Ethics Commission
City and County of San Francisco

Minutes – October 19, 2011

Minutes of the Special Meeting of
The San Francisco Ethics Commission
October 19, 2011
Room 416, City Hall
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102

I. Call to order and roll call.

Chairperson Hur called the meeting to order at 5:30 PM.

COMMISSION MEMBERS PRESENT: Benedict Y. Hur, Chairperson; Jamienne Studley, Vice-Chairperson; Beverly Hayon, Commissioner; Dorothy S. Liu, Commissioner; Charles Ward, Commissioner.

STAFF PRESENT: John St. Croix, Executive Director; Mabel Ng, Deputy Executive Director; Shaista Shaikh, Assistant Deputy Executive Director; Garrett Chatfield, Investigator/Legal Analyst.

OFFICE OF THE CITY ATTORNEY: Jon Givner, Deputy City Attorney.

OFFICE OF THE OAKLAND CITY ATTORNEY: Mark Morodomi, Supervising Attorney.

OTHERS PRESENT: April Veneracion, Steven Hill; Larry Bush, Ray Hartz; Anita Mayo; Derek Kerr; Maria Rivero; David Pilpel; and other unidentified members of the public.

MATERIALS DISTRIBUTED:
– Informal Advice Letter to Steven Gold re: whether ActBlue may act as an intermediary for contributions made to political committees participating in elections for offices and ballot initiatives in the City and County of San Francisco, dated October 5, 2011.
– Legislative Digest of proposed amendments to the San Francisco Campaign Finance Reform Ordinance by Supervisor Jane Kim.
– Memorandum from the Executive Director re: Proposed Amendments to the Campaign Finance Reform Ordinance, dated September 8, 2011.
– Memorandum from the Executive Director re: Amendments to Bylaws, dated October 6, 2011.
– Draft Minutes of the Regular Meeting of the San Francisco Ethics Commission on September 12, 2011.
– Executive Director's Report to the Ethics Commission for the Meeting of October 19, 2011.

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

Steven Hill stated that he was a co-author of the public financing ordinance. He stated that the public has not been part of the process regarding the revisions in the public financing laws. Responding to Vice-Chairperson Studley, Mr. Hill suggested that the Ethics Commission use email or the internet to inform the public regarding the proposed revisions.

Dr. Maria Rivero stated that she is a whistleblower and that she submitted a complaint to the Ethics Commission over two years ago. She stated that the complaint has not yet been resolved.

Dr. Derek Kerr stated that he worked for Laguna Honda Hospital for over 20 years. He stated that he is a whistleblower and was laid-off from his position after submitting a complaint to the Ethics Commission. He stated that two years to resolve a complaint is too long.

Ray Hartz read Article 20 from the California Constitution. He asked the Commission what role they have played to ensure people can exercise their First Amendment rights. He stated that the Ethics Commission does not stand up for the people of San Francisco.

Larry Bush stated that Oliver Luby had provided a written proposal regarding contractor prohibitions on contributions. He stated that the Ethics Commission offers no training to contractors regarding the prohibition.

Chariperson Hur stated that the Ethics Commission evaluates every case and understands that the confidentiality provisions prohibiting the Commission from commenting on cases can be frustrating.

III. Discussion of the public financing program, including consideration of developments since the Commission's approval of amendments to the Campaign Finance Reform Ordinance (CFRO) to address the U.S. Supreme Court's decision in Arizona Free Enterprise Club's Freedom Club PAC, et al. v. Bennett, as well as alternative proposals such as Supervisor Jane Kim's proposal to amend sections CFRO sections 1.140, 1.143 and 1.144.

Deputy City Attorney Givner left the room and the Ethics Commission received counsel from Mark Morodomi, Supervising Attorney with the Oakland City Attorney's Office.

Executive Director St. Croix stated that the Board of Supervisors did not adopt the recommendation submitted by the Ethics Commission. He stated that Supervisor Kim submitted a proposal to the Ethics Commission for consideration. He stated that it is important that the Ethics Commission address revisions to CFRO before February 2012, when public financing for the 2012 Board of Supervisors race begins.

April Veneracion, legislative aide to Supervisor Kim, introduced Supervisor Kim's proposal.

Responding to Chairperson Hur, Ms. Veneracion stated that Supervisor Kim's proposal considered the average spending by candidates in the 2008 and 2010 elections.

Public Comment.

Steven Hill stated that the Board of Supervisors were not comfortable with the Ethics Commission's proposal. Responding to Commissioner Liu, Mr. Hill stated that San Francisco spent an average of $1.50 per citizen on public financing.

Ray Hartz stated that now there are offices for sale and that these revisions in response to the Supreme Court decision disenfranchises voters. He stated that this denies the average citizen from being effective in city government and only allows the rich to continue running for office.

Larry Bush stated that the U.S. Supreme Court has changed the dynamic on election races.

David Pilpel stated that the Ethics Commission does not have to take any action on this item.

Responding to Vice-Chairperson Studley, Ms. Veneracion stated that Supervisor Kim wanted to present a qualifying amount to the Commission in her proposal, but that it could be severed from the proposal.

Responding to Commissioner Liu, Mark Morodomi stated that the Ethics Commission should consider making the changes necessary to comport with the U.S. Supreme Court's decision to avoid a legal challenge.

Responding to Commissioner Ward, Mr. Morodomi stated that the first proposal to the Board of Supervisors severed the connection between outside spending and additional public funds. He stated that the Board of Supervisors rejected that proposal.

Commissioner Liu stated that the connection must be severed otherwise it is unconstitutional.

Chairperson Hur directed the Executive Director to solicit further public input and invite proposals for the Commission to consider.

The Ethics Commission adjourned for a break at 6:44 PM.

The Ethics Commission returned from a break at 6:55 PM.

Deputy City Attorney Givner returned to the room.

IV. Consideration of possible amendments to the Campaign Finance Reform Ordinance, San Francisco Campaign and Governmental Conduct Code section 1.100 et seq.

Executive Director St. Croix introduced the item.

Chairperson Hur stated that the Commission would take public comment on each decision point prior to the Commissioner's discussion.

Decision Point 1a.

Public Comment.

Steven Hill stated that an unintended consequence of public financing is that some individuals, who might otherwise drop out of the mayoral race, stay in the race so they do not have to pay back the public funds.

David Pilpel stated that the form the Ethics Commission requires for disclosure of communications does not ask for the number of communications, only for the dollar amount of the expenditure.

Responding to Chairperson Hur, Assistant Deputy Director Shaikh stated that the revision will make this disclosure provision parallel with the other provisions in CFRO. She stated as the law currently is written, the reporting requirements are different, and they are confusing for candidates and the public.

Deputy Director Ng stated that this revision will eliminate the mass mailing disclosure requirements if the mass mailing is distributed more than 90 days from the election and no candidate's receive public financing.

Deputy City Attorney Givner stated that it is incredibly rare to have any mass mailer issued over 90 days before an election.

Decision Point 1b.

Public Comment.

Larry Bush stated that the reduction in the font size required on disclosures from 14-point to 10-point would be difficult to see and is too small.

Deputy Director Ng stated that the change is to be consistent with state law which requires 10-point font for this type of disclosure.

Commissioner Ward stated that he disagrees with the change and stated that the font size should remain at 14-point.

Decision Point 1c.

Public Comment.
None.

No discussion.

Decision Point 1d.

Public Comment.
None.

No discussion.

MOTION 11-10-19-01 (Studley/Hayon): Moved, seconded, and passed (5-0) that the Commission adopt decision point 1a to establish disclaimer and disclosure requirements for communications that are paid for by third parties and that concern candidates for City elective office.

MOTION 11-10-19-02 (Studley/Hur): Moved, seconded, and passed (4-1, Ward dissenting) that the Commission adopt decision point 1b to establish the content and form of disclaimer statements on third party communications and to require that disclaimers appear in 10-point font on written communications. (Vacated by MOTION 11-10-19-05.)

MOTION 11-10-19-03 (Studley/Liu): Moved, seconded, and passed (5-0) that the Commission adopt decision point 1c to set forth the content and form of disclosure reports regarding third party communications related to candidates.

MOTION 11-10-19-04 (Studley/Hayon): Moved, seconded, and passed (5-0) that the Commission adopt decision point 1d to identify exceptions to the disclaimer and disclosure requirements for third parties making communications related to candidates.

Decision Point 2.

Public Comment.

David Pilpel stated that requiring treasurers to scan mass mailings is too burdensome.

Larry Bush stated that the proposed font size on disclosures under this section is too small and should by 14-point.

Deputy Director Ng responded to Vice-Chairperson Studley, stating that there is some urgency in adopting the changes proposed to ensure they are in place for the 2012 election cycle.

Assistant Deputy Director Shaikh stated that the proposal to require scanning was to ensure information is immediately available to the public.

Commissioner Ward stated that the disclosure requirements for all mailings and communications should be 14-point.

MOTION 11-10-19-05 (Studley/Hayon): Moved, seconded, and passed (4-1, Hur dissenting) that the Commission vacate MOTION 11-10-19-02.

MOTION 11-10-19-06 (Hayon/Ward): Moved, seconded, and passed (4-1, Hur dissenting) that the Commission adopt decision point 1b to establish the content and form of disclaimer statements on third party communications and to requirement that disclaimers appear in 14-point font on written communications.

MOTION 11-10-19-07 (Studley/Ward): Moved, seconded, and passed (5-0) that the Commission adopt decision point 2 to establish the disclaimer and disclosure requirements for candidates who distribute communications and to require that such disclosure statement appear in 14-point font on written communications.

Decision Point 3.

Public Comment.

Larry Bush stated that there should be a 24-hour reporting period starting 10 days before an election.

David Pilpel stated that there is currently no disclosure required on election day.

Responding to Chairperson Hur, DCA Givner stated that the Commission could include election day to be another disclosure day.

Vice-Chairperson Studley stated that the Commission should balance the need for disclosing information to the public as soon as possible without trying to make the reporting requirements unreasonably burdensome. She stated the current proposal appears to achieve that balance.

MOTION 11-10-19-08 (Studley/Hur): Moved, seconded, and passed (4-1, Hayon dissenting) that the Commission adopt decision point 3 to establish a standard timing requirement for all disclosure reports to be filed by candidates and third parties who distribute communications regarding candidates for City elective office, such that the reports must be filed with the Ethics Commission by the first disclosure deadline after distribution of the communication.

Decision Point 4.

Public Comment.

David Pilpel stated that this provision might create a professional class of compliance experts, and would create a burden on small campaign committees.

Anita Mayo stated that San Francisco has one of the most complicated campaign ordinances in the country. She stated that individuals are penalized by using campaign funds to pay for ensuring compliance to the ordinance. She stated that the proposal to exempt 10 percent is reasonable.

Vice-Chairperson Studley stated that this is a way to recognize that compliance costs are a significant cost to campaigns.

MOTION 11-10-19-09 (Studley/Hur): Moved, seconded, and passed (4-1, Ward dissenting) that the Commission adopt decision point 4 to approve amendments to reflect the exclusion of up to ten percent of a candidate's compliance costs from the determination of whether to lift the Voluntary Expenditure Ceiling or to adjust the Individual Expenditure Ceiling.

Decision Point 5a.

Public Comment.

David Pilpel stated that the SFMTA has also used the consumer price index in connection with fare raises. He stated that the Ethics Commission should be required to approve any raises rather than have it be an automatic adjustment.

Anita Mayo stated that the $500 contribution limit has been in place since 1986.

Larry Bush stated that when the Ethics Commission was created there was an escalator clause to raise contribution limits. He stated that the majority of contributions are received in the final reporting period prior to an election and are not disclosed until January.

Vice-Chairperson Studley agreed that the Ethics Commission should vote to approve any raise in the contribution limit.

Chairperson Hur stated that if the limit is not raised automatically with a tie to the consumer price index, then there could be the perception that the decision to raise the limit would be arbitrary.

DCA Givner stated that the City Charter requires an annual adjustment tied to the consumer price index and this section codifies that Charter requirement. He stated that the Commission could include a clause that allows them to ratify the automatic adjustment.

MOTION 11-10-19-10 (Hayon/Liu): Moved, seconded, and passed (4-1, Hur dissenting) that the Commission adopt decision point 5a to preserve the $500 per person contribution limit to candidates, and to require the Commission to adjust annually the limit according to changes in the Consumer Price Index from a February 2010 base, provided that the Commission ratifies any such change.

Decision Point 5b.

Public Comment.

Larry Bush stated that the current limit is not an issue for candidates.

DCA Givner stated that this change is being proposed because the current limit on the number of contributions an individual can make is subject to legal challenges.

MOTION 11-10-19-11 (Hayon/Ward): Moved, seconded, and passed (5-0) that the Commission adopt decision point 5b to delete the overall limit on contributions that a person may make to all candidate committees.

Decision Point 5c.

Public Comment.

David Pilpel stated that this provision should not be deleted.

DCA Givner stated that the Ethics Commission is already enjoined from enforcing this provision and it cannot survive a legal challenge.

MOTION 11-10-19-12 (Studley/Liu): Moved, seconded, and passed (5-0) that the Commission adopt decision point 5c to delete the limits on the amount of contributions a person may make to non-candidate committees that make expenditures to support or oppose candidate for City elective office.

Decision Point 5d.

Public Comment.
None.

No discussion.

MOTION 11-10-19-13 (Hayon/Ward): Moved, seconded, and passed (5-0) that the Commission adopt decision point 5d to delete the section related to when contribution are deemed received so that local law is consistent with state law.

Decision Points 6a – 6c

Public Comment.

Larry Bush stated that the definition of charitable organization is too broad.

Anita Mayo stated that allowing campaign funds to pay for tickets to charitable events should be adopted by the Commission. She stated that charities cannot make contributions to candidates and that there is a corporate contribution ban.

Deputy Director Ng responded to Commissioner Liu that the provision does not put a limit on the amount a candidate may pay for a ticket to a charitable event.

Vice-Chairperson Studley stated that the Commission should consider defining that the amount paid for a ticket is merely for paying for attendance.

Commissioner Hayon stated that the Commission should not adopt requirements that result in heavily restricting how campaign funds are used to express support for candidates. She stated that it is not unreasonable for a contributor to expect some funds will be used to pay for admission to events so the candidate can promote his or her campaign.

The Ethics Commission adjourned for a break at 9:23 PM.

The Ethics Commission returned from a break at 9:29 PM.

MOTION 11-10-19-14 (Liu/Studley): Moved, seconded, and passed (4-1, Hur dissenting) that the Commission adopt decision point 6a-1 to allow campaign funds to be used by a candidate to attend a fundraiser for a charitable organization. (The Commission did not vote on Decision point 6a-2 to permit a candidate to use campaign funds to submit an argument regarding a ballot measure on the voter information pamphlet.)

MOTION 11-10-19-15 (Hayon/Studley): Moved, seconded, and passed (5-0) that the Commission adopt decision point 6b to clarify that a candidate may transfer funds from the candidate's committee only before funds become surplus.

MOTION 11-10-19-16 (Hayon/Studley): Moved, seconded, and passed (5-0) that the Commission adopt decision point 6c to clarify that public funds may not be used for officeholder expenses.

The Commission continued the remaining decision points for consideration at the next Commission meeting.

V. Consideration of possible amendments to the Ethics Commission's By-Laws to change the day of the Commission's regular meeting from the second Monday of the month to the fourth Monday of the month, in order to accommodate the televising of the meetings.

Executive Director St. Croix stated that the Commission will have to move the date and location of its meetings in order to televise Commission meetings.

Vice-Chairperson Studley stated that the Commission should not lock itself into having to cancel a meeting if video recording facilities are not functioning or available.

Public Comment.

David Pilpel stated that he was against televising Commission meetings.

Ray Hartz stated that the Sunshine Ordinance requires the adoption of technological changes. He stated that televising meetings allows greater public access.

Larry Bush stated that he has been videotaping Ethics Commission meetings for several months and posting the videos on YouTube.

MOTION 11-10-19-17 (Ward/Liu): Moved, seconded, and passed (5-0) that the Commission adopt changes to the Commission Bylaws to provide that beginning in January 2012, the Commission's regular meetings will be held on the fourth Monday of each month at 5:30 PM in Room 400 City Hall, and that such meetings shall be televised, where technologically feasible, except for portions of meetings that are held in closed session or otherwise required to be confidential.

VI. Minutes of the Commission's regular meeting of September 12, 2011.

Public Comment.
None.

MOTION 11-10-19-18 (Hayon/Ward): Moved, seconded, and passed (5-0) that the Commission approve the minutes of the Ethics Commission regular meeting of September 12, 2011.

VII. Executive Director's Report.

Public Comment.

David Pilpel stated that the Ethics Commission should send a letter to the Board of Supervisors to preempt legislation proposed by Supervisor Campos requiring the Ethics Commission televise its meetings.

VIII. Items for future meetings.

Commissioner Liu disclosed on the public record that Kevin Henegan, a campaign attorney, joined her law firm. She stated that an ethical screen has been established and she will have no involvement with his practice or have any access to his files or share in his profits in any way from his practice. She stated that she will recuse herself if he comes before the Commission.

Public Comment.
None.

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

Larry Bush stated that the Commission should consider requiring the e-filing of contractor reports.

Ray Hartz stated that the Ethics Commission staff should not have dismissed a complaint regarding the Library Commission's failure to submit a written statement by him in their minutes.

X. Adjournment.

MOTION 11-10-19-19 (Hayon/Studley): Moved, seconded, and passed (5-0) that the Commission adjourn.

Meeting adjourned at 10:08 PM.

Respectfully submitted,

 

_____________________
Garrett Chatfield

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