Summary and Action Requested
This memo presents draft legislation regarding the proposed reforms to reinforce contribution limits and ensure accountability for violations of City law. These recommendations were first presented in a policy report during the Commission’s April meeting, since then minor amendments have been made which are presented below. Staff recommend the Commission vote to approve the legislation presented in Attachment 1 as amended.
Background
The Policy Division initiated work on this project earlier this year to address issues identified in recent election cycles. The report published in April focused primarily on shortcomings in current City law that undermine the City’s candidate contribution limit. Gaps in the current rules have been underscored in recent enforcement matters and identified through compliance questions posed to the Commission. The recommendations in the report seek to address these shortcomings by reinforcing and expanding the City’s existing candidate contribution limit.
The report’s recommendations also aim to ensure that when City elective officers are found to have violated ethics or campaign finance-related rules, they cannot avoid existing gift rules and accountability by shifting their penalty burdens to committee contributors.
During the April meeting, Staff presented the findings and recommendations from the report and answered questions from the Commissioners. Staff were directed to continue moving the project forward and to return to a future meeting with a version of the legislation that could be voted on by the Commission. Staff have also met separately with the commissioners who were not present during the April meeting regarding this project. During the April meeting, the Commission received public comment from California Common Cause that was supportive of the reforms recommended in the report.
Overview of Legislation
All findings and recommendations can be reviewed directly in the policy report published in April. In brief, the report makes the following recommendations:
- Apply the City’s candidate contribution limit to other types of candidate-controlled committees whenever those committees are controlled by a candidate actively running for City elective office.
- Specify that if a third party spends money to republish a candidate’s campaign materials, that spending should be considered a contribution to that candidate and be subject to the City’s candidate contribution limit.
- Establish limits on City elective officers using committee funds to pay penalties issued for violations of the Campaign and Governmental Conduct Code (C&GCC).
Legislation that would enact these recommendations is provided in Attachment 1. The attached legislation has been approved to form by the City Attorney’s Office and may be voted on by the Commission. Attachment 2 provides the corresponding legislative digest from the City Attorney’s Office. A summary table of the legislation is provided in Attachment 3, which describes each change the legislation would enact by code section.
Draft regulations were also provided to the Commission for review in April. Staff are continuing to develop these regulations, and as such they are not agendized for action today. If the attached legislation is approved by the Commission and then approved by the Board of Supervisors, Staff will return with revised regulations for the Commission to consider as part of the implementation process.
Amendments
Minor amendments have been made to the draft legislation that was presented in April. These amendments are already reflected in the attached materials. The following subsections have been amended:
- Subsection 1.114(a)(3): The language regarding potential future adjustments to the contribution limit for candidate-controlled legal defense funds was amended to be consistent with other legislation before the Commission and to clarify that such adjustments would only be made to reflect changes in the California Consumer Price Index.
- Subsection 1.114(a)(4): – Language was added to this subsection to specify what candidates need to do if they are controlling a committee prior to actively running for City elective office. In such instances, candidates would have 30 days to return, use, or dispose of all funds held by the committee in excess of the applicable contribution limit, using the same methods candidate’s currently use when they have surplus funds after an election.
- Subsection 1.115(b)(4): – This subsection on rebuttable presumptions of coordination was updated so that the language used is now consistent with the language that is used in the new Subsection 1.115(d) that deals with the republication of campaign materials.
Other non-substantive changes were made to the ordinance for clarity and to conform with the best practices for legislation through collaboration with the City Attorney’s Office.
Next Steps
The Commission should consider and vote to approve the attached legislation. This legislation requires supermajority approval from both the Ethics Commission and the Board of Supervisors to be enacted. If the Commission votes to approve the attached legislation, it will be referred to the Board of Supervisors for consideration.
As this is an election year, the legislation has an operative date of no earlier than January 1, 2027. This is to avoid changing campaign finance rules in the middle of an election cycle, give the Commission sufficient time to prepare or update any relevant compliance or training materials, and give the regulated community time to prepare for these changes.
Attachments:
Attachment 1: Campaign Finance Legislation
Attachment 2: Campaign Finance Legislation Legislative Digest
Attachment 3: Overview of Campaign Finance Legislation