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:
LAZARUS FOR CITY ATTORNEY
I. Introduction
This Audit Report contains information pertaining to the audit of the committee Lazarus for City Attorney, identification number 1236075 (“the Committee”) for the period from January 1, 2001 through December 31, 2001. The intent of the audit was 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 reported that it received total contributions of $616,916 (including loans) and incurred expenditures of $644,164. The Commission was unable to conduct a complete audit to determine whether the Committee timely and accurately disclosed its activity because the records provided by the Committee for review were incomplete. The audit report will be referred to the Commission’s enforcement section for possible enforcement action for failing to maintain records regarding contributions and expenditures, in violation of Government Code Section 84104 and SF C&GC Code section 1.106; and/or possible violating of C&GC Code §1.170(e) by failing to furnish the Ethics Commission with a copy of the Committee’s campaign records.
II. Committee Information
The Committee is a candidate-controlled committee formed to support James L. Lazarus for City Attorney in the November 6, 2001 election. The Committee indicated on its Statement of Organization that it had qualified as a committee on June 21, 2001. The Committee has not terminated as of the date of this report. The Committee’s treasurer is John Zante. Renita Lloyd-Smith provided campaign finance management services to the Committee.
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
Audits are performed in accordance with generally accepted auditing standards. Audits involve a thorough review of a committee’s records for the time period covered by the audits.
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 84104: Recordkeeping
The Act requires that all campaign contributions (including loans) received and expenditures incurred be reported on the campaign disclosure statements. (Government Code Section 84211). In addition, the Act requires that committee treasurers maintain detailed accounts, records, bills and receipts that are necessary to prepare campaign statements and comply with the campaign disclosure provisions of the Act. (California Code of Regulations Section 18427). The detailed accounts, records, bills and receipts are to be retained by the filer for a period of four years. (Government Code Section 84104). The CFRO incorporates the Act’s provisions regarding disclosure and record-keeping. (S.F. Campaign and Governmental Conduct Code Section 1.106). For this reason, violations of Sections 84211 and 84104 of the Act are also violations of the CFRO.
San Francisco Campaign and Governmental Conduct Code Section 1.170(e): Withholding of Information
SF C&GC Code section 1.170(e) states that any person who knowingly or willfully furnishes false or fraudulent evidence, documents, or information to the Ethics Commission under this Chapter, or misrepresents any material fact, or conceals any evidence, documents, or information, or fails to furnish to the Ethics Commission any records, documents or other information required to be provided under this Chapter shall be subject to the penalties provided in this section.
VI. Material Findings
Government Code Section 84104: Recordkeeping
San Francisco Campaign and Governmental Conduct Code Section 1.170(e): Withholding of Information
In 2004 the Commission sent a letter to the candidate, James Lazarus, requesting that the Committee provide its records covering the year 2001 for audit review. Although Mr. Lazarus provided the auditor with the Committee’s bank statements and check register, these records are incomplete. Copies of most of the contribution checks received prior to the election were not provided. The auditor has not received access to the Committee’s complete records such as copies of contribution checks and invoices/receipts for payments, despite numerous contacts over the past several months to receive such documents. Therefore, the Commission was unable to perform a complete audit to determine whether required campaign statements were timely and accurately filed and whether the Committee complied with other campaign finance requirements.
VII. Committee’s Response to Findings
The Committee was provided with an opportunity to review and comment on this audit report. Mr. Lazarus stated that in the closure of the campaign office, one box of records containing copies of deposited checks from June 2001 through mid-October 2001 was misplaced; he made several efforts to obtain copies of these records by contacting the Bank of America, which he said erroneously sent him copies of the monthly statements for the account rather than the requested copies of deposited checks. He has again requested copies of the deposited checks.
VIII. Conclusion
The Commission was unable to conduct a complete audit to determine whether the Committee timely and accurately disclosed its activity because the Committee did not provide its complete records for review. As a result, the audit report will be referred to the Commission’s enforcement section for possible enforcement action for failing to maintain records regarding contributions and expenditures, in violation of Government Code Section 84104 and SF C&GC Code section 1.106; and/or possible violating of C&GC Code §1.170(e) by failing to furnish the Ethics Commission with a copy of the Committee’s campaign records.
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: April 13, 2005