AB 1736 amends Government Code Sections 86205 and 86206 to extend the Political Reform Act’s existing prohibition on creating a “fictitious appearance” of support or opposition to proposed legislation or administrative action to lobbyist employers (in addition to lobbyists and lobbying firms). It also revises the placement‑agent exception so payments to SEC‑registered placement agents remain allowed except where they would run afoul of the Act’s prohibitions.
The practical effect is to put employers who hire or contract for lobbyists on the hook — potentially criminally — for orchestrating deceptive communications that impersonate real people or fabricate public sentiment. That raises new compliance and risk‑management obligations for corporations, nonprofits, and other organizations that use lobbyists, while leaving intact a limited payment exception for regulated placement agents subject to SEC and FINRA oversight.
At a Glance
What It Does
The bill expands the ban on creating fictitious appearances to cover lobbyist employers as well as lobbyists and lobbying firms, and it clarifies that the existing placement‑agent payment exception does not override the Act’s prohibitions. Violations remain punishable as misdemeanors under the Political Reform Act.
Who It Affects
Businesses, nonprofits, trade associations, and other entities that employ or contract for lobbyists; lobbying firms and individual registrants; placement agents and investment managers that rely on the statutory exception; and enforcement bodies that administer the Political Reform Act.
Why It Matters
By making employers directly accountable, the bill shifts compliance duties upstream from contract lobbyists to their clients and narrows a technical loophole around placement‑agent fees. That changes how organizations manage advocacy, vendor contracts, and internal controls around purportedly grassroots communications.
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What This Bill Actually Does
Current California law already bars lobbyists and lobbying firms from attempting to manufacture the appearance of public support or opposition — for example, by sending letters or orchestrating communications in the name of fictitious people or using a real person’s name without consent. AB 1736 amends that framework so the same prohibition also applies to the lobbyist employer — essentially the person or entity that hires or pays lobbyists.
Concretely, the bill inserts language making it unlawful for a lobbyist, a lobbying firm, or a lobbyist employer to create or try to create a fictitious appearance of public favor or disfavor about pending legislative or administrative actions, or to cause communications to be sent in the name of a fictitious or unwitting real person. That shifts potential legal exposure from only registered lobbyists and firms to the organizations that direct or fund them.The bill also alters the text of Section 86206 to preserve the placement‑agent payment exception for SEC‑registered, FINRA‑regulated placement agents (as defined in Section 82047.3) but makes clear that this exception does not authorize payments that would otherwise violate the revised prohibitions in Section 86205.
In practice, that means placement‑agent fees aren’t a blanket carve‑out for behavior that amounts to deceptive astroturfing.Finally, AB 1736 includes the standard Legislative declaration that the change furthers the Political Reform Act’s purposes, notes the criminal sanctions already attached to violations (misdemeanor exposure), and contains the customary reimbursement clause explaining that additional local costs arise because the bill changes the scope of an existing crime. Together, those elements create new compliance touchpoints for in‑house legal teams, outside counsel, and government‑relations staff who must now audit employer conduct as well as lobbyist behavior.
The Five Things You Need to Know
The bill amends Government Code Section 86205 to add lobbyist employers to the list of actors prohibited from creating a fictitious appearance of public favor or disfavor.
Section 86205’s prohibition covers sending communications in the name of a fictitious person or in the name of a real person without that person’s consent.
AB 1736 revises Section 86206 to preserve the placement‑agent payment exception for placement agents registered with the SEC and regulated by FINRA, but exempts no conduct that would violate the newly clarified prohibitions in Section 86205.
Violations of the Political Reform Act remain punishable as misdemeanors; the bill notes this change creates a state‑mandated local program but declares no state reimbursement is required under the cited constitutional provision.
The bill expressly states the Legislature finds the amendments further the Political Reform Act’s purposes, triggering the act’s required legislative standard for amendments.
Section-by-Section Breakdown
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Extends the 'no fictitious appearance' ban to lobbyist employers
This amendment reorganizes subsection language and inserts employer liability into the list of prohibited actors. Practically, it makes the entity that employs or contracts for lobbyists — not just the registered lobbyist or firm — directly subject to the ban on creating artificial public sentiment or sending communications under false or unauthorized names. That means employers can be investigated or charged where they direct or tacitly approve astroturf campaigns handled by contractors.
Clarifies placement agent payment exception is limited
Section 86206 retains the existing carve‑out allowing payment for placement‑agent services when the agent is SEC‑registered and FINRA‑regulated, cross‑referencing the statutory definition in Section 82047.3. Importantly, the bill adds language making that exception subject to the prohibitions in Section 86205, which prevents parties from relying on the placement‑agent rule to shield deceptive communications or contingent payments that would otherwise be unlawful.
Reimbursement clause tied to criminalization
This is a technical conformity provision: because the bill expands or changes the definition of an offense under state law, it triggers the state’s mandate/reimbursement analysis. The section asserts no state reimbursement is required under Article XIII B because the costs stem from the change in criminal law. It does not alter penalties themselves, only who can be charged.
Legislative declaration that the bill furthers the Act
The Legislature declares the amendment advances the Political Reform Act’s goals, a procedural step the Act requires for substantive legislative changes. That language is important because it anchors the bill within the Act’s amendment standard and can bear on judicial review or administrative interpretation of legislative intent.
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Explore Government in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Voters and the public — by narrowing opportunities for organized astroturfing and deceptive campaigns that misrepresent grassroots support, the bill aims to improve transparency of who is advocating on public policy.
- Elected officials and agency decisionmakers — by clarifying liability, the bill reduces the risk of receiving communications that falsely represent public sentiment and improves the informational quality of inputs they receive.
- Competing advocates and honest lobbying firms — organizations that rely on transparent advocacy benefit from a tighter rule set that penalizes deceptive competitors and levels the playing field for legitimate outreach.
Who Bears the Cost
- Corporations, trade associations, nonprofits, and other employers that hire lobbyists — they now face direct legal exposure and must expand compliance programs, vendor oversight, and recordkeeping to avoid liability.
- Placement agents and investment managers — while not barred, they must ensure fee structures and communications do not run afoul of the Act’s anti‑deception rules, increasing due diligence needs.
- Regulatory and prosecutorial bodies (FPPC, district attorneys) — enforcement entities may see increased investigation workloads and ambiguous cases requiring factual inquiry into corporate intent and employer direction.
Key Issues
The Core Tension
The central dilemma is straightforward: the state seeks to stop deceptive, manufactured public sentiment that misleads officials, but doing so by extending criminal liability to employers risks chilling legitimate advocacy and imposes heavy compliance costs on organizations that use paid consultants; striking an effective line between illicit astroturfing and ordinary paid advocacy will require fine‑grained factfinding and clear enforcement guidance.
The bill raises several implementation and interpretive questions. First, the statutory text does not add a new, detailed definition of 'lobbyist employer' within these amendments; enforcement will rely on existing definitions elsewhere in the Political Reform Act and on factual determinations about who 'employs' or 'contracts for the services of' lobbyists.
That can create close cases where employers claim limited involvement while advocacy contractors run campaigns using employer branding or paid testimonials. Determining whether an employer 'caused' or 'attempted to cause' a communication will hinge on documentary evidence, internal approvals, and the nature of contractual arrangements.
Second, criminalizing employer conduct raises mens rea and proof issues. Prosecutors must establish that an employer intended to create a fictitious appearance or acted with sufficient knowledge, which may be difficult where third‑party vendors conduct outreach.
Employers will likely respond by inserting broad indemnities, control clauses, and consent requirements into contracts — steps that reduce flexibility and could chill legitimate grassroots engagement. Finally, the placement‑agent clarification narrows a narrow safe harbor but does not eliminate regulatory overlap; firms that operate across federal securities and state political‑law spheres must coordinate compliance across regimes governed by different standards and enforcement tools.
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