Draft Minutes of the Regular Meeting of
The San Francisco Ethics Commission
Friday, January 18, 2019
Room 416 – City Hall
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102
(Approved _____, ___)
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1. Call to order and roll call.
Chair Daina Chiu called the meeting to order at 2:08 pm.
COMMISSION MEMBERS PRESENT: With Chair Daina Chiu, Commissioner Paul Renne, and Commissioner Noreen Ambrose in attendance, a quorum of members was present. Vice-Chair Quentin L. Kopp joined the meeting at 2:10 pm. Commissioner Yvonne Lee was not present due to an excused absence.
STAFF PRESENT: LeeAnn Pelham, Executive Director; Pat Ford, Senior Policy Analyst; Jeffrey Zumwalt, Investigative Analyst; and Eric Willett, Senior Investigative Analyst.
REPRESENTATIVES OF THE OFFICE OF THE CITY ATTORNEY PRESENT: John Givner, Deputy City Attorney; Andrew Shen, Deputy City Attorney.
OTHERS PRESENT: Ellen Lee Zhou; Lou Ann Bassan; Steven Hill; John Avalos; Larry Bush; Jon Golinger; Catherine Ashworth; Charles Marsteller; and Esther Marks.
- Draft minutes for the December 21, 2018 regular meeting of the Ethics Commission.
- Proposed Stipulation, Decision, and Order In the Matter of John Avalos (Ethics Commission Complaint No. 13-150618).
- Staff report dated January 14, 2019 on draft ordinances regarding the Public Financing Program.
- Staff’s monthly Policy Report dated January 14, 2019 and attachments.
- Staff’s monthly Enforcement Report dated January 14, 2019 and attachments.
- Executive Director’s Report dated January 14, 2019.
2. Public comment on matters appearing or not appearing on the agenda.
Ellen Lee Zhou spoke regarding San Francisco’s decision to become a Sanctuary City. She stated that she identified many shortcomings in the electoral process, including that she was not allowed to participate in all Mayoral debates. She stated that she was discriminated against because she is not white, not black, and not Democrat. She further stated that undocumented immigrants and dead people voted during the last election.
Lou Ann Bassan stated on December 24 she received a communication from the Ethics Commission Executive Director that fined her $10 because allegedly she had filed a disclosure statement one day late. She stated that she had delivered it within five business days and objected to the late filing fee assessment. She stated it took 67 days for the Staff to determine that she was one day late and that the late fee letter gave her only 14 days to reply. She alleged a deliberate and vicious attempt to make her life difficult, and stated it was an abuse of power. She believes the Commission should conduct an audit and exercise more oversight of its administrative office.
Vice Chair Kopp asked Director Pelham for a clarification about the letter. Pelham explained the letter had been issued mistakenly and that it would be cancelled. Commissioner Kopp stated for the record that he does not believe the Ethics Commission of the City & County of San Francisco is out of control.
Steven Hill addressed the Commission on public financing. He stated that he was one of the original authors of the public financing legislation and had been previously involved in amendments to that legislation. Hill stated that the current spending limits have been moderately effective and that he believes that staff’s proposal as identified in the agenda item is dangerous to this law. He stated that individuals familiar with the City of Los Angeles approach would later testify regarding the effect of lifting the expenditure ceiling. Hill stated his opposition to adopting the Los Angeles model.
John Avalos thanked the Commission for the opportunity to speak and stated that he accepts the settlement that he reached with the Ethics Commission that appears on the agenda. He acknowledged shortcomings of his treasury records. He stated that his committee did not misspend any money, however, and that he returned $48,000 to the City because his committee had not spent all its treasury. He stated that he accepted full responsibility for his committee’s shortcomings. He further stated that this matter has imposed a toll on his life and he is eager to get the matter behind him.
Larry Bush stated that he objected to Amendment 2 on Item 5. He stated that this proposal does not impose penalties for violations of law outside the Commission’s jurisdiction, including public financing dollars. He further stated that the penalties apply for inadvertent errors, which he believes disincentivizes new candidates or volunteer treasurers. He stated the issue should address intentional violations.
CONSENT CALENDAR ITEMS
3. Draft minutes for the December 21, 2018 Ethics Commission regular meeting.
4. Proposed Stipulation, Decision, and Order In the Matter of John Avalos (Ethics Commission Complaint No. 13-150618).
Chair Chiu called the Consent Calendar items and called for any comment on both items.
Commission Vice-Chair Kopp noted on page four of the Draft Minutes that reference to the Planning Department as “on the issue” should instead read that the Planning Department was “active on the issue.”
Ellen Lee Zhou stated that the Draft Minutes should be corrected to show that her comment under Item 2 was that she was excluded from “many” debates, not “all” debates. Vice-Chair Kopp responded that the sentence that references that “she was not allowed to participate in all debates” is, therefore, accurate. Vice-Chair Kopp then urged that the Draft Minutes be adopted. Commissioner Renne seconded the motion.
Chair Chiu called for a motion to approve the Consent Calendar. Vice-Chair Kopp moved adoption and the Commissioner Renne seconded the motion. Motion approved unanimously (4-0) by all Members present.
Motion 190118-01 (Kopp/Renne): Moved, seconded and passed 4-0 that the Commission approve the Draft Minutes for the December 21, 2018 regular meeting agenda.
Chair Chiu then called any discussion or public comment on the Proposed Stipulation, Decision, and Order In the Matter of John Avalos. Seeing none, she then called for a motion to approve and Vice Chair Kopp moved adoption of the Proposed Stipulation. Chair Chiu seconded the motion. Motion approved unanimously (4-0) by all Members present.
Motion 190118-02 (Kopp/Chiu): Moved, seconded and passed 4-0 that the Ethics Commission approve the Proposed Stipulation, Decision, and Order In the Matter of John Avalos (Ethics Commission Complaint No. 13-150618).
5. Discussion and possible action on draft ordinances regarding the public financing program.
Commissioner Ambrose stated that she understands there is a lot of interest and desire for public comment on this item. She noted that Commissioner Lee was absent but had hoped to be able to vote on it. She noted that because Commissioner Lee was out sick, she would propose a motion to take public comment today but to continue the item for action at the next meeting. Chair Chiu seconded the motion.
Vice-Chair Kopp stated that he sees logic in taking public comment at this meeting and to continue the vote on the item to February. He inquired whether, in the interests of time, public comment at the February meeting might therefore be limited to information or statements not made at today’s meeting.
DCA Givner responded that the Commission could request that as a courtesy but could not formally put that condition on public comment in that way if an item appears on the next meeting. The Commission could encourage new comments, but it cannot limit the content of comments provided.
Vice-Chair Kopp stated he would offer a friendly amendment to encourage new commentary only at the February meeting. In response to a question by Commissioner Renne to clarify the motion, Chair Chiu restated the motion offered by Vice-Chair Kopp.
Commissioner Renne stated that the difficulty he has with that approach is that this is a very important issue. If the issue remains open to February, he believes the Commission should take comment on the proposal regardless of restriction so that the public can be fully involved in the matter. He added that it was likely a new Commissioner would be sitting at the February meeting and stated he did not believe it would be practical to adopt a rule against repeating public comment that may have been previously provided.
Chair Chiu noted there was yet a second on Vice-Chair Kopp’s motion. Commissioner Ambrose added it would not be a restriction, but rather an encouragement to not duplicate prior testimony, however she questioned whether that request would have a practical effect. She conveyed her desire that the Commission not vote on the matter today given Commissioner Lee’s explicit request.
Vice-Chair Kopp noted Commissioner Renne’s reminder about the possibility that a new commissioner may be seated by next month, and stated that it, therefore, is not practical in his opinion to try to adopt a rule against repeating oneself. Consequently, he would withdraw his friendly amendment and will support the motion to take testimony today and to continue action to the February meeting. Commissioner Renne seconded the motion.
Chair Chiu called for public comment on Item 5 in its entirety, including the motion to continue action to the February meeting.
Larry Bush requested that the Commission include in February all the written public comments in that packet. He further requested that the Commission permit further amendments on the legislation in February. He recommended that Commissioners read the memo he sent. He urged the Commission to look at independent expenditure committees and committees aimed at specific candidates and stated that the most important thing is the purpose of public financing to ensure greater participation by candidates and a greater sense of trust by the public.
Ellen Lee Zhou stated that she is a public employee but is speaking in her personal capacity. She stated that 1.5 million voters have been removed from San Francisco’s voter registry. She stated that San Francisco is a deep state. Zhou stated that as a citizen, a resident, and a mom, “we have no future” because we are controlled by a Super PAC, which is super corrupt. She urged that public financing be limited.
Jon Golinger stated he is a government advocate and campaign consultant experienced in Mayoral campaigns and as an advocate. He stated that Commissioners have his letter in their packet. He stated that he agrees with Staff’s stated objectives. He nevertheless believes that eliminating the expenditure ceiling is not the right approach, noting that although the current system does not entirely limit spending, it does limit spending in some measure. He proposed two alternatives, including to change the increment by which staff lifts the ceiling to reduce administrative costs, and to lift the limit when even a candidate exceeds the limit even by a penny.
Catherine Ashworth identified herself as a San Francisco resident and the Deputy Director of the California Clean Money Campaign. She stated that her organization has worked with Los Angeles to improve that city’s system and pointed to a letter provided by Clean Money Campaign Director Trent Lange. She urged San Francisco to consider several rules that govern Los Angeles’s system, such as the increased six-to-one match, and not to adopt what she characterized as the worst parts of the Los Angeles system, including permanently lifting the expenditure ceiling and basing the analysis on expenditures instead of contributions. She directed the Commission to the proposals of Steven Hill and Jon Golinger.
Charley Marsteller stated that Commissioners should know what’s on the public materials table in the meeting room table. Materials include submissions by Mr. Hill and Mr. Golinger but not by Mr. Bush.
Steven Hill commented on problems he believed existed in the staff report. He observed that if 80 percent of candidates did not meet their expenditure ceilings it was likely because those candidates had no money. He stated that an expenditure ceiling is designed instead to reach the wealthier candidates. He further stated that if candidates did not have to report their contributions in relation to the public financing system, that would diminish transparency in the election because it would require candidates to report contributes only on the state filing calendar, which he characterized as too infrequent. He further stated that lifting the interval from $10,000 to $50,000 would require staff to lift the ceiling only one-fifth of the time, as compared to the 2018 election season. He encouraged a public match beyond the current two-to-one ratio. He urged the Commission to develop a common proposal because the Board of Supervisors will require eight votes to make law, and he believes that only a proposal with broad support could achieve that.
Esther Marks stated that she was a first-time treasurer in 2016 and that it was great working with Eric Willett as an auditor following that election. She further stated that working with her auditor in 2018 had been a nightmare. She stated she is glad to see the department is placing a priority on updating information for committees. She stated her agreement with other speakers that the expenditure ceiling should not be permanently lifted, and that the analysis should remain based on contributions instead of changing to expenditures. She noted she does believe the contingency account may not be necessary so is open to having all funds in the campaign trust account. Finally, she stated that no candidate or officeholder should be penalized for prior violations by being excluded from the public financing program.
Commissioner Renne asked staff to address the purpose of the initial spending cap for participating candidates and why not maintain the limit. Senior Policy Analyst Pat Ford responded that the initial cap exists to try to fulfill the purpose stated in the law to help limit candidate spending on campaigns. He stated that based on the data, however, it does not appear that incrementally adjusting the spending limits candidates in practice. He noted as an example Mayor Breed’s 2018 mayoral campaign, in which her ceiling was not raised until May 15, which imposed a realistic limitation on her campaign.
Commissioner Renne asked further about the initial cap and how it relates to candidates’ funding, and asked what is Staff’s view about the proposal to make it a large jump to the next spending cap. Ford noted the current provisions regarding the cap are established in the statute, and added that based on empirical data, it does not appear that the incrementally adjusted spending limits are asserting any kind of limit on candidate spending. In further discussion, Commissioner Renne questioned why a participating candidate should be subject to a spending limit at all if he or she is later relieved of that spending limit. Ford responded there is value in the initial spending limit, as compared to very little value in the incremental lifting of the spending limit, which instead imposes heavy costs not only on staff but on opposition candidates to keep track of those limits.
Commissioner Ambrose stated that she believes the harm that staff has identified is the same as the harm that the public commenters have identified. She noted that she believes some of the points members of the public are making about the time value of constraining spending have some merit. She added that she does not feel she has yet fully grasped the distinction between basing the calculus on expenditures instead of contributions, and whether public commenters are correct that such a change would harm transparency.
Ford stated that he agrees on the transparency point and noted that he had worked with DCA Shen to create an amendment to ensure continued reporting of contributions in a way that would address the transparency issue.
Commissioner Renne asked why the draft ordinance would change the Code to take candidate expenditures, rather than candidate contributions, into account for purposes of adjusting spending limits. Chair Chiu asked why not instead use whichever is greater between candidate contributions and expenditures. Ford stated that using contributions or expenditures, whichever is greater, is an option, but that it would not solve the issue identified by stakeholders of an adjustment to one candidate’s spending limit automatically triggering an adjustment to another candidate’s spending limit.
Seeing no further comment Chair Chiu called for the vote on the pending motion to continue action on the item to the February meeting.
Motion 190118-03 (Kopp/Renne): Moved, seconded and passed unanimously (4-0) that the Ethics Commission continue action on Item 5 to the February regular meeting.
Vice-Chair Kopp requested before the next meeting information about the number of California charter cities which use expenditures as the measurement, those which use contributions as the measurement, and those which use a combination of expenditures and contributions.
Commissioner Renne requested that staff likewise produce alternate proposals accounting for public commenters’ concerns.
Chair Chiu requested that staff identify those cities that use an incremental approach to lifting the ceiling and those that merely lift the ceiling at the first trigger event.
6. Discussion of monthly Staff Policy Report.
Senior Policy Analyst Pat Ford presented the report and offered to answer any questions.
Vice-Chair Kopp asked if there were any further updates on pending ordinances in San Francisco. Ford reported there were no further updates at this time.
Chair Chiu stated she was pleased to see the Whistleblower Protection Ordinance was taking effect.
Larry Bush stated that he hopes the Commission would revisit the amendments to the Whistleblower Protection Ordinance because, he stated, the Board did not adopt what the Commission had originally passed, and because he believes the amendments do not fully account for its shortcomings.
Vice-Chair Kopp asked about Senate Bill 71 and whether the staff has a recommendation as to whether the Commission should recommend support of that bill. Ford responded that staff does not have an opinion at this time. Commissioner Kopp asked if a recommendation could be provided by next month and Ford responded in the affirmative.
No action was taken on the item.
7. Discussion of monthly Staff Enforcement Report.
Director of Enforcement and Legal Affairs Jeff Pierce provided a brief update on various programmatic and operational highlights of the Enforcement Program’s activities since the Commission’s last monthly meeting. He noted that this month’s report provides additional information for improved context about the caseload statistics. Now included at the suggestion of Commissioner Kopp are comparisons to caseloads from the prior month and from the same month in the prior year.
In response to a question from Chair Chiu about the factors the influence how long it takes to conduct a preliminary review, Pierce clarified that the average age of preliminary review matters does not mean it takes that amount of time to conduct a preliminary review. Rather, it indicates the amount of time, on average, that all matters are pending between intake and resolution. As to what distinguishes how much effort it requires to resolve a preliminary review matter, that varies depending on the allegations and their complexity, as well as investigator workload. In addition, all matters are subject to supervisory review and to review by the Executive Director.
Hearing no comments from Members of the Commission, Chair Chiu invited public comment.
Larry Bush urged that the Commission consider adopting a policy regarding the Freedom of Information Act, such that complainants might be advised where is the best place to file a complaint. Pierce stated that the staff does this currently as a matter of practice.
Charles Marsteller suggested that the Commission send a letter to Speaker of the U.S. House of Representatives Nancy Pelosi suggesting that she sponsor a bankruptcy code amendment such that public financing funds be considered a protected class such that the Commission might be first in line to collect debts even against a bankrupt debtor. He characterized the facts of Lynette Sweet’s case as particularly egregious.
Vice-Chair Kopp asked Marsteller whether there is legislation pending to amend the bankruptcy code. Marsteller stated he did not know. Commissioner Kopp requested that staff promulgate a draft of legislation and that a letter be drafted and sent to Speaker Pelosi outlining the concerns regarding the misuse of public funds and the risks that cities and other government entities face when recipients of those public funds have misused them and are in bankruptcy and there is no recourse for recovery of those funds. He stated he would draft such a letter to provide it to staff.
No action was taken as the item was presented for informational purposes only.
8. Discussion of Executive Director’s Report.
Executive Director LeeAnn Pelham introduced the report, stating that staff have made progress in hiring. She likewise described budget cuts that the Mayor’s Office has requested of all City agencies.
Commissioner Renne stated that Mayor Lee had previously offered similar directions to identify budget cuts and recalled that the Commission had previously directed that directive from the Mayor’s Office to not be followed by staff. Chair Chiu added her agreement to Commissioner Renne’s remarks. She then called for public comment.
Charles Marsteller asked whether salary savings might be the way to meet the budget cut obligations. He further asked when the Board’s budget analyst enters the process in comparison to when the Mayor’s budget analyst might. Vice-Chair Kopp responded that those analysts are separate.
Vice-Chair Kopp asked whether the enforcement staff is full. Pelham stated there is one vacancy in the Enforcement Division.
No action was taken as the item.
9. Discussion and possible action regarding status of complaints received or initiated by the Ethics Commission. Possible Closed Session.
Vice-Chair Kopp stated that given the hour of the day he would not request closed session but would convey 30 questions to the Executive Director and staff.
No Commissioner made a motion to go into closed session.
No public comment.
No action was taken on the item.
10. Discussion and possible action on items for future meetings.
Chair Chiu provided the opportunity for public comment and none was received. No discussion or action was taken by the Commission.
11. 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 was provided and no discussion or action was taken on the item.
Chair Chiu asked if the Commission might move to adjourn. Vice Chair Kopp moved to adjourn the meeting and Commissioner Renne seconded the motion. No public comment was received. The motion carried unanimously.
Motion 190118-04 (Kopp/Renne): Moved, seconded and passed unanimously (4-0) that the Commission adjourn the meeting.
The Commission adjourned at 3:51 pm.