California Code of Regulations
Title 2 - Administration
Division 6 - Fair Political Practices Commission
Chapter 4 - Campaign Disclosure
Section 18427 - Duties of Treasurers and Candidates with Respect to Campaign Statements

(a) Treasurers. The treasurer of a committee shall verify that to the best of the treasurer's knowledge the committee campaign statements are true and complete and use all reasonable diligence in the preparation of the statements. To comply with these duties the treasurer shall do all of the following:

(b) Candidates with respect to candidate campaign statements. A candidate shall verify that to the best of the candidate's knowledge the candidate's own campaign statements are true and complete and use all reasonable diligence in the preparation of the statements. To comply with these duties the candidate shall be subject to the same duties imposed upon treasurers as stated in subdivision (a).

(c) Candidates with respect to campaign statements of committees they control. A candidate shall verify to the best of the candidate's knowledge that the campaign statements filed by a committee the candidate controls are true and complete and that the treasurer has used all reasonable diligence in the preparation of the statements. To comply with these duties, the candidate shall do all of the following:

(d) Committees where no treasurer is designated. If a committee fails to designate a treasurer as required by Government Code Section 84100, the individual or group of individuals primarily responsible for approving the political activity of the committee, as defined in Regulation 18402.1(b), will be considered the treasurer or treasurers and will be subject to all the duties set forth in subdivision (a).

COMMENT. This regulation sets out the duties of candidates and treasurers only with respect to campaign statements. Among the duties imposed by this regulation on candidates and treasurers with respect to committee campaign statements is to "cause to be checked, and, if necessary, corrected, any information . . . which a person of reasonable prudence would question based on all the surrounding circumstances of which the treasurer [candidate] is aware or should be aware by reason of the treasurer's [candidate's] duties under this regulation and the Act." The circumstances that trigger a duty to inquire under this standard are limited to those circumstances actually known to the candidate or treasurer and to those circumstances the candidate or treasurer should be aware of in carrying out the candidate's or treasurer's duties under the Act and regulation. They do not include circumstances a candidate or treasurer "might" or "should have known" if the candidate or treasurer had gone beyond the candidate's or treasurer's required duties. For example, Mr. Jones gives Mr. Smith $100 in cash and instructs him to write a check to the candidate's controlled committee and to conceal the true source of the contribution. The committee reports the contribution received from Smith. If neither the candidate nor treasurer has knowledge of the questionable nature of the contribution and neither, through performance of their respective duties (such as monitoring campaign records or reviewing campaign statements), could have learned facts that would lead one to question the contribution, the candidate and treasurer have no duty of inquiry with respect to the contribution. There is no duty of inquiry even though Smith would have revealed the true source of the funds if he had been asked.

Once circumstances are known that raise a question concerning the accuracy of information on a campaign statement, an inquiry is required. It is not possible in a regulation to describe with particularity every factual situation that might trigger a duty to inquire because the circumstances that could arise with respect to any particular campaign transaction are endless. For example, a duty to inquire may be triggered in the case of a contribution as a result of the size of the contribution, the reported source, the likelihood of that source making a contribution of the size reported, the circumstances surrounding receipt, or the manner in which the contribution is recorded in campaign records.

The burden of inquiry is likely to fall more heavily upon the treasurer because it is the treasurer, rather than the candidate, upon whom the major record keeping and reporting responsibility falls. Therefore, the treasurer is more likely than the candidate to be the person who, by reason of performance of duties, is aware of or should be aware of facts which would give rise to a duty of inquiry.