Minutes – July 8, 2022 – San Francisco Ethics Commission

Minutes of the Regular Meeting of
The San Francisco Ethics Commission
Friday, July 8, 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 October 14, 2022)

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.

(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; Geraldo Moya, Onsite Clerk; Cesar Delgado, Online Meeting Moderator; Pat Ford, Director of Enforcement; Michael Canning, Acting Senior Policy Analyst.

REPRESENTATIVES OF THE OFFICE OF THE CITY ATTORNEY PRESENT: Andrew Shen, 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 OF THE MAYOR’S OFFICE PRESENT: Hank Heckel, Legal Compliance Officer

MATERIALS DISTRIBUTED:

Item 1. Call to order and roll call.

Chair Yvonne Lee convened the meeting at 10:08 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.

No public comment was received and general public comment was closed.

Consent Calendar, Items 3 and 4.

The Commission took up its consent calendar Item 3, Draft Minutes for the June 10, 2022 regular Commission meeting, and Item 4, consideration of a Resolution on the Continuation of Remote/Hybrid meetings.

Commissioner Finlev

Chair Lee called for public comment.

No public comment was received. Chair Lee closed public comment and called the question on Consent Calendar Items 3 and 4.

Commissioner Finlev moved adoption of the Consent Calendar and the motion was seconded by Commissioner Romano. On a roll call vote the Commission unanimously (4-0) approved the motion to approve both Consent Calendar items (Commissioner Bush was experience technical difficulties and was unable to a cast a vote).

Motion 220708-01 (Finlev/Romano): Moved, seconded, and passed unanimously (4-0) to adopt Items 3 and 4 as presented on the Consent Calendar.

Item 5. Proposed Stipulation, Decision and Order In the Matter of Gabriela Lopez (SFEC Case No. 2021-038)

Pat Ford provided an overview of the Streamlined Administrative Resolution Program (SARP) and Form 700 filings.

Commissioner Finlev asked about the process for accepting or rejecting the stipulation and if the Commission could ask staff to do additional work on the stipulation.

Ford explained that the item could be continued to a future meeting, but that if staff did work that changed the stipulation, the respondent may or may not agree to the new one.

Commissioner Finlev asked if MNC sought additional City contracts and asked what duties the respondent had as the chief academic officer and stated that those would be helpful facts to have included in the future.

Ford stated that staff will take that feedback moving forward and that no evidence was found that MNC sought more contracts than were found. Ford stated that staff did not find evidence that the respondent participated in awarding the contracts and that he did not have other details available about her other job duties, but that will include those going forward.

Chair Lee called for public comment. No public comment was received on the item.

Commissioner Bush moved to adopt the proposed stipulation, the motion was seconded by Commissioner Finlev, and approved unanimously.

Motion 220708-02 (Bush/Finlev): Moved, seconded, and passed unanimously (5-0) to adopt the proposed Stipulation, Decision and Order In the Matter of Gabriela Lopez (SFEC Case No. 2021-038).

Item 6. Proposed Stipulation, Decision and Order In the Matter of Darryl Honda (SFEC Case No. 2021-026).

Pat Ford explained the matters of the case and informed the Commission that the respondent’s attorney is present.

Commissioner Bush stated that received a question from Mr. Dratler and wants to know if the amended filings are complete and said that Mr. Dratler gave specifics for Enforcement to evaluate.

Ford stated that staff believes the amended filings are complete and that the stipulation can be approved, then in the future new matters can be invested as needed.

Chair Lee asked if staff looked at the actions the respondent took related to his undisclosed sources of income.

Ford responded that they did look and found no violations.

Commissioner Romano confirmed with Ford that the respondent did disclose the income, but not the source of the income.

Commissioner Romano asked about the need for it to be intentional deception versus being a mistake.

Ford responded that willfulness would be aggravating, and that staff did not see willfulness in this case.

Commissioner Romano asked about a minimum penalty and Ford clarified that there is no minimum per say, as it is a consideration of various mitigating factors, and that staff used the SARP penalty amounts in this case.

Commission Bush suggested that the training the Commission provides should reduce confusion for filers in the future.

Chair Lee added that the respondent resigned earlier this year, and that she thinks the Commission will have more robust training in the future.

Commissioner Bush moved to adopt the proposed stipulation and the motion was seconded by Commissioner Finlev.

Public Comment

A commenter identified as Stephanie P. stated the Commission should make the respondent’s punishment commensurate to his crime to encourage ethical behavior. Commentor also stated that last year when Mr. Dratler brought an appeal, Mr. Honda did not recuse himself although he had a conflict of interest.

Dennis Richards provided a statement giving background on Mr. Honda’s conduct, stating that in February, Mr. Honda said he always recused himself from projects.

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

Commissioner Finlev confirmed with Ford that the Commission is only looking at these specific violations and is not precluded from reviewing any other violations. Commissioner Finlev also noted that certain facts, such as the number of violations, make him believe that the penalty may be too lenient.

Commissioner Romano asked about whether there was a willful violation and any evidence of conflicts of interest. Ford stated that there was not and Romano stated he believes the penalty to be harsh.

The Commission voted on the motion to adopt the proposed stipulation made by Commissioner Bush and seconded by Commissioner Finlev. The Commission approved the motion (3-2, with Chair Lee and Commissioner Romano in the dissent).

Motion 220708-03 (Bush/Finlev): Moved, seconded, and passed (3-2) to adopt the proposed Stipulation, Decision and Order In the Matter of Darryl Honda (SFEC Case No. 2021-026).

Item 7. Presentation, discussion, and possible action on proposed Ethics Commission ordinance for November 2022 ballot and amended Ethics Commission regulations to strengthen gift and other City ethics laws.

Michael Canning gave a presentation updating the Commission on the status of the proposed ethics reforms being considered as a ballot measure and regulations.

Commissioner Bush stated that the presentation seemed comprehensive and was appreciative of staff’s efforts.

Commissioner Finlev asked Canning to remind the Commission about the difference between the definition of ‘gift’ in state versus local law.

Canning explained that the main differences are in the exceptions and that the state definition includes many exceptions that apply to all gifts, whereas the City is focused more narrowly on gifts from restricted sources. Canning also mentioned changes to how the definition is used in the definition of bribery.

Commissioners Finlev and Romano asked for more specific examples in the future and Canning confirmed those can be provided.

Commissioner Finlev asked about Section 6, regarding intermediaries.

Canning stated that he believes that language is intentional reflects past discussions.

Commissioner Finlev stated that he thinks it is unfair to put criminal liability on a non-City person as an intermediary and Commissioner Flórez Feng stated that she agrees and that there has been an uptick in feedback on this that has not gone unnoticed.

Commissioner Romano stated he would prefer the word “notwithstanding” be used on page 66, line 14, instead of “but.”

Commissioner Finlev stated he supports the language around selective assistance.

Commissioners discuss the logistics of when to have a vote regarding a potential special meeting, considering information obtained during the closed session may influence the need for such a special meeting.

Shen confirms that the Commission could vote to call a special meeting after a closed session discussion during Item #10.

Chair stated that following public comment, Item #10 should be moved up in the agenda.

Public Comment

Jennifer Waggoner, SF Resident and LWV of SF member, stated that the League supports this item going on the ballot and urges and end of delays.

Charles Head, Coalition of San Francisco Neighborhoods, echoed the comments of the previous caller and urges the Commission to move forward quickly to get the reforms on the ballot.

Francisco DeCosta stated the desire for a strong ordinance for things to move faster.

Sean McMorris, CA Common Cause, stated that Common Cause supports the draft ordinance.

Debbi Lerman, Human Services Network, stated that the devil is in the details and there is a huge possibility for unintended consequences. The measure should allow tickets for a plus-one and that there should also be exemptions for non-profit board members.

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

Commissioner Romano stated that it is not up to the Commission whether this ends up on the ballot and wanted to acknowledge that everyone at Ethics is committed to this matter. He also suggested the Commission call a special meeting only if DHR has stated that meet and confer has been concluded.

Shen stated that the Commission can call a special meeting at any time and does not need to take a vote.

Commission started to move to Item 10, but decided to first hear public comment on Item 8.

Item 8. Presentation, discussion, and possible action on implementation of City behested payment rules enacted in December 2021 and recent legislative developments.

Public comment taken prior to moving to Item 10.

Public Comment

Sam Cobbs, CEO of Tipping Point Community, stated they are very concerned about unethical behavior by city officials and applaud the commission for putting this rule on the ballot, but believe that the language is too broad and gave some examples.

Amed, from a service provider working group of 70+ non-profits working with youth, explained how department heads may solicit funds to close gaps in programs and that these rules would have a negative impact on residence that need philanthropic funds the most. Officially requested written clarification around these issues. Used Summer Together program example. Requested clear guidance for nonprofit representatives sitting on boards and commissions.

Robin Takayam, a Public Works employee that has taken time off work to be here today as a resident stated that they have questions. Asked if someone who is a city worker can tell other people about fundraiser opportunities such as cool art events, a go fund me, etc.?

Lisa Branson, Director of Partnerships of the Department of Recreation and Parks, thanked the commissioners for carefully considering public concerned, so that we can move forward. Asked that the Commission clarify interested parties. Branson explained the details of how Recreation and Parks deal with permits. Stated that even though they are working with the City Attorney’s Office, they are experiencing a lot of stress and lack of clarity.

Dylan Schneider, Department of Homelessness and Supportive Housing, stated support for the amendments on behested payment rules, specifically removing the “attempting to influence” language.

Hank Heckel, legal compliance officer in Mayor’s Office gave some background around behested payments being a disclosure system in the past. The new law moved from disclosure “reporting regime” to a prohibition. It effects over 5,000 people and is a burden to vet compliance. Legislation is well intentioned but needs to be clarified and improved.

No further public comment was received at this time and public comment on the item was paused until the Commission returns to Item 8, following Item 10.

Item 10. 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.

Public Comment

Two people called, but held their comments for Item 8.

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

Commissioner Romano stated that the Commission must go into closed session due to labor laws, but would rather have this discussion in public, to which Chair Lee expressed agreement.

Chair Lee 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 Commissioner Romano and approved unanimously (5-0).

Motion 220708-04 (Lee/Romano): 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 12:00 a.m. Due to technical issues, Commissioner Bush was unable to continue his remote participation at the end of the closed session and was excused at that time. After reconvening in open session at 1:22 pm, Commissioner Romano made a motion to not disclose matters discussed in closed session, which was seconded by Commissioner Finlev.

Motion 220708-05 (Romano/Finlev): Moved, seconded, and passed unanimously (4-0) to meet in closed session.

Item 8. Presentation, discussion, and possible action on implementation of City behested payment rules enacted in December 2021 and recent legislative developments.

Following Item 10, the Commission returned to Item 8.

Michael Canning gave a presentation to the Commission regarding the implementation of the City’s behested payment rules and recent legislative developments.

Commissioner Finlev asks if the hope is that if the Commission passes legislation, the Mayor will withdraw her measure. Canning confirmed that was correct.

Commissioner Finlev asked if legislation passed next month would potentially be overwritten by a November ballot measure. Canning deferred to the Shen, who said it would depend on how each was written.

Commission Romano reviewed the dates and when the Board would need to act in order to have legislation passed by the August 5 ballot deadline.

Shen confirmed the Board would not have enough time to act, but stated that the parties involved are looking to the Commission today to signal what its future actions may be.

Commissioner Finlev asked if the Commission needs to be the one to vote first, or if the Board could vote first. Shen confirmed the Commission must vote first.

Chair Lee asked for representatives from the Mayor’s Office or Board of Supervisors to weigh in regarding timing questions.

Pelham informed the Chair that staff from the Mayor’s Office are on the line.

Chair Lee asked Hank Heckel about the Mayor’s plans to place a measure on the ballot for November.

Commissioner Romano stated he would like to hear clarity on the schedule first.

Hank Heckel thanked the Chair and Commissioner Romano and stated that they believe there are problematic consequences related to the legislation but understands there are timing issues to work out first. Heckel stated that they have been meeting with stakeholders and would like the Commission and Board to look at the substance of the issues, and they would potentially withdraw the measure.

Chair Lee asked to confirm Ethics staff are recommending a special meeting and Pelham described the timing considerations.

Commissioner Romano stated he would like to understand the timing and why the Commission needs to vote so expeditiously.

Heckel stated that this is caused by the pause on philanthropic funding and the risk of personal liability that is pausing programs. Heckel believes the Mayor’s legislation will address these concerns. The Board may not have time to act, but the Commission could move forward.

Chair Lee asked about if the ballot measure can be withdrawn and there was general discussion regarding the schedule and timing.

Commission Finlev asked about the potential for the legislation to go back and forth between Ethics and the Board. Shen confirmed a ping-ponging can occur and has happened in the past with other legislation.

Chair Lee confirmed with Shen that a simple majority is all the Commission needs to approve the legislation, the Board needs a super majority.

Commission Finlev asked if someone from the Board was available and Canning confirmed they are waiting to hear.

Commissioner Romano asked Heckel about a definition of “ministerial” being included and Heckel stated that there is, and they are considered to be ‘off-the-shelf’ type permits, like for picnic tables.

Commissioner Romano asked Heckel about a person not being an interested party based on an attempt to influence legislation, to which Heckel replied that is correct and that the current language is quite broad and a little ague, cited Tipping Point as an example. Commissioner Romano stated that that seems like the exact type of activity we are trying to avoid, to which Heckel disagreed citing how it acquires funding for a pilot program. Commissioner Romano confirmed with Heckel that this exception would not be limited to new and novel projects.

Commission Finlev asked if Tipping Point can ask where to send money and Heckel responded that his understanding was that any direction by the City would be considered a behest. Commission Finlev asked if the concern was that without engaging with the City, Tipping Point would be unable to find the most effective use of their funds, to which Heckel replied in the affirmative, stating that coordination is necessary to identify needs.

Commissioner Romano asked what would be left of the prohibition if this legislation were to pass, Heckel responded with the example of the Airport not being able to go to a vendor and ask that vendor to fund a project that has nothing to do with that vendor. Romano confirmed that this is because they are a contractor.

Commissioner Romano asked about Number 6, that would exempt parties from development agreements. Heckel explained how the PUC has a program to solicit community benefits through their RFP process, but that has had to stop under these rules and that this is something both the Mayor and Supervisor Peskin would like to see this activity be allowed. Commissioner Romano confirmed with Heckel that this would only apply to payments that are included in an RFP or contract.

Commissioner Finlev asked about an example.

Chair Lee stated she was not comfortable moving forward without input from the Board of Supervisors.

Canning stated he would like to add additional context, that the purpose of the special meeting would be to have a more in-depth meeting, at which point staff could bring more specific language and suggestions. Canning mentioned that regarding the PUC’s SIP program, staff have had good conversations with them, and they are interested in presenting to the Commission directly.

Commissioner Flórez Feng asked what staff has done to be proactive and about what sort or customized responses could be helpful and if FAQs could be revised.

Canning confirmed that staff has had eight requests for informal advice regarding behested payments and that from those requests staff has been considering recommendations regarding changes to the Code, regulations, and compliance materials

Heckel mentioned that the Mayor’s Office has sent a list of roughly 50 questions to Ethics and the City Attorney’s Office regarding behested payments, some have been responded to and they are looking forward to responses from others.

Chair Lee confirmed potential room availability for a special meeting with Pelham.

Chair Lee, Commission Finlev, and Commissioner Romano discuss the potential of having a special meeting and staff workload to hold such a meeting. Heckel and Canning both made statements supportive of holding an additional special meeting. Heckel indicated that if the amendments are adopted there would be no need to keep the measure on the ballot and also that they are in discussion with Supervisor Peskin and may come up with a unified piece of legislation by the time of a special meeting.

Additional Public Comment

Debbi Lerman, Human Services Network, stated that they have been advocates of the behested payment rules for about six years now, but there is a real chilling effect on nonprofits. Stated this will create delays and barriers on the city’s ability to generate funds. Urged Commission to move forward as expeditiously as possible with the amended legislation submitted by the Mayor and Board.

Francisco DeCosta stated that this has been a convoluted back and forth and that SFPUC is responsible for a lot of this nonsense.

Cheryl Davis, Director SF Human Rights Commission stated they have major concerns around how interested parties are defined, the timing and scheduling of meetings, and the perpetuating of inequities. Davis stated the language is racist, some is of it is a dog whistle for black people, and sees a lack of urgency to the detriment of black communities. She believes this does not address corruption but will keep philanthropic dollars from those who need them.

Commissioner Romano asked Ms. Davis, if they are concerned with the Mayors’ proposal or the proposal from the Board? Davis responded all of it is concerning and a lot of laws and rules are not just. Commissioner Romano asked if Davis thinks the current rules are better, and Davis indicated that some of the Mayor’s and Board’s changes would be helpful. Commissioner Romano asked Davis to submit more information regarding her concerns.

Lisa Pagan, Economic and Workforce Development, stated support the proposed legislation by the Mayor’s Office and that they have put a lot of work into informing the Mayor’s Office. Pagan stated the behested payment rules have caused an administrative burden.

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

Chair Lee asked about the potential for more engagement with stakeholders before the special meeting, to which Pelham explained staff would not have the ability to hold such meetings in that short of a time period. Chair Lee stated she understood the time constraints staff is under and encouraged the public to submit comments in writing and participate in the upcoming special meeting.

Item 9. 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 written report is available on the Commission’s website and may cover a range of topics such as 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, racial equity work, and future staff projects. Any of these subjects may potentially be part of the Director’s presentation or discussed by the Commission.

Director Pelham gave a presentation on her report to the Commission, including updates on the Chair’s statement on the status of the Commission’s ethics reform work, hiring updates, the FY23-24 budget, lobbying data, and revenues.

Public Comment

Francisco DeCosta stated that the Commission is insulting the public and that the Brown Act needs to be read.

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

Item 11. Discussion and possible action on items for future meetings.

Commissioner Romano asked staff to consider ways to make meetings more effective.

Chair Lee asked if other bodies had come up with ways to reduce the time associated with hybrid meetings. Director Pelham confirmed staff could look into this.

Commissioner Finlev asked about what limits there are regarding what items can be placed on the consent calendar. Director Pelham stated that non-controversial items can go on the consent calendar.

Following additional discussion regarding public comment, Deputy City Attorney Shen stated that it would be difficult to reduce the public comment time period to below three minutes, given how few public comments the Commission typically receives per item.

Public Comment

Unidentified caller said that the Commission should read the Brown Act and suggested the Commission is not using their speaking time well and should limit their conversations.

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

Item 12. 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. No public comment was received.

Item 13. Adjournment.

The Commission adjourned at 3:16 p.m.