Ethics Commission
City and County of San Francisco

Minutes – April 25, 2016

Minutes of the Regular Meeting of
The San Francisco Ethics Commission
April 25, 2016
Room 400 City Hall
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102

1. Call to order and roll call.

Chairperson Renne called the meeting to order at 5:33 PM.

COMMISSION MEMBERS PRESENT: Paul Renne, Chairperson; Brett Andrews, Vice-Chairperson; Daina Chiu, Commissioner; and Peter Keane, Commissioner. Commissioner Beverly Hayon, excused absent.

STAFF PRESENT: LeeAnn Pelham, Executive Director; Shaista Shaikh, Assistant Deputy Executive Director; Garrett Chatfield, Investigator/Legal Analyst.

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

OTHERS PRESENT: Ray Hartz; Helen Grieco; Sylvia Johnson; David Pilpel; Elena Schmid; Michael Petrelis; Bob Planthold; Charles Marsteller; Morgan Aitken-Young; Gregory Bryan; Zach Goldfine; and other unidentified members of the public.

MATERIALS DISTRIBUTED:
– April 20, 2016 staff memorandum re: Report on Limited Public Financing Program for the November 2015 Election;
– April 21, 2016 staff memorandum re: Ethics Commission Policy Agenda for FY2017;
– April 21, 2016 staff memorandum re: Status Report on the Ethics Commission’s Proposed budget for Fiscal Years 2017 and 2018;
– April 21, 2016 staff memorandum re: Discussion and possible action regarding the Ethics Commission’s referral to the Bureau of Delinquent Revenue of forfeiture concerning Supervisor Mark Farrell;
– Executive Director’s Report for the April 25, 2016 Commission Meeting;
– Draft minutes of the March 28, 2016 Ethics Commission Regular Meeting;

2. Public comment on matters appearing or not appearing on the agenda.

Chair Renne introduced and welcomed newly-appointed Commissioner Daina Chiu.

Ray Hartz, SF Open Government, stated that he is filing a series of complaints directly with the Ethics Commission and is submitting the first complaint against Supervisor Mark Farrell. He stated that the complaint is based on two Orders of Determination from the Sunshine Ordinance Task Force and show that Supervisor Farrell’s actions are knowing and willful. He stated that prior to this meeting, he attended the Small Business Commission meeting and they treated the Sunshine Ordinance as a joke. He stated that he had to bring the Ethics Commission before the Sunshine Ordinance Task Force to have his 150-word statements included in the minutes. He stated that failing to include his statements in the minutes violated his First Amendment rights.

The following written summary was provided by the speaker, Ray Hartz, the content of which is neither generated by, nor subject to approval or verification of accuracy by, the Ethics Commission:

As previously stated, I am filing the first of a series of complaints with the EC. This first complaint is against Supervisor Mark Farrell and is based on two Orders of Determination from the SOTF. Each order involves a lawful request for public records to which the supervisor [sic] and/or his staff failed to respond in a lawful manner. Supervisor Farrell had an obligation under both the Sunshine Ordinance and CPRA, to respond in accordance with the requirements of those laws. The facts will establish the Supervisor Farrell’s [sic] office failed to respond to the request for records, to the Sunshine complaint, or to appear at the Sunshine hearing. I believe the facts will show his behavior to be both “knowing and willful,” and as such support a finding of a violation of Sunshine Ordinance section 67.34 WILLFULL FAILURE SHALL BE OFFICIAL MISCONDUCT. [Emphasis in original.] I submit they also support violation of the CPRA.

Helen Grieco, Common Cause California, stated that she is happy to answer any questions the Commission may have regarding their request for the Ethics Commission to publicly support the passage of California Senate Bill 1107.

Sylvia Johnson stated that she learned to be stronger.

David Pilpel, speaking as an individual, stated that Carla Johnson from the Mayor’s Office is unwell and that she embodies a good City employee.

Elena Schmid, Friends of Ethics, stated that it would be helpful if the Commission provided a status update on the Whistleblower Retaliation Ordinance that was sent to the Board of Supervisors.

Michael Petrelis, Government Access Project, stated that he filed a complaint with the Ethics Commission two months ago and the matter is still pending. He stated that the Commission needs to get serious about complaints and that two months is too long for the Commission to determine if it is going to investigate the allegations.

Bob Planthold, former Ethics Commissioner and Civil Grand Jury member, stated that he recommends that the Commission enforce the forfeiture request against Supervisor Farrell.

Charles Marsteller, Friends of Ethics, welcomed newly-appointed Commissioner Chiu and stated that, relating to the matter raised by Mr. Petrelis, the predecessor of East West Bank was closed by the Federal Government.

3. Presentation and discussion of staff report on public financing in the 2015 City elections.

Assistant Deputy Executive Director Shaikh presented the public financing report to the Commission.

Executive Director Pelham stated that the report is required to be submitted to the Board of Supervisors and it provides information on the status and effect of the public financing system. She stated that the Commission strives to balance the competing interests of rigorous laws regarding publicly financed campaigns and encouraging broad electoral participation. She stated that in the last election, where independent expenditures were considerably high, the Commission raised the expenditure ceiling 21 times for one candidate and 29 times for another. She stated that it raised questions on how the program can be streamlined and improved.

Responding to Chair Renne, Assistant Deputy Executive Director Shaikh stated that in the current election cycle, the Commission has received numerous questions from candidates on how to qualify for public funds. She also stated that both publicly funded candidates from the last election cycle are currently being audited and that she anticipated the audits would be concluded by the end of this fiscal year.

Public Comment:
Charles Marsteller stated that he was active in putting the public financing ballot measure to the voters, and that the San Francisco system is nationally recognized. He stated that the public financing system is both a platform for all candidate’s voices to be heard and is a check on the political system.

David Pilpel stated that the report is thorough and can assist in addressing areas of improvement. He stated that the Commission should look at ways to reduce the cost of election campaigns.

Sylvia Johnson asked what happened to taxi services.

Ray Hartz stated that he lived in the Supervisorial District in which both candidates in the last election received public funds. He stated that his mailbox was filled with c-r-a-p. He stated that it is ludicrous to have an expenditure ceiling if the Commission is going to continually raise it. He stated that the taxpayers are paying for those materials. He stated that it is not honest for candidates to promise not to exceed the expenditure ceiling when it will just be raised. He stated that the Commission sits on complaints and only reacts when someone like him confronts the Commission.

4. Discussion and possible action on proposed Ethics Commission policy agenda for July 1, 2016.

Chair Renne stated that he and the Executive Director have engaged in discussions on establishing policy positions at the Commission and talked about taking a global look at the laws within the Commission’s jurisdiction to see how the whole structure can be improved. He stated that the Commission should consider holding a conference with experts in the field, the regulated community, and the public to review the current body of laws and where improvements can be made with the goal to have one comprehensive package to address the current deficiencies.

Executive Director Pelham introduced a proposed ballot measure from Represent.Us and the Friends of Ethics to be placed on the November 2016 ballot that would restrict lobbyist contributions. She also provided information on the request from Common Cause California for the Ethics Commission to publicly support California Senate Bill (SB) 1107 which would allow non-charter jurisdictions in California to establish their own campaign finance rules.

Commissioner Keane stated that he supported the Commission holding a conference and commended the Executive Director for establishing a policy roadmap. He stated that he also supported the Commission sponsoring a ballot measure that would restrict lobbyist contributions, and that doing so would build on the Proposition C ballot measure that the Commission sponsored in the last election. He stated that the proposed measure would help stop corruption in the City and that asking the voters to approve this type of legislation is the right approach.

Responding to Chair Renne, DCA Shen stated that the Commission should build a legislative record outlining the need for any proposed legislation.

Commissioner Chiu stated that the Commission should take a comprehensive view on how it can address critical issues, and asked Executive Director Pelham how much of the policy work could be done if the Commission does not receive the budget to increase staffing.

Executive Director Pelham stated that some of the work could be done with the assistance of DCA Shen, but Investigative staff would have to be re-directed to do some of the policy work.

Vice-Chair Andrews stated that the Commission should hold at least two Interested Persons meetings before the next Commission meeting to solicit public input on the proposed ballot measure.

The Commission directed staff to hold Interested Persons meetings regarding the proposed legislation and provide an analysis of the proposed legislation for the Commission’s May 2016 regular meeting.

Commissioner Keane stated that he supported the Commission publicly stating its support for the passage of SB 1107 and suggested that the Commission make a motion to formally express that support. Commissioner Keane moved that the Ethics Commission publicly support the passage of SB 1107. Vice-Chair Andrews seconded the motion.

Chair Renne stated that the City may have a process for supporting state legislation and that the motion should be that the Commission advises that the City support SB 1107.

Commissioner Keane stated that he would accept Chair Renne’s comment as a friendly amendment to his motion. He stated that the Ethics Commission is the City body with the most experience on this matter and its voice is persuasive.

Public Comment on the Motion:
Bob Planthold supported the motion.

David Pilpel stated that the City does have a process when it comes to legislative affairs and that the Ethics Commission should urge the City to support SB 1107 rather than take a position on its own.

Charles Marsteller stated that he was the former Chair of Common Cause in San Francisco and stated that the Ethics Commission has the right to take a position on its own.

Sylvia Johnson stated that some people refuse to know who they are, and that she does not want anyone to put themselves down.

Ray Hartz stated that it is amazing the number of times he has witnessed the Commission stop itself from taking action on a matters as simple as the present one. He stated that the motion is a simple statement conveying that that the Ethics Commission supports the passage of SB 1107. He stated that the Ethics Commission is within its authority to publicly state that it supports the bill.

Motion 160425-01 (Keane/Andrews): Moved, seconded, and passed (4-0, Hayon excused absent) that the Commission formally support SB 1107 and that the Commission call upon the City’s State Legislation Committee to also formally support SB 1107.

Public Comment:
David Pilpel stated that the Commission, in the past, held a yearly retreat which has not happened for some time. He stated that the proposed legislation to restrict lobbyist contributions requires that the Commission engage in outreach to that community. He stated that the Commission should prioritize fixing its current regulations before it considers additional regulations.

Morgan Aitken-Young, Represent.Us, stated that her group is committed to government transparency. She stated that when her group polled City residents, they were surprised to find out that lobbyists can both contribute to candidate committees, as well as bundle and deliver multiple contributions. She stated that the proposed legislation is will aid in eliminating the perception of corruption.

Charles Marsteller stated that he supports the idea of a policy conference, but suggested a hybrid conference, with one dealing with policy issues and the other dealing with the year’s agenda.

Gregory Bryan, Represent.Us, stated that he supports the ballot measure and commended the Commission for working to place it on the upcoming November ballot.

Zach Goldfine, Represent.Us, thanked the Commission for supporting the proposed ballot measure.

Elena Schmid stated that the Commission should define the term “bundling” and that the Commission should continue to work with Represent.Us. She stated that the Commission should revisit the discussion regarding automatic committee audits of any public official that is being investigated for ethics violations.

Bob Planthold supported placing the proposed legislation on the November ballot. He stated that there are many free locations available to the Commission to hold a policy summit. He stated that when the Commission refers to restoring “Prop J” it should clarify which Proposition J as the same letters of desigation are used in many elections.

Ray Hartz stated that government is only responsible to the people if the people hold government accountable. He stated that enforcement must be a Commission priority, and that if rules are not enforced they are meaningless. He stated that the Ethics Commission refused to enforce Statement of Economic Interest violations by City Librarian Luis Herrera.

Sylvia Johnson made a comment about police officers.

5. Update and discussion of Ethics Commission’s proposed budget for Fiscal Years 2017 and 2018.

Executive Director Pelham presented a status report on the proposed budget for fiscal years 2017 and 2018. She stated that the Commission is continuing to work with the Committee on Information Technology to secure funding for the electronic filing project. She stated that the Commission currently only has the equivalent of one Full-time Employee (FTE) Investigator because both investigators have significant programmatic responsibilities that remove them from enforcement duties, which has caused significant aging of enforcement matters. She stated that the Mayor’s Office has indicated that they support the Commission’s priorities, but that they also have to balance the Commission’s needs against the City’s overall budget.

Commissioner Keane stated that the former Executive Director never asked the Mayor’s office for a budget increase which has resulted in the Commission’s resources becoming stagnated. He stated that Executive Director Pelham has provided an honest assessment of what resources are needed to ensure the Commission achieves its mandate. He stated that this is the time for the Mayor to indicate that he is serious about stopping corruption by providing the Ethics Commission with the appropriate resources.

Vice-Chair Andrews asked Executive Director Pelham if the four FTE positions requested in the budget are listed in order of importance. Executive Director Pelham stated that they are not listed in order of importance because all four are needed. She stated that if the two requested Policy Analyst positions are not funded, then the current Investigators would continue to be removed from enforcement matters to handle the policy needs of the Commission.

Responding to Commissioner Chiu’s question on the status of the open Deputy Executive Director position, Executive Director Pelham stated that the job posting is open until May 6, 2016. She stated that the Deputy Executive Director position would not be an investigative position, although the Deputy would be the enforcement supervisor along with assisting in policy development.

Commissioner Chiu stated that the requested level of funding is critical. She stated that no one can expect the Commission to have a strong enforcement program with the equivalent of one FTE Investigator.

Public Comment:
Elena Schmid stated that the budget report gave a good indication of what areas of the Commission’s mandate will suffer without more resources. She stated that the Commission should consider asking the Controller’s office for assistance to timely complete audits.

Charles Marsteller stated that when the Commission first started discussing electronic filing, the goal was to connect multiple City databases to allow for “auto-auditing” which would automatically correlate data. He stated that the Commission should consider researching how it might request or receive grants for various projects.

David Pilpel stated that the Commission should pursue obtaining contractor information, and that this is the first report that he has ever seen about enforcement matters that in preliminary review. He stated that preliminary review information should be included in the monthly Executive Director’s Report. He stated that the report shows the need for additional investigators. He stated that the Commission should provide an intake letter to complainants that would advise them of the status of a filed complaint.

Sylvia Johnson made a comment about the Police Department.

Ray Hartz stated that the information regarding the aging of cases makes it clear why the Commission’s investigators attempted to dissuade him from filing complaints. He stated that the former Executive Director continually dismissed cases without bringing them before the Commission and that the investigators have the same mindset. He stated that the investigators do not want to investigate any matters and are just for show.

6. Discussion and possible action regarding the Ethics Commission’s referral to the Bureau of Delinquent Revenue of Forfeiture concerning Supervisor Mark Farrell.

Commissioner Keane explained to the public the purpose of this agenda item. He stated that the item related to Supervisor Farrell taking an illegal $193,000 campaign contribution laundering it with another committee to distribute negative mail pieces regarding his opposing candidate. He stated that the money came from DeDe Wilsey and Tom Coates who are both wealthy Pacific Heights residents. He stated that the materials provided to the public are to provide information about this matter. He stated that Supervisor Farrell has never come before the Ethics Commission to deny his involvement. He stated that Charles Bell has provided a good analysis of why the statute of limitations has not run, even though Supervisor Farrell has expressed that the California Fair Political Practices Commission (FPPC) has exonerated him. He stated that the stipulation from the FPPC found that Supervisor Farrell was not responsible, but even if true, he hired the campaign manager who was responsible and the money must be forfeited.

Public Comment:
Ray Hartz stated that he finds it bizarre that the agenda does not say why this item is on the agenda. He stated that the Sunshine Ordinance Task Force held hearing on this issue from the last time this item appeared on the agenda. He stated that at that meeting, the Commission spent 40 minutes trying to figure out what this item was about. He stated that meeting in closed session gives the appearance of a back room deal and that it should be discussed in open session. He stated that the Ethics Commission is the client and it can simply waive the attorney-client privilege and have the discussion in open session.

The following written summary was provided by the speaker, Ray Hartz, the content of which is neither generated by, nor subject to approval or verification of accuracy by, the Ethics Commission:

I find it truly bizarre that this agenda item appears as it does, once again, without any meaningful description of what action the members of this EC might be called upon to take. The Executive Director may feel that telling the public “what” this is about, leaving out any reason “why” this is on the agenda, constitutes a “meaningful description,” but I do not! I believe the lengthy discussion which resulted from its last appearance on the agenda should have made it clear that even members of this Commission didn’t understand the reason for its appearance. If Commission members do not understand the item, it is entirely reasonable that members of the public also lack a “meaningful understanding.” As such, the reappearance of this item gives the appearance a [sic] “back room deal!” Cloaking it as “discussion with legal counsel,” does nothing but put a polite “fig leaf” on the deception!

Sylvia Johnson stated that just because she is sick, that does not mean she does not care.

David Pilpel stated that the last time this item appeared on the agenda, he noted that it had not been properly placed on the agenda. He stated that, because he sits on the Sunshine Ordinance Task Force, he recused himself from Mr. Hartz’s complaint against the Executive Director when it was before that body. He stated that it is not clear what the process is for collecting forfeitures once a matter is sent to the Bureau of Delinquent Revenue. He stated that he believes that the bad actor here was the committee, as Supervisor Farrell did not receive or spend the funds raised by Common Sense Voters.

Charles Marsteller urged the Commission to do the right thing.

Motion 160425-02 (Keane/Chiu): Moved, seconded, and passed (4-0, Hayon excused absent) that the Commission go into closed session.

The Commission took a recess from 8:00 PM to 8:07 PM. At 8:07 PM the Commission went into closed session. All members of the public left the hearing room. The individuals that remained in the hearing room during closed session were Chair Renne, Vice-Chair Andrews, Commissioner Chiu, Commissioner Keane, Executive Director Pelham, DCA Shen, and Investigator/Legal Analyst Chatfield.

The Commission returned to open session at 8:55 PM.

Motion 160425-03 (Keane/Chiu): Moved, seconded, and passed (4-0, Hayon excused absent) that the Commission not disclose its closed session deliberations.

Public Comment:
None.

Chair Renne stated that no action was taken during closed session.

7. Discussion and possible action on items for future meetings.

Commissioner Keane stated that Larry Bush informed him that Paul Ryan from The Campaign Legal Center has volunteered to assist with the drafting of the Commission’s proposed ballot measure.

Public Comment:
None.

8. Discussion of Executive Director’s Report.

Executive Director Pelham stated that the Deputy Executive Director position is currently being recruited and will close on May 6, 2016. She stated that Supervisor Breed’s office is interested in sponsoring the Commission’s proposed changes to the Whistleblower Retaliation Ordinance.

Responding to a question from Commissioner Chiu regarding the large increase in actual lobbyist revenues from the projected revenues, Executive Director Pelham stated that the budgeted revenues were projected prior to a change in the Lobbyist Ordinance that resulted in an increase in the number of registered lobbyists. She stated that the increase in revenue correlated with the increase in lobbyist registrations.

Public Comment:
None.

9. Discussion and possible action on draft minutes for the Commission’s March 28, 2016 regular meeting.

Motion 160425-04 (Keane/Andrews): Moved, seconded, and passed (4-0, Hayon excused absent) that the Commission approve the minutes for the Commission’s March 28, 2016 regular meeting.

Public Comment:
None.

10. Additional opportunity for public comment on matters appearing or not appearing on the agenda pursuant to Ethics Commission Bylaws Article VII Section 2.

None.

11. Adjournment.

Motion 160425-05 (Keane/Chiu): Moved, seconded, and passed (5-0) that the Commission adjourn.

The Commission adjourned the meeting at 9:04 PM.

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