Ethics Commission
City and County of San Francisco

Minutes – October 17, 2016

Minutes of the Special Meeting of
The San Francisco Ethics Commission
October 17, 2016
Room 416 – 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 1:31 PM.  Chairperson Renne read an addition to the notices at the end of the Commission’s agenda, regarding meeting decorum.

COMMISSION MEMBERS PRESENT: Paul Renne, Chairperson; Peter Keane, Vice-Chairperson; Beverly Hayon, Commissioner; Daina Chiu, Commissioner; and Quentin L. Kopp, Commissioner.

STAFF PRESENT: LeeAnn Pelham, Executive Director; Jessica Blome, Deputy Director; Gayathri Thaikkendiyil, Senior Fellow; Catherine Argumedo, Investigator/Legal Analyst.

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

OTHERS PRESENT: Larry Bush; Ray Hartz; Michael Petrelis; Charles Marsteller; Dr. Derek Kerr; Starchild; Charles Bell; and other unidentified members of the public.

MATERIALS DISTRIBUTED:

  • September 26, 2016 Commission meeting draft minutes;
  • Education and Compliance report, dated October 12, 2016, and attachment;
  • Enforcement & Legal Affairs Report, dated October 13, 2016, and attachments;
  • Executive Director’s Report, dated October 12, 2016, and attachments;
  • Court filings related to Mark Farrell for District 2 Supervisor 2010, et al. v. City and County of San Francisco, et al.(S.F. Superior Court Case No. 16-551745);
  • Public comment.

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

Larry Bush handed a list of organizations and individuals that have endorsed Proposition T, including all members of the Board of Supervisors.

Ray Hartz stated that, according to the Clerk of the Board’s office, signs exceeding 11”x17” are prohibited and that small signs are permitted.  He stated that interruptions of public comment are considered a breach of his First Amendment rights.

Michael Petrelis stated that the Commissioners infringed on his First Amendment rights during the last Commission meeting.  He stated that there is no prohibition on signs, only those that are mounted.

3. Discussion and possible action on draft minutes for the Commission’s September 26, 2016 regular meeting.

Motion 161017-01 (Keane/Chiu): Moved, seconded, and passed (5-0) that the Commission approve the Commission’s September 26, 2016 meeting minutes, with suggested changes.

Public Comment:

Charles Marsteller suggested a change at the bottom of page 4, regarding a comment he made.

Ray Hartz stated that any member of the public may submit a written statement and that nothing prohibits him from using a curse word.

Michael Petrelis objected to the draft minutes, as they did not reflect his attempt to have three minutes of uninterrupted public comment during the last Commission meeting.  He stated the minutes did not reflect reality.

4. Discussion of Education and Compliance Program Update.

Jarrod Flores, Education and Compliance Officer, introduced the item.  He stated that staff had provided a snapshot in time of activity so far in the November 2016 election.  Commissioners Keane and Kopp complimented staff on its work.

Public Comment:

Larry Bush, from Friends of Ethics, stated that people were thrilled with the completeness of the report.

Ray Hartz asked the purpose of the report, as he had during the previous meeting.

Executive Director LeeAnn Pelham stated that the initial update provided by staff last month was designed to help people understand campaign finance data and third party spending.  She stated the report was sent to the IP list, as well as being part of the agenda.

5. Discussion of Enforcement Program Report.

Deputy Director Jessica Blome introduced the item.  She provided an update on the Kawa matter and stated that this type of information for the Enforcement program would be provided for every Commission meeting.  She noted areas to improve and acknowledged that there are too many matters in preliminary review and pending in investigation.  She stated that staff would be undertaking an educational campaign so the public and City employees and officials would be aware of what the Commission’s jurisdiction is and how enforcement works.

Commissioner Kopp asked about investigations that have stopped because the District Attorney’s Office asked staff to stop.  He asked to talk about that issue during the next Commission meeting.  He suggested the Commission consider placing a 90-day limit on any holds before continuing with an investigation.  Vice-Chairperson Keane asked whether the Commission could move from having probable cause hearings in closed session to having them in open session.  Commissioner Kopp agreed with the idea.  Deputy Director Blome stated that staff would like to engage with the public and interested parties on ideas on how to change the enforcement process.

Public Comment:

Larry Bush stated that the Civil Grand Jury report from June 2014 noted many similar items. He suggested that staff and the Commission look at other similar agencies.

Ray Hartz stated that he has been coming to meetings for 8 years and is a member of Mensa. He complimented the report and was amazed at the comment that the Commission should give more deference to the Task Force.

Dr. Derek Kerr stated that it was not enough to talk about resources and investigations.  He stated that whistleblowers represent a threat to the City family.  He asked that staff address the implicit bias against whistleblowers and their fear for their own careers.

Charles Marsteller stated that this is the most discussion on the Enforcement program that he has heard in the 19 years he has been following the Commission.  He asked about new staff appointments and stated a concern about possible freezing of hiring due to budget issues in the next few weeks.

Executive Director Pelham stated that two positions were being posted this week and that the other positions would most likely start in early January.

6. Discussion of Executive Director’s Report.

Executive Director Pelham introduced the item and the Mayoral Fellow, Gayathri Thaikkendiyil.  Ms. Thaikkendiyil stated that she is excited to be part of staff and stated that she will be working with staff to gather, organize, and disseminate information on the Commission’s website and other sites for the public.  Director Pelham stated that there were two open positions, which are both exempt positions.

Public Comment:

Charles Marsteller sought clarification for the open positions.

Starchild stated that a copy of a letter provided to the Commission was incomplete.  He stated that he wanted this matter to be on today’s agenda and was not told of procedure regarding getting things on the agenda and filing complaints.  Director Pelham stated that simply filing a complaint with the Commission does not place it on a public agenda.  Starchild provided a full copy of his letter.

Ray Hartz proposed a reset with the Commission, after coming to its meetings for 8 and ½ years.  He stated that the hiring of Ms. Blome is movement in the right direction.  He stated that he was still concerned that he filed two complaints and both were dismissed without a hearing.

The Commission entered a break at 3:08 PM.   The Commission returned from break at 3:24 PM.

7. Discussion and possible action regarding proposed settlement for the Ethics Commission’s consideration in Mark Farrell for District 2 Supervisor 2010, et al. v. City and County of San Francisco, et al. (S.F. Superior Court Case No. 16-551745) for a $25,000 payment by Supervisor Farrell and mutual release of legal claims.

Chairperson Renne stated that there have been developments since the matter was last before the Commission.  He stated that Supervisor Farrell filed a lawsuit and the City filed a countersuit.  He stated that the parties have continued to see if the matter could be resolved outside of court.  DCA Sara Eisenberg stated that the City Attorney’s Office negotiated the best settlement on behalf of the City.  She stated that the City Attorney’s Office would provide additional guidance on legal issues in closed session.

Public Comment:

Ray Hartz stated that this matter has dragged on for years and it has been frustrating for the public.

Larry Bush, for Friends of Ethics, stated that Supervisor Farrell has bragged in a newspaper article that he would not come before the Commission.  He s

Dr. Derek Kerr stated that the Commission took a stand against big money in political campaigns.  He stated the previous Director kept the Commission in the dark and that the Commission has performed courageously and honorably.  He stated that the proposal represents an advance for campaign ethics.

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

In this case, the Ethics Commission took a stand against the impunity of big money in political campaigns. You had many reasons to back down. Your former Executive Director stayed inert and kept you in the dark during a 4-year FPPC investigation. The City Attorney dodged this case, fretting about the statute of limitations. Pressured by the Sutton Law Firm and the City Attorney, Mr. St. Croix caved. You were seeking a budget increase before the Board’s Budget and Finance Committee – chaired by Supervisor Farrell. And Mr. Farrell refused to appear before you, calling it a “waste of time”. The Ethics Commission performed courageously and honorably. Small as it is, the $25,000 settlement proposal represents an advance for this Commission and for campaign ethics.

Starchild, Libertarian Party of San Francisco, agreed with discussing this matter openly.

Charles Marsteller stated that there are possible issues that should be raised with the District Attorney or become part of a criminal investigation.

Charles Bell stated that this is one of the greatest frauds on San Francisco voters in recent history.  He stated that the agent admitted liability.  He stated that a candidate now, as part of an FPPC settlement agreement, would be required to sign a stipulation.

Commissioner Kopp noted that he wrote a letter that Supervisor Farrell should recuse himself from voting on the budget for the Commission.

Motion 161017-02 (Keane/Renne): Moved, seconded, and passed (5-0) that the Commission move into closed session.

The Commission entered closed session at 3:49 PM.  All Commissioners, DCA Shen, DCA Eisenberg, Executive Director Pelham, Deputy Director Blome, and staff member Argumedo remained in the hearing room.  DCA Eisenberg left the hearing room at 4:28 PM.  The Commission returned into open session at 4:29 PM.

Motion 161017-03 (Keane/Chiu): Moved, seconded, and passed (5-0) that the Commission disclose its closed session deliberations.

Chairperson Renne announced that the Commission voted 3-2 in favor of approving the settlement agreement.

Chairperson Renne made a statement regarding why he supported the settlement.  He stated that, after the matter was first sent to the Treasurer for collection, mediation was set up.  He stated he sought two items: admission of responsibility for wrong-doing of the committee and a significant payment of a fine.  He stated that the City became aware of the risk, after Supervisor Farrell filed the Anti-SLAPP motion, that if the City did not prevail, it would be responsible for substantial legal fees.  He believes the $25,000 amount was a significant amount and sends a strong message.  He stated that there were always procedural and substantive concerns with this case.  He stated that settlement was in the Commission’s best interest and in the best interest of the citizens of San Francisco.

Vice-Chairperson Keane stated he would have voted for the $25,000 settlement.  He stated that this is one of the most egregious things a modern politician can do in regards to campaign contributions and stated they were fraudulently obtained.  He stated that the FPPC never interviewed the two donors: Dede Wilsey and Tom Coates.  He stated that the FPPC never made a finding that Supervisor Farrell was not involved in this commingling activity.  He stated he would vote for the settlement except for the language in this recital.  He stated that the former Director was clearly incompetent in allowing the statute of limitations to run and that is the underlying reason he decided to retire.  He stated that the City Attorney’s Office bears no responsibility in this.  He stated that the language in the recital will be spun tomorrow.  He stated that Supervisor Farrell never had the political will or integrity to come before the Commission address it.  He stated that Supervisor Farrell has a lot to be ashamed of and the voters should know that.  He stated that, even if the Commission agrees that he had nothing to do with it, he did.

Commissioner Kopp stated that he adopted all of the statements made by Vice-Chairperson Keane.  He stated that it is not his conclusion that Supervisor Farrell did not authorize the actions of his former campaign consultant with respect to CSV.  He stated that this case is based upon a prior City employee’s malpractice.  He stated he would probably accept the $25,000 payment, but he would not accept the recitals.

Commissioner Hayon stated, as a citizen and voter of San Francisco and as the Commission’s only non-lawyer, she respected the legal opinions. She stated that the bottom line is that Supervisor Farrell took responsibility for soliciting an illegal contribution and he is going to pay a fine.  He stated that voters can feel satisfied with that.  She stated that, in the future, the Commission will take such complaints and deal with them quickly and appropriately.

Commissioner Chiu echoed the remarks from Commissioner Hayon and Chairperson Renne.  She stated the case had procedural and legal issues and that Supervisor Farrell has accepted responsibilities of the actions of his agents.  She stated that, for future violations, the Commission will act more expeditiously and effectively.

Chairperson Renne noted, in response to Vice-Chairperson Keane’s statements, the specific language in the order referencing the FPPC’s finding.  He stated that all sworn documents filed by Supervisor Farrell have denied any knowledge and that the Commission has no evidence to counter his denial.  He stated that there have been lots of accusations, but no evidence supporting them.

Public Comment:

Larry Bush stated there had been no discussion on Helfund and suggested that the Commission require someone to appear before it.

Charles Marsteller stated that much is to be learned from this mistake.  He stated that staff and the Commission need to ensure this does not happen again.  He stated that elected officials should appear before the Commission.

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

Vice-Chairperson Keane suggested a discussion regarding a Charter amendment so that probable cause hearings are no longer done in closed session.

Public Comment:

Larry Bush stated that he was impressed with the calendar for upcoming agenda items for 2017.  He suggested that the Commission engaged in stronger outreach to unions and minority organizations.

Starchild asked the Commission to place his letter on an agenda for a future meeting and stated that it should be heard before the election.  Commissioner Hayon noted that red and blue are national colors on the flag and that she respected Starchild’s view.  Chairperson Renne stated that he had serious questions over whether the Commission has jurisdiction over that matter.

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

None.

10. Adjournment.

Motion 161017-04 (Kopp/Keane): Moved, seconded, and passed (5-0) that the Commission adjourn the meeting.

Public Comment:

None.

The Commission adjourned at 5:14 PM.

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