City and County of San Francisco
Ethics Commission

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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:

COMMITTEE TO RE-ELECT TOM AMMIANO

I.          Introduction

This Audit Report summarizes the results of the audit of the committee, Committee to Re-Elect Tom Ammiano, Identification Number 1265778 (“the Committee”), for the period from January 1, 2004 through December 31, 2004.  The audit was conducted to determine whether the Committee materially complied with the requirements of 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 Sections 1.100, et seq., and 1.300, et seq., respectively).

For the period covered by the audit, the Committee received $50,116.50 in contributions and $35,000 in public funds, and incurred expenditures of $83,100.  The CFRO provides that any candidate who receives public funds must return unexpended campaign funds to the Election Campaign Fund up to the amount of public funds received by the candidate.  The Commission staff determined that the Committee had unexpended funds of $2,016.50, of which the Committee has returned $2,016.50 to the Election Campaign Fund.[1]

There were two material findings with respect to this Audit: (1) the Committee failed to disclose subvendor information, in violation of Governmental Code Section 84211(k)(6);

and (2) the candidate, who filed a statement accepting the applicable expenditure ceiling under S.F. C&GC Code section 1.128, appears to have spent $100 more than the amount of the ceiling.

II.        Committee Information

The Committee was formed in April 2004 to support the re-election of Tom Ammiano to Member, Board of Supervisors, District 9, in the November 2, 2004 general election.  Esther Marks served is the Committee’s treasurer.  The Committee received public funds for Supervisor Ammiano’s 2004 supervisorial re-election campaign.  The Committee filed a termination statement on January 25, 2005 indicating that it terminated on December 31, 2004.

III.       Audit Authority

San Francisco Charter Section C3.699-11 authorizes the Ethics Commission to audit campaign statements that are filed with the Commission.  Section 1.150(a) of the CFRO requires the Commission to audit all candidates who receive public financing.  Audits of publicly financed candidates include a review of campaign statements and other relevant documents to determine whether the candidate complied with applicable requirements of State and local law.

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 applicable filing deadlines;
2. Compliance with restrictions on contributions, loans and expenditures;
3. Accuracy of total reported receipts, disbursements and cash balances as compared to bank records;
4. Compliance with all record-keeping requirements; and
5. Compliance with all provisions related to the Commission’s public financing program.

V.        Summary of Applicable Law

Government Code Section 84211(k)(6): Reporting of Independent Contractor/Agent Expenditures

Government Code section 84211(k)(6) requires a committee to itemize payments of $500 or more made on the committee’s behalf by an agent or independent contractor (also known as subvendor payments) during the period covered by the campaign statement by providing the name, street address, the amount of each expenditure, and a brief description of the consideration for which each expenditure was made.

S.F. Campaign and Governmental Conduct Code Sections 1.128 and 1.130(d): Voluntary Expenditure Ceilings

Sections 1.128 and 1.130 of the Campaign and Governmental Conduct Code require candidates for the Board of Supervisors, who file a statement indicating that they agree to abide by the applicable expenditure ceiling, to limit their qualified campaign expenditures to $83,000 in the general election.

VI.       Material Findings

Government Code Section 84211(k)(6): Reporting of Independent Contractor/Agent Expenditures

The Committee was required to report expenditures of $500 or more made by independent contractors on its behalf.  Although the Committee reported payments to the vendors on Scheudle E of Form 460, it failed to report subvendor detail information on Schedule G, as follows:

Vendor Name	Subvendor Name	Amount Paid	Description of Payment	Reporting period during which subvendor payment should have been reported
Sterns Consulting	Kirk Briggs	$   1,095.00	Printing	1/1-6/30/04
Sterns Consulting	Peter K	$      750.00	Graphic Design	1/1-6/30/04
Sterns Consulting	Autumn Press	$   3,293.75	Printing	1/1-6/30/04
Sterns Consulting	Autumn Press	$   1,064.61	Printing	7/1-9/30/04
Sterns Consulting	Lymberg Productions	$      850.00	Graphic Design	7/1-9/30/04
Sterns Consulting	Sven Wiederholt	$      800.00	Photography	7/1-9/30/04
Sterns Consulting	Waller Press	$   2,114.00	Printing	7/1-9/30/04
Sterns Consulting	Spotlight Design & Printing	$      660.00	Printing	10/1-10/16/04
Sterns Consulting	Spotlight Design & Printing	$   1,560.00	Printing	10/1-10/16/04
Sterns Consulting	United States Postal Service	$   1,780.56	Postage	10/1-10/16/04
Sterns Consulting	United States Postal Service	$   1,212.99	Postage	10/17-12/31/04
Sterns Consulting	Clymer Direct	$      717.45	Mailhouse	10/17-12/31/04
Sterns Consulting	Spotlight Design & Printing	$     </span> 800.00	Printing	10/17-12/31/04
Sterns Consulting	United States Postal Service	$   1,800.00	Postage	10/17-12/31/04
Total		$ 18,498.36

The total amount of subvendor transactions that was not reported on Schedule G represents approximately 22 percent of the total expenditures made by the Committee.

S.F. Campaign and Governmental Conduct Code Section 1.128(b): Voluntary Expenditure Ceilings

The candidate filed Form SFEC-128 Acceptance or Rejection of Voluntary Expenditure Ceiling on June 2, 2004, indicating that he agreed to abide by the voluntary expenditure ceiling.  The ceiling was not lifted, and it remained in place for the entire election in District 9.  The Committee reported qualified campaign expenditures that appear to total $83,100, which would be $100 in excess of the voluntary $83,000 spending cap.

Included in the $83,100 total is a payment of $250 to the Women’s Building.  The Committee reported this payment on its Form 460 as an expenditure of campaign literature, which would be a qualified campaign expense that would count towards the Committee’s voluntary expenditure limit.  Documentation from the Women’s Building supports the Committee’s characterization of this payment as an expenditure for campaign literature in that donors to the Women’s Building would have their names printed in the organization’s Gala Program and in their annual report.  It is conceivable that candidates for the Board of Supervisors would want their names printed in these materials, especially as here when the payment is made before an election, in order to receive publicity and goodwill, which might encourage supporters of the Women’s Building to vote for the candidate.  The Committee’s treasurer disputes the initial characterization of this payment as an expenditure for campaign literature and has told the auditor that the payment was purely a charitable contribution.

VII.     Committee’s Response to Findings

The Committee was provided with an opportunity to review and comment on this audit report. 

The treasurer, Ms. Esther Marks, provided the following comments:

Although I reported payments to Sterns Consulting on Schedule E of Form 460, I did not report subvendor details on Schedule G because I thought Sterns Consulting was to report the subvendors on their required form.  Sterns Consulting did report the subvendors.

I have reimbursed the City and County $100 because I miscalculated the total expenditures and thought the campaign expenditures was $83,000.  I had reimbursed the City and County $1,916.50 on November 11, 2004 because I thought that was the amount we had raised over the $83,000 limit.  If I had known of my error, I certainly would have corrected the error at that time.

VIII.    Conclusion

Through the examination of the Committee’s records and campaign disclosure statements, the auditor identified two material findings: (1) the Committee failed to disclose subvendor information, in violation of Governmental Code Section 84211(k)(6); and (2) the candidate, who filed a statement accepting the applicable expenditure ceiling under S.F. C&GC Code section 1.128, appears to have spent $100 more than the amount of the ceiling.

Audit reports are posted to the Commission’s web site and are forwarded to the members of the Ethics Commission and, in cases of a violation of law, to the appropriate enforcement agency.

Date: September 28, 2005

 

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