Ethics Commission
City and County of San Francisco

Minutes – January 10, 2011

Minutes of the Regular Meeting of
The San Francisco Ethics Commission
January 10, 2011
Room 408, City Hall
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102

I. Call to order and roll call.

Chairperson Studley called the meeting to order at 5:34 PM and welcomed the new Commissioner, Beverly Hayon.

COMMISSION MEMBERS PRESENT:  Jamienne Studley, Chairperson; Eileen Hansen, Commissioner; Beverly Hayon, Commissioner; Benedict Y. Hur, Commissioner.  Commissioner Ward was excused from the meeting.

STAFF PRESENT:  John St. Croix, Executive Director; Mabel Ng, Deputy Executive Director; Catherine Argumedo, Investigator/Legal Analyst.

OFFICE OF THE CITY ATTORNEY:  Andrew Shen, Deputy City Attorney.

OTHERS PRESENT:  Peter Warfield; Ray Hartz; David Pilpel; Charles Marsteller; and other unidentified members of the public.

MATERIALS DISTRIBUTED: 
– Staff memorandum re: Complaint Disposition (No. 01-100115), dated October 14, 2010.
– Staff memorandum re: Proposed Amendments to the Campaign Consultant Ordinance, dated January 6, 2011. 
– Draft Campaign Consultant Ordinance amendments, dated January 4, 2011.
– Memorandum from the Office of the City Attorney re: Retention of Outside Counsel for Advice Regarding the 2011 Mayoral Election
– Minutes of the Regular Meeting of the San Francisco Ethics Commission on December 13, 2010.
– Executive Director's Report to the Ethics Commission for the Meeting of January 10, 2011.

II. Public comment on matters appearing or not appearing on the agenda that are within the jurisdiction of the Ethics Commission

Ray Hartz stated that section 67.16 of the Sunshine Ordinance states that "any person speaking during the public comment period may supply a brief written summary… which shall, if no more than 150 words, be included in the minutes."  He objected to the placement of a written summary as an attachment to the minutes.  He asked what the compelling state interest was in refusing to follow the Sunshine Ordinance and refusing to place a summary in the minutes.  He stated that the Ethics Commission is enumerated in the Charter and is required to follow Sunshine.  He stated that the Good Government Guide gives an opinion that attaching the minutes is sufficient, but the law states "in the minutes."  [Mr. Hartz also submitted a written statement which has been included at the end of these minutes.]

Peter Warfield then asked whether he would be permitted to make comments about agenda item 3 now and later.  Chairperson Studley stated that the Commission would not address item 3 during the meeting.  Executive Director St. Croix stated that the item was to be heard, but staff was unable to reach one of the parties.  He stated that the party contacted the office earlier that day and asked for a continuance.  He granted the continuance, as the party was unable to come to the meeting. 

Chairperson Studley apologized for any inconvenience and for the short notice and asked for public comment. 

Peter Warfield stated that he serves on a committee with Ms. Cauthen, but he was not speaking as a member of that committee.  He stated that he agreed generally with Mr. Hartz.  He stated that the inclusion of the summaries in the minutes is appropriate and intended to permit someone to read along what the person has said.

Mr. Warfield stated that he was extremely disappointed regarding the cancellation of item 3.  He stated that his plans have been affected and he would have appreciated some notice.  He made several comments regarding staff's memorandum of item 3.  He stated that staff stated Ms. Gomez violated section 67.15 of the Sunshine Ordinance, but then later recommended the dismissal of the violation.  He informed the Commission of another incident in March where he experienced similar treatment from Ms. Gomez.  He stated that staff's memorandum downplayed the incident dramatically.  He stated that Ms. Gomez yelled at Ms. Cauthen and asked the Commission to listen to the meeting tape or view the meeting DVD.

Chairperson Studley stated that she allowed Mr. Warfield to speak as though he spoke for two items, as there was a possibility that Mr. Warfield would not be able to return for a future meeting.

Commissioner Hansen asked Mr. Warfield a question about his first point regarding staff's recommendation about Ms. Gomez.  She stated that staff's recommendation was not to dismiss the violation against Ms. Gomez, but against Ms. Blackman.  Mr. Warfield stated that he was unclear as to why it would be dismissed against either of them, when the violation had occurred.  He stated that he raised the question for the Commission to discuss the issue.  Chairperson Studley stated that the Commission could not discuss the merits of the item, until it is placed on the agenda.

Mr. Hartz asked whether he would have additional time since Mr. Warfield was given additional time.  He stated that he had been at last month's Ethics Commission meeting.  He stated that he too had been disrupted by Ms. Gomez and that he had to justify his right to speak.  He stated that Ms. Gomez would not come to the Ethics Commission to explain her behavior.  He mentioned a Police Commissioner who had also committed a Sunshine and Brown Act violation and failed to explain his behavior.

III. Consideration of Ethics Complaint No. 01-100115, alleging that the Library Commission, through its representative Secretary Sue Blackman, violated Sunshine Ordinance sections 67.15(a) and 67.34 by failing to allow public comment at a Library Commission meeting, and section 67.21(e) by failing to send a knowledgeable representative to Task Force hearings.

Item continued. 

Public Comment:
None.

IV. Consideration of possible amendments to the Campaign Consultant Ordinance ("Ordinance"), San Francisco Campaign and Governmental Conduct code section 1.500 et seq. 

Decision Point 2
Commissioner Hansen stated that she had concerns regarding this decision point, as the voters should have full participation.  Executive Director St. Croix stated that before going to the voters, this matter must go before the Board and they have to agree to this point as well.  He stated that whenever changes are made, sometimes there are unintended consequences and allowing super-majorities would permit the Commission to make the necessary changes without going to the voters. 

Chairperson Studley asked the deadline for submitting this item for the November ballot.  Mr. St. Croix estimated that the deadline was in June 2011. 

Commissioner Hur stated that he saw the benefit of this authority.  Chairperson Studley stated that the voters should decide what should come to them.  Mr. St. Croix stated that the process of submitting items for the ballot is difficult and once the Commission sends an item for the ballot, the Commission must remain silent on the item.  When there are proposed amendments with super-majorities, the Commission is permitted to comment and provide advice.  Commissioner Hayon stated that many voters may feel overwhelmed with the number of ballot measures on the ballot, especially measures regarding technical changes with legalese.

Motion 11-01-10-1 (Hur/Hayon): Moved, seconded and passed (3-1; Hansen dissent) that the Commission adopt decision point 2.

Public Comment:
Mr. Pilpel welcomed the new Commissioners.  He stated that the changes would be more streamlined and are consistent with other local laws.

Decision Point 3b
Deputy Director Ng stated that Commissioner Hansen expressed interest in returning to the original definition of "candidate" and staff agreed to leave the definition basically unchanged.

Motion 11-01-10-2 (Hayon/Hur): Moved, seconded and passed (4-0) that the Commission adopt decision point 3b.

Public Comment:
Mr. Pilpel asked about the definition of "economic consideration" at the top of page 4 in the draft amendments, but then realized the question was for the next decision point.

Decision Point 3c
Commissioner Hansen expressed concerns regarding the last line of additional language on page 4, "reimburse vendors."  Ms. Ng stated that staff recommended the language to match language from a 2001 Ethics Commission advice letter regarding economic consideration.  She stated that consultants should not be deemed to have earned that money.  Commissioner Hansen stated that the Commission would be assuming the reimbursement occurs and that the vendor pays. 

Chairperson Studley asked the purpose of this definition.  Ms. Ng stated that this definition would be used in defining the minimum thresholds for a consultant, as well as calculating what the consultant earns.  Commissioner Hansen stated that she had concerns regarding hidden costs and the timing of reporting.  Ms. Ng stated that the client (campaign committee/candidate) would report payments made on its campaign statements.

Commissioner Hur asked about lines 16-19 on page 4, which were proposed to be removed.  Ms. Ng stated that the ordinance was too broad and that staff did not see why these exceptions should still exist.  The Commissioners discussed possible scenarios of the proposed stricken language.

Motion 11-01-10-3 (Hansen): Moved and not seconded that the Commission approve only the proposed changes to the definition of "vendor" in section 1.510(i). 

Commissioner Hur stated that he was not comfortable changing the definition of "vendor," as there could be unintended consequences.

Public Comment:
Mr. Pilpel stated that regarding "vendor," the relationship between candidates, committees, consultants, and vendors was a complex arrangement.  He stated that the definition may exclude someone who would not otherwise qualify as a consultant.  He stated that just because there is a vendor and economic consideration does not make the vendor subject to the Ordinance.  He stated that "services" are defined elsewhere (in 1.510(b)-(d)) and it all goes together.

Mr. St. Croix stated that the intent was not to have reimbursements considered as income to the consultant.  He suggested taking "reimbursements" from line 2, page 4, as well as the last sentence of the definition of "economic consideration."  Commissioner Hayon asked why attorneys, accountants, and pollsters were originally excluded from the Ordinance.  Mr. St. Croix stated that he did not know why.

Mr. Pilpel stated that some vendors, such as printers, are reluctant to work with campaigns because the campaign may not pay or take a while to pay. He stated that these vendors also do not want the cost becoming a contribution, if the campaign does not pay.  He stated that the vendors work with consultants because they know they will be paid.  He stated that vendors seek business and are eager to be paid for their work.

Charles Marsteller stated that Mike Housch or Larry Bush may be able to explain the reasons behind the inclusion or exclusion of certain groups in the Ordinance.

Mr. Pilpel stated that if someone is a professional campaign manager and that person is also an attorney, then that person would qualify under the Ordinance because that person is not providing "only legal services."  He suggested deleting lines 16-19 from "vendor."

Mr. St. Croix suggested changing the language of the second sentence in "economic consideration" to the following:  "Economic consideration does not include reimbursements made to consultants for payments made to vendors."  Commissioner Hur suggested deleting the second sentence, if there were other ways to limit the payments, such as a time limit.  Mr. St. Croix agreed with removing the second sentence.  Ms. Ng suggested adopting regulations to clarify "reimbursements."  Commissioner Hansen suggested adding a time frame for the reimbursements.  Mr. St. Croix suggested adding "made on a timely basis."

Mr. Marsteller stated that a common issue is where a mail house will advance postage to a committee and not bill the consultant and/or campaign committee.  He stated that would be an accrued debt, but the Commission now has an accrued debt limit.

DCA Shen reminded the Commissioners that the definition of "economic consideration" is important in order to determine whether a consultant qualifies under the Ordinance.  He expressed concerns including words like "timely" or "reasonable."

Motion 11-01-10-4 (Hur/Hansen): Moved and seconded that the Commission adopt decision point 3c, except that the phrase "reimbursements for expenses" be stricken from the first sentence and the second sentence be stricken in its entirety, and that the Commission adopt regulations after further research to clarify this issue.

Public Comment:
Mr. Pilpel approved of the changes, but stated that the language is duplicative and unnecessary.
Mr. Marsteller stated that staff may have a difficult task regarding the timeliness question.

The Commissioners discussed the possibility of kickbacks or commissions from vendors to consultants.

Motion 11-01-10-5 (Hur/Hansen): Moved, seconded and passed (4-0) that the Commission adopt decision point 3c, except to strike the phrase "reimbursement for expenses" from line 2, page 4, and strike the additional proposed language and the second sentence of the definition of "economic consideration"; in addition, the Commission proposes that staff research the issue of providing anything else of value for the potential for reimbursements that are not made in a long period of time and draft regulations.

Public Comment:
None.

Mr. Marsteller suggested adding examples into the campaign consultant manual in order to clarify this issue.

Decision Point 7
Commissioner Hur stated that section 1.525(b) – evasion of obligations – seemed vague and was too broad.  Ms. Ng stated that the language mirrored that which is in the Lobbyist Ordinance.  Commissioner Hansen noted that the decision point incorrectly referenced lines 12-18 on page 11 of the draft amendments, when it actually referenced lines 3-9 on page 12 of the draft amendments.

Motion 11-01-10-6 (Hansen/Hayon): Moved, seconded and passed (3-1; Hur dissent) that the Commission adopt decision point 7.

Public Comment:
Mr. Marsteller stated that the FPPC may have experience with the evasion question.

Decision Point 10
Commissioner Hur stated that he did not see "preponderance of the evidence" in the draft amendments.  Staff agreed to add the language "on the basis of a preponderance of the evidence" in line 15, page 14 where "on the basis of substantial evidence" used to be.

The Commissioners then discussed the proposal to delete language in section 1.540(c) allowing the Commission to cancel the registration of any campaign consultant who has violated the registration or reporting requirements of the Ordinance for up to one year.  Ms. Ng stated that the administrative penalty mirrors that in CFRO and that the monetary penalty would be sufficient.  She also stated that it had never been used.  Commissioner Hur expressed concerns that there was no limitation on the Commission to cancel a consultant's registration.  Mr. St. Croix suggested adopting regulations to limit the Commission's ability to do so.

Mr. Pilpel stated that the language in lines 11-14 on page 15 was strange.

Mr. Marsteller stated that the cancellation of someone's registration was a severe sanction.

Motion 11-01-10-7 (Hansen/Hur): Moved, seconded and passed (4-0) that the Commission adopt decision point 10, except for the fourth bullet point from staff's memorandum.

Public Comment:
None.

Motion 11-01-10-8 (Hur/Hansen): Moved, seconded and passed (4-0) that Commission staff consider regulations that would provide guidance when that power would be used by the Commission.

Public Comment:
None. 

Decision Point 17
Commissioner Hur clarified that the decision point would take everything discussed at this meeting and during December's meeting into account.

Motion 11-01-10-9 (Hayon/Hur): Moved, seconded and passed (4-0) that the Commission adopt decision point 17.

Public Comment:
Mr. Pilpel stated that line 12 on page 5 may need to be changed; he suggested "employee."  Chairperson Studley stated that line 14 on page 5 was being changed.  Mr. St. Croix stated that would be taken under consideration.  Mr. Pilpel stated that subsections 7 and 8 of section 1.515(b) were unlikely.  He also encouraged the Commission to add the requirement for a consultant to disclose whether s/he or any employee serves as an officer or director of a general purpose recipient committee and, if so, to require the consultant to list the name of the organization.  He stated that he suggested that the Commission require disclosure and not prohibit it.

V. Possible retention of the Oakland City Attorney's Office as legal counsel to advise the Ethics Commission on matters that directly involve the election or campaign in the November 2011 municipal election for Mayor of the City and County of San Francisco.

Executive Director St. Croix stated that staff would like the Commission's approval on this arrangement, so that staff would have someone if any questions are raised regarding the mayoral race.  DCA Shen clarified the nature of the firewall within the Office of the City Attorney.  He stated that the City Attorney's office would handle general questions regarding public financing and campaign finance, without the assistance of Dennis Herrera.  He stated that the City Attorney's office would not be involved in specific questions regarding the mayoral race.

Motion 11-01-10-10 (Hayon/Hansen): Moved, seconded and passed (4-0) that the Commission retain the Oakland City Attorney's Office as legal counsel to advise the Ethics Commission on matters that directly involve the election or campaign in the November 2011 municipal election for Mayor of the City and County of San Francisco.

Public Comment:
Mr. Pilpel stated that Mr. Morodomi previously worked for the FPPC and asked whether the written agreement was a public document.

DCA Shen stated that there may not be a need for a written agreement.

VI. Closed session.

Motion 11-01-10-11 (Hansen/Hur): Moved, seconded and passed (4-0) that the Commission enter into closed session.

Public Comment:
Mr. Marsteller stated that he had a comment, but missed the earlier item for general public comment.  He stated that there may be coordination for ranked-choice voting.  He stated that there may be deployment of public financing resources to ranked-choice tickets and coordination between committees.  He suggested that the Commission hold interested persons' meetings about it.

Mr. Pilpel stated that he had questions regarding the budget, but then stated that it was not on the agenda.  He then asked about the item to be discussed during closed session.  DCA Shen stated that there was a constitutional challenge to the public financing program.

[Entered CLOSED SESSION at 8:13 PM.]

[Returned FROM CLOSED SESSION at 8:27 PM.]

VII. Discussion and vote regarding closed session action and deliberations.

Motion 11-01-10-12 (Hur/Hansen): Moved, seconded and passed (4-0) that the Commission finds that it si in the best interests of the public not to disclose its closed session deliberations re: existing legislation.

Public Comment:
None.

VIII. Minutes of the Commission's regular meeting of December 13, 2010. 

Motion 11-01-10-13 (Hansen/Hur): Moved, seconded and passed (4-0) that the Commission adopt the minutes of the Commission's regular meeting of December 13, 2010, without discussion.

Public Comment:
None.

IX. Executive Director's Report.

Executive Director St. Croix stated that February's meeting will be on Valentine's Day.  He stated that there had been a probable cause hearing scheduled, but that has been continued.  He stated that another probable cause hearing is scheduled for February and is expected to take the majority of the meeting time.  He stated that the Commission will need to consider the annual budget at the February meeting.  He stated that the Commission was required to submit $53,000 in savings from this year's budget and that was approved. He stated that there have already been many questions regarding public financing for the Mayoral race and there is a training scheduled for the end of January 2011. 

Mr. St. Croix then stated that this meeting may be the last meeting that Commissioner Hansen would attend as a Commissioner, but that she may remain on the Commission in February and March.  He stated that he wanted to thank her for her tenure.  Chairperson Studley stated that she appreciated Commissioner Hansen's tenacity and candor and her work on the Commission.  Commissioner Hur stated that he appreciates hearing her comments and views and agrees with Chairperson Studley and the Executive Director.

Commissioner Hansen stated that at times it was a struggle, but that she has had a phenomenal six years.  She stated that she was appreciative to have been able to serve the City in this way.  She stated that she hopes her replacement would work well with the other Commissioners and that s/he would continue in the same vein.  She stated that she hopes that the Commission sets the bar high enough so that other cities would follow and thanked the Commissioners for their service. 

X. Items for future meetings.

Public Comment:
None.

XI. Public comment on matters appearing or not appearing on the agenda that are within the jurisdiction of the Ethics Commission.

None.

XII. Adjournment.

Motion 11-01-10-14 (Hayon/Hansen): Moved, seconded and passed (4-0) that the Commission adjourn.

Public Comment:
None.

Meeting adjourned at 8:35 PM.

Respectfully submitted,

 

_________________
Catherine Argumedo

This summary statement was provided by the speaker, Ray Hartz. The content is neither generated by, nor subject to approval or verification of accuracy by, the Ethics Commission.

The placement of this summary, as an attachment to the minutes, violates the clear wording of the Sunshine Ordinance.  The Ethics Commission has made specious arguments to justify this variance from the law.  The Brown act clearly states, “…any attempt to restrict the content of such speech must be narrowly tailored to effectuate a compelling state interest.”  It goes on to say, “…that prohibiting critical comments was a form of viewpoint discrimination.”  Further, “such a prohibition promoted discussion artificially geared toward praising (and maintaining) the status quo, thereby foreclosing meaningful public dialogue.”  The placement of public comment summaries, in variance with the law, is intended to relegate those comments to a position of secondary validity.  In reality, it serves no other purpose.  Does anyone believe that a member of the commission would, objecting to how their comments were reported in the minutes, be denied the opportunity to correct the record?

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