Proposal: GPCA Governance - GPCA Fiscal Policy Violations & California Fair Political Practice Campaign Finance Reporting Violations

GPCA Governance: GPCA Fiscal Policy Violations & California Fair Political Practice Campaign Finance Reporting Violations

Section 1: Kern County GPCA General Assembly, March 2017

The Green Party of California (GPCA) Campaign Finance Reform plank (http://www.cagreens.org/platform/campaign-finance-reform) states that the GPCA supports “prompt and full disclosure of all permissible contributions on Federal, State, and local government levels.”  The GPCA Fiscal Policy (http://www.cagreens.org/fiscal-policy) states in Article  1. Purpose, to:
   1-1.2 Promote clarity, accountability and transparency in the Party's fiscal and financial practices, including those of its committees, working groups, officers, employees and contractors.
   1-1.3 Promote financial practices by the Party that are in compliance with all applicable laws.

The GPCA Fiscal Policy states in Article  9. Financial Management, Section 9-1 Bank Accounts that funds must flow through GPCA bank accounts:
   9-1.1 All funds contributed to or made payable to the GPCA, whether by cash or negotiable instruments, shall be placed on deposit in the principal accounts of the Party, which shall be maintained by the state Treasurer.

Violation #1-1: Over $5,000 in registrations was collected at the March 2017 GPCA General Asembly in Bakersfield from the over 100 people in attendance, but only just over $300 in cash and a check was turned over to Tim Laidman, who at that time was a member of the GPCA Finance Committee. This occured only a week before the end of June 2017 California Fair Political Practices (CA-FPPC) filing period, months after the Kern County General Assembly. Laidman deposited these funds into the GPCA’s bank accounts. However the remainder of funds received at that General Assembly have not been accounted for, nor reported to the CA-FPPC in violation of state law. Where the money went has still not been revealed, despite inquiries to the GPCA Finance Committee and on the GPCA Forum email list by Tim Laidman (and several others in the party) seeking to get a clear accounting of these finances.

Violation #1-2: It has been standard GPCA party practice for years to run the General Assembly registration process through the GPCA Nationbuilder account for the following reasons: 

     1. it automatically sends the registration fees into the party’s bank account and creates a transparent record of those funds, that the party can use to comply with state law, and 

     2. it automatically enters all of the information on the registrants into the party’s data base, which is used to include GA attendees in the GPCA Inform List and for other internal purposes.

However, the March 2017 General Assembly registration process was run through EventBrite, against the explicit direction of then GPCA Treasurer Doug Barnett, who made the GPCA's standard pratice clear to the GPCA State Meeting Planning Committee and to the Kern County site organizers.  EventBrite has none of the above mentioned beneficial features, so now this information about the GPCA's finances and the Kern County General Assembly attendees is missing, along with the registration money.

Violation #1-3: At the Kern General Assembly, people were told to re-endorse their checks from going to GPCA to another entity.  The GPCA Treasurer at the time - Doug Barnett -  did not authorize re-endorsing checks to another entity other than the GPCA. It is unknown if these checks were ever deposited and to what accounts. Laidman has determined that none of these checks were deposited in any bank account, because they were endorsed in a way that prevented their deposit. Laidman's attempts to obtain information about these checks from the Kern County Green site organizer have been unsuccessful - she denied any knowledge of the situation and asked that she never be contacted again about the matter.  This individual is no longer a member of the Green Party.

None of these decisions to break from California state law, GPCA Fiscal Policy and/or GPCA standard practice were made by the GPCA state Coordinating Committee, GPCA Finance Committee, GPCA Treasurer nor any other official body of the GPCA.  Who made these decisions has not been revealed. Because the Kern County GPCA General Assembly was a state meeting of the GPCA, therefore under California state law (and under the GPCA's own Fiscal Policy and standard practices), the GPCA needs to account for and report the funds received.  In terms of what funds are reported, it does not make a difference where there were expenses incurred against the money received.  All GPCA income must be reported to the CA-FPPC; and according to long-standing GPCA policies and practices, income from GPCA events is deposited into GPCA accounts and GPCA expenses are paid by the GPCA Treasurer.  To treat the reporting of funds received in any other manner would understate the funds received, and thus violate California state campaign finance law.

Unless the money raised at the Kern County GPCA General Assembly is legally reported, the GPCA and/or Greens in Kern County could face substantial FPPC fines relative to GPCA finances, and more than the money taken in by the GPCA at the Kern County General Assembly in the first place. 

The fee structure for fines by the CA-FPPC is for each day that a report is late, and under California state law, the GPCA must file both written and electronic forms. The fine is $10 per day for EACH or $20/day. It been 18 months since the Kern GA or over 500 days. That’s $10,000. But that doesn’t include overlapping report dates. The GPCA must file semi-annually twice a year, plus file monthly during and special elections. That could easily more than double the fines, dwarfing the GPCA's available funds, and even the GPCA's potential funds should it begin fundraising successfully again, after two years of barely raising any money through direct fundraising.

The GPCA June 2018 General Assembly accepted an amendment to the budget proposal to perform an audit of the Kern County income and expenses.  No action has been taken on this since.

Proposal:  That the General Assembly direct the GPCA Treasurer and Finance Committee to complee an audit of Kern County income and expenses and to file all appropriate financial reports with the California Secretary of State and the California Fair Political Practices Commission by December 31, 2018.

Reference: Minutes of the GPCA Finance Committee Meeting of October 29, 1017:
   ATTENDEES: Victoria Ashley – Liaison, Co-co  (8/8/2016 - 8/2018), Maxine (Mica) Daniel – Co-co (1/23/2016-1/2018), Ruscal Cayangyang – Treasurer (8/3/2015-8/2017), Tim Laidman – (1/2016-1/2018), Marla Bernstein - (11/9/2015-11/2017), Bob Marsh – (2/2017 – 2/2019), Quinton Crawford  – (9/2017-9/2019), Doug Barnett, Former Treasurer
ABSENT: Frank Lambert  – (9/2017-9/2019), Gloria Bram
   AGENDA
   1.  Approve Sept 28th Meeting Minutes
​   Approved by consensus with minor changes.
   2.  Agenda approval
​   Tim - Proposes we discuss Kern County GA finances again, states, “We’re at great legal risk”, “We’ve talked about it and nothing has been done,” “The fines would be over $5k,”, “we’ve violated all the bylaws,” etc.
​   Mica - The statement that the money came into the GPCA is not correct.  Kern has to deal with that.  Only the monies that came in through the door went to GPCA and only those came in to us.
​   Bob - It has nothing to do with the GPCA because the state party did not receive funds for GPCA.  It went to Kern County.  They are organized as a not for profit association.  Whether or not that’s correct, because we didn’t get the money, it has nothing to do with the GPCA.
​   Agenda approved without Kern County item.

Section 2: San Joaquin County GPCA General Assembly, March 2017

Background: GPCA Bylaws 7-5.1 Draft Agenda (http://www.cagreens.org/bylaws/2016-07-03#Section_7-5_Meetings) require that a draft agenda for each GPCA General Assembly be distributed to each active GPCA County Organization at least 42 days before the General Assembly. 

GPCA Fiscal Policy Article 5 Budget (http://www.cagreens.org/fiscal-policy#Article_5._Annual_Budget) requires that a draft budget be included with the draft agenda, and that the draft budget include a variety of documents, as summarized in GPCA Fiscal Poilcy Section 5-4 Draft Budget (http://www.cagreens.org/fiscal-policy#Article_5._Annual_Budget), including an attached balance sheet and statement of revenue and expenditure from the most recently completed fiscal year and a statement of the year-to-date and a projected year-end total of the current fiscal year.

GPCA Fiscal Policy Article 5, Section 5-3 Budget Requests (http://www.cagreens.org/fiscal-policy#Article_5._Annual_Budget) describes a process wherein the Budget Committee and Finance Committee must work together in the draft budget preparation process, and involve the Standing Committees and Working Groups in responding to their draft budget allocations, and that the Finance Committee must be the final body that produces and proposes the draft budget to the General Assembly. Part of the reason that the Finance Committee is the final entity responsible for proposing the draft budget, is to create a separation and a balance of power which prevents one person from managing all the finances of the party without significant interaction with others.

GPCA Bylaws 7-5.6 Minutes (http://www.cagreens.org/bylaws/2016-07-03#Section_7-5_Meetings) states that the Coordinating Committee has the responsibility to ensure that minutes are taken at each General Assembly and that the minutes shall record decisions-taken (including whether by consensus or by roll-call vote) and the text of all proposals, including amendments.

Violation #2-1: The GPCA Coordinating Committee did not approve a draft budget until the Monday before the San Joaquin General Assembly, only five days before the start of the General Assembly, violating GPCA Bylaws. No copy of the draft budget was circulated on-line to GPCA County Organizations in advance of the General Assembly http://www.cagreens.org/ga/2018-06/agenda, violating both GPCA Bylaws and transparency to GPCA County Organizations, depriving them of the ability to review and debate the draft agenda in advance of the meeting, and meaning there is no on-line record available to Greens across California of what was the proposed draft budget.

Violation #2-2: The GPCA FY 2018-2019 Draft Budget proposal was not made available to delegates at the beginning of the San Joaquin General Assembly. Instead GPCA Treasurer Ruscal Cayangyang asked to move the budget item to the afternoon to have enough time to complete his Powerpoint presentation and to print copies of the budget proposal, which was then only handed out for the first time to delegates in attendance at the beginning of the afternoon session, and not made available in electronic form to delegates at home.

Violation #2-3: The GPCA FY 2018-2019 Draft Budget was not created by the process described in the GPCA Fiscal Policy.  No Budget Committee was formed to participate in the draft budget creation process as required in the GPCA Fiscal Policy (nor was one created for the GPCA FY 2017-2018 Draft Budget), nor was the draft budget produced and proposed by the Budget Comittee as required in the GPCA Fiscal Policy 4-1: "The Budget Committee shall prepare and present an annual draft budget to the General Assembly" (http://www.cagreens.org/fiscal-policy#Article_4._Budget_Committee). Instead the draft budget was produced, proposed and presented by the GPCA Treasurer in violation of GPCA Fiscal Policy - and in so doing, creating a significant conflict of interest, with the Treasurer both creating the budget and making the disbursals. The purpose of GPCA Fiscal Policy 4-1 is to create a separation and a balance of power which prevents one person from managing all the finances of the party without interaction with others.

Violation #2-4: As of October 1, 2018 draft minutes from the San Joaquin General Assembly are still not posted to the GPCA website http://www.cagreens.org/ga/2018-06/minutes - nor have they been from the previous GPCA General Assembly from November 2017 in Ventura County.  As a result, there is no on-line record available to Greens across California of what GPCA budget was approved at the San Joaquin General Assembly, denying any finacial transparency and accountabilty to 99% of all GPCA members.

Violation #2-5: As part of the FY 2018-2019 Draft Budget proposal presentation, GPCA Treasurer Cayangyang proposed to change the GPCA's Fiscal Year from July 1 to June 30, to the calendar year January 1 to December 30. However the GPCA Treasurer has no authority to make such a proposal under GPCA Bylaws. Even if the Treasurer did have such authority, such a proposed change to the GPCA Fiscal Policy was not part of the approved agenda. Even if the proposed change to the GPCA Fiscal Policy was part of the approved agenda (and the Treasurer had the authority to propose it), changes to the party's governing documents are first required to be submitted to the Bylaws Committee under GPCA Bylaws Article 13. Status and Amendment of GPCA Governing Rules (http://www.cagreens.org/bylaws/2016-07-03#Article_13-2_Amendment), and this text was not submitted to the Bylaws Committee.  Therefore the proposed bylaws change was passed in conflict with GPCA Bylaws and thus is invalid.

Violation #2-6: The FY 2018-2019 Draft Budget proposal contained insufficient data for informed decision making in violation of GPCA Fiscal Policy 5-4.5; specifically missing  any data as to actual income and expenses for any period at all. There was no report of actual data for the current fiscal year or any prior fiscal years to use as a reality check on the proposed budget. It included no actual figures whatsoever. In past year’s budget proposals actual financial data was included for several years and certainly including the current fiscal year for comparison purposes, all of which is necessary information for sound financial decision making

Violation #2-7:  The FY 2018-2019 Draft Budget for IT expenses contained inaccurate numbers for anticipated IT expenses. In the budget passed at the San Joaquin General Assembly, there was no IT funding included to complete the 2018 calendar year, and only $4500 was allocated for all of 2019. However now that the GPCA has abandoned the previous practice of paying a full year in advance in order to receive a 20% annual discount, the monthly cost for Nationbuilder rises to $518/month, which the GPCA Finance Committee decided to spend at its July 2018 meeting - meaning the General Assembly never got to consider this question.  With only $4500 available for 18 months, and costs of $518 x 18 months = $9,324, this blows a hole in the IT budget without leaving any funds for hosting the GPCA server, which is one of the top three expenses mandated to be paid under GPCA Fiscal Policy 7-2.3 Expenditures when funds are scarce (http://www.cagreens.org/fiscal-policy#Article_7._Expenditures).

Furthermore with less than $8,500 left in GPCA accounts as of the September 2018 Finance Committee minutes, with other expenses likely to draw down GPCA funds during the next 18 months, with the GPCA having raised a tiny sum via its direct fundraising since the summer of 2016, with GPCA facing over $7,000 in existing CA-FPPC fines and possibly another $5,000+ in fines as a result of not reporting the Kern County income, the party faces running out of money at some time during the 18 month budget period anticipated under the FY 2018-2019 Draft Budget, yet there was no discussion of this in the draft budget.

Reference: Finance Committee minutes, Thursday July 26th, 2018, 8 – 9:00 pm

Finally it must be mentioned that even though a requirement for an internal audit of various aspects of GPCA finances - including the unreported $5,000+ from the Kern County General Assembly -  was included in the approved FY 2018-2019 Draft Budget, as of October 1, 2018 - no audit has been undertaken. Since no draft minutes have been sent for approval to the Standing General Assembly, it isn't even possible to see the terms and timing of the audit proposed as recorded in the GPCA minutes.