Summary and Action Requested
This memo provides additional information on the City’s behested payment prohibition and analysis of amended legislation that would make changes to the waiver provision of this rule. Staff recommend the Commission discuss the proposed legislative amendment and vote to approve the legislation. The legislation, which has been amended since this item was last discussed by the Commission in November, is included as Attachment 1 and the Legislative Digest for the amended ordinance is provided as Attachment 2.
This item was discussed at the Commission’s October and November meetings and continued during both meetings to allow for additional discussion and research. This memo responds to questions and concerns raised by members of the Commission and members of the public, provides additional background information, and presents a recently added amendment.
Additional Background and Findings
To support the Commission’s consideration of this ordinance, the following sections provide additional background on the behested payment prohibition, current behested payment waiver practices, and a review of comparable rules in other jurisdictions.
Additional History of the Behested Payment Prohibition
Expanding on the background provided in the previous memoranda, the initial legislation to prohibit certain behested payments was presented by Ethics Commission staff in a 2020 project memo. The two proposed rules would prohibit City officers and employees from soliciting behested payments from interested parties, and from entities that pay them income. The rules aimed to create basic guardrails on fundraising activities that prohibit the most problematic conduct while preserving the ability of officers and employees to engage in most fundraising activities. During its November 2020 meeting, the Commission voted unanimously to adopt only the first recommendation prohibiting City officers and employees from soliciting behested payments from interested parties.
A similar report was published by the Controller’s office, which recommended prohibiting non-elected department heads and employees from soliciting donations from those they regulate or do business with, unless specifically authorized by the Board of Supervisors. Given the reliance of some City functions on philanthropy, exceptions would need to be narrowly approved by the Board of Supervisors to permit fundraising by specific employees for specific public purposes. Authorized fundraising should be publicly reported using existing procedures that apply to elected officials but do not currently apply to other city officers or employees, such as filing the state-mandated Form 803.
The behested payments legislation enacted by the Board of Supervisors in 2021 incorporated these recommendations by expanding the definition of “interested parties,” generally prohibiting elected officials, department heads, commissioners, and designated employees from soliciting behested payments from interested parties – although the prohibition would not apply to solicitations made through public appeals. The legislation also removed a previous behested payment reporting provision for elected officials and commissioners, as what was previously required to be reported would now be prohibited, making the disclosure obsolete.
In 2022, Proposition E was placed on the ballot by Supervisors Chan, Mar, Peskin, Preston, and Walton. It sought to amend the behested payment law to prevent members of the Board of Supervisors from seeking behested payments from contractors who received Board approval of their contracts. Later that same year, an ordinance was passed through the Board of Supervisors and Ethics Commission that narrowed aspects of the existing prohibition, created new exceptions, and created the waiver provision that allows the Board of Supervisors to grant waivers that allow City officials to solicit payments from interested parties in certain situations.
Current Practices from the Board of Supervisors
For behested payment waivers received since the beginning of 2025, there has been a practice of identifying any City employees and officers who would be authorized to solicit payments – a practice that would be codified under the proposed ordinance. Additionally, since October of 2025 there has been new language inserted into behested payment waiver resolutions requiring a report back to the Board of Supervisors after the expiration of a waiver. This specific provision states that:
“…the parties receiving this waiver have agreed to report to the Board of Supervisors donations to the City and any third party that were solicited under this waiver; such reports will identify the donor, the amount of the donation, the party that received the donation, and the interested relationship the donor has with the department that solicited the donation; the department or office will submit the reports to the Board within 60 days of the expiration of the 6-month period authorized by this waiver…”.
Comparable Programs in Other Jurisdictions
Staff’s original and supplemental research found that while jurisdictions outside of California do not directly refer to “behested payments” in their laws, there are similar restrictions on government officials soliciting donations from interested parties. The regulatory framework for solicitations often includes reporting requirements, limits on donation amounts, or outright bans on certain donors or third-party recipients.
No other jurisdictions appear to have waiver mechanisms as part of their ethics laws, potentially a byproduct of their prohibited donor groups being relatively narrow. Although New York City’s program does not have waivers, their restriction is narrower and each City officer or agency is required to file a public report with the NYC Conflict of Interest Board regularly disclosing the identity of each not-for-profit organization for which they sought private contributions.
Proposed Amendment
The original version of the ordinance (File #250947) that was previously considered by the Ethics Commission amended the City’s behested payment prohibition to allow the Board of Supervisors to issue waivers for its officers and employees. The original version of the ordinance also added a requirement that waiver resolutions “identify the City employees and officers to whom the waiver will apply.”
Based on concerns and questions received from members of the Ethics Commission and members of the public, Staff have proposed an amendment to the original ordinance, which is supported by President Mandelman and captured in the draft ordinance that is included as Attachment 1.This amended version makes the same changes as the initial version but adds a requirement that waiver recipients must report back information to the Board of Supervisors regarding how they used the waiver they received.
Drawing from current practices, Staff propose an amendment to require that any party who receives a waiver must provide a report to the Board of Supervisors within 60 days of the expiration of the waiver. The report must include an accounting of any donations to the City or third party that were solicited under the scope of the approved waiver, and shall identify the donor(s), the amount of the donation(s) made, the party that received the donation, and the interested relationship between the donor and the party who solicited the donation. The proposed legislation would codify this requirement so that the Board would no longer have to manually add it to each waiver resolution, instead it would apply to all behested payment waivers going forward.
This requirement is particularly valuable for payments solicited by officers and employees who are not elected, as they are not required to file the state-mandated Form 803, which elected officials must file when soliciting behested payments greater than $5,000. This new report to the Board would also cover payments solicited by elected officials that may be too small to be reported on the Form 803.
This amendment is intended to address a concern heard by Staff that the current waiver process lacks transparency. This concern was clearly articulated in form emails received by the Commission since November, which expressed a concern that if the ordinance was approved, the Board of Supervisors would be able to grant waivers for themselves “with the public never knowing which interested parties were solicited or who actually made behests under those waivers.” A copy of this email is included as Attachment 3. Between December 8 and January 2, the Commission has received 133 copies of this email.
Staff discussed this amendment with advocacy groups, Board of Supervisors staff, and the Office of the Mayor, who were all supportive of requiring this additional report back requirement. Discussions with the Office of the Mayor were particularly beneficial, as this is the department most actively requesting and utilizing behested payment waivers. While the advocacy groups support requiring additional reporting, most are likely to still oppose this ordinance as they oppose allowing the Board to grant waivers to itself, even with the additional reporting provision.
Staff also considered and discussed potentially amending the ordinance to require waiver resolutions to identify the intended recipients of the payments as part of the resolution. However, staff heard from the Board and the Mayor’s Office that recipients are not always fully known when waivers are being approved, as new recipients can be identified throughout the solicitation process. Given this, there was a request not to add this requirement to the front-end of the request process, so that waiver recipients can maintain flexibility in where funds are ultimately directed. Instead, the identity of those receiving the payments would be captured in the report filed after the waiver has expired.
As presented in past memoranda, concerns about the Board of Supervisors being able to approve its own waivers are largely mitigated by the fact all waiver approvals would require a majority vote of the Board of Supervisors and the taking of public action to approve it. The public nature of these waivers and the required agreement among members of the Board of Supervisors serves as a check against the approval of inappropriate waivers that could allow for the sorts of problematic solicitations and payments this rule was created to prevent.
As with the original version of the ordinance, the amended version also does not undermine the Commission’s identified priorities from when the waiver provision was created: requiring waiver requests to attempt to identify interested parties, prohibiting retroactive application, and ensuring waivers are posted to DataSF within 30 days of approval. The current amended version builds on these priorities by requiring the report to the Board which would publicly identify the specific interested parties solicited under the waiver.
The addition of the new reporting requirement adds an even greater level of transparency to the waiver process, ensuring the public will have a complete view of how these waivers are being used, who is using them, and who ultimately benefits from any payments made under the waivers. This added transparency improves the waiver process overall and is intended to mitigate concerns associated with the Board being able to grant waivers for itself.
Recommended Action
Staff recommend the Commission review the attached ordinance, listen to an additional presentation from President Mandelman’s Office regarding the proposed ordinance, and vote to approve.
The ordinance requires majority approval by the Ethics Commission and two-thirds vote from the Board of Supervisors to be enacted. If the Ethics Commission approves, the legislation will return to the Board of Supervisors for consideration and approval. In the event there are further substantive amendments from the Board of Supervisors, the legislation would again be referred to the Ethics Commission for additional approval.
Attachments
Attachment 1: Behested Payments Waivers Ordinance – File No. 250947
Attachment 2: Legislative Digest for File No. 250947
Attachment 3: Example of Form Letter from Public on File No. 250947