Annual Report
July 1, 1998 – June 30, 1999
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 fourth year of operation.
Isabella H. Grant
Chairperson
Highlights of the Fourth Year
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; researching and proposing ethics-related policy changes, and providing advice.
Fiscal year 1998-99 has been a year of growth and productivity for the Ethics Commission. During this period the Commission has:
- Submitted a measure for the November 1999 ballot proposing voluntary spending limits for candidates for the Board of Supervisors, who will be elected by district beginning in 2000;
- Proposed and implemented comprehensive amendments to the Lobbyist Ordinance and issued a revised Lobbyist Manual;
- Proposed and implemented a new $66,000 Internet-based filing program for the electronic filing of campaign finance statements;
- Published a comprehensive manual for City officers and employees on the City’s ethics laws;
- Implemented a new program to audit campaign finance statements;
- Proposed and implemented a new ordinance prohibiting false endorsements on campaign literature;
- Proposed and implemented registration and client fees applicable to campaign consultants;
- Expanded and improved the Commission’s Internet web site display of ethics information to make it more useful and more user friendly; and
- Enforced ethics-related laws through assessment and collection of $31,445 in registration fees, late fines and settlement of complaints.
MANDATES & ACCOMPLISHMENTS OF THE COMMISSION
During its fourth year of operation, the Ethics Commission 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 this year, there were semiannual filings on July 31, 1998 and February 1, 1999, and pre-election filings on October 5 and October 22, 1998 (for the November 3, 1998 election). Additionally, there were approximately 100 late contribution filings during the two weeks prior to the November 1998 election. Approximately 120 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. The Commission administers a strict policy for imposing fines in connection with late-filed campaign statements. This policy is 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. Although Proposition 208 is not currently in effect, San Francisco’s CFRO, which also imposes campaign contribution limits, remains in effect. 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 Initiative: Submission of 1999 Ballot Measure
In May 1999, in anticipation of the change from City-wide to district elections for Supervisors, the Commission voted to place a measure, Proposition K, on the November 1999 ballot. The measure proposed that the voluntary spending limit for candidates for the Board of Supervisors be reduced from $250,000 to $75,000 beginning in the year 2000. The Commission also proposed establishing a voluntary spending limit of $20,000 for district run-off elections for the Board. The measure was approved in the November 1999 election.
Prior to proposing the ballot measure, the Commission conducted public hearings and gathered extensive information regarding the cost of conducting election campaigns in San Francisco. The Commission determined that candidates would need significantly less money to communicate with the voters in a single district than they would need in a City-wide election. The submission of this ballot measure marks the first time that the Commission has exercised its authority under the Charter to take a proposal directly to the voters.
Ongoing Campaign Finance Initiatives
Audit Program. This year the Commission implemented one of its most important Charter mandates – auditing financial statements filed by candidates and political committees. The Commission developed and approved a comprehensive manual that outlines the audit process, and the Commission’s Campaign Finance Auditor completed several audits of campaign statements.
The Commission also approved a new process providing for random selection of committees to be audited. Under the new process, committees in each of four financial activity levels are randomly selected for audit, and the drawings are conducted at Commission meetings in public session. A higher number of committees are drawn from the higher activity levels. This allows the Commission to focus its auditing resources on committees with higher levels of financial activity.
Electronic Filing. During last year, 73 political committees were subject to the City’s Electronic Filing Ordinance. The Ordinance requires these filers to submit campaign statements through electronic media as well as on paper forms provided by the Fair Political Practices Commission.
This year the Commission introduced a state-of-the-art electronic filing program that allows candidates and political committees to file their campaign finance statements via the Internet. The On Line Filing System (OLFS), developed for the Commission by the City’s Department of Telecommunications and Information Services (DTIS), provides a free, user-friendly mechanism for reporting contributions, expenditures, loans and all other information required by state and local law. The Ethics Commission publishes this information on its Internet web site (www.ci.sf.ca.us/ethics/) as soon as it is received. The program also allows filers the option of using commercial political software, provided that the data is in the specific electronic format approved by the Commission.
The new program was implemented on July 1, 1999, a few weeks prior to the August 2, 1999 semiannual campaign filing deadline. To introduce the new filing option, DTIS and the Commission conducted a series of hands-on workshops for candidates, political committees and the press. The public can access a demonstration version of the system and an instruction manual by visiting the Commission’s web site. Response to the new program has been uniformly enthusiastic.
DTIS also enhanced the Commission’s office tools for managing campaign reports. These tools allow staff to determine whether committees are late with their filings. As a result, staff has identified and is further pursuing committees that did not comply with their filing obligations in prior years.
In FY 99-00, the Commission plans to enhance its web site to make it easier for members of the public to search and sort the campaign finance data. DTIS has also developed 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 further 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 1999, 49 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.
New Initiative: Amendments to the Lobbyist Ordinance
During this year, the Board of Supervisors adopted, and the Mayor approved, comprehensive amendments to the Lobbyist Ordinance that were proposed by the Commission. The significantly improved and strengthened Ordinance imposes new restrictions and disclosure requirements on City lobbyists. Among the changes are requirements that lobbyists:
- Report expenses and payments made by the lobbyist that benefit aides to members of the Board of Supervisors and their family members, and those payments that benefit registered domestic partners of City officers, candidates, and Supervisorial aides; and
- Limit to $50 the value of gifts made to a City officer within three months of lobbying the officer.
Equally significant, the amendments clarify ambiguities in the original Ordinance. As a result, it is now easier for lobbyists to understand their obligations under the law and for members of the public to determine whether lobbyists are in compliance.
In June 1999 the Commission issued a revised Lobbyist Manual and reporting forms reflecting the new amendments. The Commission also presented special workshops for lobbyist filers on how to comply with the amended Ordinance. In accordance with the revised Ordinance, the Commission will conduct quarterly workshops for lobbyist filers on a continuing basis.
During this year, the Ethics Commission enforced provisions of the Ordinance through collection of $20,525 in lobbyist registration and client fees and $2,475 in late fines, which has been deposited in the City’s General Fund.
CAMPAIGN CONSULTANT PROGRAM: REGISTRATION AND REPORTING
Under San Francisco’s Regulation of Campaign Consultants Ordinance, approved by the voters in 1997, 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. These may be accessed from the Commission’s web site.
A total of 32 campaign consultants were registered with the Ethics Commission as of June 1999.
Registration and Client Fees. The Ordinance provides that the Ethics Commission may charge fees to defray the cost of administration. During this year the Commission proposed a registration and client fee schedule which was approved by the Board of Supervisors and implemented in January 1999. The schedule provides that filers earning less than $5,000 pay a $50 registration fee; those earning between $5,000 – $20,000 pay a $200 registration fee; and those earning $20,000 and above pay a $400 registration fee. Campaign consultants also pay a $50 registration fee for each client.
During the first six months of 1999, the Commission collected $7,700 in registration and client fees and levied $550 in late fines.
Regulation re: Termination Statements. In March 1999 the Commission approved a regulation clarifying when campaign consultants are required to file client termination statements. The regulation clarifies the consultants’ reporting obligations and specifically prohibits consultants from continuing to provide consulting services after filing a client termination statement. The regulation is posted on the Commission’s web site.
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/not 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, 492 City officials were required to file their SEIs directly with the Commission. Initially, only 63 percent met the April 1, 1999, deadline. However, as a result of the persistent efforts of the Commission, 96 percent had submitted their SEIs by June 30, 1999. In addition, all outstanding SEIs due from the previous fiscal year (those due on April 1, 1998) were received in FY 1998-99.
This year the Commission levied $2,630 in fines for late filing of SEIs. The Commission has waived or reduced 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 about their duties as filing officer for their designated employees. The Commission also surveys department heads to confirm that all designated employees have filed. One hundred percent of those reports were received.
INVESTIGATIONS AND ENFORCEMENT
Complaints. The Commission investigates complaints regarding violations of local governmental ethics laws. During this year, the Commission processed a total of 35 complaints.
Since the Commission implemented its investigation program in June 1995, 162 complaints have been filed. The complaints contained a total of 206 allegations of violations, which can be categorized as follows:
|
No. of Allegations |
Type of Violation Alleged |
|
26 |
Conflict of Interest |
|
14 |
Campaign finance violations |
|
1 |
Lobbyist Ordinance |
|
89 |
Improper Government Activities Ordinance (Whistleblower Ordinance) |
|
2 |
*Discrimination |
|
11 |
*Harassment |
|
11 |
*Racial/sexual harassment |
|
16 |
*Personnel-related allegations |
|
8 |
Public access to meetings and records |
|
7 |
**California Elections Code |
|
21 |
Miscellaneous allegations outside the Commission’s jurisdiction |
206 Total Allegations
* 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. This year the Commission updated its complaint form with revised instructions. The complaint form may be accessed from the Commission’s web site.
During this year, a total of 11 Whistleblower complaints were filed with the Commission.
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. As discussed in prior sections of this report, during this year the Commission proposed and implemented: amendments to the Lobbyist Ordinance (p. 6) and registration and client fees applicable to campaign consultants (p. 7). The Commission also proposed and implemented a new $66,00 electronic filing program for campaign statements filed by candidates and committees (pp. 4-5).
Prohibition on False Endorsements in Campaign Literature. In October 1998, the Commission proposed, and the Board and Mayor approved, a new law prohibiting false endorsements on campaign literature. The legislation prohibits any person from sponsoring campaign literature that is distributed within 90 days of an election and that contains a false endorsement of a local candidate or ballot measure. The Commission proposed this legislation because of its concern that campaign literature that contains false endorsements may mislead voters if it is distributed so close in time to an election that it cannot be rebutted.
Contribution “Blackout” Period for Prospective Contractors. The Campaign Finance Reform Ordinance creates a blackout period during which prospective contractors who are seeking business with the City are prohibited from making contributions to the City officers who have the power to approve the contract sought, candidates seeking election to such offices, and committees controlled by such officers and candidates. In May 1999, the Commission adopted a regulation clarifying when the blackout period begins and ends. The regulation, which took effect in July 1999, is posted on the Commission’s web site.
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. The Commission co-sponsored, with the City Attorney’s Office, presentations to designated City employees who are required to complete and file SEIs. The Commission also hosted, with the FPPC, a workshop for candidates and committee officials to provide information and assistance related to campaign laws, in preparation for the November 1998 election. The Commission also presented three workshops for electronic filers on how to file using the Commission’s new electronic filing system, and made presentations to two public policy classes at Golden Gate University.
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
(By-laws, commissioner biographies, text of ordinances within the Commission’s jurisdiction, Regulations for Investigation and Enforcement Proceedings, complaint procedure, Commission agendas, minutes, annual reports, Ethics Manual) - Lobbyist Regulation
(Advice to filers, proposed legislation, Lobbyist Manual and reporting forms, quarterly reports) - Campaign Consultant Regulation
(Advice to filers, Campaign Consultant Manual and reporting forms, quarterly reports, regulations) - Draft Legislation and Proposed Legislation
- Campaign Finance
(Campaign disclosure statements, filing deadlines, link to FPPC campaign disclosure laws and campaign finance forms, electronic filing requirements, Audit Manual, Demonstration of, and Handbook for, the On-Line Filing System) - A list of City officials who have filed Statements of Economic Interests
- Forms Center
(Complaint form, form for reporting suspected unreported lobbyist activity, lobbyist reporting forms, FPPC and San Francisco campaign finance reporting forms, campaign consultant forms) - Employment and Internship Opportunities
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 1999 the Commission streamlined the site to make data access easier. Since then monthly hits have averaged 47,200. The following chart illustrates the dramatic increase in usage of the Commission’s web site.
Further improvements to the web site are expected in FY 2000-01. These improvements will allow the public to search and sort through all campaign finance data submitted to the Commission. The Commission expects to approach 100,000 monthly hits by the end of 1999, or over 5,000 hits per business day.
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. The Commission provides opinions, formal and informal advice and information on the City ordinances and regulations over which the Commission has jurisdiction.
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 5,000 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.
In this year, more than 2,400 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.
AFFILIATIONS
The Commission is a member of the Council on Governmental Ethics Laws (COGEL) and participates in its annual conference. This year, the Commission’s executive director participated in a presentation on conflicts between state and local government. At the December 1999 COGEL conference, DTIS will send a representative to conduct demonstrations of the Commission’s new Internet-based electronic filing system and the web site’s new “search and sort” capability.
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 and hearings has significantly increased over the past year.
MEMBERSHIP AND ADMINISTRATION
Membership. 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:
Commissioner
Appointed by:
Isabella H. Grant
(appointed 5/97; elected Chairperson 2/98; reappointed 6/98)Board of Supervisors
Henri E. Norris
(appointed 12/97; elected Vice-Chairperson 2/98)Mayor
Robert D. Dockendorff
(appointed 10/96)Controller
Paul H. Melbostad
(appointed 3/96, reappointed 8/98)District Attorney
Carol M. Kingsley
(appointed 6/98)City Attorney
The Commission meets regularly on the second Monday of each month at 5:00 p.m. at City Hall, 1 Carlton B. Goodlett Place, Room 408, San Francisco, and holds additional special meetings as necessary.
Staffing Levels. Increased staffing enabled the Commission to implement an auditing program and increase its technical assistance to City officers and employees and to the public. In FY 99-00, the Commission’s permanent staffing increased by one position, a full time Staff Assistant (Elections Clerk).
The Commission’s organization chart reflects all recent reclassifications 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. Armando Gomez served as Acting Campaign Finance Auditor from July through October 1998 and as Staff Assistant from February 1999 through the end of FY 1998-1999.
FY 1998-99 marks the second year that the Commission has made extensive use of interns. Andrew Massey, Catherine Chan, Jane Zhang, and Ben Matranga served as summer interns in 1999. The Commission also benefited from the services of Tina Tan and Alex Poindexter, high school interns referred by the Youthworks Program during 1998-99. In addition, Diane Hudson served as a special works volunteer-intern.
Salary savings from staff vacancies allowed the Commission to retain, through several months of FY 1997-98, the services of one temporary clerical assistant. 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 expedite frequent notices and mailings to campaign filers, elected officials, department heads and members of boards and commissions.
ANNUAL BUDGET
The Commission’s annual budget has increased as follows:
Fiscal Year
Aggregate Budget
1994-95
157,000
1995-96
261,048
1996-97
313,274
1997-98
394,184
1998-99
475,646
1999-00
650,080
With the addition of funding for a full time, permanent Staff Assistant (Elections Clerk) in the FY 1999-00 budget, the Commission’s staff increased from six to seven full-time positions.
The Board and the Mayor also approved a $50,000 enhancement to the Commission’s 1999-00 budget to implement an electronic filing program for lobbyist and campaign consultant filings. DTIS will develop and implement the program next year.
Supplemental Budget. A supplemental budget of $56,000 approved in the spring of 1999 enabled the Commission to develop and implement its new On-Line Filing System. This funding, supplemented by a $10,000 enhancement for electronic filing in the 98-99 annual budget, provided a total of $66,000 for the new program.
Strategic Plan. The Commission approved a Strategic Plan identifying future resources necessary to implement its Charter mandates. Two items included in the Plan—funding for a full time Staff Assistant and an electronic filing system for submission of lobbyist and campaign consultant statements—were subsequently approved by the Board and the Mayor as enhancements to the Commission’s 1999-2000 budget. The Strategic Plan is posted on the Commission’s web site.
Future Initiatives
During the coming months, the Commission will consider public financing of elections and will undertake a review of all local conflict of interest laws and departmental rules regarding incompatible activities. In addition, the Commission will review the City’s Whistleblower Ordinance (Improper Government Activities Ordinance). The Commission will consider proposals to clarify and strengthen these laws and rules. It is anticipated that these projects will enable the Commission to create a more effective investigation and enforcement program.
The Commission’s Charter mandates are considerable, and its jurisdiction and responsibilities continue to expand. In its first four 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 still requires significant additional resources for expansion of its professional auditing, investigative and clerical staff if that goal is to become a reality.
__________________________
Isabella H. Grant
Chairperson