California lawmakers pitch bill to raise fines for corporate criminals

SACRAMENTO, Calif. (CN) — In the wake of reduced federal dollars, California lawmakers hope to provide stable funding for victim services with a bill focused on holding bad corporate actors accountable.

Assembly Bill 2432 would increase fines for corporations convicted of crimes. The money would fund crime victim service programs, which help people by offering medical care, counseling, lost wages, courtroom advocacy and temporary housing, among other services.

Assemblymembers Jesse Gabriel, an Encino Democrat, and Eloise Gómez Reyes, a Colton Democrat, co-wrote the bill, intending to create a more stable source of money for victim services without affecting California’s general fund.

“Corporate criminal conduct can result in the loss of human life,” Gabriel said at a press conference Tuesday. “We need to move forward with this effort.”

Currently, corporate fines are capped for each felony at $10,000. The bill would raise that limit to twice the amount taken by a guilty corporation from a victim, or twice the amount lost by a victim. All funds will go to a new fund, the California crime victims fund, which will pay for victims’ services.

Restitution fines — an additional punishment meted out at conviction — will increase, too, from $10,000 to $100,000. Of those funds, 75% would go to the crime victims fund and the prosecuting agency that brought the charges would get the remaining 25%.

“It’s really something that is rare these days,” Attorney General Rob Bonta said. “It’s a win-win.”

Bonta said he believes the fund will receive hundreds of millions of dollars over the years, though on Tuesday he had no specific amount. The legislative analyst’s office will need to weigh in with an estimate.

The bill’s authors and others pointed to a drop in federal funding as a need for the bill.

Services for victims have been funded through a federal crime victims fund. However, about $700 million less, a 41% drop, is expected nationwide in the coming fiscal year. That’s a $170 million loss for California.

California lawmakers overall are starting this year with a budget deficit that varying estimates place between $38 billion and $73 billion.

Governor Gavin Newsom and top Democratic leaders forged a plan to reduce the deficit by some $17 billion by pulling back one-time spending and deferring funding to later years, however that “early action” is only one part of a larger budget that isn’t yet complete.  

“This bill puts in place a long-term funding source,” Reyes said. “The risk to these programs this year is very real.”

Tunisia Owens of the Family Violence Law Center of Oakland said her office has felt the effects of reduced federal funding already. Her center offers support to victims of domestic violence and sexual assault with services including a 24-hour hotline, advocacy, relocation and children’s therapy.

However, funding cuts mean her center will provide service to some 300 fewer people this year. Last year, it helped over 2,000 people.

Erik Nasarenko, Ventura County district attorney, said his county faces $2.3 million in cuts to crime victim services.

“The creation of a California crime victim fund is much needed and welcome in light of this dramatic decrease in federal support,” Nasarenko said.

Bonta pointed to a 2015 oil spill in Santa Barbara County as an example of how the existing law fails.

In that spill, some 140,000 gallons of crude oil entered the Pacific Ocean and spread to beaches. Prosecutors secured guilty verdicts against the corporate culprit, but could only get about $3.3 million in fines — the maximum at the time.

Bonta said the total damage done reached some $200 million, and the guilty company had $2 billion in profits that year.

“That law is outdated,” Bonta said. “It’s time for a change.”

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