July 1997 – June 1998
The Ethics Commission is pleased to provide this report to the Mayor and the Board of Supervisors, which outlines the Commission's progress and accomplishments in its third year of operation.
The Ethics Commission serves the public, City employees, elected and appointed officials, and candidates for public office through education and enforcement of ethics laws. Its duties include: serving as filing officer for campaign finance disclosure statements; auditing campaign finance statements for compliance with State and local laws; administering the City's laws regulating lobbyists and campaign consultants; investigating complaints alleging violations of the City's ethics laws; administering the Whistleblower program; serving as filing officer for financial disclosure statements filed by certain City officers and employees; educating City officials and the public; and providing advice.
The fiscal year 1997-98 has been a year of growth and productivity for the Ethics Commission. During this period the Commission has:
- Launched a new program to audit campaign finance statements
- Implemented the City's new Ordinance Regulating Campaign Consultants
- Implemented a standard filing format for electronic filers
- Systematically reviewed the City's Lobbyist Ordinance and proposed comprehensive amendments to the Board of Supervisors
- Significantly expanded the Ethics Commission's Internet web site display of governmental ethics laws and related information
- Conducted outreach to encourage public attendance and participation in Ethics Commission meetings
- Improved public access to campaign and lobbyist disclosure forms and other documents filed with the Ethics Commission
MANDATES AND ACCOMPLISHMENTS OF THE COMMISSION
During last year, the Ethics Commission's third year of operation, the Commission's made significant progress in fulfilling its Charter mandates.
The Commission administers and enforces the City's Campaign Finance Reform Ordinance ("CFRO"). The CFRO sets voluntary ceilings on campaign expenditures by candidates and imposes mandatory limits on contributions to candidates.
The Commission serves as filing officer for four categories of local candidates and committees: 1) candidates seeking election to local office and their controlled committees,
2) committees formed or existing primarily to support or oppose candidates seeking election to local office, 3) committees formed or existing primarily to support or oppose qualification of or passage of a local ballot measure which is being voted on only in San Francisco, and 4) county general purpose committees active only in San Francisco. As filing officer, the Commission receives and reviews campaign statements and notifies filers of filing requirements. During last year, there were semiannual filings on July 31, 1997 and February 2, 1998, and pre-election filings on October 6 and October 23, 1997 (for the November 4, 1997 election); and on March 22 and May 21, 1998 (for the June 2, 1998 election). Additionally, there were approximately 200 late contribution filings during the two weeks prior to the November 1997 and June 1998 elections. Approximately 160 candidates and campaign committees filed reports with the Ethics Commission on as many as six different dates over the past year.
The Commission audits campaign statements to ensure compliance with applicable laws and imposes penalties for failure to adhere to filing deadlines and reporting requirements. During the past year, the Commission adopted a strict policy for imposing fines in connection with late-filed campaign statements. This policy has been distributed to all filers.
In 1996, the California electorate adopted Proposition 208, a comprehensive campaign finance reform measure. Adoption of Proposition 208 raised many questions about how this new state law affected the CFRO. In January 1998, a Federal District Court issued a preliminary injunction barring enforcement of Proposition 208. As Proposition 208 makes its way through the courts, the Ethics Commission staff will continue to educate filers and the public about the status of its provisions.
New Audit Program. This year the Commission has begun to implement one of its most important Charter mandates–auditing financial statements filed by candidates and political committees. The Commission appointed a Campaign Finance Auditor and produced a manual that outlines the audit process.
The Commission expects to audit between five and ten percent of the candidates and political committees that filed campaign disclosure statements during the past year. Committees are randomly selected for audit. The Auditor will also perform audits on some lobbyist and campaign consultant statements.
Electronic Filing. During last year, approximately 60 political committees were subject to the City's Electronic Filing Ordinance. The Ordinance requires these filers to submit campaign statements on electronic disk as well as on paper forms provided by the Fair Political Practices Commission.
The Commission invested significant budgetary resources and staff time over the course of last year to its electronic filing program, with continuing assistance of DTIS. Technical staff at DTIS developed a standard electronic filing format that was approved by the Commission. Because the State of California is also developing an electronic filing program, and because all state and local filers are required to submit campaign statements on FPPC forms regardless of whether they file the same information electronically, the Commission worked closely with the Secretary of State's Office, the Franchise Tax Board's Political Audit Unit, the FPPC and the Los Angeles Ethics Commission to produce a format that is consistent with the FPPC's forms. The Secretary of State's Office subsequently designated the electronic format originally developed by the San Francisco Ethics Commission as the standard format for California.
The San Francisco Ethics Commission began requiring all electronic filers to use the new standard format beginning in May 1998, prior to the June election. Some filers purchased special political reporting software using the standard format. DTIS developed and distributed a free spreadsheet template using Microsoft Excel for those filers who did not wish to purchase software. Generally, these were small filers whose activity was less than $20,000. To introduce filers to this free filing option, DTIS and the Commission conducted three hands-on workshops in June 1998 in advance of the first semiannual filing due July 31. A total of thirty filers attended the workshops and twenty utilized the template for the semiannual filing due on July 31.
As a long-term goal, the Commission staff and DTIS are exploring online filing directly via the Internet as a more user-friendly alternative. The Commission hopes to have this program in place by the year 2000. This will allow political committees to file their electronic campaign reports directly to the Commission's web site, in addition to filing the required paper forms.
DTIS continues to maintain the Commission's Internet web site. As discussed on page 00, below, the web site includes electronically filed campaign statements and related information. Web site display has resulted in wider public access to this information. DTIS is also developing a relational database to allow for faster, more direct transfer of electronically filed campaign information to the Commission's web site. Next year, DTIS will enhance the database to include automatic auditing tools that will assist the Commission's auditor in identifying violations of State and local campaign finance laws.
Lobbyist Registration and Regulation
The Lobbyist Ordinance requires registration of lobbyists and regular reporting of information concerning activity intended to influence local legislative or administrative action.. The Commission audits the statements to insure completeness and accuracy and assesses penalties for failure to adhere to filing deadlines and requirements.
As of June 1998, 54 lobbyists were registered with the Ethics Commission. During the past fiscal year, the Commission issued four Quarterly Summary Reports of Lobbyist Activity. These reports summarize lobbyist income and expenditures, issues addressed and positions advocated. The quarterly reports are posted on the Commission's web site.
During this year, the Ethics Commission collected $18,030 in lobbyist fees, which has been deposited in the City's General Fund. This significant revenue production was the result of an increase in lobbyist registration fees. In response to the Commission's request, the Board increased the registration fee from $35 to $300, and the client fee from $15 to $50. The increased fees took effect in November 1997.
After conducting public hearings and seeking public comment in September 1997, the Commission issued a revised and expanded Lobbyist Manual, which provides clear and concise instructions with examples, and revised forms for lobbyist and client registration and reporting of activities.
As part of its effort to encourage compliance with the Ordinance, the Commission requested that City Boards and Commissions voluntarily place on their agendas a notice regarding the obligation of lobbyists to register and file quarterly reports. Several boards and commissions have cooperated by including this notice.
New Campaign Consultant Program: Registration and Reporting
In November 1997, San Francisco voters approved Proposition G, the Regulation of Campaign Consultants Ordinance. Under the Ordinance, persons who earn $1,000 or more in a calendar year providing campaign consultant services are required to register with the Ethics Commission and submit quarterly activity reports. The Commission administers the registration and reporting program and enforces the Ordinance. The Ordinance requires campaign consultants to report names of clients, services provided to and payments received from clients, contributions and gifts made to local officials, and other information. The Commission makes these reports available to the public and issues quarterly reports summarizing the consultants' quarterly filings.
The Commission spent considerable time and resources implementing the new program. First the Commission developed a manual, explaining the new law, and disclosure forms for use by filers. To conduct outreach and education to those likely affected by the new law, the Commission reviewed all campaign disclosure statements filed in San Francisco over the past three years and developed a list of 300 persons and entities that had been paid $1,000 or more for professional services. The Commission notified those persons and entities of the new law, and of the first filing deadline, which was June 15.
The Commission conducted a workshop in advance of the June 15 filing deadline. Materials summarizing the law were distributed to those in attendance.
A total of 35 campaign consultants have registered with the Ethics Commission. Shortly after the initial June 15 filing, the Commission issued its first report of campaign consultant activity. This and subsequent reports may be accessed from the web site.
The Ordinance provides that the Ethics Commission may charge fees to defray the cost of administration. After the June 15, 1998 filing, the Commission analyzed the filed statements to determine the costs (exclusive of start-up costs) of administering the program. Annual costs of administration are estimated at $29,000. Based on these cost estimates, the Commission proposed a fee schedule for approval by the Board. If a fee schedule is approved by the Board by December 1, the Commission will assess fees beginning in January 1999.
Financial Disclosure by City Officers and Employees
The Commission serves as the filing officer for Statements of Economic Interests (SEIs) submitted by elected and appointed officials, department heads and members of designated boards and commissions who are required to file these statements in accordance with the California Political Reform Act and San Francisco's Conflict of Interest Code.
The Commission notifies filers regarding filing deadlines and requirements, issues instructions on how to complete the forms, reviews filings, requests amendments where necessary, assesses penalties for failure to adhere to filing deadlines and requirements, and makes available on its web site a list of persons who have filed. The Commission also provides information and advice to filers. This year, Commission staff assisted the City Attorney's Office in making presentations to departmental employees on how to complete the SEIs. The Commission will continue this educational effort in the coming year.
This year, 490 individuals were required to file their SEIs directly with the Commission. Initially, only 62 percent met the April 1 deadline. However, as a result of the persistent efforts of the Commission, 91 percent had submitted their SEIs by May 11, and 99 percent (489 out of 490) had filed by October. One Bay Area newspaper reported that San Francisco had the highest compliance rate of any jurisdiction in California for this type of filing.
The Commission levied $8,140 in fines for late filing of the SEIs. The Commission has waived some of these fines in accordance with guidelines issued by the Fair Political Practices Commission.
Additionally, hundreds of designated City employees file SEIs with their department heads rather than the Ethics Commission. These reports are located at the department heads' offices. The Commission instructs department heads on their duties as filing officer for their designated employees. The Commission also surveys department heads to confirm that all designated employees have filed.
Investigations and Enforcement
Complaints. The Commission investigates complaints regarding violations of local governmental ethics laws.
During this year, the Commission processed 71 complaints, compared to 26 in the same period last year. Since the Commission first began accepting ethics-related complaints in June 1995, there has been a significant increase in the number of complaints filed each year.
Number of Complaints Filed
|1995 (last 7 months)|
|1996 (12 months)|
|1997 (12 months)|
|1998 (first 6 months)|
The 127 complaints filed since June 1995 contained a total of 153 allegations of violations, which can be categorized as follows:
|No. of Allegations||Type of Violation Alleged|
|21||Conflict of Interest|
|12||Campaign finance violations|
|83||Improper Government Activities Ordinance (Whistleblower Ordinance)|
|6||Public access to meetings and records|
|7||**California Elections Code|
|13||Miscellaneous allegations outside the Commission's jurisdiction|
*All complaints alleging discrimination, harassment, racial/sexual harassment, and all other personnel-related complaints are referred to the Director of Human Resources.
**The Commission does not have jurisdiction over the California Elections Code.
Whistleblower Program. Under the Improper Governmental Activities Ordinance, also known as the Whistleblower Ordinance, it is illegal to retaliate against any City employee who alleges improper conduct such as corruption, fraud, theft of City property, retaliation, bribery, or misuse of government property. The Commission administers the City's Whistleblower Ordinance and works with other City departments to resolve complaints.
In July 1997, the Commission established a dedicated telephone line (the "Whistleblower Hotline" at (415) 554-9515) to encourage the filing of Whistleblower complaints. An announcement regarding establishment of the hotline was sent to department heads, along with a flyer and a request that the flyer be posted on departmental bulletin boards. The number of complaints filed with the Commission increased following the establishment of the Hotline and attendant publicity.
During this year, a total of 16 Whistleblower complaints were filed with the Commission. Of these, 9 were received via the Hotline; the rest were submitted by mail or in person.
Policy Recommendations to the Mayor and the Board of Supervisors
The Commission makes recommendations to the Mayor and the Board of Supervisors regarding the effectiveness of City ordinances relating to campaign finance, conflict of interest, lobbying, campaign consulting and governmental ethics.
In June 1997, the Commission forwarded to the Board of Supervisors three proposed amendments to the Lobbyist Ordinance. This legislation clarified certain terms and reporting obligations and increased the registration and per-client fees.
During the past year, the Commission proposed a more comprehensive set of amendments, based on a systematic review of the Ordinance and the staff's practical experience in administering, enforcing and providing advice in regard to the Ordinance. At the request of the Chair of the Rules Committee, the Commission provided additional information about its proposal. Subsequently, the Commission withdrew the amendments from the Board to allow for additional public comment. In October 1998, after extensive public comment and discussion, the Commission forwarded to the Board a revised set of amendments. The amendments include substantive as well as technical changes to clarify the disclosure requirements, include new prohibitions, incorporate advice given to filers, and make the Ordinance easier to understand and apply.
In October 1998, the Commission forwarded to the Board of Supervisors a proposed amendment to the Administrative Code prohibiting false endorsements in campaign literature. The Commission had studied this issue over the course of the year and discussed the issue at many public meetings.
Education and Training
The Commission conducts education, training and outreach for City employees, City officials, candidates for office and the general public. The Commission conducts meetings and seminars on ethics issues, makes presentations, and produces and distributes educational materials. For example, the Commission distributes a brochure regarding its mission and services. The Commission also produces and distributes informational materials on a variety of subjects including the filing of Statements of Economic Interests and the provisions of the Campaign Finance Reform Ordinance. The Commission has also issued several press releases in the past year highlighting its actions and activities.
During this year the Commission made several presentations about its work to various representatives of other cities, states and nations. As mentioned above, the Commission staff assisted a representative of the City Attorney's Office in making presentations to designated City employees who are required to complete and file SEIs. The Commission hosted, with the FPPC, two workshops for candidates and committee officials to provide information and assistance related to campaign laws, in preparation for the November and June elections. The Commission also presented three workshops for electronic filers on how to file using the Commission's new standard electronic filing format. (See Campaign Finance, p. 00.)
Expansion of Internet Web Site. The Commission has worked with the Department of Telecommunications and Information Services to maintain and update the Ethics Commission web site on the City of San Francisco's Home Page. The web site provides a wealth of information to the public for immediate access, and reduces staff time that would otherwise be spent providing the information by telephone, by mail or in person. Significantly expanded during this year, the Commission's web site now includes:
- Organization of the Ethics Commission
- Lobbyist Regulation
- Campaign Consultant Regulation
(Advice to filers, Campaign Consultant Manual and reporting forms, quarterly reports)
- Draft Legislation and Proposed Legislation
- Campaign Finance
- Statements of Economic Interests filed by City Officials
- Employment and Internship Opportunities
A significant addition to the web site during the past year has been the posting of all local ordinances within the Commission's jurisdiction. Also, the addition of the FPPC's campaign finance forms to the web site has enabled members of the public to access the forms electronically.
Public accesses or "hits" to the web site have dramatically increased since January 1997, when the web site opened. For the first six months of 1997, the average monthly total of hits was 566.5. For the twelve months of 1998, the monthly average increased to 1,962. In February 1998, the Commission streamlined the site to make data access easier. Since then monthly hits have averaged 2,835. The Commission expects to approach 5,000 monthly hits by the end of 1999, or over 200 hits per business day. The following chart illustrates the dramatic increase in usage of the Commission's web site.
Advice and Information
As described above, the Commission serves as the filing officer for campaign finance, lobbying, campaign consulting and financial disclosure reports. These documents are maintained in the Commission's office and are available for public review during regular business hours, and the Saturday before each election. As mentioned above, many of these documents are also available electronically on the Commission's web site. The Commission provides opinions, formal and informal advice and information on the City ordinances and regulations over which the Commission has jurisdiction. During the past year, the Commission provided advice on several issues to campaign consultants.
In addition, the Commission received hundreds of inquiries regarding possible complaints and the complaint process. In the last year, the Commission responded to more than 2,500 inquiries concerning the nature and work of the Commission, campaign finance disclosure, electronic filing, lobbyist disclosure and requirements, campaign consultant disclosure and requirements and statements of economic interests. Dozens of calls have also been received from media organizations and hundreds of callers have called to file a complaint or to inquire about the complaint process.
In this year, more than 800 persons have visited the Commission's office to access and research information contained in the public records filed with the Commission. The Commission staff provides assistance to the public in locating records, and in making both paper and disk copies of these records. Additionally, the Commission has responded to written requests and has issued letters of informal advice on ethics-related matters.
Public Access Laws
The Commission has continued to assist the public with numerous inquiries related to public access to meetings and documents.
The Commission is a member of the Council on Governmental Ethics Laws (COGEL) and participates in its annual conference.
Outreach to Organizations and Interested Individuals
The Commission has conducted major outreach to the City's "good government" groups, unions, regulated communities of lobbyists and campaign consultants, the media, other organizations and members of the public to provide notice of meetings and agendas and to encourage participation at its meetings. Notices of the Commission's agendas are posted in accordance with the Sunshine Ordinance and are regularly mailed to a large and expanding list of organizations and individuals. As a result, public participation in Commission meetings has significantly increased over the past year.
MEMBERSHIP AND ADMINISTRATION
The Commission is composed of five members, one appointed by each of the following officials: the Mayor, the Board of Supervisors, the Controller, the City Attorney and the District Attorney. At the close of the period covered by this report, the following members were serving on the Commission:
|Isabella H. Grant||Board of Supervisors|
|(appointed 5/97; elected Chairperson 2/98; reappointed 6/98)|
|Henri E. Norris||Mayor|
|(appointed 12/97; elected Vice-Chairperson 2/98)|
|Robert D. Dockendorff||Controller|
|Paul H. Melbostad||District Attorney|
|Carol M. Kingsley||City Attorney|
Former Commission Members who also served during FY 1997-98 include Carl L. Williams, who served as Chairperson from June 1997 to October 1997; and Geoffrey Gordon-Creed, who served as Vice-Chairperson from September 1995 to October 1998, and Acting Chairperson from October 1997 to March 1998.
The Commission meets regularly on the second Monday of each month at 5:00 p.m. in Room 227, 1390 Market Street, San Francisco, and holds additional special meetings as necessary.
Increased staffing enabled the Commission to implement an auditing program, increase its technical assistance to City officers and employees and to the public and expand its office to larger premises. In the Spring of 1998, the Commission's full time permanent staffing increased by two positions, including a Campaign Finance Auditor and a Campaign Finance Officer.
The Commission's organization chart reflects all recent upgrades and new staff titles created:
During this year, the following employees served on the Commission staff: Virginia E. Vida, Executive Director; Naomi Starkman, Deputy Executive Director/Chief Investigator; Joseph Lynn, Campaign Finance Officer; Peggy Ahn, Whistleblower/Educator; Shaista Shaikh, Campaign Finance Auditor; and Jennifer Deluta-Taloa, Senior Clerk Typist. Shawn Allison served as Campaign Finance Officer until May 1998. Armando Gomez served as Acting Campaign Finance Auditor from July through September 1998.
FY 1997-98 marks the first year that the Commission has made extensive use of interns. Julio Obeso and Kim Soller served as summer interns in 1998. David Moore and Chad Jacobs served as Law Clerks during the summer, and Mr. Jacobs is continuing in that role during the 1998-99 academic year. The Commission also benefited from the services of Mike Lieberman, a high school intern referred by the Youthworks Program during FY 1997-98. Another student has been assigned for the 1998-99 academic year.
Salary savings from staff vacancies allowed the Commission to retain, through several months of FY 1997-98, the services of two temporary clerical assistants. The additional staffing allowed for more timely processing and organizing of paper filings and the creation of electronic databases to log and track campaign disclosure filings. Additional clerical assistance also enabled the Commission to create mail merges to expedite its frequent notices and mailings to campaign filers, elected officials, department heads and members of boards and commissions.
Despite the increase in staff from four to six positions, the Commission continues to be understaffed considering the increasing number of projects undertaken and complaints received during this fiscal year, and the additional filings and projects generated by implementation of the Campaign Consultant Ordinance.
The Commission's annual budget has increased as follows:
|Fiscal Year||Aggregate Budget|
Supplemental Budget. A supplemental budget approved in February 1998 enabled the Commission to increase its permanent staff from four to six and to double its office space. The supplemental also enabled the Commission to acquire computer equipment for new staff, purchase a router to enhance the office's computer network, e-mail and electronic filing program and upgrade existing computer equipment and software programs.
During the next fiscal year, the Commission will consider whether current laws are inadequate to address the types of conduct the Commission has seen in complaints, and it will review proposals for amendments to the City Charter and ethics-related ordinances to address conduct not currently covered by those laws. In addition, the Commission will consider how the complaint process can be made more effective.
The Commission's Charter mandates are considerable, and its jurisdiction and responsibilities continue to expand. In its first three years of staffed operation, the Commission has taken significant steps towards fulfilling its mandates. It remains fully committed to addressing each of its mandates in a way that will most meaningfully serve the public interest. However, the Commission will require significant additional resources for expansion of its professional and clerical staff and funding for its electronic filing program if that goal is to become a reality.
Isabella H. Grant