I. Introduction
This report summarizes the audit results of the San Francisco Labor Council (“SFLC”). The audit was conducted to determine whether the SFLC materially complied with local disclosure requirements pertaining to supervisorial candidates in the November 4, 2008 election. The Ethics Commission performed this audit using information provided on Form SFEC-152(a)-3 filings, campaign statements, a spreadsheet (“the spreadsheet”) completed by the San Francisco Labor Council disclosing all expenditures related to candidates for City elective office in the November 2008 election, and other relevant documents.
Pursuant to San Francisco Campaign and Governmental Conduct Code (“S.F. C&GC Code”)
Section 1.152(a)(3), any person who makes independent expenditures, electioneering communications or member communications that clearly identify a candidate for the Board of
Supervisors in an amount that in the aggregate equals or exceeds $5,000 must, within 24 hours of reaching the spending threshold, provide an original copy of the communication and file Form
SFEC-152(a)-3 with the Ethics Commission. Thereafter, any candidate for the Board of
Supervisors may request that the Executive Director review the original or copy of the communication filed to make an independent determination regarding which candidate(s) the communication filed with the statement supports or opposes or whether the communication is neutral. On the fourth business day following the filing of Form SFEC-152(a)-3, the individual expenditure ceilings of publicly financed candidates are adjusted as necessary, based upon the information filed on the forms and the independent determination of the Executive Director (if applicable). Forms filed incorrectly or late may affect the adjustment of the individual expenditure ceilings of publicly financed candidate and interfere with public disclosure.
II. Committee Information
The SFLC controls three committees that file forms with the Ethics Commission. The FPPC identification numbers for these committees are 941562 (“San Francisco Labor Council Labor and Neighbor” or “L&N”), 991525 (“San Francisco Labor Council Labor and Neighbor Independent Expenditure Political Action Committee” or “IE PAC”), and 970630 (“San Francisco Labor & Neighbor Member Education/Political Issues Committee, sponsored by the San Francisco Labor Council” or “PIC”). [1]
The SFLC’s Financial Manager, Hang To, prepared the Form SFEC-152(a)-3 filings and served as the contact person on the forms. Tim Paulson, the Executive Director, approved and signed the forms. Richard Rios, an attorney with Olson Hagel & Fishburn, became the contact person approximately six weeks after the election. The SFLC endeavored to cooperate with the Ethics Commission during all phases of the audit.
Commission staff determined that the SFLC made expenditures to support or oppose candidates in Districts 1, 3, 5, and 11.
III. Background
The SFLC had a high level of activity during the November 2008 election. Accordingly, staff made a concerted effort to assist it in filing accurate and complete forms. Despite such efforts, there was confusion relating to the SFLC’s Form SFEC-152(a)-3 filings. Some filings did not include a copy of the communication and for other filings it was unclear which forms and communications should be paired with one another. There was also confusion as to whether certain filings were original filings or amendments. Staff asked Ms. To to provide clarification regarding these filings. When Ms. To failed to address staff’s questions in a timely manner, staff initiated an audit of the SFLC’s Form SFEC-152(a)-3 filings.
IV. Targeted Audit
Staff selected the SFLC for a targeted audit because of several factors:
- Filings appeared incomplete and unclear. The SFLC filed some forms without any copy of the communication attached, filed several forms and communications per email without identifying which forms and communications should be paired with one another, and filed amendments that were not marked as amendments and/or not linked to original filings.
- Commission staff found evidence of mailing expenditures that were not disclosed on any form.
- The SFLC filed the greatest quantity of Form SFEC-152(a)-3 originals and amendments of any filer in the November 2008 election.
- According to staff’s analysis of Form SFEC-152(a)-3 filings, the SFLC made the most expenditures related to supervisorial candidates in the November 2008 election.
- Despite outreach to the SFLC, staff believed that the SFLC failed to clarify its filings.
V. Audit Authority
San Francisco Charter Section C3.699-11 authorizes the Ethics Commission to audit campaign statements and other relevant documents to determine whether a committee complied with applicable requirements of State and local laws.
VI. Audit Findings
The Commission determined that there were no material findings with respect to the audit of the SFLC. The SFLC substantially complied with the requirement to file the Form SFEC-152(a)-3. Upon a closer review of documents and informative discussions with SFLC representatives during the audit, staff determined that while the SFLC made some errors in its disclosures, such errors were minor, and did not obfuscate the amount that SFLC spent or the fact that the SFLC was the source and sponsor of such spending.