My friends father is 92 and has decided to turn over some of his bank accounts to him and his wife. How much can he give them before they will have to pay taxes in California?

Any one can give any amount as gift to his/her spouse.
A father can give his son, $12,000 every year without filing gift tax return. For amounts exceeding $12,000 he must file gift tax return. On the gift tax return, there is life time exclusion of 1 million.
Read Your U.S. Tax Return: The U.S. Gift Tax (http://taxipay.blogspot.com/2008/03/us-gift-tax.html)

The annual exemption can be increased to $24,000 by also giving $12,000 to his son's wife, which is also tax-free.

Further, $12,000 transfers are allowed to each grand-child as well.

Just to make it clear. The recipient pays nothing. Any gift tax due is paid by the donor. So an individual can give $12K to any other individual without incurring taxation.

So the father can give $12K to your friend and another $12K to his wife and additional $12K gifts to any grandchildren. Of course the money would be the recipients to do with as they please.