Minutes of the Regular Meeting of
The San Francisco Ethics Commission
Friday, November 13, 2020
Remote Meeting Held Online via WebEx and aired live on SFGovTV
(Approved December 14, 2020)
Note: SFGovTV provides a continuous archive of audio, video, and Caption Notes recordings of Ethics Commission meetings that allows viewers to watch those meetings online in full at the viewer’s convenience. These archives of Ethics Commission meetings may be accessed at SFGovTV at http://sanfrancisco.granicus.com/ViewPublisher.php?view_id=142.
Item 1. Call to order and roll call.
(Note: This item appears beginning at the 00:04:00 mark in the video recording at SFGovTv.)
Chair Noreen Ambrose convened the meeting at 9:36 am and stated that the meeting is being held by Teleconference Pursuant to the Governor’s Executive Order N-29-20 and the Twelfth Supplement to Mayoral Proclamation Declaring the Existence of a Local Emergency Dated February 25, 2020. Online Meeting Moderator Ronald Contreraz summarized procedures for remote participation by members of the public.
COMMISSION MEMBERS PRESENT: With Chair Ambrose, Vice Chair Yvonne Lee, and Commissioners Daina Chiu, Fern Smith, and Larry Bush attending, a quorum was present.
STAFF PRESENTING: LeeAnn Pelham, Executive Director; Patrick Ford, Senior Policy and Legislative Affairs Counsel; Jeffrey Pierce, Director of Enforcement and Legal Affairs and Acting Deputy Director; Ronald Contreraz, Online Meeting Moderator.
REPRESENTATIVES OF THE OFFICE OF THE CITY ATTORNEY PRESENT: Jon Givner, Deputy City Attorney.
REPRESENTATIVES OF THE OFFICE OF THE CONTROLLER PRESENT: Mark de la Rosa, Acting Director of Audits from the Controller’s City Services Auditor Division; Dave Jensen, Whistleblower Program Supervising Investigator.
MATERIALS DISTRIBUTED:
- Draft Minutes for the Ethics Commission’s October 9, 2020 regular meeting.
- Controller’s November 5, 2020 Report.
- Controller’s Whistleblower Presentation
- Staff report on Phase One of the Government Ethics and Conflict of Interest Review: Behested Payments
- Monthly Staff Policy Report.
- Monthly Staff Enforcement Report.
- Monthly Executive Director’s Report.
Item 2. Public comment on matters appearing or not appearing on the agenda.
(Note: This item appears beginning at the 00:05:29 mark in the video recording at SFGovTv.)
No public comment was received.
CONSENT CALENDAR ITEMS
Chair Ambrose called the consent calendar.
Item 3. Draft Minutes for the Ethics Commission’s October 9, 2020 regular meeting.
(Note: This item appears beginning at the 00:07:28 mark in the video recording at SFGovTv.)
Public Comment
No public comment was received.
Motion 201113-01 (Smith/Chiu): Moved, seconded, and passed unanimously (5-0) a motion to approve the draft Minutes for the October 9, 2020 regular meeting.
NON-CONSENT CALENDAR ITEMS
Item 4. Discussion and possible action on presentation by Controller’s Office on Controller’s November 5, 2020 Report, Preliminary Assessment: San Francisco’s Debarment Process.
(Note: This item appears beginning at the 00:11:16 mark in the video recording at SFGovTv.)
Director Pelham introduced the item and thanked Acting Director of Audits Mark de la Rosa from the Controller’s Office.
Mark de la Rosa, Acting Director of Audits from the Controller’s City Services Auditor Division, presented the third of the Controller’s preliminary assessments in its Public Integrity Review. De la Rosa explained that the emphasis of this assessment concerned the debarment of City contractors. He noted that among the actions the City Attorney has taken in response to its findings is to initiate debarment of City contractor AzulWorks. De la Rosa described the background on AzulWorks leading to its debarment.
De la Rosa stated that the Controller’s Office has reviewed the City’s debarment provisions and investigated the debarment process in other jurisdictions to evaluate the need of any changes to San Francisco’s.
De la Rosa summarized the Controller’s findings, including both consistencies and inconsistencies between the City and state and federal processes.
Chair Ambrose sought clarification regarding the distinction between suspending and debarring a contractor. De la Rosa confirmed that suspension means a contractor can neither perform work on an existing contract nor bid on additional contracts.
De la Rosa summarized the Controller’s recommendations, including to make the City’s process conform to features of state and federal debarment.
Commissioner Chiu asked, in relation to prior Controller’s findings regarding the tone at the top, whether the Controller’s Office would examine what processes or requirements might inculcate a culture of ethics among City departments. De la Rosa stated that his office would be examining the totality of internal controls that collectively shape government control, including training requirements, procedures, and practices, and that the final deliverable would include analysis of this aspect.
Commissioner Bush noted a past practice that the Mayor annually review department head performance and asked whether the Controller’s Office would be recommending practices and standards for these performance reviews. De la Rosa expressed his agreement with Bush’s observations and confirmed that may be part of their final recommendations.
Vice Chair Lee asked about debarment hearing officer qualifications, including that they be licensed attorneys. Chair Ambrose described the due process considerations at play in a debarment hearing, and noted her agreement that hearing officers should be above reproach and might not be political appointees.
No public comment was received.
Commissioner Bush asked whether a debarred entity can continue to make contributions to candidates, officeholders, and ballot measure committees. DCA Givner stated that neither existing law nor the pending legislation would impose a contribution ban. Bush asked in that case whether that means contractors cannot make contributions but debarred contractors can. DCA Givner noted that 1.126 might still reach recently debarred contractors.
DCA Givner returned to Vice Chair Lee and Chair Ambrose’s question and noted that the Controller appoints hearing officers.
Commissioner Bush asked for clarification about on what grounds a contractor might be required to repay the cost of services. DCA Givner and de la Rosa both stated they would investigate the question and get back to Bush.
Commissioner Smith commended the Controller’s Office for proposing suspension.
Item 5. Discussion and possible action on presentation by Controller’s Office Whistleblower Program Staff on Annual Report of Whistleblower Program for Fiscal Year 2019-20.
(Note: This item appears beginning at the 00:52:38 mark in the video recording at SFGovTv.)
Enforcement Director Pierce introduced the item.
Whistleblower Program Supervising Investigator Dave Jensen presented the item. Jensen described the legal authority and provisions governing the Program’s jurisdiction. He noted that the Program has received more complaints each year since FY2013, starting with 291 in FY2013 and culminating with 599 in FY2020. Jensen described the several methods by which the Program receives complaints and noted that the Program closes ~80% of complaints within 90 days, describing the factors that might prevent the Program from doing so in all instances. Jensen observed that more than half of the complaints the Program received were closed after investigation.
Jensen noted that the Whistleblower Program serves as a clearinghouse for complaints, tracking those that come and enabling the City to recognize system issues, and that the Program coordinates with the Ethics Commission, City Attorney, and District Attorney to ensure that complaints get where they need to go.
Jensen concluded by describing the Program’s initiatives and goals for FY2021.
Commissioner Bush noted that the Whistleblower Program originated in 1990, and that the first whistleblower had been Ed Lee. He stated that it was bifurcated in 2003, assigning the hotline responsibilities to the Controller’s Office and the retaliation responsibilities to Ethics.
No public comment was received.
Bush noted that the Whistleblower Program concludes its investigations within 64-90 days and asked what explains why it operates more quickly than Ethics. Jensen proposed that it’s well-resourced.
Bush asked about the amount of money at stake in the Whistleblower Program’s investigations, for example through fraud. Jensen stated that the figure is difficult to quantify.
Bush asked about the relatively few number of complaints that resulted in action at the Police Department, Sheriff’s Office, and Human Resources, which he characterized as departments that have seen controversy. Jensen observed that the Department of Police Accountability retains primary jurisdiction over the Police Department. Regarding the Sheriff’s Office, he noted distinctions in their union protections that might impact on what they find or can report out regarding the Sheriff’s Office.
Bush asked about consequences for retaliation against whistleblowing.
Regarding retaliation, Chair Ambrose noted that it goes back to the tone at the top and creating a culture that discourages retaliation.
Vice Chair Lee asked about the tip line and whether the number of complaints there might be low in comparison to other jurisdictions. Jensen stated that he believed San Francisco might instead receive more complaints via tip line than other jurisdictions.
Chair Ambrose asked what outreach the Controller’s Office has engaged in regarding promotion whistleblower protections. Jensen stated that in coordination with the Ethics Commission the Office had done some work to reach out to contractors who newly received protections under the Ordinance but that some of the outreach has stalled during COVID.
Lee asked about the demographics about reporters. Jensen stated that they don’t collect that information and that many reporters are anonymous and might be discouraged from participating if they were required to provide that information.
Chair Ambrose asked whether remote work has made investigations more challenging and whether they’ve seen fewer or more complaints during the pandemic. Jensen stated that his office transitioned immediately and smoothly to remote work and did not lose any momentum. He noted that some of its partner departments however had more trouble making the transition. Jensen further noted that the pandemic meant that his office had initially received many complaints related to fairness regarding remote work, workplace safety complaints, and others, but that these complaints have diminished in time.
Item 6. Discussion and possible action on Staff report on Phase One of the Government Ethics and Conflict of Interest Review: Behested Payments.
(Note: This item appears beginning at the 01:35:38 mark in the video recording at SFGovTv.)
Senior Policy and Legislative Affairs Counsel Pat Ford presented the item. He briefly described the background of public corruption investigations as motivating the Commission’s interest in reviewing the Government Ethics Ordinance. He described what the Commission has learned about the corruption risks inherent in the behested payment context. Ford offered examples of the corruption nexus that might illuminate the need to revise the City’s approach to behested payments, including Nuru’s advice to contractors about how to use behested payments to influence an Airport Commissioner, Nick Bovis’ use of his foundation Lefty O’Douls to pay for holiday parties for Public Works, and Supervisor Farrell’s behests to the Parks Alliance, where his wife was chair of the board.
Ford described the way in which behested payments can be used as an end-run around gift limits and the restricted source rule to obtain influence, highlighting the pay-to-play risks inherent to this practice.
Ford offered two recommendations. One is that City law prohibit officials from making behests of “interested parties,” and defining what qualifies an individual as an interested party.
His second recommendation is that officials and employees be prohibited from directing behests to organizations that are a source of income to officials and employees, including their spouses (which under state law are sources of income to the official or employee), because these are end-runs around prohibitions against conflicts of interest.
Ford noted that Supervisor Matt Haney has introduced legislation that would enshrine some portions of Staff’s first recommendation. He stated that uniquely, the Commission’s approval and participation are not required for the Board to amend behested payment laws because they are in a part of the Campaign & Governmental Conduct Code that can be amended without the Commission’s approval. He stated that the Commission could still vote to support legislation and that Staff would work with the Board of Supervisors to pursue its enactment into law.
Chair Ambrose stated that the Commission should consider Ford’s two recommendations separately.
Commissioner Chiu asked for clarification about why the Board can independently amend the behested payment ordinance if it had required a supermajority of the Commission to adopt in the first place, and Ford described the distinctions in the Code leading to that result.
Commissioner Bush congratulated Ford for the report, which he said was one of the best policy reports produced by the Commission to date. He then asked what other jurisdictions permit the practice of behested payments, and Ford identified the jurisdictions that regulate this practice.
Bush observed that behested payments also fund governmental purposes and wondered whether Ford’s recommendations might also cover conduct that funds furniture, or salaries, or other governmental expenditures. Ford stated that Bush’s concerns highlight the problem where the official exercises control over the funds. Bush noted that nonprofits need not register as lobbyists, and that they can receive behested payments while also seeking to influence City decisions. Ford stated that a nonprofit that’s attempting to influence government decisions would be covered by the first recommendation as a restricted source. Bush asked how we can identify them as restricted sources if they’re not required to register and disclose their contacts. Ford acknowledged that there is a challenge there in identifying such restricted sources.
Chair Ambrose observed that organizations have a First Amendment right to seek redress from the government, and she wished to clarify that the City was not exploring whether to prohibit them from doing so but instead to regulate officers and employees from soliciting payments from certain persons who have business before government. Ford stated that one benefit of seeking to regulate this conduct by expanding existing rules is that all of the existing regulations, advice, and related context helps inform how the new rules will be applied, including that under the regulations appearing in public comment is not to be considered an attempt to influence for purposes of the restricted source rule.
Chair Ambrose sought clarification on whether this legislation would require meet and confer and Ford confirmed that it will.
Ambrose conveyed a question from Lee about why the second recommendation is limited to spouses and not to other family members or friends. Ford responded that under state law individuals have a community property interest only in their spouse’s income and not that of others, distinguishing the corruptions risk at stake.
Chair Ambrose observed that other jurisdictions do restrict the recipients of behested payments, not merely the contributors of behested payments as in SF.
Chair Ambrose asked Bush to clarify how he envisioned regulating instances of the kind he had described. Bush suggested imposing a behesting limit of $5,000.
Chair Ambrose sought a motion from the Commission to approve Ford’s first recommendation to prohibit officer and employees from soliciting payments from interested parties. Chair Ambrose herself moved that the Commission communicate to the Board that the Commission supports this legislation. Bush suggested that the motion be amended to reflect that the Commission expresses approval including but not limited to this legislation.
Commissioner Smith sought clarification on what the motion entails. Chair Ambrose stated that the motion would convey to the Board the Commission’s approval of the legislation. Smith seconded the motion.
Chair Ambrose sought a motion from the Commission to approve Ford’s second recommendation to prohibit any City officer or employee from behesting a payment from any source to any entity in which the officer or employee has an economic interest. No motion was offered. Chair Ambrose stated her own preference to wait for additional public input before moving forward on that recommendation.
Public Comment
Debbie Lerman identified herself as representing the SF Community Services Network. She noted that the Commission had reviewed the behested payment regime several years ago and had adopted a disclosure requirement instead of a prohibition. She expressed concern that a restricted source under the Commission’s view might include any individual who simply writes a letter to an official. She advised the Commission should take its time and consider its approaches carefully. She further noted that ethics rules are increasingly complex and encouraged the Commission to provide training to contractors on how to comply.
Chair Ambrose restated the motion before a roll call vote was taken.
Motion 201113-02 (Ambrose/Smith): Moved, seconded, and passed unanimously (5-0) a motion to support Staff’s recommendation that City officials and designated employees be prohibited from soliciting behested payments from interested parties and to communicate this support to the Board of Supervisors and the public.
At 12:42pm the Chair announced a break and that the meeting would resume at 1pm.
Returning from break, Chair Ambrose conveyed a comment from Lee, that the Commission should reach out to nonprofits to solicit additional input from them on how these efforts may affect them, and Lee volunteered herself to assist with that.
Item 7. Discussion of monthly Staff Policy Report, including consideration of policy prioritization plan.
(Note: This item appears beginning at the 03:27:46 mark in the video recording at SFGovTv.)
Senior Policy and Legislative Affairs Counsel Pat Ford presented the item. He noted that a meet and confer session regarding the biennial code review had taken place on November 12 and that another was scheduled for the future.
Chiu asked whether the Commission might succeed in hiring another member to the Policy team. Ford stated that he would defer to the ED’s report.
Bush requested that when Ford conduct the code review he consider rules from the state to simplify oversight for the regulated community. He further requested that Ford’s review also have an eye toward augmenting the Commission’s budget.
No public comment was received.
No action was taken as it was provided for informational purposes only.
Item 8. Discussion of monthly Staff Enforcement Report.
(Note: This item appears beginning at the 03:37:58 mark in the video recording at SFGovTv.)
Director of Enforcement Jeff Pierce presented the report. He discussed the division’s collaboration with the Commission’s Policy Division, the City Services Auditor, and the City Attorney’s Public Integrity Unit. He said that Staff has opened three new investigations since the last Commission meeting and that the District Attorney has requested that the Commission hold off on one of its new investigations.
Pierce discussed the Bureau of Delinquent Revenue’s collections undertakings and the possibility of future small claims actions.
Chair Ambrose asked about the complaints that appear in the report and why there appear to be fewer than there were previously. Pierce said that complaints that are outside the Commission’s jurisdiction are not added to the docket, and that could be one reason.
No public comment was received.
No action was taken as it was provided for informational purposes only.
Item 9. Discussion of Executive Director’s Report.
(Note: This item appears beginning at the 03:45:37 mark in the video recording at SFGovTv.)
Executive Director Pelham presented the report. She noted that $3.4 million has been distributed through the Public Financing program during 2020, and Staff will be composing a report summarizing the use of the program in the 2020 election. When public financing requests are finished, audit staff will focus on audits and addressing BLA audit recommendations regarding audits.
The Government Audit and Oversight Committee of the Board of Supervisors is scheduling a discussion of the BLA audit of the Commission for November 19th.
Director Pelham said that since the last meeting, Staff has met with Client Services representatives at DHR to discuss expedited hiring. Staff has submitted multiple requests to fill positions, and the first one has been approved, to hire an enforcement investigator. Staff is targeting having new hires begin work in early 2021.
Pelham summarized Staff’s research into the creation of a Citywide Integrity Fund to secure Commission funding. She noted the use of fixed budgets for ethics commissions in other jurisdictions, and for the San Francisco City Services Auditor.
Pelham stated that Rachel Gage was available to provide updates on the Form 700 e-filing project.
Pelham said that Tyler Field is available to provide a demonstration of new data tools that are now available.
Commissioner Chiu asked whether the BLA would be involved in the hearing before the Government Audit and Oversight Committee, and whether there is an opportunity to discuss with BLA the Commission’s budgetary needs to support the recommendations. Pelham said that BLA auditors will be present and that she anticipates a discussion about the Commission’s resources.
Commissioner Bush said that alternative funding sources should be examined. He said there is a set aside for the Library, and that the Citizen’s Bond Oversight Committee, Fire stations, and other City programs also have set asides. Bush recommended that Staff consult with Ed Harrington as to what options exist. Bush recommended increased lobbyist fees as one potential source of funding.
Chair Ambrose said that she will watch the BLA hearing and will continue to be interested in the Citywide Integrity Fund project. She asked that the two staff presentations on the Form 700 project and new data tools be continued to next month’s meeting.
No public comment was received.
No action was taken as the item was for informational purposes only.
Item 10. Discussion and possible action on items for future meetings.
(Note: This item appears beginning at the 04:01:44 minute mark in the video recording at SFGovTv.)
- Bush requested that the Commission discuss a report from 2015 regarding an allegation that then-Mayor Ed Lee may have sought to influence City officers and employees in which candidates for Supervisor they supported.
No public comment was received.
No action was taken.
Item 11. Discussion and possible action regarding probable cause determination for complaint alleging violations of the Government Ethics Ordinance, Article III, Chapter 2 of the San Francisco Campaign and Governmental Conduct Code. Possible Closed Session
(Note: This item appears beginning at the 04:08:15 minute mark in the video recording at SFGovTv.)
Chair Ambrose explained the process for closed session.
Chair Ambrose asked for a motion on whether the Commission would assert attorney-client privilege. Chiu moved, and Smith seconded, to assert attorney-client privilege.
No public comment was received.
Motion 201113-03 (Chiu/Smith): Moved, seconded, and passed unanimously (5-0) a motion to assert attorney client privilege and meet in closed session.
The Commission met in closed session.
Returning to open session, the Commission announced that in closed session that it voted unanimously to ratify the Executive Director’s recommendation that probable cause did not exist in a particular enforcement matter.
Chiu moved not to disclose the privileged discussions. Smith seconded.
Motion 201113-04 (Chiu/Smith): Moved, seconded, and passed unanimously (5-0) a motion not to disclose information discussed in closed session.
Item 12. Additional opportunity for public comment on matters appearing or not appearing on the agenda pursuant to Ethics Commission Bylaws Article VII Section 2.
(Note: This item appears beginning at the 03:39:54 minute mark in the video recording at SFGovTv.)
No public comment was received.
No action was taken.
Item 13. Adjournment.
(Note: This item appears beginning at the 04:43:38 minute mark in the video recording at SFGovTv.)
Motion 201113-05 (Chiu/Smith): Moved, seconded, and passed unanimously (5-0) to adjourn the meeting.
The Commission adjourned at 2:25 p.m.