California Skirts Mandated Checks on Lobbyists Spending Millions

California regulators are conducting almost none of the audits of lobbyists and their clients that are required under a landmark Watergate-era ethics law, even as the state’s influence industry booms with hundreds of millions of dollars spent annually.

An investigation by Bloomberg Government found only five audits were completed between 2019 and 2025. The tally amounts to less than 1% of the lobbying audits required under the state’s Political Reform Act, which was approved by voters in 1974 to boost oversight of money in California politics and had been seen as a possible model for other states.

Lobbying groups poured more than $2 billion into swaying state lawmakers in Sacramento acting on issues from green energy and oil to labor and health policy since 2019, according to data from Open Secrets.

State law requires randomly auditing a quarter of all lobbying firms and their clients every other year. If the law had been followed, more than 1,200 audits would have been conducted over 2019 to 2025.

“It’s a complete abdication,” former state Sen. Steve Glazer (D), who authored unsuccessful legislation to overhaul the auditing process, said in an interview.

The Franchise Tax Board, the regulator responsible for the reviews, previously said it lacks the resources to complete more audits and asked Gov. Gavin Newsom’s administration for more funding in 2024, a request that was denied.

The state’s lobbying corps is reeling from a scandal that could become a liability for Newsom, a potential Democratic presidential candidate in 2028. Newsom has not been linked to any wrongdoing, but the scandal could become political fodder for his opponents.

Federal prosecutors have accused Newsom’s former chief of staff, Dana Williamson, of working with a prominent, well-connected lobbyist to siphon money from a campaign account. The state had selected the firm run by that lobbyist, Greg Campbell, for an audit in 2023—which would have covered some of the years of the alleged scheme.

But the audit was never completed and it is unclear if it was ever opened. Campbell pleaded guilty to related charges in December, though his lawyer has maintained the offenses are unrelated to his lobbying businesses. Williamson has denied wrongdoing and is fighting the charges against her.

“The governor’s most trusted aide is now caught up in corruption charges. This is something people need to see is taken head-on,” Assemblymember David Tangipa (R), a member of the budget subcommittee overseeing funding for political audits, said.

Lack of Audits

A spokesperson for the governor said the unit trained to audit lobbying firms and their clients lost staff through attrition but that the state is hiring and retraining personnel to perform this work.

In the meantime, the state has conducted hundreds of audits of campaigns—which are already mandated under the Political Reform Act—since 2019, the governor’s office noted.

“Regardless, 22 audits of lobbying firms are currently underway, and it is our expectation more will ramp up in the coming year,” Tara Gallegos, the governor’s chief deputy communications director, said.

That would still leave a substantial backlog after officials selected 230 lobbying firms and clients for audits last year alone.

“It remains a challenge, but we continue to work through these cases as efficiently as possible,” Andrew LePage, a spokesperson for board, said in a statement.

California’s Political Reform Act requires the Fair Political Practices Commission, the state ethics watchdog, to randomly select 25% of lobbying firms for audits by the Franchise Tax Board each odd-numbered year. The commission also selects 25% of what are known as lobbyist employers—companies and organizations that hire lobbyists—for auditing. All told, only five audits of either lobbyists or the companies who hired them were completed.

Bloomberg Government reviewed completed audits from 2019 through 2025 compiled by the Secretary of State’s Office.

The tax board was tasked with auditing 472 lobbying firms during that time frame but only reported two have been fully done. It only finished three audits of lobbying clients, though 782 were selected for review during that time.

The audits check the accuracy of routine lobbying disclosures filed by lobbyists, lobbying firms, and the companies that employ them over the preceding two years.

None of the five audits completed since 2019 identified any wrongdoing.

“While a random audit is always a lot of work (given the paperwork involved) we found the audit process to be vigorous and extensive, but fair, and we were pleased that GGC passed the audit successfully,” David Gonzalez, president and CEO of Gonzalez Government Consulting, wrote in a statement. The firm was one of the few audited since 2019.

The law imposes punishments for those who are caught running afoul of California’s regulations in audits, but there’s no punishment doled out to the Franchise Tax Board for failing to complete them.

James Thurber, a professor at American University who studies lobbying, said it’s important to have effective oversight of lobbying because “if you don’t have transparency in the law, or enforce it, people sort of push the edges.”

“Ultimately, it’s the state legislature that has oversight that can threaten the power of the purse, cut off money for the agency, redirect the agency to do something,” Thurber said. “But if the state legislature doesn’t care that much because they don’t want that much transparency, even though they may say they do, then they’re not going to push that.”

Division of Labor

Lawmakers have rejected proposals in recent years to overhaul the process. Glazer, the former state senator, filed legislation in 2023 and again in 2024 to shift responsibility for the audits to the Fair Political Practices Commission.

The commission is the state’s ethics agency but the Franchise Tax Board—primarily responsible for collecting personal and corporate income taxes—is responsible for the audits in an arrangement that is a holdover from the Watergate era in which the Political Reform Act was born.

To critics, it’s a major shortfall of the state’s oversight regime.

The law’s authors were concerned about concentrating oversight of lobbying and campaign finance in just one agency.

“If one agency fell down, other agencies would be able to pick up the slack,” Bob Stern, who helped draft the original law in the 1970s, said.

Stern expressed misgivings about the arrangement today, however, arguing Franchise Tax Board hasn’t treated the audits as a priority.

“If I were doing it over again, I would have the FPPC do the audits,” Stern said, referring to the Fair Political Practices Commission.

The commission backed the idea, and the measures to shift audit responsibilities passed the state Senate, but both stalled in the Assembly amid opposition from lobbyists themselves and their trade association, the Institute of Governmental Advocates, which argued the Franchise Tax Board is better equipped as a tax agency to conduct audits.

Tasking one agency with audits and a different one with enforcement creates an important separation of powers, according to Katherine Brandenberg, a lobbyist who chairs the group.

“We don’t want judge, jury, and executioner all in one,” Brandenberg said.

The Franchise Tax Board sought an additional $2 million annually in September 2024 and 14 new staff to handle political audits. That would have nearly doubled the agency’s staffing and funding for political audits.

“FTB’s inability to adequately administer the program hinders the Political Reform Act’s goal of instilling public trust of California’s elected officials,” the agency said.

Newsom’s administration denied the request and a proposed budget the governor released in January also does not provide additional funding due to projected deficits.

“Additional resources for the specific workload you reference weren’t included in the Governor’s Budget due to competing budget priorities in a challenging budget environment,” H.D. Palmer, a spokesperson for the state’s Department of Finance, said.

Glazer, the former lawmaker who has pushed for overhauling the law, is skeptical more funding for the Franchise Tax Board would fully fix the shortfall in auditing.

“Even if more money was allocated to the FTB, they don’t care. This is an obligation they’ve been able to skirt for a decade or more,” he said.

Steven Maviglio, a long-time Democratic strategist and Newsom critic, was in favor of more oversight of the lobbying and influence industry, but said “there’s no incentive right now among lawmakers to welcome that kind of review” when “nothing good can come out of it for them.”

“The problem here is we have laws, but they’re not enforced, so therefore they get ignored,” Maviglio said.

State Sen. Melissa Hurtado (D), who chairs a subcommittee overseeing the tax board’s budget, said legislators should look more closely at the issue.

“The audit system at the FPPC and FTB is beyond broken, and the lack of momentum to repair it is deeply concerning,” she said in a statement.

Tangipa, the Republican vice chair of the Assembly Budget Committee, said he is still interested in authoring legislation to shift the responsibility for audits to the Fair Political Practices Commission.

“People need trust in their government, and it has been violated,” he said.