California CPA

On your side: CalCPA’S GR team has one special interest—you! – California Society of Certified Public Accountants government relations

On your side: CalCPA’S GR team has one special interest—you! – California Society of Certified Public Accountants government relations – Cover Story

Jerry Ascierto

ON A SWELTERING SPRING DAY in Sacramento last year, hundreds of CalCPA members–outfitted with pins that pronounced “CPAs: Committed to Excellence”–flooded the State Capitol corridors.

Unfettered by the heat outside and buoyed by a singularity of purpose, members applied a little heat of their own as they spoke to legislators about their opposition to Assembly Bill 1995.

These members helped shape an important chapter in the profession’s history in California. The concerns voiced that day–and in earlier deluges of faxes and e-mail from other members–helped defeat AB 1995 just two days later.

The bill would have restricted the scope of services that CPAs could provide to audit clients by specifying a narrow list of permissible non-audit services and prohibiting all others.

The introduction of AB 1995 was considered “fallout” from the several high-profile corporate meltdowns that prompted California legislators to launch fundamental changes to public accounting, often without any distinction between public and privately held companies–or without any understanding of their proposals’ unintended consequences.

But the AB 1995 story is just one of the more public chapters in CalCPA’s nonstop pursuit of fair and reasonable legislation and regulation of California CPAs and businesses.


According to a recent survey of California CPAs conducted by Voter/Consumer Research, the two most important issues facing CPAs are improving the profession’s image and strengthening its voice in the regulatory process.

And the third most important issue is forever tied to the first two: electing officials who understand the profession.

CalCPA’s Government Relations team–including the staff in CalCPA’s Sacramento office, our member-driven Government Relations Committee and our grassroots member network–works toward these ends by influencing and helping to shape legislation and regulation on the profession’s behalf.

“We see more restrictions on the practice environment, and the AICPA can’t help us on a state level,” Silicon Valley CPA Bob Petersen says.

And while every CPA is important, doors don’t always swing open for a lone Member–but they do for a veteran Sacramento lobbyist like CalCPA Government Relations Director Bruce Allen.

“Access to regulators and legislators is a key benefit of membership,” says former CalCPA Chair David George. “As a small practitioner, I don’t have in-house lobbyists like a national CPA firm, but as a CalCPA member, I know that our government relations team is working on my behalf to tackle the issues that matter most to me as a CPA and business owner.”

After aggressive efforts a year ago to protect our profession from extreme so-called “reforms,” the first half of 2003 was spent largely in discussion with California Board of Accountancy staff and testifying at CBA hearings and task force meetings regarding technical clarifications and regulations arising from 2002 legislation.

“We represent all our CPA members, and as such, we must present a united front,” says Allen. “Our messages can’t be confused or contradictory. They can’t be conservative or liberal They must apply to all members, all philosophies.”

Legislators have commented to Allen that they recognize CPAs don’t just represent themselves and their businesses, they also represent tens of thousands of clients and are a vibrant part of California’s economy.

The key to an effective government relations program, according to Hal Schultz, Government Relations Committee co-chair, is “constant vigilance.”

“Proposals that could affect the profession can arise in obscure sections of bills that seem to have nothing to do with the accounting profession and in actions by regulatory agencies that range from the CBA to the Franchise Tax Board to the EDD and Department of Labor,” says Schultz.

He adds, “The GR Committee is an implementation committee, rather than a policy committee, and our efforts involve active participation by CalCPA volunteer and professional leadership and liaison with the appropriate policy committees.

“It is always important to distinguish between the underlying concepts of a proposal and its practical implementation,” says Schultz. “Frequently, there are problems that deserve solutions, but often the proposed cure is worse than the illness. If something is going to be adopted, it is important for CalCPA’s GR team to work to make the rules practical.”


A key reason the GR Committee was formed more than 20 years ago was to increase member participation in the process.

“In the early ’80s, there was increased activity in the California Legislature aimed at monitoring and regulating the profession,” says Petersen, who founded the Government Relations Committee in 1980. “GR needed the technical support of CPAs on potential legislation.”

In fact, Petersen adds, the need is greater than ever for member involvement.

“The number of bills introduced in the California Legislature has increased probably three or four-fold since 1980,” says Petersen. “And their attention to the accounting profession has increased similarly–really exploding in the last three years.”

Like many CalCPA members, Conrad Davis wasn’t sure just how the state’s legislative process worked. Then he got involved.

Earlier this year, Davis, a tax specialist and partner with Sacramento-based Ueltzen and Company, volunteered to assist the GR effort and testify before the Legislature’s Revenue Taxation Committee on two tax shelter bills, AB 1601 and SB 614. The language of the original proposals was too broad, Davis says, and was unfair to both general taxpayers and the average CPA.

“I made a personal appeal,” Davis says. “I give tax advice and do tax planning for a living, and even though I haven’t participated in creating any tax shelters, a whole new level of complexity and liability would have been added to my life had the original proposals passed.”

After the hearing, a series of roundtable sessions began between CalCPA representatives and legislative staff.

“It was a real privilege, after all these years of being a CaICPA member, to participate … where the rubber meets the road,” Davis says.

“All members can help,” Davis says. “Getting involved really gives us a chance to participate in a positive way, rather than just complain about a new regulation. It allows us to be more positive and make some changes.”

CalCPA members can help influence legislation in many ways, says Susan Waters, CalCPA’s CEO. When CalCPA presents its case before the Legislature, CPAs can help by testifying on how pro posed legislation will affect their practices and businesses, either in person or via e-mails and letters.

“The legislature needs to hear from CPAs,” Waters says. “It gives real credibility and puts a human face on the issues we’re talking about, and that’s very important.”

“We’d like every member to recognize that they are the profession every day,” says Michael Ueltzen, co-chair of CalCPA’s GR Committee. “Individually, each member stands for the integrity and objectivity for which this profession is well-recognized.”


While some of the fallout of the last two years has subsided, Sacramento’s political landscape is constantly changing–and challenging.

Changes in term limits, campaign finance and redistricting, as well as a general shift in the Legislature toward what many call a more “anti-business” stance, have made advocacy on behalf of the profession an even greater challenge.

“Once everything that’s taken place in the last two years-from family leave, to universal health care, to workers’ compensation reform boils out, the cost of doing business in California is going to increase,” says Jeannie Tindel, CalCPA’s director of legislation. “Maybe as much as 30 percent in the next two to five years–and that’s scary.”

The grassroots activities of CalCPA members also have morphed in response to redistricting and term limits. One-on-one meetings between members, regulators and legislators have been supplanted by e-mail, faxes, letters and phone calls.

“We’ve reached a stage in Sacramento where we have to rethink the whole government relations process,” Allen says.

“We have to regenerate our contacts regularly. And in many instances, we don’t have them, because the legislators aren’t staying in Sacramento very long due to term limits. And because they aren’t staying that long, our members don’t get to know them.”

But it’s not just the lack of long-term relationships between members and legislators. It’s also the lack of knowledge among legislators themselves.

“Prior to term limits, there was a tremendous amount of institutional memory in the [State Capitol] building,” says Allen. “It wasn’t uncommon for legislators and staff to have 10, 20, even 30 years or more experience in the Capitol. They knew the process, knew the issues, knew the score.

“Those were the days when we could spend our time presenting our case and persuading them to our point of view,” says Allen. “Nowadays, we have to spend considerable time educating them on our issues before we can even present our specific points. It’s a lot more challenging.”

This is one of the many reasons that political action–through the CPA-PAC–is more important than ever. The easiest way to prevent bad legislation and policy is to elect pro-business candidates.


While rallying hundreds of CPAs to appear in Sacramento to support a position is a highly visible act, much of what GR does remains unseen by most.

One-on-one lobbying with legislators is one of the most commonly used tools employed by the GR staff.

And when it comes to the politics of public policy, it isn’t always the slam-dunk victories that matter most. Often, it’s the compromise that prevents something really bad. It’s knowing how damaging a piece of legislation could’ve been if you hadn’t struck a compromise.

Allen and Tindel constantly meet with legislators, regulators and key staff members to suggest improvements, forge compromises and help refine proposals into something that both sides can live with.

“You’ve got to slay focused on what the most threatening part of the legislation is,” Allen says. “It’s really a question of dealing first with the catastrophic aspects of the legislation. Sometimes you’ve got to compromise. That’s the thing in the Capitol: the art of compromise. The art is to get the most you can get.”

It’s difficult to imagine what would have happened to the profession–or California’s business community if CalCPA’s GR presence was not at the table when crafting the public policies that impact the profession and the economy.


“What we do is a series of large and small victories,” says Tindel. “We spend a great deal of time meeting with the decision-makers at the appropriate time.”

And it’s time definitely well-spent

“The day-to-day work of the Legislature and the regulatory agencies is frequently mundane and lightly covered by the press … unfortunately, requirements that can affect CPAs and their employers can come out of left field at any time,” says Schultz. “Monitoring Sacramento activities and maintaining a broad array of relationships takes time and money. The economies of scale are tremendous. GR is an activity that it is very important for CalCPA to pursue on behalf of all of its members.”

While different issues require different approaches, the process always begins with an analysis of the proposed legislation and input from CalCPA members on the bill’s potential effects.

Then the GR Committee members, along with CalCPA staff and subject-area CPA experts, analyze strategies. GR has a variety of strategies and tactics at its fingertips, including legislative action groups, CalCPA Action Alerts and mobilization of leadership or grassroots action. And GR has become quite adept at singling out the most effective plan of attack-and implementing it with precision.

“Obviously, we want to give them what they need to make an informed decision on a proposed piece of legislation,” Tindel says. “Over the years, we’ve learned to quickly determine what tool we need to use in what forum, and what works most effectively at any given time, with any given person.”

Jerry Ascierto is CalCPA’s associate editor. You can reach him at


By combining the small annual contributions of individual CPAs, CPA-PAC can pack a powerful punch in the political arena. But are politics really that important?

“Absolutely!,” answers former CalCPA President Don Gursey. “Political clout is not just a nicety, it’s a necessity. And while everybody is doing it to some degree, some are doing it better than others. And their members are reaping the rewards.”

Take the teachers, for example. A teacher in California maybe averages an annual salary of $52,000. Let’s say the dues for California Teachers Association (CTA) membership are about $50 per month. That’s $600 per year, per teacher. And whether your political persuasion swings to the right or to the left, you can’t question teachers’ clout in the Capitol.

Of course, as a union the CTA has the benefit of mandatory, 100 percent participation in their PAC. However, considering the results, it’s hard to believe that many members would opt out if given the choice.

Things work a little differently at CalCPA, but the potential benefits are just as great. “CPA-PAC is a way CPAs can make a real difference in who gets elected,” says CalCPA CEO Susan Waters. “It also helps form bonds with those legislators, who will listen to our story and consider our point of view.”

The fund is mainly used for campaign contributions to candidates running for various offices in California, regardless of their political affiliation. The contributions are based on a candidate’s ability to make a difference for California’s CPAs and businesses.

“Sure, CalCPA dues are almost $400–but that’s less than 1 percent of most CPAs’ annual income,” says Gursey. “And when you think of the returns we make on that investment, it’s a bargain.”

Only 9.8 percent of CalCPA members contribute to CPA-PAC–which raises just under $100,000 annually, “We simply can’t take political action for granted–it’s just too important,” says Michael Ueltzen, GR Committee co-chair. “That’s why we need to ask for $50 per member for CPA-PAC–it really is critical.” We want to encourage every CalCPA member to contribute to the CPA-PAC. Just think of the difference it could make in your business, your profession and your life.

For more information on how to contribute, go to or contact CalCPA’s GR team at or call (916) 441-5351

COPYRIGHT 2003 California Society of Certified Public Accountants

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