Annual Report
July 1996 – June 1997
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 second year of fully staffed operation.
A. Background
The Ethics Commission was created by a Charter Amendment approved by the voters on November 2, 1993. The Amendment has been incorporated as Charter Sections 15.100-108, C3.699-10 through C3.699-16, and C8-105. Under the Charter, the Commission serves the public, City employees, elected and appointed officials, and candidates for public office through education and enforcement of ethics laws. The Commission also provides open and consolidated access to public records in ethics-related matters. Its duties include: filing and auditing of campaign finance disclosure statements, lobbyist registration and regulation, administration of the Whistleblower program, conflict of interest reporting, investigations and enforcement, education and training, advice giving and statistical reporting.
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.
Membership
The Commission is composed of five members, one each appointed by the Mayor, the Board of Supervisors, the Controller, the City Attorney and the District Attorney. The original members of the Commission were sworn in on June 6, 1994, and the Commission opened its office on a limited basis, in August 1994.
At the close of the period covered by this report, the following members were serving on the Commission:
| Commissioner | Appointed by: |
| Carl L. Williams, Chairperson (appointed 3/97; elected Chairperson 6/97) |
Mayor |
| Geoffrey Gordon-Creed, Vice-Chairperson | City Attorney |
| Isabella H. Grant (appointed 5/97) |
Board of Supervisors |
| Robert D. Dockendorff | Controller |
| Paul H. Melbostad | District Attorney |
Former Commission Members who also served during FY 1996-97 include Virginia C. Gee and Joseph Julian. Virginia C. Gee, an appointee of the Board of Supervisors, served as a Member of the Commission from its inception, and as Chairperson from June 1995 to April 1997. Joseph Julian, who was appointed by the Mayor in February 1996, served as a Member of the Commission through February 1997.
Legal Advisor
The San Francisco Charter designates the City Attorney as the Commission's legal advisor. In its initial years of operation, the Commission has benefited greatly from assistance provided by the City Attorney's Office in preparing draft legislation and addressing numerous legal questions that have been raised.
Budget
The Commission's annual budget has increased as follows:
| Fiscal Year | Aggregate Budget | |
| 1994-95 | 157,000 | |
| 1995-96 | 261,048 | |
| 1996-97 | 327,610 |
For fiscal years 1996-97 and 1997-98, the Commission's budget was approved to maintain the same level of staffing and operating costs/expenses as in previous years. Adjustments were made for salary step and fringe increases. Additionally, $25,000 was allocated to the Controller's Information Services Division (ISD) in 1996-97, and to the Department of Telecommunications and Information Services in 1997-98, for computer-related services, including necessary hardware and software to develop and maintain an Internet site for public access to campaign finance reports and other data filed with the Ethics Commission.
In the Spring of 1997, a supplemental budget of $18,270 was approved by the Mayor and the Board of Supervisors. This included $11,620 for expenditures related to the implementation of campaign reform provisions of State Proposition 208, which went into effect on January 1, 1997; and $6,520 for expenditures related to the conduct of a special election in June 1997. The supplemental budget brought the Commission's total budget for the fiscal year to a total of $327,610. The budget breakdown for FY 1996-97 (the period covered by this report) is as follows:
| Salaries (Perm. and Temporary) | $ 190,609 |
| Mandatory Fringe Benefits | 47,078 |
| Non-personal Services | 37,704 |
| Materials and Supplies | 3,949 |
| Capital outlay (hardware) | 5,000 |
| Services of Other Depts. (ISD) | 25,000 |
| Subtotal | $ 309,340 |
| Supplemental appropriation | 18,270 |
| FY 1996-97 Total aggregate budget: | $327,610 |
The Commission's aggregate budget for FY 1997-98 includes an amount of $100,000 which was placed in unappropriated reserve in July 1997 by the Board of Supervisors. This funding is expected to be incorporated into the Commission's 1997-98 budget in January 1998.
| Fiscal Year | Anticipated Aggregate Budget | |
| 1997-98 | $427,610 ($100,000 in unappropriated Board reserve) |
Staffing Levels
During FY 1996-97, there were four full-time, permanent staff members, consisting of an executive director, an investigator/auditor, a whistleblower/educator, and an administrative assistant. The staff also included one part-time, temporary clerical assistant.
With the anticipated transfer of an additional $100,000 from Board reserve to the Commission's budget, the Commission expects to increase its investigatory/auditing and clerical staff, and to expand its office to larger premises.
Office Location
Since December 1995, the Commission's office has been located in a small suite of rental space in Fox Plaza at 1390 Market Street, Suite 701. In this location, the Commission has provided public access to campaign, lobbyist and conflict of interest filings, and has enhanced its usage of computer technology. However, the expected addition of new staff in 1998 will require the above-noted expansion to larger quarters.
B. DUTIES AND ACCOMPLISHMENTS OF THE COMMISSION
The Commission's duties and responsibilities are described in San Francisco Charter Section C3.699-11. In its second year of fully staffed operation, the Commission's accomplishments have been significant, both in terms of addressing administrative/organizational issues and in the performance of its charter-mandated duties.
Campaign Finance Disclosure
Since December 1995 the Commission has administered and enforced the City's Campaign Finance Reform Ordinance (CFRO), approved by the voters as Proposition N in November of that year. The CFRO sets voluntary ceilings on campaign expenditures by candidates, which in turn impact on contribution limits. Per the transition year requirements of the CFRO, the Commission adjusted the expenditure ceilings for the November 1996 election and informed all candidates of this action.
In January 1996 the Ethics Commission assumed responsibility from the Registrar of Voters (later re-named the Department of Elections) for all local campaign finance disclosure filings and related enforcement activities. Since then, the Commission has served as filing officer for four categories of local candidates and committees:
- candidates seeking election to local office and their controlled committees,
- committees formed or existing primarily to support or oppose candidates seeking election to local office,
- 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
- county general purpose committees active only in San Francisco.
Per advice received from the Fair Political Practices Commission, the Department of Elections continues to serve as filing officer for all other campaign disclosure statements, such as those filed by candidates for state office, state ballot measure committees and major donors. Supplemental independent expenditure reports and statements from slate mailer organizations are also filed with the Department of Elections.
As filing officer for local campaign filings, the Commission receives and reviews campaign statements disclosing contributions and expenditures filed by candidates, current officeholders and ballot measure committees in San Francisco. It notifies campaign committees of filing requirements, including deadlines. It audits the statements to ensure that campaign contributions and expenditures are within legal limits of state and local campaign laws. It also assesses fees and penalties for failure to adhere to filing deadlines and reporting requirements. Since it began collecting late fines in 1995, the Commission has collected approximately $15,000 in fines, of which approximately $10,000 was collected in FY 1996-97. These monies have been deposited in the General Fund as revenue to the City.
In FY 1996-97, the Commission served as the filing office for all local candidates, candidate committees and ballot measure committees for the semi-annual filings on July 31, 1996 and January 31, 1997, and the pre-election filings on October 7 and October 24, 1996 (for the November 4, 1996 election); and on April 24 and May 22, 1997 (for the June 3, 1997 election). Additionally, there were approximately 100 late contribution filings in the two weeks prior to the November 1996 and June 1997 elections. Approximately 250 filing entities are currently active and required to file reports on six different dates over the year. The passage of state Proposition 208 greatly increased inquiries to this office concerning new campaign reform provisions, and as Proposition 208 makes its way through the courts, will continue to require ongoing staff involvement in educating filers, the media and the public about its implementation.
During 1997 the Commission notified department heads and City officials of a provision in the CFRO which prohibits contractors from contributing to the campaigns of City elective officers and candidates for City elective office during negotiations for City contracts which require approval of those officers.
Electronic Filing
Of the Commission's 250 campaign filing entities, approximately 100 during this fiscal year met the $5,000 threshold requirement which mandates Electronic Filing, per Administrative Code Article XIIB Section 16.535-539. These filers are required to file campaign financial statements on electronic disk as well as on paper forms provided by the FPPC.
In this year, the Commission has invested significant budgetary resources and staff time in the development of its electronic filing program. It has extended its contract from the previous year with the Department of Telecommunications and Information Services (DTIS — formerly ISD, a unit of the Controller's Office) to develop and implement a standard electronic filing format and associated database for campaign finance data submission by all electronic filers, and to maintain the Commission's web site, including the posting electronically filed campaign finance data to the site. Web site display has resulted in wider public access to this information, and has reduced the public's need to visit the office to inspect the paper disclosure forms.
The Commission expects to require electronic filers to use the standard format sometime in the next fiscal year, after it has been made available on a voluntary trial basis. The new format will facilitate posting of campaign finance contributions and expenditures on the web site, and will also expedite the Commission's review of the data with the assistance of automated electronic auditing tools to be incorporated into the database program. The Commission will ensure that its standard filing format includes all information required by the FPPC and that it is consistent with the standard filing format being developed by the Secretary of State. The Commission also plans to begin development of a voluntary on-line electronic filing program for submission of campaign finance data next year. This will allow filers to file data directly to the Commission's web site, in addition to filing in paper format.
Lobbyist Registration and Regulation
In FY 1995-96, authority to administer and enforce the municipal Lobbyist Ordinance was transferred from the Clerk of the Board of Supervisors to the Commission. The Ordinance requires registration of lobbyists and their clients, and regular reporting of contributions and expenditures from lobbyists representing interests at City Hall and throughout City government. The Commission audits the filed statements to insure completeness and accuracy, and it assesses fees and penalties for failure to adhere to filing deadlines and requirements.
As of June 1997, 53 lobbyists were registered with the Ethics Commission. During the past fiscal year, the Commission issued four Quarterly Summary Reports of Lobbyist Activity. These reports, which are issued to elected officials, the media and the public, provide comprehensive charts and summaries of lobbyist expenditures and activities, including the issues addressed and positions advocated.
During this year the Commission staff expanded the Quarterly Reports to indicate the amount of money paid by business and organization lobbyists to influence local legislative or administrative action.
Also this year, the Ethics Commission collected $4,285 in Lobbyist Registration fees, which has been deposited in the General Fund as revenue to the City. A Commission proposal to increase lobbyist fees and fines was approved by the Commission and forwarded to the Board of Supervisors in May 1997. (New fees and fines were subsequently approved. See Recommendations to the Mayor and the Board of Supervisors, pages 7-8.)
After conducting public hearings and seeking public comment last year, this year the Commission issued a revised and expanded Lobbyist Manual, which provides a copy of the Lobbyist Ordinance, clear and concise instructions with examples, and revised forms for lobbyist and client registration and reporting of activities. The Commission contemplates a second revision to the Lobbyist Manual in FY 1997-98. (See page 8.)
Policy Recommendations to the Mayor and the Board of Supervisors
The Commission makes recommendations to the Mayor and the Board of Supervisors governing campaign finance reform, adoption of and revision of City ordinances relating to conflict of interest, lobbying and governmental ethics, and may submit to the voters ballot measures proposing Charter amendments pertaining to ethics-related issues.
In June 1997, the Commission forwarded to the Mayor and the Board of Supervisors three proposed amendments to the Lobbyist Ordinance. This legislation, as amended and approved by the Mayor and the Board of Supervisors in FY 1997-98, contains the following provisions:
New Lobbyist Ordinance Provisions
- Amends section 16.523 to include in the definition of the term "City Officer" the Board of Education, Community College Board, Housing Authority, Redevelopment Agency, and Transportation Agency. (Persons who lobby the above entities are now required to report contacts with, and activity expenses which benefit, members of these agencies.)
- Amends section 16.524 to increase annual lobbyist registration and re-registration fees from $35 to $300; increase lobbyist client registration fees from $15 to $50; and increase late filing fines from $10 per day to $25 per day. (The Commission expects annual income to the City from lobbyist fees and fines to increase from $5,250 to approximately $27,800. This amount will reimburse the City for about 75 percent of the costs of administering the Lobbyist Program.)
- Amends section 16.526 to provide that whenever a lobbyist is required to report salary payments to an employee because the employee is also a City officer, the lobbyist need only disclose, in a check-off format, whether the total salary payment is less than $250, greater than $250 but less than $1,000, greater than $1,000 but less than $10,000, or greater than $10,000. (This amendment was approved by the Board and the Mayor in FY 1997-98. The check-off format, which would replace a requirement that the exact salary be reported, addresses privacy considerations raised by lobbyists.)
Further Anticipated Revision of the Lobbyist Ordinance
Over the past year the Commission staff has performed a careful review and analysis of the Lobbyist Ordinance in light of its practical experience in administering, enforcing and providing advice on this legislation. Accordingly, in the next fiscal year the Commission anticipates that it will propose to the Board of Supervisors an extensive revision of the Lobbyist Ordinance, based on further recommendations from the staff. These will include substantive changes as well as revised language that will clarify the requirements and make the Ordinance easier to understand.
Conflict of Interest Reporting
In FY 1995-96, responsibility for conflict of interest reporting was transferred from the Clerk of the Board of Supervisors to the Commission. Since then, the Commission has served as the filing officer for Statements of Economic Interests (SEIs) for elected and appointed officials, department heads and members of designated boards and commissions who are required to file these statements in accordance with the Political Reform Act and Chapter 58 of the San Francisco Administrative 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 fees and penalties for failure to adhere to filing deadlines and requirements, and makes available on its web site a list of persons who have or have not filed. The Commission performs comprehensive oversight of the program, and provides information and advice to filers.
This year, over 500 department heads and members of boards and commissions filed their Statements of Economic Interests directly with the Commission. Beginning this year, the Commission began posting on its Internet web site the names and departments of persons required to file SEIs with the Ethics Commission. Additionally, hundreds of designated employees also file SEIs with their department heads. These reports are located at the department heads' offices. This year, the Commission began making presentations to employees of City departments on how to complete the SEI Form 700. Expansion of this educational program is anticipated in the coming year.
Investigations and Enforcement
The Commission investigates complaints filed regarding violations of ethics laws, including campaign finance, lobbying, conflict of interest and governmental ethics. The Commission is authorized to process complaints, hold hearings and issue findings, as outlined in the Charter and in the Commission's Regulations for Investigations and Enforcement Proceedings.
A major accomplishment this fiscal year was the Commission's publication of its revised Rules and Regulations for Investigations and Enforcement Proceedings. Approved by the Commission in May 1997 after extensive public comment and analysis by the Commission members and staff, the Regulations became effective in July 1997 following review by the Board of Supervisors. The new Regulations are much clearer, more readable and better organized than the original document, and also include a more streamlined and effective process for investigation of complaints and implementation of enforcement provisions. The revised Regulations are available from the Commission office or its web site address: http://www.ci.sf.ca.us/ethics/
A significant change in the Regulations allows the Commission staff to conduct a preliminary inquiry regarding a complaint before making a recommendation to the Commission as to whether a formal investigation should be authorized.
A Complaint Form, approved this year, was posted to the Commission's web site address. The new form, which provides guidance and assistance to complainants, has encouraged the provision of relevant information and has encouraged submission of complaints on matters within the jurisdiction of the Commission.
During FY 1996-97, the Commission processed 26 complaints, compared to 11 in the same period last year. Per the provisions of the Charter, all complaints are confidential.
Whistleblower Program
Since 1995, the Commission has administered the City's Whistleblower program, formerly administered by the Mayor's Office. The Commission processes Whistleblower complaints alleging violations of the Improper Governmental Activities Ordinance, in accordance with the Charter and Rules and Regulations for Investigation and Enforcement Proceedings, and works appropriately with other City departments to resolve these complaints. Alleged violations of the Improper Government Activities Ordinance include, but are not limited to, corruption, fraud, theft of City property, retaliation, bribery, and misuse of government property.
In June 1997, the Commission authorized the establishment of a dedicated Whistleblower telephone line (the "Whistleblower Hotline") to encourage the filing of complaints alleging violations of the City's Improper Government Activities Ordinance. The Hotline, at (415) 554-9515, was activated in July. An announcement was sent to department heads, along with a flyer, with a request that it be posted on departmental bulletin boards. The number complaints filed with the Commission increased dramatically following the establishment of the Hotline and attendant publicity.
Public Access Laws
The Commission has continued to assist the public with numerous inquiries and issues related to laws governing access to, and participation in, open meetings as well as access to public records. These include the City's Sunshine Ordinance.
Education and Training
The Commission administers an education and training program 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.
In cooperation with other appropriate entities and resources, the Commission has begun to participate in and implement a variety of outreach efforts to provide education and training to City officials and employees, constituent groups and the public. The Commission continues to distribute a brochure regarding its mission and services. The Commission has produced and distributed informational materials on a variety of subjects including the filing of Statements of Economic Interests, and the provisions of the Campaign Finance Reform Act. The Commission has also issued several press releases in the past year highlighting its actions and activities.
Presentations. During this year, through the Executive Director, presentations about the work of the Ethics Commission have been made to various representatives of other cities, states and nations. The Commission staff also made three presentations to designated City departmental employees who are required to complete and file Statements of Economic Interests with the Commission or their department head. In the next fiscal year, the Commission anticipates hosting, with the Department of Elections and the FPPC, a workshop for candidates and committee officials to provide information and assistance related to campaign ordinance requirements, in preparation for the June and November elections. It also anticipates presenting a workshop for electronic filers on a standard mandatory filing format to be introduced by the Commission.
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. Significantly expanded during this year, the Commission's web site now includes:
- General information about the Ethics Commission
- Campaign financial disclosure data (contributions and expenditures) filed by candidates and committees
- Electronic filing requirements
- The Commission's annual reports and by-laws
- Biographies of Ethics Commissioners
- Text of the Lobbyist Ordinance
- Quarterly lobbyist reports
- Lobbyist Manual
- Commission meeting agendas and minutes
- Revised Regulations for Investigations and Enforcement Proceedings
- Complaint form
- Draft legislation under consideration by the Ethics Commission
- A list of persons who have (or have not) filed Statements of Economic Interests
- A link to FPPC campaign disclosure laws
- A summary of provisions of state Proposition 208 re: campaign finance
In the coming fiscal year the Commission anticipates completion of a project to post to its web site all local ordinances regarding campaign finance, lobbying, conflict of interest and governmental ethics.
Affiliations. The Commission is a member of the Council on Governmental Ethics Laws (COGEL), and has served on the nominating committee and been represented at its annual conference. The Commission has also been represented at the Berkeley Graduate Theological Union Center for Ethics and Social Policy.
Filings, Advice and Information
The Commission serves as the filing office for campaign finance, lobbying, and conflict of interest reports and forms. All filings are maintained in the Commission's offices for public access, and are increasingly being made available electronically on the Commission's web site address: http://www.ci.sf.ca.us/ethics/ The Commission provides opinions, formal and informal advice and information on the City ordinances and regulations over which the Commission has jurisdiction.
In the last year, telephone calls to the Commission have doubled, as staff members have responded to over 2000 inquiries:
- 180 inquiries re: the nature/work of the Commission
- 350 inquiries re: campaign finance disclosure
- 820 inquiries re: lobbyist ordinance requirements
- 375 inquiries re: statements of economic interests
- 45 inquiries re: Whistleblower issues
- 240 inquiries from the media
In this year, approximately 700 persons have visited the Commission's office to access and research information contained in the public records filed with the Commission. Commission staff members provide assistance to the public in locating records, and in making both paper and disk copies of statements filed. Additionally, the Commission has responded to written requests, and issued letters of informal advice on ethics-related matters.
Staffing
The approval of the Commission's FY 1996-97 supplemental budget request allowed the Commission to retain, through the end of the fiscal year, the services of a part-time, 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, and to create mail merges to expedite the Commission's frequent notices and mailings to campaign filers, elected officials, department heads and members of boards and commissions. The need for such notification was increased by voter approval of state Proposition 208, which included several campaign reform provisions.
The Executive Director worked with the Department of Human Resources to arrive at appropriate reclassifications of the three permanent staff positions reporting to the Executive Director. The new classifications provided more accurate descriptions of duties performed and allowed for modest salary increases for those positions.
The position of Whistleblower/Educator became vacant in April 1997. Candidates were recruited and interviewed, and the position was filled that month.
Training and education for staff has been provided in cooperation with the State's Fair Political Practices Commission on the filing of campaign finance reports and duties of filing officers regarding statements of economic interests. The Department of Telecommunications and Information Services has also provided training for Commission staff in the use of database software applications related to electronic filing of campaign financial disclosure statements.
C. FUTURE INITIATIVES
During FY 1997-78, the Commission will identify and calendar for implementation the priority issues and projects that will most effectively fulfill its Charter mandates. The Commission will consider various proposals to clarify and otherwise improve the City's ordinances pertaining to political campaigns, lobbyist activity, governmental ethics (the Whistleblower program) and conflicts of interest. It will consider proposals to issue or revise regulations pertaining to ordinances within its jurisdiction. The Commission will also identify its priority educational programs and publications.
In November 1997 voters approved a ballot measure which creates registration and reporting requirements for political consultants. As with the CFRO, this will result in additional responsibilities for the Ethics Commission, beyond those originally delineated in the Charter.
Finally, the Commission will assess its budget needs for a supplemental budget request to be submitted for FY 1997-98, and for its new initiatives budget for FY 1998-99. The Commission's Charter mandates are considerable, and its jurisdiction and responsibilities have continued to expand. In its first two years of fully staffed operation, the Commission has taken significant steps towards fulfilling its mandates. The expected addition of $100,000 to its FY 1997-78 budget will significantly increase its effectiveness. But significant additional resources will be required to expand its investigative, auditing and educational staff if the Commission is to address each of its mandates in a way that will most meaningfully serve the public interest.
__________________________
Geoffrey Gordon-Creed
Vice-Chairperson
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