For a summary of the behested payment rules, please visit this page or download this document. The text of the City’s payment rules can be found in Article III, Chapter 6 of the Campaign and Governmental Conduct Code. Additionally, Ethics Commission regulations which further clarify the City’s rules on behested paymnets and articulate certain exceptions are available here.
On November 6, 2022, new behested payments legislation took effect in San Francisco. Enactment of the amended legislation followed its approval by the Ethics Commission at its regular monthly meeting on August 12, 2022. Subsequently, the Board and Mayor approved the legislation on September 27 and October 6, respectively. As adopted, Ordinance No. 220539 amends local behested payments rules that voters approved in June 2022 with the passage of Proposition E, which prohibits officers and designated employees from directly or indirectly soliciting behested payment from interested parties. As detailed below, the new legislation narrows the scope of ‘interested party’ and ‘attempt to influence,’ and shortens the length of time a contractor is an interested party. In addition, the newly enacted legislation expands the ‘interested party’ definition to include lobbyist clients and affiliates of lobbyist clients and creates new exceptions to the behested payment rules.
Important Note: The City’s new law does not change existing disclosure requirements for elected officials under California State law that apply to behested payments they solicit from persons who are not defined as an “interested party.” State law continues to require elected officials report all behested payments of $5,000 or more made at their behest. Such payments are reported to the official’s agency on the State Form 803. For more information about this requirement, click here.
A payment that is made at the behest of an officer, or an agent thereof, and that is made principally for a legislative, governmental, or charitable purpose. “At the behest of” means under the control or at the direction of, in cooperation, consultation coordination, or in concert with, at the request or suggestion of, or with the express, prior consent of.
A monetary payment, or the delivery of goods or services, with a value of $1,000 or more, or series of payments within a 12-month period that in the aggregate total $1,000 or more.
Any commissioner, department head, or elected official.
Any employee of the City and County of San Francisco required to file a Statement of Economic Interest (Form 700) under Article III, Chapter 1 of the Campaign and Governmental Conduct Code.
Overview of Enacted Legislation
Whose Activities are Covered Under the New Law?
Narrowed Definition of “Interested Party”
An “interested party” is:
- any party, participant (or agent of a party or participant) involved in a proceeding regarding either administrative enforcement, a license, permit, or other entitlement for use, before any officer within the department of the officer or designated employee;
- any party, participant (or agent of a party or participant) involved in any other governmental decision regarding either administrative enforcement, a license, permit, or other entitlement for use, in which the officer or designated employee was personally or substantially involved;
- any City Contractor contracting with or seeking to contract with the designated employee’s or officer’s department, or any affiliate of such contractor;
- as pertains to the Board of Supervisors, any City Contractor, or any affiliate of such a City Contractor, if the Board of Supervisors approves the City Contractor’s agreement with the City;
- any person who attempted to influence the designated employee or officer regarding the approval, denial, extension, or amendment of a City contract, as defined in the Ethics Commission’s regulations;
- any contact or expenditure lobbyist who has registered with the Ethics Commission, if the contact or expenditure lobbyist is registered to lobby the designated employee’s or officer’s department;
- any person on whose behalf a contact or expenditure lobbyist has made a contact with the employee’s or officer’s department in the last 12 months; or clients, or affiliates of clients, for whom they have contacted the department for in the last 12 months; or
- any permit consultant who has registered with the Ethics Commission, if the permit consultant has reported any contact with the designated employee’s or officer’s department to carry out permit consulting services during the prior 12 months.
What is Exempted from the Definition of “Interested Party”
“Interested party” does not include:
- a nonprofit organization that the Charter has explicitly authorized to support one of the arts and culture departments established in Article V (i.e., the nonprofits that support the Asian Art Museum and the Fine Arts Museum);
- any federal or State government agency;
- an individual solely because the individual is an uncompensated board member of a nonprofit organization that is an interested party;
- for the purposes of the “contractor and prospective contractor” category, providing a grant to the City or a City department, does not make a person an interested party; or
- any person due to their involvement in a proceeding or government decision regarding license, permit, or other entitlement for use that is issued on a ministerial basis.
Over What Time Period Does the Behested Payment Solicitation Prohibition Apply?
The period of time during which the prohibition applies depends on what makes a person an interested party. It is typically 12 months after a certain event involving the interested party occurs. The rule applies in the following ways:
- For a party, participant or agent of a party of participant in a proceeding or governmental decision before your department, the rule applies while the matter is pending and for 12 months following when the final decision is reached;
- For contractors who are a party to or seeking a contract with your department, the prohibition applies from the submission of a proposal until the later of either the termination of negotiations for the contract, or 12 months following the end of the contract’s term, unless five years have lapsed since the execution of the contract without any amendment, extension, or renewal;
- For a person who is an interested party due to an attempted to influence a City contract, the rule applies for 12 months following the date of each attempt to influence;
- For a registered contact or expenditure lobbyist, the rule applies anytime the contact lobbyist or expenditure lobbyist is registered to lobby your department;
- For a person on whose behalf a contact or expenditure lobbyist has made a contact in the last 12 months, the rule applies for 12 months following the most recent contact; and
- For a registered permit consultant, the rule applies if the permit consultant has reported any contacts with your department to carry out permit consulting services during the prior 12 months.
The prohibition on soliciting behested payments does not apply to solicitations made through a “public appeal,” even if an interested party receives the solicitation.
A “public appeal” is a request for a payment when such request is made by means of television, radio, billboard, a public message on an online platform, the distribution of 200 or more identical pieces of printed material, the distribution of a single email to 200 or more recipients, or a speech to a group of 20 or more individuals.
Competitively Secured Program Solicitations
Solicitations made under an authorized program, approved by the Board of Supervisors by ordinance, for charitable donations of time and/or money from interested persons to nonprofit 501(c)(3) or public schools, through a competitively procured contract.
Solicitations made in connection with the negotiation or administration of a City contract, including but not limited to, development agreements, agreements for the development or use of public property, agreements for the City’s acquisition of real property, and contracts for the acquisition of community benefits, if the payment solicited directly relates to the terms of, or performance under, the contract.
Upon request, the Board of Supervisors may waive the requirements of Chapter 6, Section 3.620 of the Campaign and Governmental Conduct Code. See Section 3.620 (4)(f) for more information. Information on waivers approved by the Board is available here.
Local Behested Payments Filing Requirements are Now Eliminated
Examples of How the Behested Payments Law Applies
What is NOT ALLOWED under the law:
- Asking a company executive to make a behested payment if that executive’s company is a party to, or is seeking to enter into, a City contract with the officer or designated employee’s department.
Why? The executive is an interested party.
- Asking a permit applicant who is seeking a permit from the officer or designated employee’s department to make a behested payment, if that permit is before any officer within the officer or designated employee’s department.
Why? The permit applicant is an interested party.
- Asking a person to make a behested payment if the person has sought to influence the official’s action on a City contract in the last 12 months.
Why? The person is an interested party.
- Asking a lobbyist who is registered to lobby the official’s department to make a behested payment.
Why? The lobbyist is an interested party.
- Asking a permit consultant who has reported contacting the official’s department in the last 12 months regarding a permit.
Why? The permit consultant is an interested party.
- Asking a person to make a behested payment if that person is the subject of an administrative enforcement proceeding before an officer within the officer or designated employee’s department.
Why? The person is an interested party.
What IS STILL ALLOWED under new ordinance:
- Officials can solicit behested payments from anyone who is not an interested party for them.
Note: It is likely that the vast majority of individuals in communities served by the official will not be interested parties to that official. The law does not restrict the solicitation of behested payments from those individuals so long as they are not an “interested party.” As noted above, for elected officials, State law may continue to require disclosure of those activities.
- Officials can solicit behested payments TO any organization they may wish to, including an organization that is an interested party to the official.
Note: The law prohibits officials from asking an “interested party” to make a behested payment. The law does not prohibit officials from asking a source to make a payment to any organization so long as that source is not an “interested party” to the official. For example, if the Board of Supervisors approves a grant to a nonprofit organization, Members of the Board may solicit behested payments for that non-profit organization, so long as they do not solicit behested payments from an “interested party.” In this example it does not matter that the non-profit that is a recipient of a behested payment is an interested party.
- Officials can solicit behested payments from an interested party if the request is made through a public appeal.
Note: A public appeal is one made through TV, radio, social media, or printed publications or through a speech or presentation to 20 or more people.
- City employees whose positions are not designated in their departmental Conflict of Interest Code as a designated Form 700 filer are not required subject to the prohibition.