Ethics Commission
City and County of San Francisco

Ethics Commission Policies re Fixed Penalties for Violations of Certain CFRO Sections

Introduction

At its July 22, 2013 meeting, the Ethics Commission approved the following policies to establish fixed penalties for violations of certain provisions of the Campaign Finance Reform Ordinance (“CFRO”), San Francisco Campaign and Governmental Conduct Code (“C&GC Code”) section 1.100, et seq.  Violations of the sections identified below are generally discovered during a review of campaign finance statements or other disclosure statements and, in general require little, if any, additional investigation or other evidence to show that the violation occurred.  While the policies will generally require a Respondent to enter into a stipulated order with the Commission, each Respondent remains free to exercise his or her rights under the Enforcement Regulations to move through the hearing process for any alleged violation of law. 

These policies will be effective for activities related to the November 2013 election and will remain effective until modified or rescinded by majority vote of the Commission.  Staff is bound by the adopted policies regarding these violations until changed by the Commission.  The Commission retains the authority to approve or disapprove the stipulation and settlement amounts. 

If there is more than one violation, either multiple instances of the same code section and/or different code sections, Respondent will be liable for the penalty amount of each violation.  If a violation pertains to a law that requires a campaign or other disclosure statement to be amended, the amended statement must be filed prior to the stipulation’s approval.

Violations of CFRO Section 1.114 by Candidates

CFRO section 1.114(a)(1) prohibits a candidate committee from soliciting or accepting a contribution from any person that will cause the contribution received from that person to exceed $500.  Section 1.114(b) prohibits any corporation from making a contribution to a candidate committee.  Section 1.114(e) states that if the cumulative amount of contributions received from a contributor is $100 or more, the committee may not deposit the contribution unless the committee has the following information: the contributor’s full name; the contributor’s street address; the contributor’s occupation; and the name of the contributor’s employer or, if the contributor is self-employed, the name of the contributor’s business.1 

Under section 1.114(f), each committee that receives a contribution that exceeds the contribution limit or that does not comply with the other requirements of section 1.114 “shall pay promptly” the excess amount to the Ethics Commission, for deposit into the City’s General Fund. 

The Commission approved the following schedule of settlement and penalties to govern Respondent candidates/candidate committees that violate section 1.114.  

  1. If, during a preliminary review, there is a reason to believe that a candidate committee may have committed a violation of section 1.114(a)(1), (b) or (e), Enforcement staff will notify the candidate committee  of the violation(s) and advise that the matter is in preliminary review.  The notice will provide the following information:
    1. The committee has fourteen (14) days to forfeit the excess contribution or provide evidence as to why there is not a violation; and
    2. If no such evidence is presented, in addition to forfeiting the excess contribution, an enforcement action will be initiated immediately after the fourteenth (14th) day; and
    3. A Probable Cause Report will be issued 21 business days after the enforcement action is initiated.
  2. If evidence is presented prior to the 14-day deadline demonstrating that there is no violation, the matter will be dismissed by the Executive Director.
  3. If evidence is presented after the 14-day deadline demonstrating that there is no violation, the Commission will review the evidence and determine whether the matter should be dismissed in closed session.
  4. If no exonerating evidence is presented prior to the 14-day deadline, Respondent must forfeit the amount of each excess contribution.  In addition, a formal enforcement action will be initiated with the following schedule for stipulated orders:
    1. Stipulation prior to issuance of Probable Cause Report – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount equal to two times the amount of the total excess contribution(s) but not to exceed $5,000 per violation (mitigation/aggravation factors may apply).
    2. Stipulation after issuance of Probable Cause Report – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount equal to three times the amount of the total excess contribution(s) but not to exceed $5,000 per violation (mitigation/aggravation factors may apply).
    3. Stipulation after the Commission makes a finding of probable cause – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount of four times the amount of the total excess contribution(s) but not to exceed $5,000 per violation (mitigation/aggravation factors may apply).

Violations of CFRO Section 1.114(e) by Committees

Section 1.114(e) provides that no committee – not just candidate committees – may deposit any contribution that causes the total amount of contributions received from a contributor to total $100 or more unless the committee has information regarding the contributor’s full name, street address and occupation.  The same procedures set forth above regarding violations of section 1.114(e) by candidate committees apply also to other committees that file reports with the Ethics Commission.

Violations of CFRO Section 1.114(a) by Contributors

Section 1.114(a)(1) prohibits any person other than a candidate from making a contribution that exceeds $500 to a candidate committee; section 1.114(a)(2) prohibits any person from making a contribution that will cause the total amount contributed by such person to all candidate committees in an election to exceed $500 multiplied by the number of City elective offices to be voted on in that election.2  On June 24, 2013, the Commission approved the issuance of a Contributor Guide.  Now that this guide is available to the public, contributors are on notice that they are personally subject to the provisions set forth in section 1.114.  The following schedule of settlement and penalties will govern Respondent contributors who violate section 1.114.

  1. If, during a preliminary review, there is a reason to believe that a contributor may have committed a violation of section 1.114(a)(1) or (a)(2), Enforcement staff will notify the contributor of the violation(s) and advise that the matter is in preliminary review.  The notice will provide the following information:
    1. The contributor has fourteen (14) days to provide evidence as to why there is not a violation;
    2. If no such evidence is provided, an enforcement action will be initiated immediately after the fourteenth (14th) business day; and
    3. A Probable Cause Report will be issued 21 business days after the enforcement action is initiated.
  2. If evidence is presented prior to the 14-day deadline demonstrating that there is no violation, the matter will be dismissed by the Executive Director.
  3. If evidence is presented after the 14-day deadline demonstrating that there is no violation, the Commission will review the evidence and determine whether the matter should be dismissed in closed session.
  4. If no exonerating evidence is presented prior to the 14-day deadline, a formal enforcement action will be initiated with the following schedule for stipulated orders:
    1. First Offense – Respondent contributor must sign a stipulation agreeing that he or she violated the law.  No fine/penalty amount will be assessed.  If Respondent contributor refuses to sign a stipulation, staff will issue a Probable Cause Report and follow the schedule in sections b.ii and b.iii below.
    2. Two or More Offenses:
      1. Stipulation prior to issuance of Probable Cause Report – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount equal to two times the amount of the total excess contribution(s) but not to exceed $5,000 per violation (mitigation/aggravation factors may apply).
      2. Stipulation after issuance of Probable Cause Report – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount equal to three times the amount of the total excess contribution(s) but not to exceed $5,000 per violation (mitigation/aggravation factors may apply).
      3. Stipulation after the Commission makes a finding of probable cause – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount of four times the amount of the total excess contribution(s) but not to exceed $5,000 per violation (mitigation/aggravation factors may apply).

Violations of CFRO Section 1.116

CFRO section 1.116 sets limits on the amount of money a candidate may loan to his or her candidate committee.  The limits are $15,000 for a candidate for the Board of Supervisors, the Board of Education or the Community College District, $120,000 for a candidate for Mayor, or $35,000 for a candidate for Assessor, Public Defender, City Attorney, Treasurer, District Attorney, or Sheriff.3  Under section 1.116, in addition to any other penalty, a loan made by a candidate to his or her campaign in excess of the allowable amounts is deemed a contribution to the campaign and may not be repaid to the candidate.  The following schedule of settlement and penalties will govern Respondent candidates who violate section 1.116.

  1. If, during a preliminary review, there is a reason to believe that a candidate may have committed a violation of section 1.116, Enforcement staff will notify the candidate of the violation(s) and advise that the matter is in preliminary review.  The notice will provide the following information:
    1. The candidate has fourteen (14) days to provide evidence as to why there is not a violation; and
    2. An enforcement action will be initiated immediately after the fourteenth (14th) day; and
    3. A Probable Cause Report will be issued 21 business days after the enforcement action is initiated.
  2. If evidence is presented prior to the 14-day deadline demonstrating that there is no violation, the matter will be dismissed by the Executive Director.
  3. If evidence is presented after the 14-day deadline demonstrating that there is no violation, the Commission will review the evidence and determine whether the matter should be dismissed in closed session.
  4. If no exonerating evidence is presented prior to the 14-day deadline, a formal enforcement action will be initiated with the following schedule for stipulated orders:
    1. Stipulation prior to issuance of Probable Cause Report – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount equal to 20 percent of the maximum fine per violation, or $1,000 (mitigation/aggravation factors may apply).
    2. Stipulation after issuance of Probable Cause Report – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount of 50 percent of the maximum fine per violation, or $2,500 (mitigation/aggravation factors may apply).
    3. Stipulation after the Commission makes a finding of probable cause – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount equal to 80 percent of the maximum fine per violation per violation, or $4,000 (mitigation/aggravation factors may apply).

Violations of CFRO Sections 1.161, 1.161.5, or 1.162

Several sections of the CFRO require written disclaimer statements that, among other things, identify who paid for the mass mailing (section 1.161), electioneering communication (section 1.161.5), and campaign advertisement (section 1.162.  These printed disclosures must be in at least 14 point type and in a color or print that contrasts with the background so as to be easily legible to the intended public.  The following schedule of settlement and penalties will govern committees that violate the disclaimer and disclosure sections of the CFRO.

  1. If, during a preliminary review, there is a reason to believe that a committee may have committed a violation of any part of section 1.161, 1.161.5, or 1.162,  Enforcement staff will notify the committee and advise that the matter is in preliminary review.  The notice will provide the following information:
    1. The committee has fourteen (14) days to provide evidence as to why there is not a violation; and
    2. An enforcement action will be initiated immediately after the fourteenth (14th) day; and
    3. A Probable Cause Report will be issued 21 business days after the enforcement action is initiated.
  2. If evidence is presented prior to the 14-day deadline demonstrating that there is no violation, the matter will be dismissed by the Executive Director.
  3. If evidence is presented after the 14-day deadline demonstrating that there is no violation, the Commission will review the evidence and determine whether the matter should be dismissed in closed session.
  4. If no exonerating evidence is presented prior to the 14-day deadline, a formal enforcement action will be initiated with the following schedule for stipulated orders:
    1. Stipulation prior to issuance of Probable Cause Report – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount equal to 20 percent of the maximum fine per violation, or $1,000 (mitigation/aggravation factors may apply).
    2. Stipulation after issuance of Probable Cause Report – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount equal to 50 percent of the maximum fine per violation, or $2,500 (mitigation/aggravation factors may apply).
    3. Stipulation after the Commission makes a finding of probable cause – Respondent must sign stipulation stating that a violation(s) occurred and pay a settlement amount equal to 80 percent of the maximum fine per violation, or $4,000 (mitigation/aggravation factors may apply).

Factors in Mitigation and Aggravation

The Commission will consider each mitigating or aggravating factor to determine how much weight should be given to each factor.  For example, an intent to conceal, deceive or mislead will be considered much more egregious and weigh more heavily against a Respondent, so much so that the existence of mitigating factors may not offset it.  The following lists of mitigation and aggravation factors are not exhaustive.

  1. Mitigation Factors:
    • Absence of any intention to conceal, deceive, or mislead
    • Violation was negligent or inadvertent
    • Violation was isolated and not part of a pattern
    • No prior record of violations of law with the Commission
    • The degree to which the Respondent cooperated with the investigation
    • The degree to which the Respondent demonstrated a willingness to remedy any violations (only applicable if a  agrees to a stipulation prior to issuance of Probable Cause Report)
    • Respondent filed all required disclosure statements and/or amendments within 14 days of initial contact by Enforcement staff
    • A disclosure containing the required information appeared on a mass mailing, electioneering communication, or campaign advertisement, but the disclosure was in font size that was not 14 point
  1. Aggravation Factors:
    • Evidence shows an intent to conceal, deceive, or mislead
    • Violation was deliberate
    • Violation was part of a pattern
    • Prior record of violations of law with the Commission
    • The degree to which the Respondent was uncooperative with the investigation
    • The degree to which the Respondent  failed to demonstrate a willingness to remedy any violations
    • Respondent failed to file required disclosure statements and/or amendments within 14 days of initial contact by Enforcement staff

S:\Enforcement\Investigations.Enforcement.Regulations\Enforcement.Investigations.Regulations\SettlementsPenalties policiesapprovedbyEC7.22.2013.doc


1 Section 1.114(d) states that for purposes of the contribution limits, the contributions of an entity whose contributions are controlled by any individual must be aggregated with contributions made by that individual and any other entity whose contributions are directed and controlled by the same individual.  Because violations of section 1.114(d) are not easily discovered during a review of campaign disclosure statements, they are not included in this settlement and penalties scheme.  Instead, such violations will be handled via the normal course of handling violations pursuant to the Commission’s Regulations for Investigations and Enforcement Proceedings.  

In addition, section 1.114(c), adopted by the voters as part of Proposition O in 2000, sets limits on the amount of contributions a person may make to non-candidate committees that make expenditures to support or oppose candidates.  On September 20, 2007, a federal district court issued a preliminary injunction enjoining enforcement of section 1.114(c); since then, the Commission has not enforced the section.  The court has since issued a permanent injunction prohibiting the City from enforcing section 1.114(c). 

2 Please note that the Ethics Commission will no longer enforce the limit in Section 1.114(a)(2) in light of recent United States Supreme Court jurisprudence. See Ethics Commission Resolution adopted May 28, 2014; McCutcheon v. Federal Election Commission, 752 U.S. __, No. 12-536 (S.Ct. Apr. 2, 2014).

3 Publicly-financed candidates must agree not to loan or donate to their campaigns, in total, more than $5,000 of their own money; nor may they accept any loan from anyone else.  CFRO § 1.140(a)(1)(D).  The settlement and penalties structure discussed here do not apply to violations of section 1.140(a)(1)(D).

Was this page helpful?

:

*Required fields

Scan with a QR reader to access page:
QR Code to Access Page
https://sfethics.org/ethics/2013/07/ethics-commission-policies-re-fixed-penalties-for-violations-of-certain-cfro-sections.html