10 min read

Reimagining California's campaign finance system

It's time for the state to take practical and technical steps to bring campaign finance reporting into the 21st century.
Reimagining California's campaign finance system

Imagine you are a resident of San Marcos, CA, a city north of San Diego. As the upcoming election approaches, you're interested in reviewing the campaign finance disclosures of candidates to see who they've received money from.

You visit the city's campaign finance website for the 2022 election cycle, and start from the top of the list. You click on the name "Rebecca Jones."

What (eventually) pops up on your screen is a 240-page PDF document. It contains each piece of paperwork that Jones has filed during that cycle, all combined into one file.

You try to press "CTRL+F" to do a keyword search for certain terms in the document. Ah, but because the PDF has not been processed for optical character recognition, you don't get any results. Now, in order to get the information you were hoping for, you'll have to spend half an afternoon combing through this giant document.

This isn't just in San Marcos. It's plenty of other jurisdictions throughout the state.

Having spent a lot of time to researching and analyzing data related to campaign finance for various reasons, I've come to a conclusion: California’s campaign finance apparatus is complicated and confusing.

On one side of the coin, this issue primarily affects the daily life of a narrow set of constituents: a small group of consultants, academics, and researchers, and the investigative and political reporters in the media who track this data.

On the flip side, the purpose of campaign finance laws is to promote transparency and accountability. If it's harder for a journalist to report what's going on, it's harder for the public to understand what's going on.

Here are the declarations the legislature made when implementing the Online Disclosure Act of 1997, which required the state to build an online database to collect campaign finance disclosures from specified (but not all) offices:

(a) The people of California enacted one of the nation’s most comprehensive campaign and lobbying financial disclosure laws when they voted for Proposition 9, the Political Reform Act of 1974, an initiative statute.
(b) Public access to campaign and lobbying disclosure information is a vital and integral component of a fully informed electorate.
(c) Advances in technology have made it necessary for the State of California to develop a new, data-driven online filing and disclosure system that provides public disclosure of campaign finance and lobbying information in a user-friendly, easily understandable format.
(d) Members of the public, including voters, journalists, and researchers, should be able to access campaign finance and lobbying information in a robust and flexible manner, including through searches and visual displays such as graphs and maps.

These are all important principles; yet, as the current campaign finance system is designed, the state, in my opinion, isn't quite living up to them.

Here's the core of the problem: At a statewide level, there are basically two bodies that administer campaign finance rules and regulations. These two bodies are the Fair Political Practices Commission (FPPC), which is in charge of interpreting and enforcing campaign finance laws, and the Secretary of State, which collects and organizes campaign finance data for all political candidates throughout the state.

Any candidate who wants to run for political office in California and plans to raise a minimal sum of money must register a committee with the Secretary of State and is then given a unique FPPC number, which is assigned to the committee ("Jones for San Marcos Mayor 2022").

However, when that same candidate files their required disclosure paperwork related to that committee, they do so with their local jurisdiction, not with the state. The exceptions to this rule are candidates for statewide office, the state legislature, or the Board of Equalization (a public agency that deals with tax-related issues). These candidates file with the Secretary of State, using the office's "CAL-ACCESS" public database. There are some other offices that also file their reports directly with the Secretary of State, but most candidates running for office in California, despite having to register with the Secretary of State, do not file their disclosures with that office.

To illustrate this in real terms, let's say Jane Smith wants to run for City Council. She has to send her initial paperwork that opens her committee to the California Secretary of State. After a few days, her campaign committee gets a unique FPPC number. When her first fundraising deadline comes up, she has to file a disclosure report to detail her donations and expenses. But she doesn't file this with the Secretary of State. She files it with her local city. And she might file it as a digital excel file, easy to analyze and process, or she might file it in person via PDF, requiring a worker in a Clerk’s office to scan it and upload it manually. Even today, there are even candidates who still turn in their reports having written them by hand in pen.

The system is similarly complicated for committees who are reporting independent expenditures leading up to an election. In many jurisdictions, these reports are typically filed as a PDF for each expenditure. Aggregating these figures can be difficult, making it hard to figure out just how much outside spending a given organization made, or a given candidate benefited from.

Some jurisdictions do an excellent job of collecting, organizing, and presenting campaign finance data. Some even make it easy to export a lot of that data for analysis, and some even offer an API, a tool to allow other websites or sources to incorporate that data into their own datasets.

Too often, when trying to find information on a specific campaign, you have to navigate a city or county’s website and spend a lot of time trying to find where the campaign finance information is even kept. When you do find it, it can often be a collection of folders for each candidate, with scanned PDF files that aren't easy to read or analyze (much like the example that began this article).

Some cities may not even post their campaign finance disclosure forms online, forcing you to email the City Clerk's office and hope they can reply promptly. In one recent case, I had to physically visit the City Clerk and take pictures of the physical paperwork in order to obtain the data.

Some jurisdictions attempt to implement a digital interface to allow for users to easily obtain files, but they do so in a way that makes it very difficult to actually find and extract information.

All of this is not efficient and it falls far short of what could be possible in the year 2023.

When the initial wave of campaign finance rules were implemented in California in 1974 (well before the internet), the most practical way for people to be able to review the disclosure forms was to physically visit the location where they were kept. So that's how the law was written – local candidates would report to their local jurisdictions.

However, as both the campaign finance requirements and technology have evolved over time, there seems to be fewer and fewer reasons to retain this balkanized, chaotic approach to campaign finance disclosure.

Frustratingly, this makes it practically impossible to examine a candidate’s data efficiently. It also makes enforcement of existing campaign finance laws difficult, as it requires diligent citizens to manually examine each report, spot an issue, and then take time to file a complaint with the FPPC.

If you were to design a system from the ground up, here's how it might look:

Just like it is now, every candidate for office who planned to raise or spend a certain amount of money would have to open and register a committee with a state agency.

However, instead of reporting to their local agency, a candidate would report their campaign finance activity directly to the state agency, just as candidates for state offices are required to do. There's no reason the existing database can't simply be expanded.

As part of this reporting process, the state should develop an intake process that would make it as easy as possible for treasurers and candidates to report their donations, expenses, and other required data. There would be no PDF forms to fill out or upload. Everything would be digital and in a consistent format for every candidate throughout the state.

Professional treasurers typically handle this work and often have fairly dedicated backend systems in place that allow for easier tracking and reporting to the relevant agencies (if the agency allows it). However, for the large number of first-time or inexperienced candidates who self-report, this system would presumably be a significant improvement.

As a result, any citizen, reporter, or researcher could simply visit the state website and type in the name of the candidate or committee, for any jurisdiction in the state. If the site was designed properly, the visitor could view data for each reporting period, or the aggregate sums of contributions and expenditures for the entire campaign. They could easily look up individual donors or vendors to see if any conflicts-of-interests existed. They could export the data as a spreadsheet, or they could connect to an API to analyze the data in whatever way they wanted. Or the state could build a dashboard for each candidate to display the data in whatever helpful ways they conceive of.

With this new system, questions like the following could then, theoretically, be easily answered with just a couple button clicks:

a) How much did a cable company spend on local elections this past cycle across the state?

b) Who were the most significant individual donors across the state?

c) Which candidates have raised the most for San Marcos City Council?

In addition, this would allow for the creation of more efficient systems by the FPPC to detect potential violations of campaign finance law. A donation that exceeds the limit for a given jurisdiction? A flag would be raised in the database. A report isn’t filed by the due date? A flag would be raised. A committee’s numbers don’t add up? A flag would be raised.

Jurisdictions would simply need to provide their contribution limits (and other rules) to the agency collecting the data to allow the database to capture any violations.

Moreover, if each individual who ran for office also had a unique candidate ID, it would be easier to track campaign finance behavior for each elected official over time. Or, in situations where an elected official has multiple committees open at once, you could get a more holistic view of how much money they’ve been given by a specific donor during a single cycle.

Overall, this system would simplify the process for candidates, organizations, treasurers, and regulators.

It would create a consistent reporting standard that would be easier to understand and file, and it would be far easier to access.

In the future, you could even augment the FPPC staff's capabilities with predictive modeling or AI implementation to detect patterns and anomalies in campaign finance data, raising red flags that might not be detectable with rigid algorithms. This is an approach similar to how credit card companies can analyze vast swathes of data to detect potential fraud in real time.

Some might point out that many jurisdictions have unique rules and enforcement bodies that work either in conjunction with, or separately from, the FPPC. For those who value local control, a statewide database such as this might sound a bit concerning.

This proposed centralized state database would not remove the ability for local jurisdictions to implement and enforce their own rules. The only change would be where the data is stored. Instead of referring to their own internal system to view reports and disclosures, they could access the state database and evaluate the data to ensure it complies with their rules. They could even develop their own flagging system in case they have stricter rules than the FPPC.

Mechanically speaking, this system shouldn't be too difficult to implement.

From the standpoint of the legislature, the law would need to change to require all candidates for offices to file with the existing electronic system via the Secretary of State, not just those currently running for statewide, legislative, or Board of Equalization offices.

From the standpoint of technology, the existing Secretary of State database already exists; the administrators would just need to be sure it could scale to handle an influx of filers and viewers.

At a more advanced level, I and many others would argue that the user interface and experience of the current database could be significantly overhauled; partly to implement some of the more interesting data presentation features I mentioned in this article; partly to improve the usability for first-time candidates to upload their finance data.

The good news is that the state is currently overhauling its existing filing system to conform to some of these ideas. The state's own system is long overdue for an overhaul just from a technical standpoint.

The current iteration of the state's online database was launched a bit more than two decades ago. It currently faces a number of limitations: those entities filing online often run into technical issues. The system doesn't work well with all web browsers or on Mac computers. Also, it doesn't catch mistakes until after someone has already submitted their paperwork. Plus, the system doesn't support online registration and doesn't provide an easy way to view balances or make online payments.

The public also has trouble using the current system. It's not easy to navigate, and it's hard to find specific information because of limited search options. The site doesn't allow users to find out which bills lobbyists are supporting or opposing. And, it's not designed to work well on mobile devices, which is a problem for people who rely on their smartphones or tablets for internet access.

Lastly, the staff who run the system face challenges as well. They often need to find workarounds for things the system can't do, which can lead to mistakes. The system also isn't set up for multitasking, and it doesn't make it easy to access or read reports. When they need to send mass emails, they have to export data and use additional software, making the process more complicated than it needs to be.

That's why legislation was passed into law in 2016 that would overhaul the system. The law requires "the Secretary of State, in consultation with the Commission, to develop and certify for public use an online filing and disclosure system for campaign statements and reports that provides public disclosure of campaign finance and lobbying information in a user-friendly, easily understandable format."

The bad news is that this updated system has been painfully slow to implement. The bill requires "The Secretary of State shall make the online filing and disclosure system developed pursuant to this subdivision available for use no later than February 1, 2019." As of the most recent update, the Secretary of State aims to hire the vendor to build this new system no later than mid-2024. Considering the fact that the Secretary of State's office is less than two hours from the world's greatest collection of technical talent in Silicon Valley, this delay is puzzling.

In conclusion, in order to significantly improve the campaign finance infrastructure for the entire state, two things need to happen:

a) The legislature needs to pass a law requiring all candidates to file via the statewide database.

b) The Secretary of State needs to finally implement the vision that was assigned to them seven years ago.

Based on the amount of time it's taken already, taking these steps is probably easier said than done. But for the sake of improving our archaic campaign finance infrastructure, these steps are critical.