Ethics Commission
City and County of San Francisco

San Francisco Ethics Commission Audit Report: Coalition for Fair Water Rates, A Coalition of San Francisco Environmentalists, Homeowners, Property Owners, Hotels and Realtors – No on A, FPPC ID #1247126

San Francisco      
Ethics Commission                   
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Ness Avenue, Suite 3900
San Francisco CA  94102
Phone 581-2300 Fax 581-2317

SAN FRANCISCO ETHICS COMMISSION AUDIT REPORT:

COALITION FOR FAIR WATER RATES, A COALITION OF SAN FRANCISCO ENVIRONMENTALISTS, HOMEOWNERS, PROPERTY OWNERS, HOTELS AND REALTORS – NO ON A

I.          Introduction

This Audit Report contains information pertaining to the audit of the committee, Coalition for Fair Water Rates, A Coalition of San Francisco Environmentalists, Homeowners, Property Owners, Hotels and Realtors – No on A, Identification Number 1247126 (“the Committee”), for the period from January 1, 2002 through December 31, 2002.  The audit was conducted to determine whether the Committee materially complied with the requirements and prohibitions imposed by the Political Reform Act (“the Act”) (California Government Code Section 81000, et seq.) and San Francisco ’s Campaign Finance Reform Ordinance (“CFRO”) and Electronic Filing Ordinance (S.F. Campaign and Governmental Conduct Code §§ 1.100, et seq., and 1.300, et seq.).

For the period covered by the audit, the Committee received total contributions of $456,949 and incurred expenditures of $466,320.  There was one material finding with respect to this Audit: the Committee failed to disclose complete contributor information for 3 contributions, in violation of former S.F. C&GC Code § 1.114(d)[1].

II.        Committee Information

The Committee was formed to oppose Proposition A – Hetch Hetchy Water Bonds in the November 5, 2002 election.  The Committee filed a Statement of Organization with the Secretary of State on August 22, 2002 indicating it qualified as a committee on August 23, 2002.  The Committee’s treasurer was Steven S. Lucas.  The Committee filed its termination statement on May 1, 2003 indicating that its filing obligations were completed on April 22, 2003.

III.       Audit Authority

San Francisco Charter Section C3.699-11 authorizes the Ethics Commission to audit campaign statements that are filed with the Commission and other relevant documents to determine whether a committee complied with applicable requirements of State and local law.  The Ethics Commission, by a random process, selected the Committee for audit.

IV.       Audit Scope and Procedures

This audit was performed in accordance with generally accepted auditing standards.  The audit involved a thorough review of the Committee’s records for the time period covered by the audit. 

This review was conducted to determine:

  1. Compliance with all disclosure requirements pertaining to contributions, expenditures, accrued expenditures, and loans, including itemization when required;
  2. Compliance with applicable filing deadlines;
  3. Compliance with restrictions on contributions, loans and expenditures;
  4. Accuracy of total reported receipts, disbursements and cash balances as compared to bank records; and
  5. Compliance with all record-keeping requirements.

V.        Summary of Applicable Law

Former S. F. Campaign and Governmental Conduct Code Section 1.114(d): Contributor Information Required

Former S. F. C&GC Code section 1.114(d) stated that if the cumulative amount of contributions received from a contributor is $100 or more, the committee treasurer must not deposit the contribution unless the committee treasurer has the following information: the contributor’s full name; the contributor's street address; the contributor’s occupation, and the name of the contributor’s employer or, if the contributor is self-employed, the name of the contributor’s business.  Contributions that are deposited without obtaining the required contributor information must be forfeited to the City from “available campaign funds, if any”.  Former C&GCC §1.114(e)[2].

VI.       Material Findings

Former S. F. Campaign and Governmental Conduct Code Section 1.114(d): Failure to Obtain and Disclose Contributor Information

A review of the Committee’s campaign statements indicated that the Committee itemized 205 contributions.  Of the 205 itemized contribution entries, contributor information was not fully or properly disclosed for 3 contributions.  The missing information related to contributors’ street addresses.  The Committee reported P.O. Box addresses for the three contributions.

As explained above, under former S.F. C&GCC sections 1.114(d) and 1.114(e), contributions that are deposited without the required contributor information must be forfeited to the City from available campaign funds, if any, in addition to any other penalties.  The amount that is subject to forfeiture is the amount that exceeds the first $99.99 of a contributor’s contribution; i.e., on a $100 contribution that lacks the required contributor information, the amount subject to forfeiture is one cent.  The Committee is required to forfeit $600.03 in contributions, in addition to any other penalties. 

VII.     Committee’s Response to Findings

The Committee was provided with an opportunity to review and comment on this audit report.  The Committee disagreed with the materiality of the finding.  It believes that the finding does not meet the Commission’s standards for material findings and requested that the finding be classified as an immaterial finding for reasons of insignificance of the amount in terms of both dollars and percentages ($900 represents only 0.2% of the total dollars received), its insignificant importance (minor technical omission) and infrequent occurrence (3 items represent only 1.4% of all itemized contributions).  In addition, the Committee stated that with respect to the three contributions, the contributors were identifiable.  Furthermore, the Committee stated that the three contributions were timely and accurately disclosed.

VIII.    Conclusion

Through the examination of the Committee’s records and campaign disclosure statements, the Auditor found that the Committee failed to disclose complete contributor information for 3 contributions, in violation of former S.F. C&GC Code § 1.114(d).

Audit reports are posted to the Commission’s web site and are forwarded, in cases of apparent violations of law, to the appropriate enforcement agency.

Date:  March 1, 2005


[1] Former section 1.114(d), which was applicable during the period covered by the audit, is now codified as section 1.114(e).

[2] Former section 1.114(e) has been modified and now exists as section 1.114(f).

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