A bill is moving to Gov. Jerry Brown that would exempt ID numbers and other unique alphanumeric codes used by public agencies to identify vendors and contractors from public disclosure under the California Public Records Act.
The legislation, SB 441 from Sen. Lois Wolk, D-Solano, has quickly gained traction, months after a purported criminal scheme uncovered last spring that attempted to intercept payments sent by the city of Dixon to a vendor.
"Today there's no specific exemption in the Public Records Act that allows a city to redact the Vendor Information Numbers from their Internet and public information. [SB] 441 would make confidential an ID number or other unique code used by public agencies to identify a vendor, except in cases of public bidding, or when used in an audit," Wolk said Thursday in remarks on the Senate floor.
"This comes from the fact that a small city in my district — and it's not the only one in the state — was the victim of an attempt to divert $1.3 million through an automatic payment system," Wolk said, referring to the incident that targeted Dixon.
According to The Reporter newspaper in Vacaville, Dixon officials uncovered the fraud scheme in early March via a phishing email sent to city staff "including an attached letter pretending to be on the vendor’s letterhead" that included the vendor's ID number and fraudulent change instructions for the payment. The criminal actors likely found the vendor ID number through a simple Internet search, officials said. Funds were recovered before the transaction was finished, the newspaper reported.
The city of Dixon then met with Wolk and others to encourage and support legislation that would address the threat.
"SB 441 balances the public’s right to government transparency with the duty to protect public funds,” Dixon Mayor Jack Batchelor wrote in the letter to the Senate Judiciary Committee in support of the legislation. “Making vendor numbers confidential would assist public agencies in detecting fraud and adding another layer of security to their internal systems.”
The State Senate unanimously concurred in Assembly amendments on Thursday. The Senate Judiciary Committee heard SB 441 on Wednesday.
"I appreciate the bill. I think this is probably just the beginning. ... I think we're going to be seeing this until we realize that we've got to do more. While the Public Records Act is designed for a very, very good purpose — and deservedly so given technology today we're just going to have to be very careful and mindful," said Sen. Hannah-Beth Jackson, the Senate Judiciary chair. Preventive measures are needed, she added.
