Summary and Action Requested
This memo provides background and analysis to assist the Commission in determining whether to grant a post-employment waiver to Dan Bernal. Based on its review of Mr. Bernal’s request and applicable law, Staff recommends that the Commission not approve the waiver. However, the Commission should evaluate Mr. Bernal’s waiver request, and as required by City law, consider if not granting Mr. Bernal’s waiver would cause extreme hardship for Mr. Bernal. The Commission should approve or deny Mr. Bernal’s waiver based on that finding.
On September 29, Dan Bernal sent a formal request to the Ethics Commission requesting that part of the City’s post-employment restrictions in the Campaign and Governmental Conduct Code (C&GCC) be waived. Mr. Bernal has been a member of the San Francisco Health Commission since 2017 and currently serves as the President of that commission. Mr. Bernal is seeking a waiver for City’s prohibition on receiving compensation from City contractors imposed by Subsection 3.234(a)(3), so that he may accept an offer of employment from the University of California, San Francisco (UCSF). Mr. Bernal’s waiver request is included as Attachment 1. The facts included in this memorandum are drawn primarily from Mr. Bernal’s written request, documents acquired through Mr. Bernal, and communications between Mr. Bernal and Staff.
Receiving Mr. Bernal’s formal request on September 29 was Mr. Bernal’s first contact with the Ethics Commission regarding this matter; however, Mr. Bernal apparently sought guidance from the City Attorney’s Office prior to submitting his formal waiver request to the Commission.
Ethics Commission Regulation 3.234-4(a)(3) specifies that a waiver request shall be considered at the Ethics Commission’s next regularly scheduled meeting, if “such request is received at least two calendar weeks in advance of the meeting.” Mr. Bernal’s request was received on the afternoon of September 29, which was exactly two weeks in advance of the Commission’s October 13 meeting. While this request was received within the deadline, this left Staff with minimal time to review and analyze this waiver request before meeting materials were posted on October 6.
The City has rules for all officers and employees that restrict what former City officials can do after they leave City service. These rules include a permanent restriction on representing any other person (except the City) before any court or government agency in connection with particular matters, a one-year restriction on communicating with the former City official’s former department, and a prohibition on being employed by parties that contract with the City.
These rules further the purposes of the Campaign and Governmental Conduct Code, which per Section 3.200 is chiefly to “promote fairness and equity for all residents and to maintain public trust in governmental institutions.” The law seeks to ensure “that public officers and employees [are] independent, impartial, and responsible to the people and that public office and employment [is] not…used for personal gain.” The Code also asserts that government decisions by City officers and employees “should be, and should appear to be, made on a fair and impartial basis.”
Permanent Restriction on Representation in Particular Matters
Subsection 3.234(a)(1) of the C&GCC prohibits former City officers from representing any other person (except the City) before any court or government agency in connection with particular matter in which the former City officer was personally and substantially involved in as a City officer, with intent to influence. Ethics Commission Regulation 3.234-1 outlines the scope of this restriction and provides guidance on determining whether this permanent ban applies to certain activities.
One-Year Restriction on Communicating with Former Department
Subsection 3.234(a)(2) of the C&GCC prohibits former City officers from, with the intent to influence a government decision, communicating on behalf of any other person (except the City) with any officer or employee of the department for which the former City officer served, for one year following the termination of their employment with the City. Ethics Commission Regulation 3.234-2 outlines the scope of this restriction and provides guidance on determining whether this one-year ban applies.
Employment with Parties that Contract with the City
Subsection 3.234(a)(3) of the C&GCC prohibits current and former City officers from being “employed by or otherwise receiv[ing] compensation from a person or entity that entered into a contract with the City within the preceding 12 months where the officer or employee personally and substantially participated in the award of the contract.” Ethics Commission Regulation 3.234-3 outlines the scope of this restriction and provides guidance on determining whether this prohibition applies.
This prohibition on employment with City contractors furthers the goals of the Campaign and Governmental Conduct Code by ensuring that City officials cannot help award a City contract and then become employed by the contractor who has recently benefitted from the actions of the City official.
This rule is intended to create a buffer between the time a contract is awarded and when a City official involved in the award of that contract may become employed by the contractor. This buffer is an important tool for ensuring that government decisions are, and appear to be, made fairly and impartially. Without this rule, City officials could be tempted to make government decisions with their short-term career goals in mind, rather than the best interests of the City. Even if a City official makes their decisions fairly and impartially, going to work for a City contractor within 12 months of them entering into their contract could create the appearance of corruption among the public. Just the appearance of corruption can erode the public’s faith in government and is something this rule is intended to prevent.
Waiver Authority of the Ethics Commission
Subsection 3.234(c)(3) of the C&GCC grants the Commission the ability to waive the prohibition on employment with parties that contract with the City, “if the Commission determines that imposing the restriction would cause extreme hardship for the City officer.”
Ethics Commission Regulation 3.234-4 further outlines the process for submitting and potentially approving post-employment waivers. The regulation specifies that the Commission “shall not approve any request for a waiver from the ban on receiving compensation from certain City contractors made under subsection 3.234(c)(3) unless the Commission makes a finding that imposing the restriction in subsection 3.234(a)(3) would cause extreme hardship for the individual.” When determining if not granting such a waiver would cause extreme hardship, the regulation specifies that the Commission may consider:
- the vocation of the individual;
- the range of employers for whom the individual could work;
- the steps the individual has taken to find new employment; and
- any other factors the Commission deems relevant.
When considering waiver requests, the Commission should also consider whether granting a waiver would further the purposes of the Campaign and Governmental Conduct Code. The Commission may grant a waiver only if it finds that not granting the waiver “would cause extreme hardship for the City officer.”
Waiver requests are evaluated based on the facts that are provided in the request, shared in related communications with Staff and the Commission, and found in additional documents provided to Staff and the Commission. These facts allow the Commission to evaluate whether a waiver is appropriate and must therefore be complete and accurate. Any waiver that the Commission grants is limited to the facts provided, and, should the facts change, the requestor should seek an updated waiver from the Commission.
As the term “extreme hardship” is not defined in the Code or regulations, it is the responsibility of the Commission to determine if on balance, not granting a waiver would cause extreme hardship for the requestor. As specified in Commission regulations, the Commission may consider “any other factors the Commission deems relevant” beyond those explicitly listed above. In the past, the Commission has considered factors like the importance of the work being done, the level of personal and substantial involvement the City officer had in awarding the contract, the timing of their involvement, the unique nature of the position, the impact on the prospective employer, the impact on the City or other stakeholders, and other factors, to determine if denying a waiver would cause the requestor extreme hardship.
Dan Bernal has been a member of the San Francisco Health Commission since 2017 and currently serves as the President of that Commission. Mr. Bernal is currently employed as the Chief of Staff for Speaker Emerita Nancy Pelosi, a position he has held since 2002. On April 27, a search firm contacted Mr. Bernal regarding the position of Vice Chancellor of Community and Government Relations position with UCSF. Mr. Bernal received a tentative offer of employment from UCSF on August 29. Mr. Bernal has stated that if permitted to accept this position with UCSF, he intends to resign from the Health Commission immediately and plans to spend the rest of his career with UCSF. Mr. Bernal did inform Staff that he has already given notice to his current employer, to which Staff recommended he delay until the Commission has decided on his waiver request.
During the past 12 months, in his capacity as President of the Health Commission, Mr. Bernal has participated in six votes to approve nine contracts involving UCSF. Each of these contracts was approved through a voice vote on the Health Commission’s consent calendar and each vote was unanimous. Some of the contracts were new and others were amendments to existing contracts. Descriptions of each contract are included in Mr. Bernal’s waiver request that has been included as Attachment 1. The combined value of these contracts is in excess of $75 million.
Additionally, on July 18, during a closed session of the Health Commission, Mr. Bernal participated in a unanimous voice vote for a settlement of litigation in which the City and UCSF were co-defendants and each paid $100,000.
The Need for a Waiver for Mr. Bernal to Accept Employment with UCSF and Perform the Duties of that Position
For both the permanent restriction on representation in particular matters rule and the one-year post-employment communication rule, it does not appear that a waiver is necessary, as the position with UCSF would not require Mr. Bernal to engage in the activities prohibited by these rules. If Mr. Bernal wanted to represent UCSF, or any other non-City entity regarding any particular matters in which he personally and substantially participated as a City officer (such as the awarding of a UCSF City contract), he would need to seek a waiver from the Commission to allow that representation. Similarly, if Mr. Bernal wanted to communicate with his former colleagues at the Health Commission or the Department of Public Health with the intent to influence a government decision within 12 months of leaving City service, he would also need a waiver from the Commission. Mr. Bernal is not currently seeking a waiver for either of these rules and stated in his waiver request that he is both aware of these rules and intends to comply with them if allowed to accept this position with UCSF. Based on the facts provided, Staff does not believe a waiver for either of these rules is necessary for Mr. Bernal to be employed by UCSF and perform his potential duties as described.
Based on the facts presented in Mr. Bernal’s waiver request, Staff believes that a waiver for the restriction on employment with parties that contract with City is necessary for Mr. Bernal to accept employment with UCSF.
Based on Ethics Commission Regulation 3.234-3, the restriction on employment with parties that contract with the City would apply to Mr. Bernal’s proposed employment with UCSF, since:
- Mr. Bernal would be accepting employment and be entitled to compensation from UCSF, which is an entity other than the City.
- The entity offering the employment, UCSF, entered into contracts with the City during the 12 months prior to Mr. Bernal receiving or being entitled to compensation.
- Mr. Bernal participated personally and substantially in the award of the contracts between UCSF and the City, per the definition of “participate personally and substantially” found in Ethics Commission Regulation 3.234-5(e).
Regarding bullet point #2 above, Mr. Bernal has provided a list of contracts that he was personally and substantially involved in during the past 12 months. However, Section 3.234 concerns contracts that were “entered into…within the preceding 12 months where the officer or employee personally and substantially participated in the award of the contract. These are not necessarily the same lists. For example, if Mr. Bernal participated in the awarding of a contract 13 months ago, but that contract was not entered into (finalized and signed by both parties) until 11 months ago, that contract would be relevant to Section 3.234(a)(3), but not reflected in the list provided by Mr. Bernal. However, this potential discrepancy is not particularly relevant here, considering the quantity of contracts Mr. Bernal was involved in approving during the last 12 months, most of them have likely also been entered into within the last 12 months, which is sufficient for this rule to apply. But it is possible that there may be additional contracts UCSF entered into within the last 12 months, where Mr. Bernal was personally and substantially involved.
Regarding bullet point #3 above, Mr. Bernal has stated that his involvement in the awarding of these contracts to UCSF was nominal and had no impact on the outcome. Mr. Bernal has referenced that the Health Commission voluntarily votes on San Francsico Department of Public Health (SFDPH) contracts as a matter of policy and that this is done in an advisory capacity. Ethics Commission Regulation 3.234-5(e) specifies that to “participate substantially means that the officer’s…involvement is, or reasonable appears to be, significant to the matter.” As the President of the commission voting on the contract, Mr. Bernal’s participation was both personal and substantial to the awarding of the contract, even if the Health Commission does not have the technical authority to approve contracts for SFDPH. Mr. Bernal does not dispute that he was personally and substantially involved in the awarding of these contracts or that Section 3.234(a)(3) applies.
In order for Mr. Bernal to receive or be entitled to compensation from UCSF, within 12 months of UCSF’s entrance into the most recent contract with the City that Mr. Bernal was involved in awarding, Mr. Bernal would need a waiver from the Ethics Commission for the restriction on employment with parties that contract with City.
Considering if Imposing the Prohibition on Employment with Parties that Contract with the City would Cause Extreme Hardship for Mr. Bernal
When determining if not granting Mr. Bernal a waiver would cause extreme hardship, the regulations specify that the Commission may consider: Mr. Bernal’s vocation, the range of employers for whom he could work, the steps he has taken to find new employment, and any other factors the Commission deems relevant. This memo will first consider the three factors explicitly identified in the Commission’s regulations, before then exploring other potentially relevant factors.
Mr. Bernal’s vocation, the range of employers for whom he could work, the steps he has taken to find new employment.
Mr. Bernal is currently employed as Speaker Emerita Nancy Pelosi’s Chief of Staff, arguably one the most coveted positions in San Francisco or national politics. Mr. Bernal has worked for Speaker Emerita Pelosi for more than 20 years, and with the Speaker Emerita running for election in 2024, Mr. Bernal could stay in his position for the foreseeable future. Mr. Bernal’s extensive career, both within San Francisco and at the highest levels of the federal government, would suggest that there would be numerous employment opportunities available within his chosen field. However, Mr. Bernal has told Staff that he was not actively looking for work when approached by UCSF’s search firm regarding this position.
In 2018, the Ethics Commission granted a post-employment waiver request for the rule against employment with City contractors to Jeff Sheehy; however, the facts in that case were significantly different. Sheehy was appointed to the Board of Supervisors in 2017 and then lost his re-election bid in 2018. As a Supervisor, he participated in the approval of three UCSF contracts. Prior to serving as a Supervisor, Mr. Sheehy was employed by UCSF for 17 years and wanted to return to that employer after losing re-election. In contrast to Mr. Bernal, Mr. Sheehy was unemployed, had looked for other employment opportunities in his desired field, and was unable to find any other suitable opportunities. During its July 2018 meeting, the Commission voted to approve a waiver allowing Mr. Sheehy to apply for positions within UCSF.
Other factors the Commission may deem relevant.
In Mr. Bernal’s request, he references multiple other factors that the Commission has considered when reviewing prior waiver requests, such as the importance of the work being done, the level of personal and substantial involvement the City officer or employee had in awarding the contract, the timing of their involvement, the unique nature of the position, the impact on the prospective employer, and the impact on the City or other stakeholders. Staff will briefly address these factors below, before raising additional factors the Commission may wish to consider.
Importance of the work being done in UCSF position: Staff does not dispute how important the work UCSF does is or how passionate Mr. Bernal is about said work.
The level of personal and substantial involvement Mr. Bernal had in awarding the contracts: As previously discussed, Mr. Bernal does not dispute that he was personally and substantially involved in awarding the contracts to UCSF or that the rule in Subsection 3.234(a)(3) applies to him. However, Mr. Bernal does describe his participation as being nominal and having no impact on the outcome, in part because these votes were all unanimous, not debated by the Commission, and approved on the Commission’s consent calendar.
Part of what makes an official’s involvement in a matter “significant” for the purposes of Subsection 3.234(a)(3), per Ethics Commission Regulations, is if the officer’s “involvement is, or reasonably appears to be, significant to the matter.” Part of this rule considers the public’s perception and what would ‘reasonable appear’ to be significant to a matter. From the perspective of the public, any vote the President of Commission participates in is going to be impactful. Furthermore, the votes being unanimous and not debated by the Commission could be perceived as being even stronger endorsements of the contracts, than if they had been debated or had split votes.
While items placed on a consent calendar may be routine, being approved through consent does not indicate that an item is not important or impactful. Many policymaking bodies routinely address critical matters through their consent calendars.
Mr. Bernal also states that the Health Commission “does not actually have the technical authority to approve SFDPH contracts” and that the Health Commission’s role is ultimately advisory for contracts that must be approved by the Director of Health or the Board of Supervisors. While this may be true, it does not mean the actions of the Health Commission are not impactful. Even if not technically required, the actions of the Health Commission likely matter to specific stakeholders and the public. At the very least, these votes are a communication from the Health Commission to the Director of Health, the Board of Supervisors, and the public as to how the Commission views the appropriateness and quality of these contracts.
Health Commission approvals being voluntary does not suggest that they are not relevant for the purposes of Subsection 3.234(a)(3), which applies to all contracts in which the City officer “personally and substantially participated in the award of the contract.” This language does not specify that this participation be mandatory. This is in contrast to other rules in the C&GCC, such as the rule against contractor contributions from Subsection 1.126(b)(1), which explicitly only applies when “the contract must be approved by such individual.” This suggests Subsection 3.234(a)(3) is an intentionally broader standard than the one used elsewhere, and that voluntary participation is relevant.
The timing of Mr. Bernal’s involvement in the awarding of the contracts: This factor was most recently considered in August, when the Commission considered, and approved, a post-employment waiver request for Tracy Packer. This factor was relevant for Ms. Packer’s request because her involvement in the single contract she participated in awarding to her prospective employer occurred in 2019, but the contract was not entered into until January of 2023. Whereas Mr. Bernal has reported being personally and substantially involved in the awarding of nine contracts involving UCSF in the past 12 months.
The unique nature of the UCSF position: Staff does not dispute that Mr. Bernal is likely well-qualified for this position and that the position would be a good fit for both him and UCSF. However, considering he has not actively been looking for other employment opportunities, it is unclear how unique of an opportunity this would be for Mr. Bernal. Staff are also not aware of what UCSF’s hiring process has been for this position or how uniquely qualified Mr. Bernal is among any other candidates that may have been considered.
The impact on UCSF, the City, or other stakeholders: Staff anticipates that representatives from UCSF, the City, and other stakeholders will engage with the Commission and share how they believe the Commission’s decision will impact them through public comment associated with this item during the October 13 meeting.
Financial hardship: In his request, Mr. Bernal articulates that accepting the position would be a financial benefit for him, as it would nearly double his current salary. However, describing Mr. Bernal’s situation as a financial hardship is questionable. As previously discussed, Mr. Bernal is currently employed in a position at the top of his field and is not required to leave. Mr. Bernal has also not engaged in an extensive job search to determine what other comparable opportunities may be available to him, with prospective employers for whom he has not recently participated in the awarding of City contracts. In fact, Mr. Bernal’s waiver request even refers to him, at least in the past, being aware of “more lucrative opportunities available in the private sector.” It does not seem unreasonable to assume that someone with Mr. Bernal’s experience and skillset could find other meaningful employment opportunities that are also well compensated.
Potential violation of C&GCC: While preparing this memorandum regarding Mr. Bernal’s waiver request, Staff observed a potential violation of the C&GCC that Mr. Bernal may have committed by participating in matters concerning UCSF, when he was already discussing employment UCSF. Subsection 3.206(c) of the C&GCC prohibits City officers from making, participating in making, or otherwise seeking to influence a government decision, affecting an entity with whom the officer is discussing or negotiating an agreement concerning future employment.
As presented above, Mr. Bernal was contacted by UCSF’s search firm on April 27. Mr. Bernal participated in the vote for a settlement of litigation on July 18 and may have voted on contracts involving UCSF after April 27. If Mr. Bernal was involved in decisions regarding UCSF, while simultaneously discussing employment with UCSF, Mr. Bernal may have violated Subsection 3.206(c).
After identifying this potential violation, Staff notified Mr. Bernal on October 5 and recommended he proactively reach out to the Commission’s Enforcement Division regarding this matter. The current status of this matter and any subsequent actions by the Enforcement Division are confidential per the City Charter.
Staff have included this information so that the Commission is aware of the situation. The Commission can determine if it wishes to consider this potential violation a relevant factor in Mr. Bernal’s waiver request.
Other ethical concerns: Both the permanent restriction on representation in particular matters rule (Subsection 3.234(a)(1)) and the one-year restriction on communicating with former department (Subsection 3.234(a)(2)) require the Commission to consider if granting a waiver would “create the potential for undue influence or unfair advantage.” While Subsection 3.234(a)(3) uses the “extreme hardship” standard, not the “undue influence or unfair advantage” standard, the Commission may wish to consider this as a factor when determining extreme hardship, as well as broader consideration as to the intent of the City’s Campaign and Governmental Conduct Code.
While the Commission’s public waiver process does serve to shed light on specific matters and potentially make future inappropriate activity less likely, there is still the potential for the appearance of undue influence or unfair advantage in this matter. Even if Mr. Bernal’s actions on the Health Commission were made fairly and without undue influence, Subsection 3.234(a)(3) is concerned with the potential appearance of impropriety, which can have harmful consequences on the public’s trust in City government. If Mr. Bernal was to receive a waiver to work for UCSF, he would now be occupying a lucrative position with an entity for whom he had recently helped enrich with his City position, through the awarding of contracts that are valued in excess of $75 million. This is more than enough to raise doubt in the mind of the public regarding the fairness and impartially of City contracting.
The issue of the potential appearance of impropriety is also present in the findings and purpose section of Article III, Chapter 2 of the C&GCC, which states that “City and County contracts should be, and should appear to be, awarded on a fair and impartial basis.”
As previously discussed, City law only allows the Commission to issue a waiver for the prohibition on employment with City contractors found in Subsection 3.234(a)(3), if the Commission “determines that imposing the restriction would cause extreme hardship” for the City officer. The Commission has discretion in determining what factors are relevant to determining when “extreme hardship” may occur and has the authority to evaluate any factors it deems relevant.
Based on its review of Mr. Bernal’s request and applicable law, Staff recommends that the Commission not approve the waiver. This recommendation is based on 1) the fact that Mr. Bernal is already employed, with the option to remain at his current employer, and has not yet attempted to find other, non-prohibited employment opportunities, 2) the scope and quantity of contracts he has participated in awarding to UCSF, including at least nine contracts within the past 12 months valued in excess of $75 million, and 3) concerns that granting such a waiver could contribute to the appearance of impropriety within City contracting and further erode the public’s faith in City government.
However, Staff recommends the Commission evaluate Mr. Bernal’s waiver request, review the contents of this memo, and engage with Mr. Bernal and other stakeholders during the October 13 meeting, to determine if, based on any factors the Commission deems relevant, denying this waiver would cause Mr. Bernal an extreme hardship. If the Commission determines that not granting the waiver would cause extreme hardship to Mr. Bernal, the Commission should approve Mr. Bernal’s waiver.
Staff would like to thank Mr. Bernal for his waiver request, willingness to communicate throughout this process, and service to the City.
Attachment 1: Waiver Request from Dan Bernal Dated September 29, 2023