San Francisco
Ethics Commission
30 Van Ness Avenue, Suite 3900
San Francisco CA 94102
Phone 581-2300 Fax 581-2317
SAN FRANCISCO ETHICS COMMISSION AUDIT REPORT:
SAN FRANCISCANS FOR AFFORDABLE CLEAN ENERGY (YES ON PROPOSITION D)
I. Introduction
This Audit Report contains information pertaining to the audit of the committee, San Franciscans for Affordable Clean Energy (Yes on Proposition D), Identification Number 1246425 (“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 (“C&GC Code”) §§ 1.100, et seq., and 1.300, et seq., respectively).
For the period covered by the audit, the Committee received total contributions of $105,724 and incurred expenditures of $103,988. There were four material findings with respect to this Audit: (1) the Committee failed to file four Late Contribution Reports, in violation of C&GC Code § 1.106 and Government Code § 84203; (2) the Committee failed to send major donor notification letters to three contributors of $5,000 or more, in violation of C&GC Code
§ 1.106 and Government Code § 84105; (3) the Committee failed to disclose complete contributor information for two contributions in violation of former S.F. C&GC Code
§ 1.114(d)[1]; and (4) the Committee failed to itemize 36 contributions of $100 or more totaling $19,761 in violation of C&GC Code § 1.106 and Government Code § 84211(f).
II. Committee Information
The Committee was formed to Support Proposition D – Energy Self-Efficiency Charter Amendment in the November 5, 2002 election. The Committee filed a Statement of Organization with the Secretary of State on August 12, 2002 and qualified as a committee on August 6, 2002. The Committee’s treasurer was Carolyn Knee. Renita Lloyd-Smith provided campaign finance management services to the Committee. The Committee filed its termination statement on December 11 , 2003 indicating that its filing obligations were completed on December 5, 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:
- Compliance with all disclosure requirements pertaining to contributions, expenditures, accrued expenditures, and loans, including itemization when required;
- Compliance with applicable filing deadlines;
- Compliance with restrictions on contributions, loans and expenditures;
- Accuracy of total reported receipts, disbursements and cash balances as compared to bank records; and
- Compliance with all record-keeping requirements.
V. Summary of Applicable Law
Government Code Section 84203: Filing of Late Contribution Reports (Form 497)
“Late contribution” means any contribution, including a loan, which totals in the aggregate $1,000 or more that is made or received by a candidate, a controlled committee, or a committee formed or existing primarily to support or oppose a candidate or measure before the date of the election at which the candidate or measure is to be voted on but after the closing date of the last campaign statement required to be filed before the election. (C&GC Code §1.106 and Government Code § 82036). The combined activities of affiliated entities shall be used to determine whether the $1,000 threshold is met or exceeded. (C&GC Code §1.106 and Cal Code of Regs. § 18428).
Late contributions must be reported within 24 hours of receipt by facsimile transmission, telegram, guaranteed overnight mail through the United States Postal Service or personal delivery. (C&GC Code § 1.106 and Government Code § 84203(b)). A candidate or committee that receives a late contribution must include on the Late Contribution Report: 1) its full name and street address; 2) the date and amount of the late contribution; and 3) the contributor’s name, street address, occupation, and employer, or if self-employed, the name of the business. Late Contribution Reports must be filed with each office with which the candidate or committee is regularly required to file campaign statements. (C&GC Code §1.106 and Government Code § 84203(a)).
Government Code Section 84105: Notification of Contributors
C&GC Code section 1.106 and Government Code section 84105 require committee treasurers to notify contributors from whom they have received contributions totaling $5,000 or more in a calendar year that such contributors must file campaign disclosure statements if the $10,000 contribution threshold is met. Committee treasurers must keep a record of notices they send to individuals or entities that have contributed $5,000 or more. The notification must occur within two weeks of receipt of the contributions but need not be sent to other candidates or recipient committees that have a committee identification number assigned by the Secretary of State.
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].
Government Code Section 84211(f): Reporting Contributions of $100 or More
C&GCC section 1.106 and Government Code section 84211(f) provide that if the cumulative amount of contributions (including loans) received from a person is $100 or more, the recipient’s campaign statements must provide the contributor’s full name, street address, occupation, and the name of his/her employer (name of business if self-employed), the date and amount of each contribution received from the contributor during the reporting period; and the cumulative amount of contributions received from the contributor during the calendar year.
VI. Material Findings
Government Code Section 84203: Failure to Report Late Contributions for the General Election.
The Committee received seven contributions, each $1,000 or more, totaling $20,210 during the late contribution period (the 16 days immediately preceding the election, 10/20-11/4/02) for the November 5, 2002 election. Therefore, the Committee was required to file Late Contribution Reports. The Committee failed to file four of the seven required Late Contribution Reports as indicated below:
| Contributor | Amount | Date of Receipt | LCR Due | LCR Filed |
|---|---|---|---|---|
| Vanguard Public Foundation | $ 2,000 | 10/30/2002 | 10/31/2002 | No |
| Professional and Technical Engineers | $ 1,500 | 11/1/2002 | 11/2/2002 | No |
| Democratic State Central Committee | $ 3,000 | 11/1/2002 | 11/2/2002 | No |
| SEI Union Local 790, Non-Candidate Committee | $ 5,000 | 10/25/2002 | 10/26/2002 | No |
| $ 11,500 |
Government Code Section 84105: Notification of Contributors
Five contributors gave the Committee $5,000 or more each in 2002. After receiving the contributions, the Committee was required to send notices to the contributors informing them of possible filing obligations. The Committee sent notices to two of the five contributors regarding major donor filing obligations. The Committee failed to send major donor notice letters to the following three contributors who contributed $5,000:
| Major Contributor | Total Contributions |
|---|---|
| San Francisco Bay Guardian | $ 21,670 |
| San Francisco Police Officers’ Association | $ 5,000 |
| Health Care Workers Union Local 250 | $ 5,000 |
According to the Committee’s treasurer Carolyn Knee, Bruce Brugmann is the Editor and Publisher of San Francisco Bay Guardian, and therefore notice was sent to the Bay Guardian. The Committee’s records show, however, that the Committee sent a letter regarding major donor filing obligations to Bruce Brugmann because the Committee received $7,200 in contributions from him as an individual contributor. Separate notice to the separate contributor, San Francisco Bay Guardian, was required.
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 60 contributions. Of the 60 itemized contribution entries, contributor information was not fully disclosed for two contributions. The missing information related to the contributors’ occupation and employer information.
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 $200.02 in contributions, in addition to any other penalties.
Government Code Section 84211(f): Report of Contributions of $100 or More
The Committee was required to itemize contributions of $100 or more. The Committee itemized 60 contributions totaling $84,558, but failed to itemize 36 contributions of $100 or more totaling $19,761. Please see attached list of contributions that the Committee failed to itemize. If the Committee, at the time of the deposit, did not have the contributor information for the contributions that were not itemized, the contributions are subject to forfeiture.
VII. Committee’s Response to Findings
The Committee was provided with an opportunity to review and comment on this audit report. The Committee’s treasurer Carolyn Knee stated that she faxed complete information regarding unreported contributions to Renita Lloyd-Smith, who provided paid campaign reporting services to the Committee. Ms. Knee provided proof that she had faxed several of the missing reporting items to Ms. Lloyd-Smith. For this reason, Ms. Knee believed that the appropriate information would be reported on the campaign statements.
Please note that under the Political Reform Act, the treasurer is responsible for verifying the contents of campaign statements prior to signing and submitting them.
VIII. Conclusion
Through the examination of the Committee’s records and campaign disclosure statements, the Auditor found that: (1) the Committee failed to file four Late Contribution Reports, in violation of C&GC Code § 1.106 and Government Code § 84203; (2) the Committee failed to send major donor notification letters to three contributors of $5,000 or more, in violation of C&GC Code § 1.106 and Government Code § 84105; (3) the Committee failed to disclose complete contributor information for two contributions in violation of former S.F. C&GC Code § 1.114(d); and (4) the Committee failed to itemize 36 contributions of $100 or more totaling $19,761 in violation of C&GC Code § 1.106 and Government Code § 84211(f).
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 22, 2005
Attachment to the Audit Report of San Franciscans for Affordable Clean Energy (Yes on Proposition D)
List of Contributions that the Committee Failed to Itemize:
| Contributor | Amount | Check Date | Deposit Date | Reporting Period in which Contribution should have been reported |
|---|---|---|---|---|
| Stephanie Jensen | $ 100 | 8/27/2002 | 9/10/2002 | 1/1-9/30/02 |
| James Q. Biggs | $ 100 | 9/9/2002 | 9/16/2002 | 1/1-9/30/02 |
| Prof and Technical Eng Local 21 | $ 1,000 | 9/20/2002 | 9/24/2002 | 1/1-9/30/02 |
| David Novogrodsky | $ 250 | 9/20/2002 | 9/24/2002 | 1/1-9/30/02 |
| Sdarienne Hirt | $ 500 | 9/20/2002 | 9/24/2002 | 1/1-9/30/02 |
| Michael Strausz & Co., Inc. | $ 250 | 9/18/2002 | 9/24/2002 | 1/1-9/30/02 |
| Charles Wiliam Wenham | $ 200 | 9/25/2002 | 9/25/2002 | 1/1-9/30/02 |
| Mark E Scott | $ 100 | 9/22/2002 | 9/25/2002 | 1/1-9/30/02 |
| Susan Abby | $ 200 | 9/24/2002 | 9/25/2002 | 1/1-9/30/02 |
| Cindy N. Tomooka-Chun | $ 100 | 9/17/2002 | 10/4/2002 | 10/1-10/19/02 |
| Health Care Workers Union Local 250 | $ 5,000 | 10/3/2002 | 10/4/2002 | 10/1-10/19/02 |
| Leo's Tire Shop | $ 250 | 10/4/2002 | 10/7/2002 | 10/1-10/19/02 |
| Bruce Grugmann | $ 2,000 | 10/2/2002 | 10/7/2002 | 10/1-10/19/02 |
| Todd Lefurge | $ 100 | 10/5/2002 | 10/8/2002 | 10/1-10/19/02 |
| Loris Lipski | $ 100 | 10/8/2002 | 10/10/2002 | 10/1-10/19/02 |
| Joseph Boss | $ 100 | 10/1/2002 | 10/10/2002 | 10/1-10/19/02 |
| Jean Brugmann | $ 100 | 10/9/2002 | 10/10/2002 | 10/1-10/19/02 |
| Jean Brugmann | $ 100 | 10/9/2002 | 10/10/2002 | 10/1-10/19/02 |
| Jean Brugmann | $ 100 | 10/20/2002 | 10/21/2002 | 10/20-12/31/02 |
| Latino Democratic Club | $ 361 | 10/22/2002 | 10/25/2002 | 10/20-12/31/02 |
| Robert S. Eshelman | $ 100 | 10/23/2002 | 10/26/2002 | 10/20-12/31/02 |
| Peter B Wiley | $ 100 | 10/23/2002 | 10/27/2002 | 10/20-12/31/02 |
| Service Employees International Union Local 790, Cope: Non-Candidate Committee | $ 5,000 | 10/24/2002 | 10/28/2002 | 10/20-12/31/02 |
| San Francisco Web Pressman & Prepress Workers' Union No.4 |
$ 300 | 10/24/2002 | 10/29/2002 | 10/20-12/31/02 |
| SEIU Local 535 Issues Account | $ 500 | 10/24/2002 | 10/29/2002 | 10/20-12/31/02 |
| David Schonbrunn | $ 200 | 10/28/2002 | 10/29/2002 | 10/20-12/31/02 |
| Christopher J. Donnelly | $ 100 | 10/27/2002 | 10/29/2002 | 10/20-12/31/02 |
| Looman Associates | $ 100 | 10/29/2002 | 10/30/2002 | 10/20-12/31/02 |
| Jan Schori | $ 250 | 10/8/2002 | 10/30/2002 | 10/20-12/31/02 |
| Rosanna J. Herber | $ 150 | 10/20/2002 | 10/30/2002 | 10/20-12/31/02 |
| AFT 2121 | $ 300 | 10/30/2002 | 11/1/2002 | 10/20-12/31/02 |
| Sierra Club, SF Bay Chapter Campaigns | $ 250 | 10/28/2002 | 11/1/2002 | 10/20-12/31/02 |
| Nustar Heating and Metal Supply, Inc | $ 200 | 10/23/2002 | 11/1/2002 | 10/20-12/31/02 |
| Ralph Kazanjian | $ 100 | 10/28/2002 | 11/1/2002 | 10/20-12/31/02 |
| Total monetary contributions | $ 18,661 | |||
| Non-monetary Contributions: | ||||
| Rafael Mandelman | $ 100 | 10/16/2002 | 10/1-10/19/02 | |
| San Francisco Bay Guardian | $ 1,000 | 10/3/2002-10/15/02 | 10/1-10/19/02 | |
| Total Unreported Contributions | $ 19,761 | |||
[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).