislature to enact legislation to create a public financing system for elections within the state.

Section One of the bill would name the act as the as the “Clean Money Act of 2021.”

Section Two of the bill would make eleven legislative findings and declarations in support of the bill, including that “there is great potential for corporate special interests to manipulate the interests and priorities of elected officials and candidates throughout the state, such that these interests and priorities do not align with the will of their constituents or the people of California.” In addition, “corporations exist for the purpose of making profit, and thus their political activities are fundamentally in the interest of increasing said profits by giving monetary incentives for favorable policy.”

In addition, “as corporations have an undeniable interest in matters before the state government, as well as an incontrovertible influence as large contributors, it is evident that a ban on their direct contributions to campaigns for elective office within the state is necessary.” As a result, “in order to curb actual corruption and the appearance of corruption of our government by corporate contributions, it is incumbent upon the Legislature to prohibit direct contributions to political campaigns in the state by corporations.”

Section Three of the bill would add the following provisions to Government Code Section 85322:

(a) Notwithstanding Section 85301, a business entity, as defined in Section 82005, shall not make a contribution to a candidate for elective office.

(b) A candidate for elective office shall not accept a contribution from a business entity, as defined in Section 82005.

Section Four of the bill states legislative intent to enact legislation to create a public financing system for elections within the state.

AB 20 is likely to get its first policy committee hearing in March 2021.