Draft Minutes – July 27, 2022

Draft Minutes of the Special Meeting of
The San Francisco Ethics Commission
Wednesday, July 27, 2022
Hybrid meeting conducted in-person in City Hall Room 400, 1 Dr. Carlton B.Goodlett Place, San Francisco, and also held online as a Remote Meeting via WebEx and aired live on SFGovTV
(Approved ____)

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 SFGovTVat http://sanfrancisco.granicus.com/ViewPublisher.php?view_id=142.

(Note: A complete video recording of this meeting is available at SFGovTv.)

COMMISSION MEMBERS PRESENT: With Chair Yvonne Lee, Vice-Chair Larry Bush, and Commissioners Theis Finlev, Michael Romano, and Argemira Flórez Feng attending, a quorum was present.

STAFF PRESENTING: LeeAnn Pelham, Executive Director; Eric Willett, Onsite Clerk; Cesar Delgado, Online Meeting Moderator; Michael Canning, Acting Senior Policy Analyst.

REPRESENTATIVES OF THE OFFICE OF THE CITY ATTORNEY PRESENT: Ana Flores, Deputy City Attorney.

REPRESENTATIVES OF THE DEPARTMENT OF HUMAN RESOURCES PRESENT: Carol Isen, Human Resources Director; Ardis Graham, Employee Relations Director; Jonathan White, Employee Relations Manager.

REPRESENTATIVES FROM THE BOARD OF SUPERVISORS PRESENT: Aaron Peskin, Supervisor

REPRESENTATIVES OF THE MAYOR’S OFFICE PRESENT: Hank Heckel, Legal Compliance Officer

REPRESENTATIVES FROM THE SFPUC PRESENT: Ron Flynn, Deputy General Manager and Chief Operating Officer

MATERIALS DISTRIBUTED:

Item 1. Call to order and roll call.

Chair Yvonne Lee convened the meeting at 9:35 a.m. and stated that the hybrid meeting is being held pursuant to the Forty-fifth Supplement to Mayoral Proclamation Declaring the Existence of a Local Emergency Dated February 25, 2020, which the Mayor issued February 10, 2022. Meeting Moderator Cesar Delgado summarized procedures for participation by members of the public for the hybrid meeting.

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

Under Item 2, the Commission provided the opportunity for general public comment on matters not appearing on the Agenda but within the Ethics Commission’s subject matter jurisdiction.

Public Comment

Francisco DeCosta commented that SOFT and the Ethics Commission have failed SF voters and kicked the can down the street and are unable to prioritize what is urgent. DeCosta alleged corruption at the SFPUC and stated empirical data had been provided but not been investigated.

No further public comment was received and public comment on the item was closed.

Item 3. Presentation, discussion, and possible action on legislative proposals from the Board of Supervisors and the Mayor regarding City behested payment rules.

Director Pelham provided context related to the revised version and materials provided from the Mayor and the Board of Supervisors.

Acting Senior Policy Analyst Michael Canning gave a presentation updating the Commission on the legislation before the body.

Chair Lee stated questions should be held until after the Commission hears from the Board, the Mayor, and the SFPUC.

Supervisor Peskin spoke about authorizing Measure E and his history with the behested payments issue. He said he had hoped the Commission would have promulgated regulations to help clarify the new rules, but that did not happen, and legislation is now under consideration to clarify certain issues.

Chair Lee thanked Supervisor Peskin for his remarks.

Hank Heckel spoke about the history of behested payments, definitions, and examples of behested payments. Heckel said the Mayor’s office had received questions and vetting compliance with these rules can be challenging, some of the questions have been answered, but others remain unanswered. Heckel stated there is a set of consensus amendments and that he appreciates Staff’s detailed memo. He stated the issues that have received the most attention were “attempt to influence”, the “de minims” exception, the time limitation on the contractor prohibition, additional new exceptions, and the grace period to allow Ethics to promulgate regulations.

Chair Lee thanked Heckel for his remarks and called on the SFPUC to speak.

Ron Flynn spoke about one specific new exception, which would allow solicitation from interested parties to benefit 501(c)(3)s and schools through their SIP program. He explained the SFPUC’s process of social impact partnership. He clarified that the City and City employees cannot direct where that money should go. He stated that the SFPUC oversees enforcing the terms of contracts. The Controller’s Office audited this program and had seven recommendations which they have taken steps to address. Flynn stated that some of the contracts with SIPs never fulfilled their commitments and spoke about what they are doing to improve transparency.

Chair Lee thanked Flynn for his remarks.

Commissioner Bush stated that most of these issues require meet and confer and asked if the City engaged in meet and confer before Prop. E went to the ballot.

Supervisor Peskin stated that he believed the original legislation did go through meet and confer, but that Prop. E did not have meet and confer, but that DHR could speak to this.

Commissioner Bush stated that he did not want to be mysterious about his question. He stated we have been trying to update legislation and we have been part of a meet and confer process for two years. He asked if that is the same situation that the Mayor went through.

DHR Director Carol Isen stated that the original legislation went through an extensive meet and confer, and it was concluded and because we concluded that there are no additional adverse actions which would affect employees, DHR determined there would not need to be a meet and confer. She noted meetings with labor leaders and indicated a challenge would be unlikely because there are not significant and adverse changes to employment.

Commissioner Finlev stated to Heckel that we want to be a good partner, but we have a timeline.

Heckel stated that his office is looking for progress and movement and areas of agreement or concerns and that they wish to help the Commission get to a place that works for all partners.

Commissioner Finlev stated that the Commission is limited in what it can do at this meeting and that it is going to be hard to signal movement.

Heckel thanked the Commission and stated he sees progress in discussions with Supervisor Peskin and hopes today can serve to air areas of agreement and potential disagreement.

Commissioner Finlev stated that he does have questions. He asked Heckel about wanting to get rid of the “intended to influence” prong. He asked Heckel if it could be more specific, rather than getting rid of the whole provision. He referred a question to Tipping Point Community CEO Sam Cobbs, who was in the audience regarding whether they were communicating about their own grants.

Heckel stated that this element of the legislation sounds like it has value on its face but is challenging in practice. He said any conversation could be construed as an attempt to influence and provided some examples.

Commissioner Finlev asked Heckel if he thinks the other prongs cover contractors and lobbyists. Heckel responded that he does.

Commissioner Finlev asked whether the Board of Supervisors could waive themselves under the proposal. Heckel stated that he would have to look at the language again, but even if that were theoretically possible, it would not be advisable. He stated he believes it is limited, but if there is a special circumstance or program that warranted a pre-clearance, that could be done.

Commissioner Finlev disclosed that he spoke to the City Attorney’s Office and Supervisor Peskin about the behested payments matter.

Commissioner Bush stated that the record shows that people seek to influence without being contractors and gave an example of the Chamber of Commerce and said none of that was ever disclosed additionally advocating for appointments, which are not covered. He stated he is concerned that by trying to close one door we have opened more.

Heckel responded that there is a public process for appointments and other restrictions exist for bribery or quid pro quo actions.

Chair Lee asked Supervisor Peskin if he can give the Commission the thinking behind this and the rationale behind why this amendment was proposed?

Supervisor Peskin stated that the amendments are a compromise version and include an implementation provision that asks the Ethics Commission to timely promulgate regulations before January 2023 but as soon as possible. It seeks to not penalize anyone prior to January 1, 2023, or when regulations are promulgated, whichever is first. He stated he would be happy to add preapproval by Supervisors to the ordinance if the Commission so suggests.

Commissioner Romano asked Supervisor Peskin about the administrative action piece.

Supervisor Peskin said it is more and more difficult to implement. He gave the example of the budget as a legislative action. In a compressed period on an annual basis, numerous organizations participate and attempt to influence the budget. The proposal reflected a compromise agreement with Mayor’s Office. Supervisor Peskin noted that he also spoke to Commissioner Finlev who had some creative ideas.

Commissioner Romano stated that promulgating regulations is something he is interested in pursuing. Supervisor Peskin stated he shares that desire.

Chair Lee stated she appreciates the intent of the safe harbor provision but has an issue with this on principal.

Supervisor Peskin stated that it would not object if the Commission were to recommend this legislation without that provision or to adjust it. He stated he believes the legislation could say “shall pass regulations” by a certain day.

Tipping Point CEO Sam Cobbs stated that they consulted with their own attorney to point out, based on past action, where they would have been an interested party. He stated that Tipping Point advocates all the time and gave some examples. He stated they also talk to the City about where dollars should be invested in neighborhoods.

Chair Lee stated that the Commission can approve the proposals as presented, approve with amendments, or take no action knowing that it is possible that there may be similar items on a future ballot.

Commissioner Finlev proposed taking no action and that the Mayor sees this conversation as an act of good faith.

Commissioner Bush stated that the Commission should move forward.

Chair Lee asked Commissioner Bush if he is making a motion.

Supervisor Peskin stated he sees movement forward and suggested the Commission could continue this matter until the Commission’s next meeting, which is August 12. Supervisor Peskin stated he has demonstrated that his office open to compromise and that if this is what the Commission is also signaling, that would be helpful.

Commissioner Romano addressed Commissioner Bush’s comments and stated that the proposals right now are only to create exceptions. He sought to confirm that everyone understands that the proposal is to make more exceptions, not strengthen rules.

Chair Lee asked Mr. Heckel to clarify and Heckel spoke of the urgency his office sees to move forward.

Commissioner Romano stated that he understands the urgency and that the Commission wants to be good partners and wants to move forward with regulations to clarify the issues.

Chair Lee stated the desire to act at the next meeting and asked if the Deputy City Attorney if the Commission can have competing motions on the floor to consider. Deputy City Attorney Flores confirmed multiple motions could be considered.

Commissioner Finlev moved to continue the item to next meeting on August 12, 2022, and the motion was seconded by Commissioner Romano.

Chair Lee moved to approve the joint proposal but amended to remove the language that limited the Commission’s ability to apply penalties, and the motion was seconded by Commission Bush.

Public Comment

Sam Cobbs, Tipping Point, gave an example of a state grant that cannot move forward because of this legislation stated that they need to be able to talk to City departments. He stated he supports the motion to continue this matter so the public can see the compromises. He thanked the Mayor and Board of Supervisors.

Susie Smith, Deputy Director of SF Human Services Agency reiterated the urgency and stated they are also wanting to apply for the state grant.

Matt Valdez, Giants Community Fund. explained the relationship between his foundation and the Recreation and Parks Department. Valdez explained the project and the impact the legislation has had on their program and asked that their program and programs like theirs move forward.

Cathy Lowery, Rising Up Initiative explained their public private partnerships related to youth homelessness and stated they support the amendments.

Shireen McSpadden, Department of Homelessness and Supportive Housing, acknowledged the good intentions of the original legislation and stated support for the amendments. McSpadden stated that no fiscal or racial analysis was conducted before the original legislation.

Mary-Kate, representing various nonprofits, stated a desire for the City to move quickly and decisively to approve and adopt the amendments around fundraising and remove from “interested parties” people who attempt to influence administrative and legislative actions as they contribute to a chilling effect.

John Cunningham, CEO of the National AIDS Memorial, stated support of the legislation however, based on his partnership with the Recreation and Parks Department for 30 years, he is concerned that their public private partnership would not be possible today given this legislation. Cunningham asked the Commission to ensure this would not have a chilling effect.

No further public comment was received and public comment on the item was closed.

The Commission voted on the motion from Commissioner Finlev to continue the item to next meeting on August 12, 2022, which was seconded by Commission Romano and approved by the Commission (3-2, with Chair Lee and Commissioner Bush in the dissent).

Motion 220727-01 (Finlev/Romano): Moved, seconded, and passed (3-2) to continue this item to the Commission’s next meeting on August 12, 2022.

Chair Lee withdrew her motion after conferring with City Attorney Flores.

Commissioner Romano restated his primary concerns with the proposals and stated that he agrees there are issues with the current rules and is impressed with the coalition that has come together to raise these concerns. He stated his intention to address those concerns while maintaining the spirt of the original law enacted last year.

Supervisor Peskin stated that he welcomes Commissioner Romano’s statement and looks forward to getting together and doing this work to resolve this matter and take the politics out of it. Supervisor Peskin stated he appreciates that the Mayor never liked this legislation, but we should be clear this is somewhat of a manufactured crisis. He described the executive order to stop all philanthropic giving as politics.

Heckel stated he would like to echo the sentiment of working collaboratively. He stated the executive order is about reviewing programs, so that there is a way for them to move forward pending review.

Commissioner Flórez Feng stated that in the spirt of transparency, she wanted to disclose that in the prior week she met in the Office of the Assessor-Recorder with the Managing Director of the SF War Memorial, John Caldon and the Arts Commission’s Director of Cultural Affairs, Ralph Remmington to discuss potential changes regarding behested payments and gifts, as this discussion may influencer her thinking going forward.

Item 4.  UPDATE WITH LABOR NEGOTIATOR – LABOR NEGOTIATIONS [Discussion and Possible Action].

Chair Lee introduced the item and explained the need to go into closed session to discuss labor negotiations. She stated the topic of discussion is the status of the meet and confer process with the San Francisco Municipal Executives Association (MEA) regarding the Commission’s proposed November 2022 ballot measure and regulation amendments. Representatives from DHR were present to participate in closed session.

Chair Lee explained the process that public comment on the item will first be received and then a vote a will be taken on whether to meet in closed session under California Government Code Section 54957.6 and Sunshine Ordinance Section 67.10(e) to discuss labor negotiations. Then, if a closed session is held, the Commission will initiate a closed session meeting with Labor Negotiators and will then reconvene in an open session. Finally, pursuant to Brown Act section 54957.1 and Sunshine Ordinance section 67.12, the Commission will then discuss and vote on a motion whether or not to disclose any action taken or discussion held in the closed session regarding labor negotiations.

Chair Lee called for public comment.

No public comment was received and public comment on the item was closed.

Commissioner Romano moved to meet in closed session under California Government Code Section 54957.6 and Sunshine Ordinance Section 67.10(e) to discuss labor negotiations. The Motion was seconded by Chair Lee and approved unanimously (5-0).

Motion 220727-03 (Romano/Lee): Moved, seconded, and passed unanimously (5-0) to meet in closed session.

Chair Lee explained that the Commission will be entering closed session but that the audio and visual airing of the Commission will resume once the Commission resumes its meeting back in open session.

The Commission went into closed session at 11:29 a.m. Commissioner Romano left the Commission meeting at 12:00 pm with an excused absence. After reconvening in open session at 12:44 pm, Commissioner Finlev made a motion to not disclose matters discussed in closed session, which was seconded by Chair Lee.

Motion 220727-04 (Finlev/:Lee): Moved, seconded, and passed (3-1, with Commissioner Bush in the dissent) to not disclose what was discussed in closed session.

No public comment was received and public comment on the item was closed.

Item 5. Additional opportunity for public comment on matters not appearing on the agenda pursuant to Ethics Commission Bylaws Article VII Section 2.

Chair Lee called for public comment.

Public Comment

Francisco DeCosta stated that now the Commission can focus on the Form 700 and auditing the lobbyists so that we can get results. What is happening in this deliberation is that the community is not aware of what is going on or aware of this meeting and all the other people who are speaking because they want to make some money. It is not fair that some people get more opportunities to speak just because they come in person. What was being discussed is making exceptions to the behested rules and what the people want is for people to follow the rules, not to be exempt from the rules. DeCosta restated his request that the Commission not kick the can down the street.

No further public comment was received and public comment on the item was closed.

Item 6. Adjournment.

The Commission adjourned at 12:50 p.m.

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