Ethics Commission
City and County of San Francisco

San Francisco Ethics Commission Audit Report: Truth on Prop H – Concerned Citizens Against Prop H Committee, Sponsored by: Small Property Owners of San Francisco, FPPC ID #1292084

I. Introduction

This Audit Report summarizes the audit results of the committee, Truth on Prop H – Concerned Citizens Against Prop H, Sponsored by Small Property Owners of San Francisco, Identification Number 1292084 (“the Committee”), for the period from January 1, 2006 through December 31, 2006.  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”) (San Francisco Campaign and Governmental Conduct Code section 1.100, et seq).

II. Audit Authority

San Francisco Charter section C3.699-11 authorizes the Ethics Commission (“the Commission”) to audit campaign statements that are filed with the Commission along with other relevant documents to determine whether the committee complied with applicable requirements of State and local laws. 

III. Audit Scope and Procedures

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

The Commission posts audit reports to its web site and, in cases of apparent violations of law, forwards them to the appropriate enforcement agency.

IV. Committee Information

The Committee was formed on October 23, 2006 to oppose Proposition H in the November 7, 2006 general election.  Henry C. Levy served as the treasurer and Stacy E. Owens served as the assistant treasurer.  The Committee was active as of December 31, 2006.

V. Audit Findings

For the period covered by the audit, the Committee received $85,036 in contributions (including non-monetary contributions of $1,350) and incurred expenditures of $80,509.

The Commission determined that there was one material finding with respect to the audit of the Committee.  The Committee did not report complete contributor information for 12 contributors, in violation of Government Code section 84211(f) and San Francisco Campaign and Government Conduct (S.F. C&GC) Code sections 1.106, 1.114(e), and 1.114(f).

Government Code section 84211(f) and S.F. C&GC Code section 1.106 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.  S.F. C&GC Code section 1.114(e) prohibits the deposit of any contribution of $100 or more unless the contribution has the required information, i.e., the contributor’s full name, street address, occupation and employer.  A committee will be deemed not to have had the required contributor information at the time the contribution was deposited if the required contributor information is not reported on the first campaign statement on which the contribution is required to be reported.  Contributions that are deposited without the required contributor information must be forfeited to the City, 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.  S.F. C&GC Code § 1.114(f).

The Committee received 244 contributions that required detailed disclosure.  Of the 244 contributions, contributor information was not fully or properly disclosed for 12 contributions. 

As explained above, under S.F. C&GCC sections 1.114(e) and 1.114(f), contributions that are deposited without the required contributor information must be forfeited to the City, in addition to any other penalties.  The Committee is required to forfeit $25,050.12 in contributions.  The details of the forfeitures are as follows:

Contributor

Reason for Forfeiture

Transaction Date

Contribution Amount

Forfeiture Amount

Kramp Jr., Harry

A P.O. Box address was reported.  No street address reported.

10/19/2006

$100

$0.01

Mantione, Vince

A P.O. Box address was reported.  No street address reported.

10/19/2006

$100

$0.01

Nordstrom, Zoanne

A P.O. Box address was reported.  No street address reported.

10/19/2006

$100

$0.01

Roake, Stephen

A P.O. Box address was reported.  No street address reported.

10/19/2006

$100

$0.01

Dissolution Properties, LLC

A P.O. Box address was reported.  No street address reported.

10/31/2006

$100

$0.01

Filbert St Partners dba Leong 550

A P.O. Box address was reported.  No street address reported.

10/19/2006

$100

$0.01

McArdle, John J.

A P.O. Box address was reported.  No street address reported.

10/31/2006

$100

$0.01

Bell, Clifton

A P.O. Box address was reported.  No street address reported.

10/19/2006

$150

$50.01

McKeever Properties

A P.O. Box address was reported.  No street address reported.

10/19/2006

$150

$50.01

Epstein, Howard

Did not specify business name.

10/19/2006

$250

$150.01

Small Properties Owners of San Francisco

A P.O. Box address was reported.  No street address reported.

11/6/2006

$5,000

$4,900.01

Small Properties Owners of San Francisco

A P.O. Box address was reported.  No street address reported.

11/2/2006

$20,000

$19,900.01

Total

$26,250

$25,050.12

VI. Committee’s Response to Finding:

The Committee’s comments are as follows:

Stacy E. Owens, the assistant treasurer, stated that contributions that were reported with P.O. Box addresses were administrative errors due to the mistake of reporting the address that was printed on the checks received.  Ms. Owens stated that the two largest contributions ($5,000 and $20,000) were received from the Committee’s sponsor, whose street address was in fact reported on page 1 of every report as the Committee’s address.  Ms. Owens further stated that because Small Property Owners of San Francisco is the Committee’s sponsor, it follows that the Committee’s address is also the sponsor’s address and that the Committee’s mailing address as reported on the campaign statements is consistent with the P.O. Box address used to report the contributions from its sponsor. 

With respect to the remaining contributions that lacked a street address, Ms. Owens noted that these contributions total $1,000, and represent approximately one percent of the total contributions received during the period covered by the audit.  Ms. Owens explained that the Committee reported Howard Epstein’s occupation and employer information exactly as it was received from the contributor.  She stated that the total of this contribution and the 1,000 in contributions lacking street addresses represent $1,250, or 1.46 percent of total contributions, an amount the Committee considers to be immaterial.

In addition, Ms. Owens stated that the findings should not be considered material or forfeitable according to new San Francisco Ethics Commission policies proposed in a March 4, 2008 memo from John St. Croix to the members of the Ethics Commission and adopted on March 24, 2008.  Specifically, Ms. Owens stated that total infractions are less than 10 percent of revenues or expenditures, staff failed to notify the Committee of its forfeitures within one year of the actual filing deadline, and  upon discovery of incomplete or inaccurate donor information, the Commission should notify the Committee and allow the Committee thirty days to cure the information.

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