Minutes of the Regular Meeting of
The San Francisco Ethics Commission
Friday, June 15, 2018
Room 416 – City Hall
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102
(Approved _____, __ ____)
Note: SFGovTV provides a continuous archive of selected Commission, council and board meetings that allows viewers to watch those meetings online in full at the viewer’s convenience. Video and audio archives of Ethics Commission meetings may be accessed here.
1. Call to order and roll call.
Chair Daina Chiu called the meeting to order at 2:05 pm.
COMMISSION MEMBERS PRESENT: Chair Daina Chiu, Vice-Chair Quentin Kopp, Commissioners Noreen Ambrose and Paul Renne. Commissioner Lee had an excused absence and was not in attendance. A quorum of members was present.
STAFF PRESENT: LeeAnn Pelham, Executive Director; Jeffrey Pierce, Acting Director of Enforcement & Legal Affairs; Pat Ford, Policy Analyst; Thomas McClain, Senior Investigative Analyst; Jeffrey Zumwalt, Investigative Analyst.
OFFICE OF THE CITY ATTORNEY: Deputy City Attorney Andrew Shen.
OTHERS PRESENT: Sonja Trauss, Ben Libby, Charley Marsteller, Larry Bush, Elena Schmid, and other unidentified members of the public.
MATERIALS DISTRIBUTED:
- Draft minutes for the April 3, 2018 Ethics Commission special joint meeting with the Board of Supervisors on the Anti-Corruption and Accountability Ordinance.
- Draft minutes for the May 7, 2018 special meeting of the Ethics Commission.
- Proposed Stipulation, Decision, and Order in the Matter of Olson Lee (Ethics Commission Case No. 1617-99).
- Staff memo dated June 8, 2018 and attachments, regarding a proposed Policy Prioritization Plan, and a two-page handout distributed by Staff as a discussion tool at the meeting.
- Staff’s monthly Policy Report dated June 8, 2018 and attachments.
- Staff’s monthly Enforcement Report dated June 8, 2018 and attachments.
- Executive Director’s Report dated June 8, 2018.
2. Public comment on matters appearing or not appearing on the agenda.
District 6 Supervisorial Candidate Sonja Trauss addressed the Commission and stated she plans to appeal to the Commission a determination she received that her campaign is ineligible to receive public funds. She stated that she is planning to participate in the program and that the issue was that she hadn’t filed the form declaring that she would be participating in the public financing program by the required deadline. She stated this arose because she is using professional accountants that have not done public financing before. She said she has the documentation and requisite number of donors and funds raised to participate in the program.
Commissioner Kopp asked Staff about the status of the filing. Director Pelham responded that the City’s campaign finance law sets out various deadlines for the public financing program and that the deadline for candidates to file their statement declaring their intent to participate or not participate in public financing for the election occurred in the past week on the same deadline for candidates to submit nominating petitions to place their names on the ballot. She said Staff notified candidates from whom the Commission had not received a statement to inform them that they were ineligible based on their non-filing. The staff also notified them of the appeals process and will bring any appeals to the Commission as requested per processes outlined in the law.
Ben Libby addressed the Commission on behalf of the Trauss campaign and described the campaign’s new experience with the public financing program and stated the accountants the committee hired had used a different software.
Commissioner Renne asked if the statement of participation is the first step toward qualification for public financing, and if there is any way to cure a non-filing. Pelham responded that the law allows candidates to submit claims requesting public funds before they file this statement, but the statement is a prerequisite to being able to participate. She stated the question of curing is one that the Commission will have the opportunity to consider should any appeal be brought before it.
Chair Chiu asked Ms. Trauss if she had filed her appeal and Ms. Trauss stated she wrote to communicate her intent to appeal and that she would be submitting her appeal.
Charley Marsteller commented on the intent of the public financing program and the desire of those who drafted it to have the fullest candidate participation possible and a user-friendly system.
CONSENT CALENDAR ITEMS
Chair Chiu called for public comment on the consent calendar items, and hearing none called for a motion to approve items 3 and 4.
3. Draft minutes for the April 3, 2018 Ethics Commission special joint meeting with the Board of Supervisors on the Anti-Corruption and Accountability Ordinance.
4. Draft minutes for the May 7, 2018 special meeting of the Ethics Commission.
Motion 180615-01 (Chiu/Renne): Moved, seconded and passed unanimously (4-0; Lee not present) that the Commission adopt the draft Minutes for the Commission’s April 3 and May 7, 2018 special meetings.
NON-CONSENT ITEMS
5. Discussion and possible action on Proposed Stipulation, Decision, and Order in the Matter of Olson Lee (Ethics Commission Case No. 1617-99).
Acting Director of Enforcement and Legal Affairs Jeffrey Pierce introduced the item and noted it is appearing as a non-consent item for discussion per Enforcement Regulation 12.E at the request of Commissioner Kopp. He described the procedures governing the resolution of matters through a Stipulation, Decision and Order. He noted the document presented resolves both factual and legal allegations and proposes to settle the matter with Olson Lee, who at the time served as Director of the Mayor’s Office of Housing and Community Development (“MOHCD”). He stated both Staff and the Respondent believe this to be a fair and appropriate Stipulation, both as to the language and to the penalty amount. The Stipulation is before the Commission for consideration with the options to accept it by a vote of three Members, or to reject it by a vote of three. He explained public comment is required and added that Respondent’s Counsel is present to offer remarks on her client’s behalf.
Mollie Stump from the Palo Alto City Attorney’s Office introduced herself and stated she was retained by the San Francisco City Attorney to represent Olson Lee in his individual capacity in this matter.
Commissioner Kopp confirmed with Ms. Stump that she is the attorney for the City of Palo Alto and asked if the city allowed her to have an outside practice. She stated this was not an outside practice but rather was an additional activity that was part of cooperative work from time to time on behalf of other public agencies when there are conflicts or other reasons where the City Attorney benefits from outside counsel. She stated she was providing that service for Mr. Lee. In response to a further question by Commissioner Kopp about whether she San Francisco taxpayers were paying her fee, she stated there is no fee involved in this service and said she questioned the relevance of that inquiry. She noted Mr. Lee was provided with public counsel in this case because at issue in this matter is conduct he engaged in as an official of the City and County of San Francisco entirely in his official capacity. Under these circumstances the decision was made that assistance of the City’s lawyers was appropriate.
Ms. Stump noted Mr. Lee has agreed to resolve the matter as proposed. She added that because the Commission has decided to remove the matter from the consent calendar, however, she believes the most appropriate resolution at this time would be to direct the staff to dismiss the matter with no finding of violation and no penalty assessed. She stated that there was no incompatible activity on her client’s behalf. She stated that even if there were some technical violation, there should be no penalty because, under the penalty factors the Commission should consider, there was no real harm. Intead, it was official work that served the interests of the division and the City of San Francisco, and Mr. Lee was not personally enriched. She stated that the Mayor’s Office Statement of Incompatible Activities speaks to board service on a non-profit that is seeking a grant or funding and is a provision aimed at private conduct of City officials who may serve on outside boards. She said when a question arose about the duties of Mr. Lee, the Mayor quickly clarified that that the incompatible activities statement was not intended to reach this conduct. She concluded by stating that if the Commission is not willing to reject the Stipulation, Mr. Lee desires that the matter be resolved today as he is now a private citizen and retired for over a year.
Commissioner Renne moved that the Commission accept the recommendation of the Staff. Commissioner Ambrose seconded the motion.
Commissioner Kopp asked Director Pelham about the factors that accounted for a reduction of a maximum penalty amount of $5,000 to $800, and what factors might create a lower or higher amount than that. Pelham responded that the Staff assesses the factors identified in the law and balances the facts and seriousness of each case against those factors and makes a best-judgment determination of what would be a fair resolution. The negotiated settlement is a proposal representing what Staff and Respondent believe to be a fair and appropriate resolution based on the facts, and the process considers the interests of resolving matters where appropriate through a Stipulated settlement rather than through a more lengthy and expensive hearing on the merits.
Chair Chiu called for public comment. Charley Marsteller asked if the item had been made publicly available as he did not see copies of Agenda Item 5 with other public documents on the public table. Director Pelham responded that the document had been made available publicly as part of the Commission’s meeting materials and that it had been posted on the website since the prior Monday. She offered that the item could be held over until later in the meeting, if necessary, if additional copies were needed for the public table. Deputy City Attorney Shen provided Mr. Marsteller with a copy from the public table.
Chair Chiu called for a vote on Commissioner Renne’s motion. The proposed Stipulation was approved by a vote of 3 to 1 with Commissioner Kopp voting no.
Motion 180615-02 (Renne/Ambrose): Moved, seconded and passed 3-1 (with Kopp in the dissent) that the Commission approve the proposed Stipulation, Decision and Order in the Matter of Olson Lee, Ethics Commission Case No. 1617-99.
6. Discussion and possible action on proposed Policy Prioritization Plan for Fiscal Year 2019.
Pelham introduced the item, noting that Senior Policy Analyst Kyle Kundert was not at today’s meeting as it was his last day on staff before moving back to his home state of Wisconsin.
Pelham described the background and purpose of the Commission’s policy planning process and the Policy Prioritization Plan. She described the plan as a tool to enable the Commission to regularly consider the full range of policy items that have come before it and provide feedback about the policy priorities it wishes to see in the months ahead. Its first iteration was established in July of 2016 as an annual policy plan to capture all items that were pending on the Commission’s policy radar at that time. It was also designed to factor in how the Commission would conduct more comprehensive policy assessments and more proactively pursue needed policy changes on a more regular basis. She said the creation of a dedicated policy unit with two staff positions was central to that work. With Kundert’s departure, she noted that the unit will be functioning with one staff member until the other position is filled.
Pelham provided two slides illustrating the Commission’s policy work as a discussion tool. She said the first slide illustrated how the Commission’s policy portfolio has various components, including policy research and analysis, data evaluation, drafting of legislation and regulations, legislative affairs, and providing advice and program support for the implementation of legislation, including outreach and communication on new requirements of the law. By way of example, she described that over the prior five or six months during the period of the June 2018 election, the policy team had spent roughly 50 percent of its time overall on compliance advice and support of the public financing program, with approximately 25 percent of its time on policy research and another 15 percent on legislative affairs. Turning to Slide 2, Pelham noted the orange slice of the pie chart as representing policy research that is the focus of today’s Agenda Item 6. Specifically, the goal of this agenda item is to allow the Commission to offer its guidance and feedback about the key policy matters it wishes to see as a priority focus. She noted that the current prioritization is for the public financing system to remain the top priority for the policy team’s work.
Chair Chiu thanked Pelham and noted that this item is timely now with a full complement of Commissioners. Chiu stated that time and resources are finite, particularly with Kundert’s departure, and she expressed her support for the prioritization tool. She invited Commissioner comments and moved to adopt the first three priorities as shown on Attachment 1 of Agenda Item 6.
Commissioner Renne asked about the numbers in columns indicating “impact” and “urgency/timeliness.” Pelham explained that the document used a larger number to illustrate a greater impact. Commissioner Renne suggested that it would be more helpful for the public if the top priority were indicated with a “1” rather than a bigger number, which often indicates a lower ranking on a scale of one to 10. Pelham agreed the items could be renumbered to ensure they convey impact and urgency most clearly for the Commission and public.
Commissioner Kopp asked for clarification about what percentage of time policy staff spend on the public financing program. Pelham responded that the two staff members spent approximately 25 percent of their time on public financing in the recent election season. Regarding the placement of public financing on the policy prioritization plan, Commissioner Kopp observed that it was ranked as the most impactful and urgent, and Pelham confirmed that it is ranked that way.
Chair Chiu invited public comment.
Larry Bush stated that the policy plan lacks the input of the public. He noted that slate mailers fall low on the priority list despite the question having arisen three years prior. Bush urged that the plan be distributed broadly and that the Commission host an Interested Persons meeting regarding the plan. He provided copies of an email he sent to the Commission regarding various issues including public financing, Proposition J, and other items. He stated he is concerned that the document reflects only the best thinking of those inside the building but omits that of those outside the building.
Charley Marsteller stated that staff persons are experts in certain policy areas and queried what expertise Kundert might take with him as he departs. He encouraged the Commission to contemplate also the expertise that members of the public might provide. He noted as an example that Larry Bush offers technical expertise on slate mailers. He encouraged a look at whether San Francisco should consider the Seattle voucher program and suggested hosting a conference to discuss the matter.
Chair Chiu asked Pelham what the staff is proposing as most useful at this time, and Pelham responded that it was the Commission’s input on what it views as the highest and second highest priorities, as well as confirming if the Commission is comfortable with the proposed approach of bringing back a policy prioritization discussion each quarter.
Commissioner Kopp asked whether Pelham was representing to the Commission that Staff will have completed all 16 priorities by June 30, 2019, and Pelham answered no, that is not the case.
Commissioner Kopp asked why the slate mailer issue is ranked lowest on the prioritization plan. Pelham responded that, on balance, there are a number of issues that warrant the Commission’s focus, for example things not yet disclosed and other laws that do not yet fully achieve the goals for which they were established. She said disclosure does exist with slate mailers, even if in a different venue. Given limited bandwidth, she said, hard decisions must be made about issues on the list that will have to be addressed later rather than sooner.
Commissioner Kopp asked about why the proposal for the Ethics Commission to subsume the responsibilities of the Controller’s Office Whistleblower Program was ranked nearly the lowest. Pelham responded that it was placed at that ranking because information indicating a need for the change is unknown.
Chair Chiu moved adoption of the top three policy items as identified in Item 6, Attachment 1. Commissioner Renne seconded the motion.
Commissioner Kopp stated that he disagreed with some of the priorities. He stated that public financing, priority 1, should include an investigation on the Seattle program and requested a report on it. He asked whether he can abstain from voting on the plan. Deputy City Attorney Shen stated that abstentions are not typically allowed but that Commissioner Kopp could request that his fellow Commissioners permit him to recuse himself on the item. Commissioner Kopp stated he would not recuse himself and instead would vote on the item.
Commissioner Ambrose commented what the Commission would be approving through the pending motion. To clarify her understanding of its purpose and impact, she confirmed that the action would be to agree with the Executive Director on the priorities for the next three months given the availability of staff, that the key goal is getting something out on public financing, and that there will be a next opportunity in the fall to review items later as the items are not set is stone. Staff affirmed that understanding. With that understanding, Commissioner Ambrose said, she will support the motion.
Chair Chiu called for a vote on the motion and the motion passed 3-1 with Commissioner Kopp in the dissent.
Motion 180615-03 (Chiu/Renne): Moved, seconded and passed 3-1 (Kopp voting no) that the Commission approve the proposed Policy Prioritization Plan for FY2019 as detailed in Agenda Item 6.
7. Discussion of monthly Staff Policy Report.
Policy Analyst Pat Ford introduced Agenda Item 7 on behalf of Senior Policy Analyst Kyle Kundert, who was not available to present the item, and highlighted various updates for the Commission.
The Anti-Corruption and Accountability Act (ACAO) was approved by the Board of Supervisors after two readings and that it was signed by the Mayor on May 30. Certain provisions, therefore, would become operative at the end June 2018 with the remainder becoming active January 1, 2019.
The Rules Committee of the Board of Supervisors scheduled the pending Whistleblower Protection Ordinance on its June 27 meeting agenda.
Ford reiterated the plan to review the public financing program and explained that a set of draft regulations for issuing opinions and advice were also in development. He said the draft advice regulations would likely be introduced at the Commission in July or August. He provided brief updates on legislation at the Board of Supervisors that Staff have been tracking. He noted the policy report mistakenly indicated that Supervisor Jane Kim’s legislation had been unanimously approved; it was continued to the Call of the Chair. Pending legislation on Trustee Elections introduced by Supervisor Malia Cohen also was continued to the Call of the Chair.
Commissioner Kopp asked why it has taken some three months for the Fair Political Practices Commission (FPPC) to answer the question he had posed whether a county committee is subject to San Francisco’s jurisdiction. Ford responded that he had discussed the question with an FPPC attorney, who shared some preliminary thinking but also observed that the agency had not yet committed an answer to writing. Ford agreed that Staff would follow up again.
Chair Chiu invited public comment.
Larry Bush stated that the calendar and priorities should be decided not merely by staff but also by the public. He referred to Item C.3 contained in the memo and stated that this effort was requested by Commissioner Renne. He stated that he has been conferring with elections attorneys who have confirmed that it would be possible to regulate some of the activities of PACs if the regulation were drawn suitably narrow. He urged the Commission not to accept a recommendation of no action on this item. He also stated that the record should be corrected, stating that there is no relevant disclosure regarding slate mailers; no one can ascertain how much money is spent on them.
Charley Marsteller commented that members of the public can view slate mailers at a site where they are collected. Marsteller stated that he believes Larry Bush has in mind scrutinizing the slate mailer operations. He encouraged the Commission to invite the Alioto campaign to participate in the review of the public financing program and added that aggressive outreach on the public financing program will benefit the public.
8. Discussion of monthly Staff Enforcement Report, including an update on various programmatic and operational highlights of the Enforcement Program’s activities since the last monthly meeting.
Acting Director of Enforcement and Legal Affairs Jeffrey Pierce reviewed highlights from the monthly Enforcement Report. He noted that the Enforcement team is working to resolve pending preliminary review matters, and as a result, the average age of those matters has gone down. However, the age of ongoing open investigations has risen. He said a number of older ongoing investigations are nearing completion, however, which will likely bring down the overall average age of ongoing investigations.
Pierce stated that the Controller’s office Whistleblower Program invited Staff to speak on June 14th at an interdepartmental liaison training. At a prior training session, then-Deputy Director Jessica Blome addressed questions about whistleblower retaliation claims. At this training, Staff explained the mechanics of a retaliation claim, including the process that is involved with making a claim.
Pierce added that in response to a question at the last meeting about pending penalty payments, Staff have attempted to connect with staff from the Bureau of Delinquent Revenues (BDR). Staff will ask BDR to offer a staff presentation before the Commission at an upcoming meeting and Chair Chiu confirmed interest in such a presentation. She commended Staff on progress in resolving outstanding complaints.
Commissioner Kopp asked Pierce about the reasons behind the reduction in the average age of preliminary reviews. Pierce responded that a nearly full team of investigators has made them a focus and that team members have been working diligently through their caseloads.
Commissioner Kopp asked Pierce about the status of various cases listed as having been referred to the Bureau of Delinquent Affairs and stated his interest in a briefing by staff from the Bureau of Delinquent Affairs.
Chair Chiu then invited public comment.
Larry Bush stated that several complaints were made to the Commission before the June Election and that none had been acted on prior to the election. He stated that no action has been taken on a complaint regarding a delinquent Form 700 filing by Christine Johnson. He encouraged that a policy be enacted to provide private plaintiffs the ability to receive a portion of penalties awarded.
9. Discussion of Executive Director’s Report.
Director Pelham highlighted information contained in the Executive Director’s report. She noted that the Commission’s budget had not been cut in the budget process. If adopted as is, the budget will allow for current resource levels to continue to be devoted to ongoing projects and Staff functions.
She described significant work involved with administering the public financing program for the June election and stated that the program was getting underway for the November election. Staff had conducted an in-person candidate training earlier in the week for candidates in the November election.
Pelham acknowledged Senior Policy Analyst Kyle Kundert and the work he did in that role to develop the new policy unit over the past year. She announced that there would be a seamless transition on the policy team as Policy Analyst Pat Ford is being appointed to the position to replace Mr. Kundert as Senior Policy Analyst.
Regarding hiring progress on other staff vacancies, Pelham said she expects the Policy Analyst position to be posted soon. A senior business analyst position is also actively in process. Two additional positions in the Engagement & Compliance division remain open and will be a priority for the coming month. The job announcement for a permanent Director of Enforcement and Legal Affairs will be posted on Monday.
Pelham reported on an upcoming renovation of the Commission’s office space and the temporary relocation it will require of all Staff starting June 21. During this temporary relocation, she said a number of staff will be relocating to the offices of the Controller in City Hall, including the front office team, while others will be housed in space provided by the Department of Real Estate at 25 Van Ness, and others will telework. Information will be provided to the public to help minimize any disruption to service provided to the public. Due to a likely return to the Commission’s permanent space at 25 Van Ness Suite 220 in mid-August, the regular August Commission meeting is being cancelled.
Chair Chiu extended her thanks to Mr. Kundert for his expertise, legal acumen, and many contributions to the Commission during his tenure. She congratulated Pat Ford on his new role and said she hoped that he would find a suitable replacement for himself soon. Commissioner Renne said he associated himself with those remarks.
Chair Chiu invited public comment.
Charley Marsteller asked to clarify where staff would be moving. Pelham responded that front-facing staff would be housed in Room 316 in the Controller’s Office in City Hall. She stated that other staff would be housed in a Controller’s Office workspace also on the 3rd floor of City Hall, and still other staff on the 4th floor of 25 Van Ness. She confirmed that all staff will move back to the Commission’s permanent space at 25 Van Ness, Suite 220, once the updating work is complete.
10. Discussion and possible action regarding status of complaints received or initiated by the Ethics Commission. Possible Closed Session.
Commissioner Kopp made a motion that the Commission go into closed session on the item. Commissioner Renne seconded the motion.
No public comment was received.
Motion 180615-05 (Kopp/Renne): Moved, seconded and passed unanimously 4-0 (Lee not present) to go into closed session.
The Commission went into closed session.
The Commission resumed in open session at 4:23pm.
Commissioner Renne made a motion to not disclose what was discussed during the Commission’s closed session. Commissioner Ambrose seconded the motion.
No public comment was received.
Motion 180615-06 (Renne/Ambrose): Moved, seconded and passed unanimously 4-0 (Lee not present) to not disclose what was discussed during its closed session.
11. Discussion and possible action on items for future meetings.
Commissioner Kopp stated he was introducing for action as soon as possible by the Commission an ordinance to amend the Campaign and Governmental Conduct Code to change certain eligibility requirements for candidates to receive public financing. He said most notable among the provisions is one that provides that if a candidate has received public financing in a previous election and there has been an audit finding that the candidate failed to maintain complete campaign records for expenditures totaling $10,000 or more, then that person is no longer eligible for public financing in any future campaign. He asked that the item be calendared for action at the Commission’s next meeting.
Chair Chiu clarified that the proposed ordinance would amend the existing public financing regime and noted that the request to do so at next month’s meeting would be before the Staff has completed its overall public financing review. Commissioner Kopp confirmed that he desires the Staff to provide a report for possible action at the July meeting, and he directed his question to Staff to confirm the custom and practice for handling such requests.
Director Pelham responded that it is the custom and practice of the Staff to respond to the policy that the Commission, as a body, would like staff to prioritize. Pelham stated she has a question and concern regarding how staff would prioritize a policy item outside the policy prioritization plan discussed earlier. She urged the Commission to enfold this proposal into the ongoing public financing program review so that in assessing the proposal the Commission and public can have the benefit of a full perspective on how the moving parts of the public financing program fit together.
Chair Chiu noted an upcoming public financing overview staff is preparing for the July meeting and stated she would take the ED’s recommendation to fold it in to the larger process. Commissioner Renne said he agreed with that concept and stated that staff could also address the subject of Commissioner Kopp’s proposed amendment at that time. Commissioner Ambrose echoed Commissioner Renne’s remarks and suggested the item be one of the topics noted in July’s discussion, but that action can be taken in the context of the fuller recommendations.
Pelham stated that the Staff would undertake that approach.
No public comment was received.
12. Additional opportunity for public comment on matters appearing or not appearing on the agenda pursuant to Ethics Commission Bylaws Article VII Section 2.
No public comment as received.
13. Adjournment.
Motion 180615-07 (Renne/Kopp): Moved, seconded and unanimously adopted 4-0 (Lee not present) that the Commission adjourn.
The Commission adjourned at 4:31 PM.