City and County of San Francisco
Ethics Commission

English

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:

YES ON R, HOPE-HOME OWNERSHIP PROGRAM FOR EVERYONE, SPONSORED BY SAN FRANCISCO TENANTS AND BUSINESSES, WITH SUPPORT FROM TENANTS FOR HOME OWNERSHIP, THE CALIFORNIA ISSUES PAC, AND THE COMMITTEE ON JOBS

I.          Introduction

This Audit Report contains information pertaining to the audit of the committee, Yes on R, HOPE-Home Ownership Program for Everyone, Sponsored by San Francisco Tenants and Businesses, with Support from Tenants for Home Ownership, the California Issues PAC, and the Committee on Jobs, Identification Number 1244434 (“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., respectively).

For the period covered by the audit, the Committee received total contributions of $594,772 and incurred expenditures of $653,927.  There was one material finding with respect to this Audit: the Committee failed to disclose complete contributor information for one contribution, in violation of former S.F. C&GC Code section 1.114(d).[1]

II.        Committee Information

The Committee was formed to oppose Proposition R – Tenant-Initiated Home Ownership Program for Everyone in the November 5, 2002 election.  The Committee filed a Statement of Organization with the Secretary of State on May 17, 2002 indicating that it had qualified as a committee on May 16, 2002.  The Committee’s treasurer was James R. Sutton.  The Committee filed its termination statement on July 31, 2003 indicating that its filing obligations were completed on June 30, 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 154 contributions.  Of the 154 itemized contribution entries, contributor information was not fully or properly disclosed for one contribution.  The Committee reported a P.O. Box address for this contribution rather than a street address as required.

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 $900.01 in contributions, in addition to any other penalties. 

After the auditor identified the contribution that is subject to forfeiture, the Committee filed an amended campaign statement which provided the street address of the contributor.  During the time period covered by this audit, the practice of the Ethics Commission was allow committees to supply the missing contributor information without subjecting the contributions to forfeiture if the committees could demonstrate that they possessed the missing contributor information at the time of the deposit.  If the Commission determines that the Committee did not have the information at the time it deposited the contribution, the Committee will be required to forfeit the contributions for which it did not have the required information.

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 requested that the finding be classified as an immaterial finding because it believes the use of a P.O. Box rather than a street address does not meet the Commission’s standard for materiality.   The Committee claims that $1,000 is not a significant amount and represented less than one percent of total contributions received.  In addition, the Committee stated that it clearly identified the contributor by name, P.O. Box and city domicile; thus, the use of P.O. Box did not deprive the public of any information.  Furthermore, the Committee amended its report to add the street address as soon as the omission was brought to its attention.

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 one contribution, in violation of former S.F. C&GC Code section 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 22, 2005

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