Ethics Commission
City and County of San Francisco

San Francisco Ethics Commission Final Audit Report: No On Prop E – Stop The Prohibition, A Coalition Of Concerned Citizens Supporting Freed Of Choice, Adult Consumers, Community Leaders, And Neighborhood Small Businesses, Committee Major Funding From R.J. Reynolds Tobacco Company; FPPC # 1397586

March 31, 2020

I. Introduction

This Audit Report summarizes the audit results for the committee No On Prop E – Stop The Prohibition, A Coalition Of Concerned Citizens Supporting Freed Of Choice, Adult Consumers, Community Leaders, And Neighborhood Small Businesses, Committee Major Funding From R.J. Reynolds Tobacco Company, FPPC Identification Number 1397586 (“the Committee”), for the period from January 1, 2017 through December 31, 2018. The Committee was selected for audit using an objective criteria method pursuant to San Francisco Campaign and Governmental Conduct Code (“Code”) section1.150(a) and the Commission’s authority under San Francisco Charter section C3-699-11(4), from a pool of eligible committees active in elections during the 2018 calendar year. The audit was conducted by Ethics Commission staff following the 2018 City election as part of the Commission’s 2019 audit cycle to determine whether the Committee materially complied with requirements of the Political Reform Act (California Government Code section 81000, et seq.) and supporting regulations, and the San Francisco Campaign Finance Reform Ordinance (San Francisco Campaign & Government Conduct Code Section 1.100, et seq) and supporting regulations.

II. Audit Authority

San Francisco Charter section C3.699-11 authorizes the Ethics Commission to audit campaign statements that are filed with the Commission along with other relevant documents to determine whether a committee materially complied with applicable requirements of State and local laws. Code section 1.150(a) requires the Commission to audit all candidates who receive public financing and authorizes audits of other committees to be initiated irrespective of whether the committee received any public funds.

III. Audit Scope and Procedures

This audit was performed in accordance with generally accepted auditing standards.  The audit is based on documentation provided by the Committee and involved a review of the Committee’s filings and records for the period covered by the audit.  This review was conducted to determine, among other things:

  1. Compliance with all disclosure requirements pertaining to contributions, expenditures, accrued expenditures, and loans, including itemization when required;
  2. Compliance with applicable filing deadlines;
  3. Compliance with any applicable restrictions on contributions, loans, and expenditures;
  4. Accuracy of total reported receipts, disbursements, and cash balances as compared to bank records; and
  5. Compliance with all record-keeping requirements.

The Commission posts to its website all Audit Reports. The Audit Division forwards Audit Reports to the Commission’s Enforcement Division, or other appropriate agency, for review to determine whether any further action regarding findings of non-compliance are warranted. The scope of an audit is not exhaustive of all conduct by a committee during the audit period and conduct by a committee not identified as a material finding in an Audit Report may be subject to investigation and possible enforcement action by the Ethics Commission or another agency with jurisdiction to enforce applicable laws.

IV. Committee Information

The Committee was initially formed on July 6, 2017, under the name “Let’s Be Real San Francisco, A Coalition of Concerned Citizens Supporting Freedom of Choice, Adult Consumers, Community Leaders, and Neighborhood Small Businesses with Major Funding by R.J. Reynolds.” The Committee was primarily formed to support a “referendum against the City and County of San Francisco’s ordinance prohibiting the sale of flavored tobacco products, including menthol cigarettes”, late designated as Measure E on the San Francisco June 5, 2018 ballot.

Following the designation of ballot measuring lettering by the San Francisco Department of Elections, the Committee filed an amended Form 410 in March 2018 to re-name the Committee as “No On Prop E – Stop The Prohibition, A Coalition Of Concerned Citizens Supporting Freed Of Choice, Adult Consumers, Community Leaders, And Neighborhood Small Businesses, Committee Major Funding From R.J. Reynolds Tobacco Company”.

For the period of this audit, Jason D. Kaune and Joel Aurora, served as Treasurer and Asst. Treasurer respectively. Over the course of the audit period the Committee received $11,695,248 in contributions (including non-monetary contributions of $444,679).  The Committee incurred $11,250,568 in qualified campaign expenditures.

V. Audit Findings

The Commission concluded that there were no material findings with respect to the audit of the Committee.

 

 

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