Attorney General Bonta, Assemblymember Gabriel Announce Legislation to Increase Penalties for Corporate Malfeasance, Fund Crime Victim Service Programs

SACRAMENTO — California Attorney General Rob Bonta today announced his sponsorship of a bill authored by Assemblymember Jesse Gabriel (D-Encino) and joint authored by Assemblymember Eloise Gómez Reyes (D-Colton) that would allow state courts to levy increased monetary penalties on corporations convicted of criminal offenses. Such penalties would in turn provide much-needed funding for crime victim service programs in California, which provide free medical care, mental health counseling, lost wages, courtroom advocacy, and temporary housing, among other forms of assistance, to victims and their families. While the crime victim service programs have been historically financed through the federal Crime Victims Fund (Fund), the Fund is experiencing a significant decline in funding. Compared to fiscal year 2023, the Fund will be 41%, or $700 million, lower nationwide in fiscal year 2024. At the same time, unlike several other states, California has not yet updated its criminal code to take into account the size and power that corporations have now. Assembly Bill 2432 (AB 2432) would create a new state-level funding mechanism for the crime victim service programs.

“Our crime victim service programs are in dire need of additional funding. While I recently joined a bipartisan coalition of attorneys general in urging Congressional leaders to provide that funding, California cannot and will not stand idly by — too much is at stake,” said Attorney General Rob Bonta. “By enhancing monetary penalties for corporate crimes, AB 2432 would establish a supplemental funding source at the state level, bringing greater peace of mind to victims of crimes and those who support victims of crime while holding accountable corporate bad actors. I’m grateful to Assemblymember Jesse Gabriel for his partnership in tackling this important issue.”  

“This bill is about fairness and justice — when major corporations break the law, they must be held accountable,” said Assemblymember Jesse Gabriel. “The enhanced penalties in this bill will ensure that bad actors cannot evade responsibility when they defraud or exploit vulnerable Californians or illegally pollute our environment. At the same time, AB 2432 also will provide critical funding for programs that serve crime victims in California, including victims of human trafficking, domestic violence, and child abuse. I am grateful to Attorney General Bonta for his strong leadership and I look forward to working closely with him to better protect our communities and support crime victims across the Golden State.”

“Ventura County is facing over $2.3 million in cuts to essential crime victim services due to declining federal revenue,” said Ventura County District Attorney Erik Nasarenko. “The creation of a California crime victim fund is much-needed and welcome in light of this dramatic decrease in federal support.” 

The federal Fund is the primary funding source for victim services in all 50 states and six U.S. territories. It was established by the federal Victims of Crime Act of 1984 (VOCA) and is financed exclusively by fines and penalties levied on individuals convicted of federal crimes. Through annual grants to states, the Fund supports approximately 3.7 million victims nationwide. As a payor of last resort, the California Victim Compensation Board (CalVCB) also administers state compensation to crime survivors, but is underfunded as well. 

Under AB 2432: 

• The maximum criminal fines that could be imposed on corporations would be increased to generally twice the amount taken from victims by the defendant or twice the amount of the loss caused by the defendant. Currently, the maximum criminal fines are generally $10,000 per felony. 100% of the monies would be deposited in a newly created fund — specifically, the California Crime Victims Fund — that will subsequently be disbursed to the crime victim service programs.  

• Restitution fines for corporations would be increased to $100,000 from $10,000. 75% of the monies would be deposited in the California Crime Victims Fund, and 25% would be distributed to the prosecuting agency that brought the criminal prosecution. Restitution fines are an additional fine imposed on defendants upon conviction. 

• In addition to creating a new state funding stream that will support crime survivors, the proposed criminal enhancements will help ensure corporate offenders are held accountable and offer a significant deterrent for the benefit of all Californians.

For example, AB 2432 would have led to a more just outcome in the case regarding the 2015 Refugio Oil Spill in Santa Barbara County, during which 140,000 gallons of crude oil were released into the Pacific Ocean and spread across coastal beaches. In that matter, then-Attorney General Xavier Becerra and then-Santa Barbara County District Attorney Joyce E. Dudley secured guilty verdicts against Plains All American Pipeline, L.P. (Plains) in 2018. Plains was sentenced to pay only $3,347,650 in total fines and penalty assessments — the maximum allowable amount under state law — and the corporation fought payment of any suitable restitution to hundreds of victims of this criminal conduct. AB 2432 would have given the court discretion to levy an additional fine against Plains proportionate to the conduct and harm caused by Plains, the proceeds of which would have been paid into the new California Crime Victims Fund, thereby providing greater support to victims of crime across California. It is estimated that the misconduct by Plains, a Fortune 200 company that made over $2 billion in net income during 2018, caused over $200 million in damages in the 2015 Refugio Oil Spill.  

A copy of the legislation can be found here.