Minutes of the Regular Meeting of
The San Francisco Ethics Commission
March 27, 2017
Room 400 – City Hall
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102
(Approved April 24, 2017)
1. Call to order and roll call.
Chairperson Keane called the meeting to order at 5:30 PM.
COMMISSION MEMBERS PRESENT: Peter Keane, Chairperson; Daina Chiu, Vice-Chairperson; Paul Renne, Commissioner; Quentin L. Kopp, Commissioner. Note: Commissioner Beverly Hayon resigned in the days prior and was not present at this Meeting.
STAFF PRESENT: LeeAnn Pelham, Executive Director; Jessica Blome, Deputy Director; Johnny Hosey, Campaign Finance Assistant; Eric Willett, Auditor.
OFFICE OF THE CITY ATTORNEY: Josh White, Deputy City Attorney.
OTHERS PRESENT: Larry Bush; Charles Marsteller; Ray Hartz; Marc Salomon; Elena Schmid; Marijane Pierson; Richard Peterson; Oliver Luby; Allegra Fortunati; Craig Weber; Kirin Lau; Louis Dillon; other unidentified members of the public.
MATERIALS DISTRIBUTED:
- February 27, 2017, draft minutes.
- March 23, 2017, Staff report on Limited Public Financing Program for the November 2016 Election and attachments.
- March 22, 2017, Staff report on Proposed Revised Method for Selection of Campaign Audits for the 2016 Audit Cycle and attachments.
- March 22, 2017, Commissioner Keane’s Proposals to Restore Provisions of Proposition J (2000) cover memo and attachments.
- March 22, 2017, Education and Compliance Report and attachments.
- March 22, 2017, Enforcement Report and attachments.
- March 22, 2017, Executive Director’s Report and attachments for the March 27, 2017, Regular Meeting.
2. Public comment on matters appearing or not appearing on the agenda.
Larry Bush expressed appreciation for former Commissioner Hayon’s service to the Ethics Commission.
Charles Marsteller expressed appreciation for former Commissioner Hayon’s service to the Ethics Commission.
Ray Hartz, Director of San Francisco Open Government, stated his belief that there is an ongoing fraud being perpetrated on the citizens of San Francisco by the Office of the Mayor.
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:
So, we are talking about the ongoing fraud being perpetrated on the citizens of San Francisco by the Office of the Mayor! From the findings of the FPPC: “Respondent, Luis Herrera, while serving as City Librarian for the San Francisco Public Library, failed to report gifts received from The Friends of the San Francisco Public Library on annual Statements of Economic Interests for calendar years 2009, 2010, and 2011 in violation of government code section 87300.” He signed those statements with the following declaration: “I certify under penalty of perjury under the laws of the State of California that the foregoing is true and correct.” So, a City Department Head, appointed by the Mayor, perjured himself by lying year, after year, after year! Almost $15,000 over those three years! And, at that point, it had become a custom for more than a decade! Did he do this knowingly and willfully?
Mark Salomon stated the data provided on the Planning Department website was deficient as it pertains to Proposition J. Commissioner Kopp asked Chairperson Keane whether the issues raised by Mr. Salomon would be addressed in part by the Proposition J legislative proposal that evening. Chairperson Keane responded in the affirmative.
3. Discussion and possible action on draft minutes for the Commission’s February 27, 2017, meeting.
Commissioner Renne made a spelling correction to the minutes.
Public Comment:
Ray Hartz stated his support for public commenters submitting 150 word summaries for inclusion within the minutes of Commission meetings.
Motion 170327-01 (Kopp/Renne): Moved, seconded, and passed (4-0) that the Commission approve the minutes for the February 27, 2017, regular meeting, as amended by Commissioner Renne.
4. Presentation and discussion of staff report on public financing in the 2016 City election.
Executive Director Pelham presented information summarizing the staff report on the Limited Public Financing Program for the November 2016 Election and attachments.
Commissioner Kopp asked clarifying questions regarding the maximum amount funding the Public Financing program per fiscal year. Executive Director Pelham confirmed $7 million was the maximum amount allowable to fund the Public Financing program per fiscal year.
Commissioner Kopp asked how staff was going to determine the estimate of funds needed to fund the Public Financing program for the 2017-2018 fiscal year. Executive Director Pelham stated that an allocation formula based on $2.75 per resident determines the funds necessary so long as the fund is not already at its maximum. She also noted the fund was currently at its maximum.
Commissioner Chiu asked whether the questions raised on page nine of the report would be addressed when the Ethics Commission was fully staffed. Executive Director Pelham confirmed that these questions, along with others raised in the Executive Director’s report, will be addressed this Spring when the Policy team is fully staffed.
Commissioner Kopp asked whether suggestions made by participants of the program were integrated into the questions raised by page nine of the report. Executive Director Pelham responded in the affirmative and added that additional outreach efforts were forthcoming.
Public Comment:
Charles Marsteller, representing Friends of Ethics, expressed appreciation of the comprehensiveness of the report and drew attention to the Arizona Freedom Club PAC vs. Bennett case. He also stated there are provisions repealed by the Ethics Commission that Friends of Ethics were going to raise at upcoming Interested Persons Meetings.
Larry Bush, representing Friends of Ethics, expressed support for the reinstatement of identifying publicly financed candidates within the voter handbook and suggested an email be sent to every voter within a jurisdiction with publicly financed candidates to encourage voter participation.
Mark Salomon suggested that a control be put in place that prevents publicly financed candidates who are not elected from being awarded executive positions in City government within two years of the election.
5. Discussion and possible action on staff proposed revised method for selection of campaign audits for the 2016 audit cycle.
Executive Director Pelham presented information summarizing the staff report on a Proposed Revised Method for Selection of Campaign Audits for the 2016 Audit Cycle and attachments.
Commissioner Kopp asked whether Executive Director Pelham recommended continuing with an audit selection process that is discretionary rather than statutory. Executive Director Pelham responded that she supported a discretionary selection process.
Commissioner Chiu asked clarifying questions regarding the best practices of other Ethics Commissions in determining the percentage of committees audited and percentage of activity. Executive Director Pelham stated that an ordinance required the Los Angeles Ethics Commission to audit all committees with activity over a certain level.
Commissioner Kopp asked Executive Director Pelham to confirm whether she felt continuing an audit selection process that was at staff’s discretion was the preferred method. Executive Director Pelham stated she did not currently have enough information to make a recommendation for statutory changes to the audit selection process.
Commissioner Chiu expressed support for the proposed audit selection process targeting committees with a higher level of financial activity.
Commissioner Renne expressed support for the proposed audit selection process targeting committees with a higher level of financial activity.
Public Comment:
Larry Bush suggested Major Donors be subject to audit as well as any committee that leaves 20 percent or more of its contributor information blank, and committees that have been served with a formal legal notice of violation by a City, State, or Federal agency.
Commissioner Renne asked a clarifying question regarding Mr. Bush’s suggestion to audit Major Donors.
Larry Bush recommended a facial audit be conducted to determine whether Major Donor forms were properly filled out and submitted.
Ray Hartz expressed support for targeting the top 20 percent of committees for audit that have failed to file timely and/or properly during the election cycle.
Oliver Luby expressed support for a targeted audit selection process and made clarifying remarks regarding facial audits of Major Donors.
Mark Salomon expressed support for an audit selection process that engenders support from the community by proving the Ethics Commission was working for, and not against, the electorate.
Charles Marsteller brought to the attention of the public that slate mailers were under the purview of the Department of Elections and were not audited by the Ethics Commission.
6. Discussion and possible action on legislative proposal by Chairperson Keane to restore various contribution related restrictions enacted by Proposition J in November, 2000.
Chairperson Keane presented background information leading to the development of the Proposals to Restore Provisions of Proposition J (2000) cover memo and attachments.
Oliver Luby and Larry Bush presented information summarizing the Proposals to Restore Provisions of Proposition J (2000) cover memo and attachments.
Commissioner Renne asked a clarifying question regarding the determination of a $50,000 threshold in section 1.126. Oliver Luby stated the amount was an existing threshold in section 1.126, which also mirrored that of a current proposal with regard to land use made by a member of the Board of Supervisors. He also recommended the City’s disclosure system with the EthicsCommission be switched to an integrated campaign finance and City contract database to automate the filing process.
Commissioner Renne asked a clarifying question about the definition of Board on which an individual serves and how it applies to a Commissioner who is not elected. Oliver Luby replied he felt the definition in the original law was meant to refer to the Board of Supervisors specifically or possibly a State appointee.
Commissioner Renne asked a clarifying question regarding debarment in section G and whether a debarment notice was an automatic disqualification for an individual going forward with a contract. Oliver Luby replied that it was his understanding the ultimate decision moving forward in this case rested with the contracting officer, which was very similar to the Los Angeles law on which it is based. Commissioner Renne expressed concern that this allowed for a contractor to be found in violation and yet still be approved by a City agency that determined the contractor was too important. Oliver Luby stated that this situation had occurred to him as well, that he hoped Executive Director Pelham’s time with the Los Angeles Ethics Commission would help provide an understanding of the reasoning behind the disbarment section, and that there may be situations where there are legal problems if debarment is automatic.
Commissioners Renne and Kopp thanked Mr. Luby.
Public Comment:
Ray Hartz stated his agreement that the definition of Board related to the Board of Supervisors who would select members of the Board of Supervisors to serve as Commissioners on other Boards. He also stated that the bodies which authorize these types of arrangements will go to immense lengths to hide and withhold public records that document wrongdoing.
Oliver Luby defined Board as something on which an individual serves to also include the Board of Education and Community College Board. He also stated the reason the term exists is because some contracts are approved by an elected official and some contracts are approved by a Board of elected officials.
Mark Salomon stated that politics in San Francisco centers around land use, where all the money and action is. He expressed concern that contracting for development projects and campaign contributions have shaped his community and led to displaced residents in the Mission District. He also expressed support for reinstating Proposition J to include the consultants of the developers, the attorneys of the developers, and various other people who exist to assist project expedition.
Charles Marsteller stated that 80 to 90 percent of campaign finance is connected to land use and that there were only a handful of key players running land use in San Francisco. He also expressed support for the broadening of Proposition J to address how land use and contracting affect campaign finance and the decisions made by elected officials.
Craig Weber drew attention to an appeal brought by a non-profit organization against Lennar Corporation to block development by them and Access Development in the Mission District. He felt that the San Francisco Chronicle editorial did not address the role of non-profit organizations that will block or provide support for members of the Board of Supervisors.
Kirin Lau, a member of RepresentUS, expressed support for implementing changes that slow down profit-driven development in favor of building families and communities in San Francisco.
Elena Schmid expressed support for a transparent process to reinstate various provisions of Proposition J.
Commissioner Kopp expressed a desire to submit this legislative proposal to the Board of Supervisors, but acknowledged legislative process must be followed.
Commissioner Renne echoed Commissioner Kopp and stated he wanted to take tentative action before sending the legislative proposal to the public and final approval by the Commission.
Executive Director Pelham reminded the Commission of the success of Proposition T, which was facilitated by the Commission conducting a thorough vetting of the proposal, and requested a timeframe for conducting interested persons meetings and appraisal by Staff and the City Attorney’s office.
Chairperson Keane stated the interested persons meetings should take place over the next few weeks, that staff and the City Attorney’s office should have a finished proposal to be voted on by the Commission during the April or May Commission meeting.
Commissioner Renne asked whether the Board of Supervisors should be included in this process as well.
Chairperson Keane stated that the intention was to present the proposal to the Board of Supervisors for adoption within 90 days, with the caveat that if it was not substantially adopted it will be put on the ballot in 2018.
Deputy City Attorney White requested additional time for the City Attorney’s office to conduct a thorough legal analysis of the legislative proposal.
Commissioner Kopp and Chairperson Keane replied that the Commission may have to move forward without the City Attorney’s office’s assistance.
Commissioner Chiu proposed Staff and the City Attorney’s office move as expeditiously as possible by conducting work in the following month for presentation at the April Commission meeting.
7. Discussion of Education and Compliance Report. A periodic update on various programmatic and operational highlights of the Education and Compliance division.
Executive Director Pelham highlighted the various outreach efforts and trainings regarding the April 3, 2017, Statement of Economic Interests Form 700 filing deadline.
Commissioner Chiu asked whether the number of people filing the Form 700 by paper would stay in the thousands or decrease as more people transitioned to electronically filing the Form 700. Executive Director Pelham answered the number of people filing the Form 700 by paper would stay the same.
Public Comment:
Ray Hartz stated his belief that there is a no penalty for filing false statements or for lying on the Form 700.
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:
The fatal flaw in this training effort regarding Statements of Economic Interest (Form 700) Annual Filings is that there appears to be no discussion of penalty for filing false statements. Documents are submitted under penalty of perjury, as we saw in my earlier comments, but there is no penalty for lying! City Librarian Luis Herrera, a City Department Head, was brought to the attention of the Ethics Commission which ignored the complaint. Individual citizens had to take Herrera to the FPPC in Sacramento to get action. Of the 33 Orders of Determination I hold from the SOTF, two thirds concern “The Friends of the SFPL.” The findings regard either the withholding of public records or the interference with public discussion of this fraud being perpetrated on the citizens of San Francisco! I just want to make all of those required to file aware that they can lie without consequence!
Charles Marsteller expressed support for expanding the Form 700 filing requirement to include all parties and not just the top strata and asked the Commission if it was prepared to take this expanded filing requirement to the ballot if it failed at the Board of Supervisors.
Larry Bush expressed support for increasing, at the local level, the penalty for late filings of the Form 700.
8. Discussion of Enforcement Report. An update on various programmatic and operational highlights since the last monthly meeting.
Deputy Director Blome stated she has been attending 24-hour Plus trainings for supervisors put on by the City, researching the enforcement policies of the FPPC and FEC to develop new complaints procedures to shorten investigation timeframes, and attended a Sunshine Ordinance Task Force hearing on a complaint brought by Ray Hartz. She stated the Task Force found Mr. Hartz’s public comment time was abridged by about seven or eight seconds and found the Commission in violation of the Sunshine Ordinance. She also stated a new case management system would be reviewed with the Controller’s Office this week.
Commissioner Chiu asked a clarifying question regarding the possibility of installing a new case management system with funds available this fiscal year. Executive Director Pelham stated the procurement process may take longer, but Staff were aggressively pursuing a new system and funds were included in the new budget in addition to the possibility of funds available this fiscal year.
Commissioner Renne asked clarifying questions regarding the ruling by the Sunshine Ordinance Task Force.
Deputy City Attorney White stated the Commission’s best practice would be to allow the speaker to have their allotted public comment time before asking clarifying questions. He also stated it is the view of the City Attorney’s office that clarifying questions may be asked during the public comment time so long as the question and answer period did not subtract from the public commenter’s allotted time.
Commissioner Renne asked a clarifying question regarding the proper procedure for a matter referred by the Sunshine Ordinance Task Force on a matter concerning the Ethics Commission.
Deputy City Attorney White confirmed the Ethics Commission would not hear a matter referred to it by the Sunshine Ordinance Task Force on a matter concerning the Ethics Commission and that in the such matters were referred to the Oakland Ethics Commission.
Commissioner Kopp asked a clarifying question regarding whether a statute of limitations pertained to items on page three of the report in the delinquent accounts section. Deputy Director Blome stated a collections statute of limitations did not apply to the Ethics Commission, but that she was unsure of the collections statute of limitations of the Bureau of Delinquent Revenue (BDR).
Public Comment:
Larry Bush urged the Commission to adopt a standard for action on complaints and recommended complaints of an official about to take office become a priority.
Ray Hartz stated he was the complainant in the Sunshine Ordinance Task Force case.
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:
This Ethics Commission is comprised of five members, four of whom are attorneys, with one being Dean Emeritus of Golden Gate Law School and another a former Superior Court Judge! I have repeatedly identified the comments that members of the public make at these meetings as “Constitutionally protected political free speech.” Not once has any member of this body raised an objection! Thomas Aquinas teaches that “Willful ignorance of what one ought to know is a mortal sin.” Instances where members of this body have either interfered with or attempted to censor public comment can be viewed as nothing other than willful! And the behavior of other members, sitting in silence as it happens, can be viewed as nothing less than violations of their oaths of office! Interfering with or censoring public comment is bad enough, but, is truly egregious when those actions are both “knowing and willful!”
Louis Dillon stated he filed a complaint with the Sunshine Ordinance Task Force for the closure of the stables in Golden Gate Park and brought the matter to previous Ethics Commission meetings to no avail. Mr. Dillon stated he plans to bring this matter to the attention to the current Commission.
9. Discussion of Executive Director’s report.
Executive Director Pelham highlighted various areas of the report and mentioned meeting with newly sworn-in members of the Board of Supervisors to introduce the Commission and identify areas of shared interest.
Commissioner Chiu asked a clarifying question about the Behested Payments ordinance. Executive Director Pelham confirmed the ordinance becomes operative on January 1, 2018, and stated this date was when a system must be up and running to accept Form 803 payments.
Commissioner Kopp expressed concern regarding the length of time that has elapsed without a full complement of investigators on staff at the Ethics Commission and provided public notice of his intention to eliminate this situation. Chairperson Keane stated that he supports Commissioner Kopp’s remarks.
Public Comment:
Larry Bush requested the following items be added to the policy agenda: a discussion of the criteria and cost to taxpayers of items reported on Form 803, the addition of timelines for the disclosure of contributions in the 10-day period after the second pre-election report, and the document retention policy to address cell phone usage.
Ray Hartz drew attention to pending legislation to strengthen the Whistleblower ordinance.
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:
On the matter of the Whistleblower Program I would refer the public to comments made by Dr. Derek Kerr included in the Ethics minutes of February 27, 2017 under agenda item eight. As a recipient of a very large settlement from the City of San Francisco for multiple violations of the program he is certainly well-positioned to speak to the issue! When Dr. Kerr states that “the burden of proof is stacked against whistleblowers,” he is exactly right! In considering his argument I would also like for you to consider the following: “You may consider the ability of each party to produce evidence. If a party provided weaker evidence when it could have provided stronger evidence, you may distrust the weaker evidence.” The City is always in the position of providing stronger evidence, but, it is always in their interest to withhold such evidence even if doing so is unlawful!
Louis Dillon stated there was a disconnect between the people of the City and the people running the City and that he supported the opportunity to provide public comment.
Charles Marsteller expressed support for the budget process of the New York Ethics Commission, which allows the Commission to submit its budget to the Mayor’s Office for comment and then send it to the City Council for full discussion in open session. He also expressed support for the Commission to receive a portion of the designated funds supplied by those applying for conditional use.
10. Discussed and invited public comment on whether to meet in closed session regarding the status of complaints received or initiated by the Ethics Commission, and took no action to enter into closed session.
Commissioner Kopp stated that since the investigator team consisted solely of Deputy Director Blome, he did not see anything new in the document that he would learn in closed session.
Commissioner Renne asked a clarifying question regarding the status of the continuation of show-cause hearings. Executive Director Pelham stated the show-cause hearings were further continued due to her inability to sit down with Deputy Director Blome.
Commissioner Renne stated he did not see the need to conduct a closed session or discussion regarding Item 10 of the agenda.
Commissioner Kopp asked whether the 90-day rule with the District Attorney’s office was being followed. Deputy Director Blome responded in the affirmative.
Public Comment:
None.
11. Discussion and possible action on items for future meetings.
Commissioner Kopp stated he had a number of items to supplement the Proposition J subject matter and reflect the time and effort of Friends of Ethics. He stated the following items must take the form of legislative action by the Board of Supervisors and/or a charter amendment submitted by the Commission: existing or proposed legislation to ensure a conflict of interest prohibition exists to prevent occurrences such as a member of the Planning Commission also being an officer of SPUR; recipients of Public Financing should be required to participate in three debates and candidates in receipt or not in receipt of Public Financing should be identified as such in the voter handbook; audit policy considerations should include slate mailers being under the Ethics Commission rather than the Department of Elections and audit selection priority given to violators of campaign finance regulations as well as those that fail to disclose contributor information on their campaign statements; a regulation imposing a six month deadline to complete investigations of claimed violations; a charter amendment preventing an elected candidate currently under investigation from taking office; tickets to entertainment events given to public officials represent lost revenue for the City and should be prohibited; finalizing the document retention policy to include cell phones; action to calendar these suggestions for the April or May Commission meetings; the addition of a 10-day reporting period after the second pre-election report; an appointed officer or employee of the City shall automatically forfeit their position as a City employee when he/she becomes a candidate for election; non-profit housing entities should be prevented from using cash-out proceeds to finance campaigns.
Public Comment:
Ray Hartz stated he has thirty-three orders of determination from the Sunshine Ordinance Task Force and felt the Commission was ignoring them.
Louis Dillon expressed support for the changes he feels are going to take place in the Ethics Commission and the statements made by its Commissioners. He also stated he would be bringing to the Commission materials concerning his complaints and orders of determination regarding the stables in Golden Gate Park.
12. Additional opportunity for public comment on matters appearing or not appearing on the agenda pursuant to Ethics Commission Bylaws Article VII Section 2.
Commissioner Kopp recognized Bradley J. Kopp in attendance.
Public Comment:
None.
13. Adjournment.
Motion 170327-2 (Chiu/Kopp): Moved, seconded, and passed (4-0) that the Commission adjourn.
The meeting was adjourned at 8:30 PM.