Part 11 — LEGAL DEFENSE FUNDS

It is the intent of the City Council of the City of San José in enacting this part to permit officeholders and candidates to establish legal defense accounts pursuant to Government Code Section 85304.5(a), as may be amended, and to place limits on the amount individuals may contribute to an officeholder or candidate legal defense account in order to prevent the perception by the public that such contributions may give rise to undue or improper influence over elected officials.

(Ords. 29792, 30768.)

The definitions set forth in this section shall govern the application and interpretation of this part.

A.

Candidate. "Candidate" means a candidate for elective office in the City of San José.

B.

Legal Defense Account. "Legal defense account" means the bank account established at a financial institution located in the State of California pursuant to Government Code Section 85304.5(a), as may be amended.

C.

Legal Defense Fund. "Legal defense fund" means money in a legal defense account.

D.

Officeholder. "Officeholder" means an elected officer in the City of San José.

E.

Political Reform Act. "Political Reform Act" means California Government Code Section 81000 et seq., as may be amended.

(Ords. 29792, 30768.)

A.

An officeholder or candidate may establish a legal defense account by depositing funds into a bank account separate from any other bank account held by the officeholder or candidate.

B.

The officeholder or candidate shall establish a controlled committee for the legal defense account by filing a statement of organization pursuant to Government Code Section 84101, as may be amended.

The statement of organization shall contain a description of the specific legal dispute or disputes for which the account is established, and shall be amended pursuant to Government Code Section 84103, as may be amended, as legal disputes are either resolved or initiated.

The words "legal defense fund" and the officeholder's or candidate's last name shall be included in the committee name.

The officeholder or candidate, and the treasurer of the legal defense committee, are subject to recordkeeping requirements specified in Government Code Section 84104, as may be amended, and shall keep separate detailed accounts, records, bills, and receipts, for each legal proceeding including documentation to support the basis and timing for raising legal defense funds.

(Ords. 29792, 30768.)

A.

Contributions to the legal defense account are limited to one thousand one hundred dollars per calendar year from any person to any officeholders or candidate. This contribution limit will automatically be adjusted to equal the amount as the mayoral candidate limit pursuant to Section 12.06.210.B, as amended pursuant to Section 12.06.210.D.

B.

The contributions to a legal defense account are limited to an amount reasonably calculated to pay for attorney's fees and other related legal costs for the legal proceeding or proceedings identified in the

statement of organization.

(Ords. 29792, 30768.)

A.

Legal defense account contributions are not campaign contributions for purposes of this chapter. Such contributions are solely intended to pay for attorney's fees and other legal costs related to the defense of the officeholder or candidate in a particular civil, criminal or administrative enforcement proceeding, arising directly out of the conduct of an election campaign, the electoral process, or the performance of the officeholder's governmental activities and duties.

B.

Contributions to the legal defense account may not be solicited or received until and unless the officeholder or candidate:

Reasonably concludes that a government agency has commenced an investigation which may lead to a civil, criminal, or administrative enforcement proceeding or the agency formally commences the proceeding, whichever is earlier; or

A private person has filed a complaint in a civil proceeding.

C.

Contributions must not be expended for fundraising, media or political consulting fees, mass mailing or other advertising, payment or reimbursement for a fine, penalty, judgment or settlement, or payment to return or disgorge contributions made to any other committee controlled by the officeholder or candidate.

(Ords. 29792, 30768.)

An officeholder or candidate, and any person or committee on behalf of an officeholder or candidate, is hereby prohibited from establishing an account established under the Political Reform Act for the solicitation and expenditure of legal defense funds, except as provided in this chapter. Nothing in this section prohibits an officeholder or candidate from spending personal funds for legal defense purposes.

(Ords. 29792, 30768.)

A.

An officeholder or candidate who is a candidate in an upcoming city election shall disclose his or her legal defense fund activity on campaign statements filed in accordance with the schedule prescribed by the Political Reform Act and Chapter 12.06 for other candidate controlled committees in the city.

B.

An officeholder or candidate who is not a candidate in an upcoming city election shall disclose his or her legal defense fund activity on campaign statements filed quarterly, as follows:

No later than April 30 for the period of January 1 through March 31.

No later than July 31 for the period of April 1 through June 30.

No later than October 31 for the period of July 1 through September 30.

No later than January 31 for the period of October 1 through December 31.

C.

The disclosures required under this section shall be made to the city clerk in accordance with the requirements for campaign disclosure statements as described in Section 12.06.910 et seq. of this Code.

(Ords. 29792, 30768.)

The legal defense account must be terminated, and all remaining funds returned or disposed of, within ninety days of the date the last legal dispute for which the account is established has been resolved.

(Ords. 29792, 30768.)

Funds remaining in the legal defense account following payment of all attorney's fees and other related legal costs for which the account was established shall be distributed in the following manner:

A.

Returned to the contributors on a pro rata basis; or

B.

Transferred to the general fund of the City of San José.

(Ords. 29792, 30768.)