Ethics Commission
City and County of San Francisco

Draft Minutes – March 12, 2021

Draft Minutes of the Regular Meeting of
The San Francisco Ethics Commission
Friday, March 12, 2021
Remote Meeting Held Online via WebEx and aired live on SFGovTV
(Approved __, 2021)

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 00:04:15 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, Larry Bush (joined the meeting at 9:44 am), and James Bell (left the meeting at 10:45 am) attending, a quorum was present.

STAFF PRESENTING: LeeAnn Pelham, Executive Director; Jeffrey Pierce, Director of Enforcement and Legal Affairs and Acting Deputy Director; Pat Ford, Senior Policy and Legislative Affairs Counsel; Ronald Contreraz, Online Meeting Moderator.

REPRESENTATIVES OF THE OFFICE OF THE CITY ATTORNEY PRESENT: Andrew Shen, Deputy City Attorney.

MATERIALS DISTRIBUTED:

Item 2. Public comment on matters appearing or not appearing on the agenda.

(Note: This item appears beginning at the 00:04:48 mark in the video recording at SFGovTv.)

Ellen Lee Zhou identified herself as a public employee and a union delegate. She stated she has been addressing the Commission over several years, including with complaints related to election fraud. She identified a list of policy issues she finds concerning and which she attributed to the fact that only Democrats govern in San Francisco.

Commissioner Bush joined the meeting at 9:44am.

CONSENT CALENDAR ITEMS

Chair Ambrose called the consent calendar.

Item 3. Draft Minutes for February 12, 2021 Ethics Commission Regular Meeting.

(Note: This item appears beginning at the 00:12:14 mark in the video recording at SFGovTv.)

Bush requested that the Minutes reflect he had requested that Commission Staff prepare a draft of how to implement the Controller’s recommendations.

Chiu moved, and Lee seconded, to defer action on the February 12, 2021 Minutes until the Commission’s April meeting.

Public Comment

Ellen Zhou stated that City Hall should not be closed during the pandemic. She stated that the Ethics Commission is running a failed commission and urged that the City reopen.

Motion 210312-01 (Chiu/Lee): Moved, seconded, and passed (5-0) to continue Item 3 to the Commission’s April meeting.

NON-CONSENT CALENDAR ITEMS

Item 4. Discussion and possible action on Staff Policy report, including Policy Prioritization Plan

(Note: This item appears beginning at the 00:22:53 mark in the video recording at SFGovTv.)

Senior Policy and Legislative Affairs Counsel Pat Ford presented the item. He noted that this month’s report attaches the Policy Prioritization Plan and recommended that the Commission preserve the current policy project of reviewing the Conflict of Interest Code and regulations. He updated the Commission that Supervisor Haney was moving forward with the behested payment legislation on which he had collaborated.

Bell stated he had received a briefing on this proposal and thanked Staff for the thoughtful work they had done here.

Chair Ambrose noted that the Controller’s next report would be about closing disclosure loopholes and inquired about the timeline in light of the possibility that the Board of Supervisors’ legislative calendar fills by late spring. She asked whether Staff would bring a substantive proposal regarding amending the gift rules at the April meeting.

Ford stated he would be happy to do so but reminded the Commission that Staff typically consult with stakeholders beforehand. Chair Ambrose stated that it need not necessarily be an action item in April. She stated that San Francisco has some of the most stringent gift rules currently on the books and that the problem in the corruption scandal is compliance with existing rules. She identified a concern with the use of third-party nonprofit organizations as a source of laundering gifts.

Chiu asked to confirm that Haney’s legislation would not have to come before the Commission for its approval. Ford confirmed. Chiu asked whether the Commission could use the ballot process instead. Deputy City Attorney Shen stated that the Commission can weigh in on the legislation even if it cannot amend the legislation. He further stated that we will not know whether a statewide election will take place this fall until certain recall efforts succeeded in getting on the ballot.

Chair Ambrose sought clarification on the deadline for placing a measure on the ballot, assuming an election does take place in November. Shen stated that the deadline is 95 days before the election, usually early August.

Lee stated that she hopes for broader stakeholder input than the Commission has typically secured and asked that Staff invite a broader community to ensure that the Commission will have a broader view of how changing the gift rules might impact the broader community.

Bush added his agreement with Lee that the Commission reach out to broader stakeholders, and that Staff seek stakeholder input early in the process about the scope of potential revisions. He suggested that the Commission use the ballot process as appropriate. He stated that the Commission could likewise involve entities like the Brennan Center for Justice. Bush stated that the Conflict of Interest review should be one of several projects instead of the sole project. He stated that the Commission should seek to treat permit consultants like lobbyists. He stated that the Commission should publish a list of all Form 700 filers and direct the public where to find those filings. He further stated that the Commission should advise filers that they must amend their Form 700s within 30 days of any changes to their reportable interests. He asked that City officers be directed to disclose their unpaid positions on nonprofit boards. He further stated that the Commission should explore additional disclosure requirements for nonprofits who receive significant City funding. Bush inquired whether any enforcement actions would be initiated against City officers for improper Form 700 filings, including Mohammed Nuru and Harlan Kelly for failure to disclose gifts. He stated that the Commission need not be last in line for investigations and enforcement when it is serving the public.

Chiu sought clarification about an item regarding a waiver identified in the Policy Report and added her agreement that entities like the Brennan Center be involved in policy efforts. Ford stated that the waiver had been withdrawn. He further stated that Staff has historically involved external entities in its policy efforts, noting that the Campaign Legal Center had been heavily involved in the prior legislative effort to review the public financing system and in Phase I of the ongoing Conflict of Interest project. He clarified that the Policy Prioritization Plan regards only legislative projects and does not encompass all efforts that Staff undertake.

Chair Ambrose identified a review of permit consultant compliance as a high priority.

Chair Ambrose requested that Director Pelham address Bush’s request about Form 700 filer identification during her report.

Chair Ambrose acknowledged that the corruption investigations have revealed that nonprofits may launder unlawful gifts but cautioned that requiring all community organizations to provide additional disclosure may require more than one piece of legislation.

Chair Ambrose noted that Bush’s concerns about enforcement actions can be taken up in the next agenda item.

Public Comment

Ellen Lee Zhou stated that Public Health’s website identifies the number of COVID infections, COVID deaths, and ongoing COVID-related hospitalizations. She stated that a state of emergency can persist only for 60 days. She stated that nonprofits laundering money has contributed to the City’s homelessness problem. She stated that City officials are using COVID to abuse their power.

Bell reminded the Chair that he would have to exit the meeting at 10:45 to attend a board meeting.

Bush clarified that his aim for nonprofit disclosure is directed not at service providers but organizations that exist primarily to influence City law. He requested that the issues he raised be identified in the Minutes and that action be taken on those issues. Bush reiterated his view that Staff should involve broader stakeholders, including the Latinx and African American communities.

Chair Ambrose stated that in her experience, when reaching out to those who are not typically involved in City legislation the feedback can be unhelpfully generic, and that Staff might therefore need to provide some framework to those stakeholders to focus that feedback.

Bell stated that the Commission is discussing both process and product, and that if no clear process yet exists then the Commission should create one. Regarding the Policy Prioritization Plan, Bell stated his approval of the Conflict of Interest project and noted that the Commission has only one staff person for that purpose.

Chiu stated that the corruption scandal makes clear what questions the Commission needs to be asking. She inquired what resources the Commission has to reach out to the Latinx and Asian communities acknowledging that English is not the first language for all.

Lee stated that the history of nonprofits in San Francisco is unique. She further stated that the majority of stakeholders do not know what the Ethics Commission does.

Chair Ambrose asked whether Ford or Director Pelham had any further comment. Ford stated that the Commission’s feedback has been clear and that, as to process, it articulated not a difference of kind but of quantity. He invited the Commission to provide Staff with specific ideas about which additional groups to reach out to. Ford stated that he could bring before the Commission a list of legislative questions that Staff is working on.

Chair Ambrose requested that Staff share its list of stakeholders with Commissioners so that Commissioners could supplement that list.

Bush stated that Friends of Ethics had previously provided Staff with a disk containing a list of community groups active in the City.

Item 5. Discussion of Enforcement Division staff report.

(Note: This item appears beginning at the 01:35:51 mark in the video recording at SFGovTv.)

Enforcement Director Jeff Pierce presented the item. He first highlighted the settlement between the City and Recology over inflated garbage rates that resulted from bribes made by Recology. Pierce asked Deputy City Attorney Andrew Shen to discuss the settlement, insofar as he is able to subject to the limitations of confidentiality and privilege, because of his involvement in the settlement negotiations. Pierce asked Shen to discuss the legal question of whether a behested payment can be a bribe.

Shen said that the settlement still requires approval by the Board of Supervisors. Shen said that he is limited in what he can about the settlement. He also highlighted that it is separate and apart from the federal criminal case against former Recology employee Paul Giusti.

Chair Ambrose asked when the settlement would be approved.

Shen said he is not able to offer a timeline but hopes that it will occur soon.

Chair Ambrose congratulated Shen and other on their successful negotiation of the settlement and lauded its importance. Ambrose said that she believes that the Ethics Commission should not pursue enforcement actions against the targets of the ongoing federal criminal corruption investigation, but that enforcement actions should be brought against those defendants who have already pled guilty and been sentenced.

Commissioner Chiu asked Pierce what if any actions the Department of Public Works has undertaken to change their tone at the top. She also asked about the status of the new law to restructure the Department of Public Works, including the creation of a commission.

Deputy City Attorney Shen said he could provide information in the future about when the new Public Works commission and department will be set up to do.

Chair Ambrose said that the new City Administrator should be invited to speak to the Commission about what she is doing to address the tone at the top within Public Works. The Commission should also let the City Administrator know that Ethics staff are available to help improve the culture of compliance at Public Works.

Commissioner Bush said that former US Attorney David Anderson should be invited to speak at the Commission’s next meeting.

Chair Ambrose asked Director Pelham to coordinate invitations to the City Administrator and Mr. Anderson.

Bush asked what steps could be taken to determine the economic value that City approvals have for private businesses. He said enforcement should look into this. Bush asked about the status of lobbyist audits.

Director Pelham said a pilot lobbyist audit program is dependent on hiring an audit supervisor. She said that Staff seeks to undertake the program by the end of the fiscal year. She said the program should be done internally, rather than by the Controller or another office.

Bush said that that is too long to wait for lobbyist audits and that outside offices should become involved.

Chair Ambrose said that involving outside offices would likely not speed up the initiation of lobbyist audits. She highlighted that the Controller’s office is entering budget season and is unlikely to be available to help. Unless the audit supervisor position cannot be filled, the lobbyist audit program should be designed and carried out by Ethics staff.

Bush said that the Commission could easily tap Dennis Affergut or Ann Ravel as contractors to carry out the lobbyist audit program.

Chair Ambrose said that sole source contracting rules would likely make the process Bush described complicated.

Bush said that the Controller would be able to get around sole source rules if they administered the contract.

Ambrose said that that kind of extraordinary measure is not guaranteed and is not likely to speed up the process at this point.

Chiu said that it is not easy to use an outside party to create and administer the audit program, but that time is of the essence. She said it is worth pursuing finding out how feasible and fast it would be to outsource the audits.

Director Pelham said that that scoping would divert vital resources away from hiring the audit supervisor.

Bush asked when a list of all lobbyists, with basic lobbyist data, will be posted.

Pelham noted that that data is already available on the Commission’s website.

Chiu asked Pierce about investigative holds, as described in the report. She asked what plan is in place to address these matters in a timely matter before the statute of limitation runs.

Pierce said that Enforcement has been in discussions with the District Attorney’s office. He said that he is limited in what he can say about a specific matter, but that staff are conscious of the issue and are working to resolve the matter in a timely manner.

Chiu asked about referrals to the Bureau of Delinquent Revenue. She asked how these long outstanding matters can be resolved, including by Ethics staff taking these matters back.

Pierce said that staff taking collection matters back would take resources and may not be appropriate given staff’s lack of expertise as collections agents. Pierce said that in the Lynette Sweet matter, a payment plan had been agreed to, but Sweet defaulted on the settlement. There are ongoing court actions to enforce a judgment that the City has now obtained in the matter.

Chiu asked that staff explore other means to collect delinquent revenues.

Ambrose said that court closures are likely making it more difficult. She also said that the Commission needs to have a plan in place for when it is appropriate to cease collection efforts against particular respondents.

Pierce said that he will ask the Bureau what their policy for abandoning matters is.

Ambrose said that that is premature, since collections are on hold for now due to the economic crisis.

The opportunity for Public Comment was given and no Public Comment was received.

Bush asked whether there is legal authority to bar respondents from assuming City positions while they have unpaid fines.

Pierce said he is not aware of any provision of law that empowers the Commission to do that. He added that the Commission could communicate with the appointing authority if that issue did happen.

Ambrose added that the Commission cannot control the appointing authority of another person or body. That would require a Charter amendment. She said that alerting appointing officers is the best option.

Vice Chair Lee said that it would be good practice to tell the Rules Committee that they should check with Ethics whenever they do background checks of appointment candidates.

Chair Ambrose said that for evaluating the financial value of City actions, for real estate matters there is a statute that requires financial impact to be assessed. The Budget and Legislative Analyst does a financial assessment of every contract that goes before the Board. This analysis being positive is essential for contracts moving out of committee in practice. Ted Egan, the City’s economist, may be able to give high level statistics about the value of City contracts.

Item 6. Discussion of Executive Director’s Report. An update of various programmatic and operational highlights of Ethics Commission staff activities since the Commission’s previous meeting. The Executive Director’s written report, which is available on the Commission’s website, covers a range of topics such the Commission’s budget, outreach activities, campaign finance disclosure and public financing programs, audit program, lobbyist program, campaign consultant program, permit consultant program, major developer program, and future staff projects. Any of these subjects may potentially be part of the Director’s presentation or discussed by the Commission.

(Note: This item appears beginning at the 02:34:16 mark in the video recording at SFGovTv.)

Director Pelham presented the item. She noted that auditor Amy Li has accepted an opportunity with another department and recently left the Ethics Commission. She stated that the Commission has made significant progress on its hiring efforts.

In relation to tone at the top, Pelham stated that the Commission provided notice last week to all department heads about the importance of reminding employees about the provisions of their departmental Statements of Incompatible Activities. Pelham further stated she addressed department heads at a recent meeting on that issue.

Pelham stated that she and Deputy City Attorney Shen have done training sessions on Form 700 filings. She noted that the Commission had provided training for filing officers on March 10 and would be providing additional remote training to designated filers on March 17.

She stated further that she had conducted a training with the City’s Digital Services team.

Pelham updated the Commission on the budget process. She highlighted that Supervisor Haney, Chair of the Budget and Finance Committee, had articulated among his budget priorities that departments account for how they will address the tone at the top regarding ethics, transparency, and the public interest.

Chair Ambrose asked whether the Budget and Finance Committee would not hold hearings on proposed budgets until after the Mayor had issued her budget, and Pelham affirmed.

Chair Ambrose requested that Pelham calendar for discussion and possible action at the May meeting an update on the budget.

Chair Ambrose wished Amy Li well. She noted that Staff should move swiftly not only to fill the 1824 audit manager position but now also to backfill Li’s 1822 auditor position. Director Pelham stated that the Commission has been benefiting from ongoing support from partners at DHR.

Chiu also thanked Li for her superior audit service. She stated she would like to engage directly with Haney’s office. She stated that optimally other departments might better coordinate with the Ethics Commission on seeking to change their cultures and tone at the top.

  1. Bush requested that Pelham provide to Commissioners examples of budgets that identify how to seek outside resources, for example to enable outside entities to compile reports related to lobbyists and permit consultants on the Commission’s behalf.

Chair Ambrose stated that perhaps Bush could identify some questions that he would like to get answers to and that he and she could then follow up with Director Pelham to see what resources that might entail or to explore whether a third-party entity like the Brennan Center would be interested to conduct such research on the Commission’s behalf.

The opportunity for Public Comment was given and no Public Comment was received.

Item 7.  Discussion and possible action on items for future meetings.

(Note: This item appears beginning at the 03:00:40 minute mark in the video recording at SFGovTv.)

Chair Ambrose noted that the Commission has identified for future meetings that Staff would invite former U.S. Attorney David Anderson to address the Commission, and that Staff agendize the budget as an action item when timely.

The opportunity for Public Comment was given and no Public Comment was received.

Item 8. 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 03:04:03 minute mark in the video recording at SFGovTv.)

The opportunity for Public Comment was given and no Public Comment was received.

Item 9. Adjournment.

Motion 210312-02 (Chiu/Lee): Moved, seconded, and passed (4-0) to adjourn the meeting.

The Commission adjourned at 12:39 p.m.

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