January 13, 2025
To: Members of the Ethics Commission
From: Olabisi Matthews, Director of Enforcement
Subject: Agenda Item 5: Quarterly Enforcement Report
Summary and Action Requested
This report provides general programmatic updates and data about the cases handled by the Commission’s Enforcement Division.
No action is required by the Commission, as this item is for informational purposes only.
Cases Resolved
Fiscal Year 2025
So far in Fiscal Year 2025 (July 1, 2024 – November 30, 2024), the Enforcement Division has concluded a total of 63 enforcement matters.
Cases In Progress
So far in FY25, 114 enforcement matters have been initiated. 57 of these cases began from complaints that the Commission received from the public. Forty-eight of the 114 cases are cases that the Division initiated based on media reports, observations in public disclosures, independent research, findings from audit reports, and interactions with regulated persons. Nine matters were initiated based on referrals from the Controller’s Whistleblower Program. Some of these matters initiated in FY25 remain in progress while others have already been resolved.
In total, 90 matters are currently in progress, including matters that were initiated during FY25 and matters that were initiated in FY24. Of these matters, 23 are in preliminary review, and 67 are open investigations. Majority of the open cases are SEI non-filer cases currently under review under the Streamlined Administrative Resolution Program (SARP) unless evidence indicates that the case is ineligible for SARP.
The current cases in progress are broken down by program area in the charts 1-2 below.
Matters in Preliminary Review:
Chart 1 – Matters in Preliminary Review by Program Area: 22
Chart 2: Open Investigations by Program Area: 67
Over the past few years, the Enforcement Division has implemented various strategies to make complaint processing, preliminary reviews, and case resolutions more efficient and timelier. The Division also grew, including the addition of two attorneys to the team, leading to a significant reduction in the amount of time taken on average to complete preliminary reviews and resolve cases overall. Because of the additional staff resources and improved protocols, the Division continues to exceed its goal of seeking to resolve preliminary reviews within 90 days on average.
| Fiscal Year | Average Time Spent on Preliminary Reviews completed in Fiscal Year (Days) |
|---|---|
| FY21 | 313 |
| FY22 | 117 |
| FY23 | 92 |
| FY24 | 33 |
| FY 25 (07/01/24 – 01/10/25) | 35 |
Expedited Investigations of Certain Campaign Finance Cases in Election Year
The Enforcement Division continually reviews its protocols and seeks ways to consistently generate better case outcomes and to resolve cases within shorter timeframes. Earlier in 2024, with the election several months ahead, the Division implemented a more efficient approach to handling certain campaign finance related cases which allowed Staff to investigate certain matters quicker and work to resolve them in a timelier fashion. This effort proved to yield positive results for the Division, allowing it to resolve what resulted in a historic fine of $108,179.99 against respondents in the recently concluded case, In the Matter of Mayor Mark Farrell for Yes on Prop D, Mark Farrell for Mayor 2024, Mark Farrell, and Roy Herrera. This case continues to receive wide public attention[1] due to its historic nature and the Division’s ability to reach a settlement agreement with respondent when it really mattered most to the public. The Division will continue to seek avenues to ensure that cases are resolved expeditiously, and with a full staff, the Division will have the capacity to execute its operations to achieve this goal.
Enforcement Regulations Review
The Enforcement Division is conducting a review of its Enforcement Regulations to identify gaps and weaknesses and propose changes that would better guide the enforcement process, inform the Commission, respondents, staff, and the public about the rules that govern this process. The review will also allow the enforcement process to be carried out in a more efficient and fair manner. In February 2023, the Division published its Enforcement Guidebook in an effort to clarify the enforcement process and highlight the areas within the Enforcement Regulations where the applicable rules are silent or unclear, particularly regarding the administrative hearing process. With this review of the Enforcement Regulations, the Division intends to directly address those weakness and propose revisions that will strengthen the Enforcement Regulations and allow the entire enforcement and administrative hearing process to be fairer for all parties. As part of this meeting, Staff will provide a brief presentation that explains the goal of this project and will serve as notice of Staff’s efforts to review and revise the Ethics Commission’s Enforcement Regulations. Staff welcome the Commission’s input throughout its review process and will return at the conclusion of the review process to seek the Commission’s ratification to the proposed changes.
Form 700, Ethics Training Certificate and/or Sunshine Ordinance Declaration Noncompliance Cases
Universal electronic filing of the Form 700 became operational on January 1, 2022, and since then, all City Officers and employees who are required to file the Form 700 must do so electronically through the Commission’s NetFile system. With this requirement, Staff have been able to track compliance in real time and has allowed the Enforcement Division to use each filer’s current filing status information in NetFile to identify which of the City’s 5,704 filers have failed to file the Form 700 or have done so late. At this time, 6,908 filers (96.3%) have filed a Form 700 that was due in 2024. Of these, 361 (5.9%) filed late. Currently, out of 5,704 filers who were required to file an Annual Form 700 in 2024, there are 78 filers (1.4%) who failed to file that Annual Form 700. The Enforcement Division used an objective set of criteria to select 19 Annual Form 700 non-filers to be pursued through enforcement action. The criteria were the filer’s disclosure category, position (with managers being prioritized), history of non-filing, and department (with departments with higher rates of non-compliance being prioritized). Because of the staffing resources required to carry out each case, the Division limited the cases to 19 out of 78 non-filers (24%). Additionally, the Enforcement Division selected to pursue enforcement actions against the 23 City Officers who failed to file their Ethics Training Certificate and/or Sunshine Ordinance Declaration that were due in 2024. Each case will be administered through the Streamlined Administrative Resolution Program (SARP) unless evidence indicates that the case is ineligible for SARP. This could happen if large financial interests were required to be disclosed on the missing Form 700 or if a conflict of interest or incompatible activity is discovered.
Staff Update
Two positions which became vacant last year have been filled, with the hiring of Senior Investigator Bertha Cheung, who began on November25, 2024 and is serving in the attorney role that became vacant after my promotion to the position of Director of Enforcement, and Senior investigator Daniel Feng who began earlier this week on January 14, 2025, and is filling the position that became vacant following the promotion of former Senior Investigator Eamonn Wilson to the position of Audit manager.
[1] See San Francisco fined Mark Farrell faster than ever. How?