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More Than Voter FraudHiding Ed Lee's Money Cartoon

Mayor Lee Alliance Committee and Others Hide Their Donors

Since the news came out that workers with independent expenditure group SF Neighbor Alliance for Ed Lee for Mayor 2011 may have engaged in voter fraud, including marking others' ballots, accounts of serious voting irregularities have mounted at the feet of Ed Lee's campaign for Mayor. Seven of Lee's rivals have even issued a call for our election to be watched over by federal observers and state election monitors.

Less attention has been paid to another scandal: Neighbor Alliance for Ed Lee has yet to disclose the receipt of a single campaign contribution. No donors appear in any of its disclosure reports on file with the Ethics Commission.

Nevertheless, it has spent a hefty $135,000 in support of Mayor Lee, exploiting an ugly loophole in campaign reporting law, one that harks back to the days of Willie Brown's own election campaign.

One account to actually address controversy regarding Neighbor Alliance for Ed Lee's lack of financial transparency appeared in the Fog City Journal. Luke Thomas's article indicated that Alliance coordinator and campaign consultant Enrique Pearce was told to leave the Buck Tavern by owner and former Supervisor Chris Daly, following an argument during which Daly queried Pearce about the source of Alliance's funding. Thomas's account of the argument indicated that Peace said Alliance would not disclose its funding until the late October filing deadline provided by state campaign law.

Thomas further wrote: "Asked why the committee is not being forthcoming about the book's benefactors, Pearce said, 'Because we're complying with the law.' "

Whether you think Pearce's justification for non-disclosure is reasonable or not, the detrimental nature of the non-disclosure becomes apparent when Alliance's reporting is scrutinized and contrasted with other campaigns.

Spending money out of thin air

Funding disclosure is the cornerstone of campaign finance reporting law and a key to election transparency. Without disclosing the financial contributions to campaigns, it becomes very difficult if not impossible for the public to learn who is paying for election propaganda.

In California, campaigns involved in an election are supposed to disclose their funding as of two "Pre-election" reporting deadlines (occurring in late September and late October in 2011). Most do. Others intentionally wait until one or more disclosures deadlines pass in order to delay their disclosure and public attention to its contents.

In late September when election campaigns' first Pre-election reports were due, Alliance reported only $7,000 in accrued expenditures, with no funding source disclosed. In other words, Alliance was in the red from the get-go. In my prior Citireport articles about the financing of this year's election committees, I and co-author Marc Salomon referred to a committee whose accrued debts exceeded their cash on hand as lacking "solvency." In our August 8th article, we noted:

"While debt that exceeds available cash can sometimes be brief and innocuous, such as when a candidate incurs expenses when anticipating an influx of public financing, the circumstances are often indicative of troubling problems. Such problems can include financial mismanagement, gratuitous credit extended by vendors such as consultants, or the tactic of concealing expected contributors until a subsequent reporting deadline (often after an election)."

In the case of Alliance, surely the people arranging for Alliance to accrue debts had a sense of how they would pay the debts. Thus, a fair question is raised: Did Alliance intentionally avoid receipt of contributions and report only debt as of the September deadline in order to delay disclosure of its financiers?

Neighbor Alliance for Ed Lee's insolvency has been compounded since late September. While continuing to report expenditures it made on behalf of Ed Lee, as required by local law, whatever funding Alliance received has still not been reported, despite to date spending $135,000 in support of Mayor Lee. Alliance's next required report about all of its finances, including funding, is due this Thursday, October 27.

By delaying donor disclosure until October 27, the press, opponents of Alliance's efforts, and the general public will only have 12 days to learn about and react to the news. Such a limited amount of time diminishes the likelihood that the disclosure will meaningfully inform the public. Moreover, Alliance is free to once again report accrued debts that exceed its cash on hand, thereby further concealing additional donors, including until possibly after the election.

If you are wondering if such donor concealment could be intentional, consider this: Alliance's predecessor, the Run Ed Run campaign (conducted via the Progress for All campaign committee) repeatedly reported insolvency. As of its mid-year report filed in July, Progress for All had less than $1,000 in the bank[i] but over $22,000 in accrued debts. By the September Pre-election deadline, Progress for Allreported a negative cash balance (-$1,162), but total debts of nearly $38,000. We still don't know who will pay for that $38,000, which is about ⅓ of the total amount spent by the committee. Such a track record may indicate that Alliance will continue to use debt reporting as means to delay donor reporting.

Which independent groups are concealing their donors

Neighbor Alliance for Ed Lee's election activity is significant not only because it spent the second largest amount of any independent group in support of Mayor Lee's election. Alliance also engaged in more spending without identifying funders than any other campaign in San Francisco's 2011 election. To illustrate the problem, the other lesser independent campaign culprits are as follows[ii] (as of Monday, October 24):

1. Coalition For Sensible Government with major funding by San Francisco Association of Realtors:

With its Treasurer, a known campaign loophole expert, attorney Jim Sutton, the Association of Realtors' newest general purpose committee has yet to report any campaign contributors ($0 received), but that hasn't stopped it from spending $85,000 on the election, including $12,000 in support of Bevan Dufty for Mayor, $12,000 in support of David Chiu for Mayor, $14,000 in support of Alioto-Pier for Mayor, and $47,000 in support of Mayor Ed Lee.

2. San Francisco Alliance for Jobs and Sustainable Growth PAC:

Another committee using Jim Sutton as Treasurer, the Growth PAC's September Pre-election report disclosed $0 in contributions received, contrasted with over $1,000 in accrued debts. To date, the committee has spent $33,000 in support of Ed Lee for Mayor. According the SF Ethics Commission's website, Growth PAC has also spent $34,000 in support of George Gascon for District Attorney.

3. Committee for Effective City Management–A Committee in Support of Ed Lee for Mayor 2011:

As of September 24, this Ed Lee committee had $14,000 in cash on hand. Since September 24, the committee has spent over $73,000 in support of Ed Lee for Mayor.

4. Cunnie for Sheriff 2011 sponsored by the San Francisco Police Officers Association:

As of September 24, this independent committee promoting Chris Cunnie for Sheriff had $18,000 in cash on hand. Since September 24, the committee has spent $54,000 in support of Cunnie.

5. Coalition for a Safer California:

This committee is designated as a California state committee. As of June 30 of this year, it reported having less than $5,000 in the bank. Since then, the committee has spent $25,000 in support of Ed Lee for Mayor. As state committee, a quirk of California law exempts the committee from having to file Pre-election reports in odd-numbered years (2009, 2011, etc). Thus, the public could be completely deprived of disclosure about this committee's financial backers until after the election. This committee may be in violation of state law requiring that it amend its status to become designated as a San Francisco committee.

6. Educating Voters for Jobs Against Avalos and Adachi for Mayor 2011 a coalition of police and construction workers unions:

As of September 24, this independent committee opposed to Avalos for Mayor and Adachi for Mayor had $17,000 in cash on hand. Since September 24, the committee has spent over $18,000 against Avalos.

7. San Franciscans for Safe Streets and Sound Government – a committee for Lee Mayor 2011, Gascon District Attorney 2011 & Cunnie Sheriff 2011:

As of September 24, this independent committee supporting Ed Lee for Mayor, Gascon for DA, and Cunnie for Sheriff reported $5,000 in cash on hand but $5,219 in accrued debt.

8. City Residents Opposing Ed Lee for Mayor 2011, sponsored by American Federation of State County and Municipal Employees AFL-CIO and AFSCME CA People:

Most of the large amount spent by this committee on the election can be attributed to disclosed funding sources. However, the committee's expenditure recently exceeded its reported funding received, so it is included in this list. As of September 24, this committee reported cash on hand of $234,000. As of October 14, the committee remained solvent, despite making large amounts of expenditures (over $200,000). As of October 18, the committee's total expenditures made since September 24 in opposition to Lee for Mayor exceeded $260,000.

By comparison, the following other independent committees made expenditures that did not exceed their reported sources of funding[iii]:

1. San Franciscans for Jobs and Good Government, Supporting Ed Lee for Mayor 2011: Supporting Ed Lee for Mayor.

2. Committee for a Safer San Francisco, Sharmin Bock for District Attorney 2011:

Supporting Sharmin Bock for District Attorney.

3. SEIU Local 1021 Candidate PAC:

Supporting John Avalos for Mayor, Bevan Dufty for Mayor, & Leland Yee for Mayor.

4. SEIU Local 1021 Independent Expenditure PAC:

Supporting John Avalos for Mayor, Bevan Dufty for Mayor, & Leland Yee for Mayor.

5. California Nurses Association PAC:

Supporting John Avalos for Mayor, David Chiu for Mayor, & Leland Yee for Mayor.

6. SEIU United Healthcare Workers West:

Supporting Ed Lee for Mayor.

7. Support Drafting Ed Lee for Mayor 2011:

Supporting Ed Lee for Mayor.

Comparison of those independent committees that were insolvent to those that were not potentially suggests a political trend. Those taking advantage of loopholes to make expenditures without reporting funding sources supported Lee for Mayor, Gascon for DA, and/or Cunnie for Sheriff, or opposed Avalos for Mayor (or Lee for Mayor), while those who did not take advantage of the loophole supported Avalos, Chiu, Dufty, Yee and/or Lee for Mayor or supported Bock for DA.

Familiar loophole signals a pattern

Under California law, a campaign "contribution" can take various forms: money; donated nonmonetary items of value; payments made by third parties for communications; loans; enforceable promises to pay. That last one is telling. Only enforceable promises to pay count as campaign contributions that must be reported.

One way a donor's promise to make a contribution becomes enforceable is if the promise is in writing and the campaign relies on that expectation of funds by entering into a contract with a vendor. If the promise is not in writing (if the donor merely verbally tells the campaign that they can count on their support), the promise is not enforceable and, therefore, the promise is not a legal contribution that the campaign must disclose to the public. Within that legal architecture is the key to a loophole. If a campaign has reliable donors that it does not want the public to know about, it can get verbal commitments from the donors, rack up debts, and delay disclosure of the donors used to pay the debts until a later date.

That campaigns are able to exploit this loophole of reporting total expenditures greater than total contribution receipts, thereby concealing donors, is not a new phenomenon. Various articles have exposed examples of this campaign trick.

However, this trick is not just something used in recent years; it is vintage. For example, in 2000, an independent expenditure committee called the Willie Brown Leadership PAC(Treasurer, Jim Sutton) reported debts that exceeded available cash, including by June 30 ($4,037 in debt with just $642 cash on hand) and September 30 ($8,570 in debt with just $108 cash on hand) of that year.

Similarly, the original real estate-backed San Franciscans for Sensible Government PAC spent nearly $400,000 advocating for Mayor Willie Brown in the 1999 general and run-off elections, but disclosed none of its 7/1/99-12/31/99 period activity until after the election, exploiting the antiquated California rule that allows state committees to be exempt from Pre-election reporting in odd-numbered years such 1999 and 2011.

A variety of other committees over the years, often those backed by wealthy business interests, follow the same pattern. The key is always concealment of the source of funding, a frequent embarrassment for interests backed by big money trying to convince the general citizenry about how to vote.

How we get out of the problem

In 2006, the Board of Supervisors in office at that time passed a law designed to address one form of abuse by campaigns reporting accrued debt. Following the 2003 election, Mayor Newsom's campaign was effectively bankrupt, with massive accrued debt which took until 2005 to pay down. Thus, the debt effectively functioned as a loan (primarily from Newsom's campaign consultant), circumventing the $500 contribution limit. However, the 2006 reform made it illegal for San Francisco candidate campaigns to not pay their debts after 6 months. Unfortunately, campaigns such as Neighbor Alliance for Ed Lee may still use debt reporting as disclosure concealment, as discussed above.

While San Francisco law passed to supplement loopholes in state law requires that independent election advocacy spending of $5,000 or more on San Francisco candidates must be disclosed within 24 hours, the independent group responsible for such spending need only disclose its sources of funding in that 24 hour report if it takes the form of "electioneering communications," an obscure form of election advocacy that is itself a plug to a loophole in the definition for typical "independent expenditures" (the latter are what most voters think of when they see election mail or ads from independent sources telling them how to vote). As result, most election advocacy communications by independent groups involved in San Francisco elections do not trigger any supplemental reporting about who is the source of funds used to pay for the communications

If you hope that the San Francisco Ethics Commission may be swift to take action on such loopholes and require funding disclosure for all independent spending of $5,000, I am afraid I have some bad news for you.

Recent amendments passed by the Ethics Commission, which, in the words of its Executive Director John St. Croix, were "designed to clarify, strengthen and simplify the [Campaign Finance Reform Ordinance]," have entirely eliminated the requirement of donor disclosure from the third party reports, even regarding "electioneering communications." In addition, the amendments replaced 24 hour reporting with a rate of less frequent reporting, thereby reducing the amount of public disclosure.

To address accrued debt and donor reporting loopholes, the following is needed:

(1) The California Fair Political Practices Commission should propose and the state should pass an amendment to the Political Reform Act, providing that the Pre-election reporting threshold applicable to state General Purpose Committees applies not only in even-number years but also in odd-numbered years.

(2) In San Francisco, local committees should be banned from accruing expenditures that exceed the committee's available funds.

(3) In San Francisco, the reporting requirement regarding $5,000 independent spending should include a provision mandating disclosure of all previously undisclosed sources of funding, as is currently required by the state's independent expenditure disclosure requirement applicable during the 16-day period right before elections.

(4) For all independent campaigns such as Neighbor Alliance for Ed Leethat have been spending on our election without disclosure of the complete sources of their funding, the public should demand both immediate public disclosure of the funding sources and that independent campaigns conduct no further spending without concurrent disclosure of sufficient funding sources.

Disclosure: Oliver Luby has contributed $25 to the John Avalos mayoral campaign and $15 to the Ross Mirkarimi for Sheriff campaign. Mr. Luby has also done some volunteer work for the Avalos campaign. Mr. Luby has endorsed David Onek for District Attorney, Ross Mirkarimi for Sheriff, and John Avalos for Mayor, and continues to weigh the options for 2nd and 3rd choices out of the mayoral candidates who are not Ed Lee. Mr. Luby is friends with Enrique Pearce but cannot abide donor concealment. This article was written in the author's capacity as a longtime advocate for campaign finance disclosure, and the work was independent of any election campaign.

[i] Progress for All later filed an amendment to correct its mid-year reporting, raising its reported cash on hand balance to over $11,000, still less than what was needed to pay its accrued debts.

[ii] One committee that technically spent more than it disclosed receiving was excluded from the results noted above. Despite reporting a $0 cash balance as of June 30th of this year, Unite Here Local 2 PAC has since then spent $120,000 in support of Dennis Herrera for Mayor, $8,500 in support David Chiu for Mayor, and $28,000 against Ed Lee for Mayor. However, Unite Here Local 2 PAC's lack of funding disclosure is less significant than that of committees such as SF Neighbor Alliance for Ed Lee, given that Local 2's contributions received are regularly reported to be unitemized lump sums (amounts of less than $100 per contribution) received from its union members. By contrast, independent groups not supported by labor union dues tend to disclose large figures from deep-pocketed interests.

[iii] For the relative amounts spent by these committees, please see Section 1 of the October 20 article in Citireport [].

Larry Bush's is The Wall St. Journal's Blog of the Year 2011

November 2011


Best of the Net

A Dirty Fight Over Clean ElectionsIllustration: City Hall with open dome

Supervisor Sean Elsbernd, frustrated over his proposal to gut a key provision of San Francisco's public finance program, turned to bitter sarcasm, accusing his colleagues of "dereliction of duty" at last week's Board meeting, setting the stage for this week's make-or-break vote.

Elsbernd's loss of control showed the frayed nerves of the newly moderate Board majority unable to corral an eight-vote supermajority as they sweep aside reforms passed when the Board was less influenced by downtown priorities. Forced to either lose on his proposal entirely or delay another week in hopes of convincing one board member to join him, Elsbernd resorted to inflated claims of the consequences for San Francisco if Elsbernd didn't get his way, threatening the loss of "hundreds of thousands of dollars" needed for essential city services.

As victory edged further from his grasp, Elsbernd derided his colleagues, all but accusing them of chasing unicorns in search of what Elsbernd called a "magic elixir."  Challenging the supervisors who voted against his measure, Elsbernd stopped just short of saying "It's on like Donkey Kong," perhaps only because he's unfamiliar with the game. He then went into a sulk.

For most San Franciscans, the issue was an esoteric exercise in the mathematics of campaign finance, like pitting geometry against trigonometry in a test of theorems about vacuums in space.

The reality was more down to earth. The Board was being asked to change the rules for a mayor's election just weeks away, and to do so with an approach dictated by the city's political high rollers intent on flooding the system with campaign money that could provide an insurmountable advantage for themselves.

If this change is approved as it stands, it means that candidates would be denied the ability to match spending with the deep pocket interests at City Hall – where one committee alone has pledged to spend $1 million to influence voters.

The issue arrived at the Board through a process so private that it would make the Bohemian Club envious. A U.S. Supreme Court decision handed down at the end of June narrowly ruled against an Arizona law setting up a public financing program for campaigns.

Cities across the country began pouring through the decision, examining their own laws, and holding hearings to determine how to comply with the Court while saving the law's intent that campaign spending would not succeed in putting private interests ahead of public interests.

Except in San Francisco.

A Bandwagon Rolls Out of Ethics

Here the issue of falls under the Ethics Commission appropriately deemed a Sleeping Watchdog by the Civil Grand Jury that same month. Instead of conducting an "Interested Persons" meeting, including alerting the veterans of the city's public financing campaigns, the Ethics Commission simply added one more item to their July 11 agenda. Only the routine notifications went out.

The July 11 agenda already was full. The Commission was set to deliberate on its response to the Civil Grand Jury report faulting Ethics for failures on nearly every item it reviewed. Executive Director John St. Croix was furious, and drafted a response that heaped scorn on the Civil Grand Jury.

At the same time, Ethics was set to hear its first-ever Sunshine Ordinance violation in a case involving the President of the Library Commission.  It was an emotional and contentious topic since Ethics had previously rejected every Sunshine complaint – 18 in all – and the pent-up hostility toward Ethics was palpable. It was also one of the points raised by the Civil Grand Jury.

Sandwiched at the end of the meeting was a discussion about the Supreme Court decision and a staff proposal to entirely gut sections of San Francisco's law.

In all, less than 30 minutes was spent in public hearings and Commission discussion of a key campaign law as the city readied for an election for Mayor, District Attorney and Sheriff.

Unsurprisingly, there were only six speakers on the issue. Most of the testimony came from downtown campaign interests. Representatives of the Committee on Jobs, Building Owners and Managers, the Alliance for Jobs and Sustainable Growth and the Sutton Law Firm spoke in favor of gutting the law and dangled the prospect of suing the City if Ethics didn't act. Their only caveat was that they wanted additional provisions of the law also repealed.

One speaker, former Common Cause coordinator Charlie Marsteller, urged repeatedly that the Commission do more outreach to experts on public finance laws, including participants in the Supreme Court pleadings. No one else spoke in favor of delay.

Some Commissioners were uneasy about jumping onto the bandwagon but were pushed on board by Commission President Ben Hur, who insisted on action that night. Suggestions of consulting with such reputable experts as Bob Stern, head of the Center for Government Studies and familiar as an advisor on the drafting of the original San Francisco law, were dropped without action. Hur needed four of the five commissioners to pass the measure, and he made it without a vote to spare.

By way of contrast, other cities, from Los Angeles to the State of Maine, began an open process drafting various alternatives that could meet the Court's test while preserving the law's intent.

Last week, as the Board met, there were at least 20 options considered to be viable and being weighed by other cities in the context of their laws.

The Center for Governmental Studies had issued a press release even before Ethics met in July pointing to several options that Albuquerque, New Mexico might find sustainable in the wake of the Court's decision.  By last week, those options were fleshed out further. New York's Brennan Center for Justice issued a list of remedies that became part of a study by the State of Maine's Clean Elections body.

In July, Maine undertook the steps that San Francisco rejected – pulling together those most knowledgeable about the law, about the court decision, and writing a report with recommendation. Last week they delivered their report ahead of schedule for specific recommendations to the state legislature.

Steven Hill, whose work on San Francisco's law was seminal, drafted potential avenues to preserve the intent of the law while meeting the court's test even though he is working on special assignment in Romania.

San Francisco's Board took up the Ethics Commission proposal endorsed by downtown interests — a "winner take all" for the opponents of public financing.

Elsbernd Smokescreen Obscures
Factual Review

Elsbernd and Farrell's claim that the city could face hundreds of thousands of dollars in legal fees defending the city's law, only to ultimately lose, was more than a canard. It was a false trail.

No member of the Board or any supporters of the city's law proposed defending the current law. At most, it would be an issue of defeating a motion for an injunction imposed before the election five weeks away.  The cost to the city would be minimal compared to defending the law itself.

Second, any suit to be filed against the San Francisco law likely would come from the Sutton Law Firm that already notified the Ethics Commission that it has a legal argument against the city's law.

This is the same law firm that served as the treasurer for the City College Bond Committee whose officers pled guilty to felonies last week over money laundering. The Sutton Firm, which also serves as the campaign legal counsel to District Attorney George Gascon, was not brought into the prosecution.

The Sutton Law Firm also holds the record for the highest fines ever levied in San Francisco for violating the city's ethics laws, which took place when they failed to disclose contributions by PG&E in a ballot battle over public power. In that case, the Sutton Firm itself had to pay hundreds of thousands of dollars for its role.

The Sutton Law Firm also was at the center of the controversy over the Gavin Newsom 2003 Inaugural Committee expenses which appeared to be  earmarked to illegally pay campaign costs. That incident resulted in a James Madison Award for Oliver Luby and Kevin Liban for their refusal to destroy the emails from the Sutton Law Firm that appeared to outline such a scheme. The Firm claimed it was all a mistake.

This does not make the Sutton Law Firm incompetent, which it is not, but it is a record of seeking to push the envelope beyond what is always legally defensible.

Currently the firm is involved in a number of San Francisco political contests, including as the attorney for some of those that testified at the Ethics Commission. In an awkward footnote, the Sutton Law Firm also is the attorney for the Leland Yee Mayoral effort. It also served as the campaign attorney for Supervisor Sean Elsbernd.

At Tuesday's Board meeting, Elsbernd's effort will fail if it cannot muster eight votes. The most likely to vote against the measure are Supervisors David Campos, Eric Mar, John Avalos in a switch from last week, and either Jane Kim and/or Ross Mirkarimi, who missed last week's vote and who Elsbernd hopes to convince to vote with him.

This Tuesday's Board Meeting

The likely opponents to Elsbernd's measure have signaled they want an alternative. Maine's preferred alternative is being reviewed by some supervisors, and the original advocates for public finance are drafting options that they believe would meet the court's test but still keep faith with the law's intent.

Even if one of the alternatives could win eight votes, it could not immediately take effect. The Board was told that any change in the current proposal would have to return to Ethics for its vote, where it would again require at least four of five commissioners to support it. The suggestion was made that the Board and the Ethics Commission could act simultaneously.

The failure of the Ethics Commission to provide the due diligence required for such a significant issue could well serve as the explanation for returning the measure for the kind of in-depth study and public outreach that has taken place elsewhere.

Most Board members who spoke on the issue acknowledged that whatever happens now, the entire issue of the city's campaign finance law needs to be revisited and likely revised. Unless the Board plans to go through an extensive outreach and public hearing process to write their own law, the city's Ethics Commission will have to take the lead.

The entire issue has suddenly emerged as a flashpoint in the city's politics, largely due to the strengthened hand of a coalition of groups intent on using millions of dollars to secure influence for the next four years. Whether supervisors vote for their favored approach, as carried by Elsbernd or take another direction will influence both how money is spent now and how individual supervisors fare with the voters.

Larry Bush's is The Wall St. Journal's Blog of the Year 2011

October 2011


Civil Grand Jury

Ethics Commission: A Sleeping Watchdog

Supervisor Sean Elsbernd

Supervisor Sean Elsbernd is shown he at the Ethics Commission's investigation into evidence tampering. He was excused from testifying and the phony check issue was never resolved by the Commission or pursued by the Director.

The San Francisco Civil Grand Jury today reported that the SF Ethics Commission is a Sleeping Watchdog that abdicates its responsibilities, has failed to act on all 18 Sunshine violations referred to it for action, and is vulnerable to manipulation in assessing fines against politicians and political groups.

It recommends several corrective actions, including televising Ethics Commission meetings to ensure greater transparency in its deliberations.

The Civil Grand Jury's findings echo in some respects the concerns about the Ethics Commission voiced during the Board of Supervisor's Rules Committee consideration of an appointee to the Ethics Commission.

Supervisors privately expressed reservations that one candidate, Allen Grossman, had sued the Ethics Commission over its failure to enforce the Sunshine Ordinance. His application was rejected by the Rules Committee in favor of Dorothy Liu, who was described by Supervisor Elsbernd as "the perfect candidate" because she had no experience with city politics or the Ethics Commission.

The Civil Grand Jury report found that the Ethics Commission has never enforced the Sunshine Ordinance and allowed rulings to be ignored.

"Since October 2004 through December 2010 there have been 18 cases where the Sunshine Ordinance Task Force has requested that the Ethics Department enforce a violation of the ordinance. In all 18 cases the commission has not taken ANY action for violation of the Sunshine Ordinance," the report states.

John St. Croix

Ethics' Executive Director John St.Croix, with a salary of $137,897 annually,is considered the major stumbling block to the implementation of Sunshine laws according to manyopen government advocates, though Deputy Director Mable Ng and City Attorney Dennis Herrera often share the blame.

"Because of the Ethics Commission's lack of enforcement, no city employee has been disciplined for failing to adhere to the Sunshine Ordinance. The Commission has allowed some city officials to ignore the rulings of the Sunshine Ordinance Task Force" according to the report.

The Civil Grand Jury also recommended that the Ethics Commission meetings be televised as a step toward greater transparency of its deliberations. The Rules Committee settled on the nomination of Dorothy Liu, who expressed strong reservations about televising the hearings because they might embarrass some people. Grossman was a strong advocate of televising the commission hearings.

The Civil Grand Jury also found that there is a "negative and jaded perception" of the Ethics Commission members because of the way they are appointed, which can give rise to political interference in their decisions.

At Rules, Dorothy Liu promised that she would consult with the Board of Supervisors that appointed her before making any important decisions.

Ethics "Vulnerable to Manipulation"

The impression of political favoritism and irregularity in assessing penalties for violating city ethics laws was a key consideration of the Civil Grand Jury.

"When a violation has been established, the Commission staff engages in negotiations with the alleged violator or their counsel to determine the fine. This puts the Ethics Commission staff in a recurring negotiating role with the city employees, campaign consultants, campaign staff or lobbyists to establish the fine. This is most irregular and vulnerable to manipulation against the public interest," state the report.

The report also found that Ethics Commission members had abdicated their responsibilities to its Executive Director, who controls what issues receive a public hearing or even whether commissioners know if their colleagues seek to consider complaints of violations.

"Additionally the commissioners are not notified about which specific items are scheduled for the closed session making it difficult to prepare for the meeting. One of the commissioners stated there was an expectation that "…the commission should support the Executive Director in his decision to dismiss a case".

The Civil Grand Jury noted that only two Ethics Commissioners volunteered to appear to explain their work and responsibilities.

"The focus of this report, however, is limited to an examination of the arbitrary method by which fines are determined, enforcement irregularities, the failure to provide adequate transparency, the excessive influence of the Executive Director over commission members leading to the commission members abdicating their responsibilities to serve as our independent watchdog, and investigations performed by Ethics Commission staff."

Supervisors to Vote On Report

The next step is for city departments to provide a written response to the Civil Grand Jury findings and recommendations, followed by a hearing and vote at the Rules Committee and the full Board on the report and action on the recommendations.

Findings and Recommendations:

Finding 1 Having the Ethics Commission staff establish the fine and then enter into negotiations could be viewed as lacking a strong and effective operating system that could lead to questions of fairness and transparency.

Recommendation 1.1 The Ethics Commissioners should establish a fixed fine structure for violations or apply the maximum allowed fine.

Recommendation 1.2 If the respondent disagrees with the fine a request may be made for a public hearing. This will allow the commissioners to exercise discretion over the fines process.

Finding 2 The failure of the Ethics Commission to enforce Sunshine Ordinance Task Force actions weakens the goal of open government and reduces the effectiveness of the Sunshine Ordinance.

Recommendation 2All Sunshine Ordinance Task Force enforcement actions deserve a timely hearing by the Ethics Commission.

Finding 3 Waiting for the District Attorney or City Attorney to inform the Ethics Commission that they are not going to pursue a case causes unnecessary delays.

Recommendation 3 After the 14 day window, Ethics Commission investigations should start.

Finding 4 Currently commissioners are appointed by elected officials. In turn, the staff and commissioners scrutinize campaign expenditures and activities of those same elected officials. The Civil Grand Jury feels this leads to the appearance of impropriety.

Recommendation 4 The City Charter should be changed to add four additional commission members appointed by nonpartisan community organizations and individuals such as: The League of Women Voters, Society of Professional Journalists, The San Francisco Labor Council, The Bar Association of San Francisco, and the Dean of UC Hastings Law School.

Finding 5 The Ethics Commissioners have relinquished their authority to the Executive Director concerning items recommended for dismissal.

Recommendation 5 The commissioners should amend section VI. A in the Ethics Commission Regulations For Investigations and Enforcement Proceedings to require review and a vote on investigations recommended for dismissal.

Finding 6 The Ethics Commission staff does not appear to have a proper database to track issues efficiently.

Recommendation 6 The Ethics Commission staff should create or modify their database to increase search and tracking capabilities.

Finding 7 In the context of open government, providing audio recordings of the Commission meetings does not provide enough transparency.

Recommendation 7 To maximize transparency, the San Francisco Ethics Commission should broadcast their meetings on the SFGOVTV television network.

Larry Bush is the editor of Feedback:

July-August 2011

Follow The Supes’ Money

All right, we’ll admit upfront that it’s not a lot of money. But it is your money, and each Supervisor gets to spend it without anyone asking questions – or even looking at the books.

What is it? It is the office account that each Supervisor can spend as he or she wishes – fresh flowers every day, paper hats for the staff to wear on constituent days, mani-pedi in the office Wednesdays, whatever.

So we asked for the records and we’re ready to tell you what we learned.

Which supervisor was the most frugal? Who ran through almost every dollar in a matter of months? Which ones pay to subscribe to the San Francisco Chronicle, and which ones don’t (the answer may surprise you)?

First, not all supervisors are equal. Everyone starts out with $5,000 in mad money, unless they happen to be coming to the end of their term, in which case they get $2,500, or are taking office in mid-year, in which they get $2,500.

The Board President gets more – fifty percent more – for a total of $7,500 (this budget, Chiu had a total of $10,000 because he was Board President in two overlapping terms)

That’s the base line facts. Now to the spin.

Squeezed Every Nickel Award goes to…ta da…Chris Daly. Bet you didn’t see that coming. Daly was the most frugal of all the supervisors with his public dollars, spending just $307.64 and leaving $2,192.36 on the table to go back to the city budget.

Day Late and Dollar Short Award goes to…Mark Farrell. After just 100 days, Supervisor Farrell has spent just about every dollar he had — all but $6.69 of his $2,500 budget. And this is the guy who wants to rewrite city tax law on stock options, which the Examiner pointed out would benefit himself.

Full Speed Ahead Award goes to those supervisors who use their office account to pay for Allen’s Press Clippings, which can provide a reservoir of news stories and headlines that just might be useful in a future campaign. Why would we even suggest such a thing? Well, for starters, just three supervisors spent office account money for the news clipping service. They were David Chiu, Bevan Dufty, and Ross Mirkarimi. All three will be on the November ballot seeking another office. Duh.

“Support Your Local Newspaper Award” goes to just three supervisors: Sophie Maxwell, Ross Mirkarimi, David Campos and John Avalos. Three out of 15 (includes outgoing and incoming supes). No wonder the Chronicle is in trouble. It can’t even get city supervisors to subscribe. Not even the ones the paper endorses.

What’s Black and White and Read All Over Award goes to those supervisors who subscribe to the out-of-town press (and, by coincidence, only one subscribes to local media). They would be Bevan Dufty (New York Times), Mark Farrell (The Economist and Bloomberg Business – btw, Mark, aren’t those must reading for your job as an investment adviser?, Ross Mirkarimi (New York Times), Sean Elsbernd (Harvard Business Review) and David Campos (New York Times).

There’s More to Our World Award goes to those supervisors who used their office account to subscribe to community papers and translation services. John Avalos bought the Spanish translation for Internet Effectiveness. David Chiu subscribes to Sing Tao. Sophie Maxell subscribed to the Sun Reporter. And that’s it. No one else. Except maybe you could count Sean Elsbernd’s subscription to the San Francisco Business Times.

Doing My Job Award goes to the supervisors who spent office money in an effort to be more involved in the people’s work. Eric Mar, for example, paid his registration fee for the National Association of Counties. David Campos paid to attend the Immigrant Rights Conference. John Avalos outdid everyone with spending for neighborhood and community events in his district, from Community Initiatives meetings, to OMI and Excelsior meetings, to district meetings.

The Envelope, Please Award goes to all of them, but we’ll point out that some supervisors only spent on things like envelopes, toner cartridges and the like and didn’t subscribe to any papers, spend on any community meetings, attend any conferences, or do anything but clerical work. They would be Scott Weiner, Michaela Alioto-Pier, Jane Kim, Carmen Chu, and Malia Cohen.

So here’s the view from 30,000 feet of how the supes spent your money, and what they left on the table or still have in their wallet (first number is amount spent, second number is what’s still in the office kitty):

Board President David Chiu

$10,000 budget (Board President twice), Spent $5,347.57, with $4,652.43 left

Supes with $5,000 budget

Sean Elsbernd spent: $1,131.56; balance left: $3,868.44

Eric Mar Spent: $1,824; balance: $3,176

Carmen Chu Spent: $2,629.45; balance left: $2,370.55

David Campos: Spent: $3,417.95; balance left: $1,582.05

John Avalos Spent: $4,773.62; balance left: $1226.38

Ross Mirkarimi Spent: $3,503.98; balance left: $1,396.02

Supes with $2,500 budget:

Chris Daly Spent: $37.64; balance left to city: $2,192.36

Sophie Maxwell Spent: $737.08; balance left to city: $1762.92

Michela Alioto-Pier Spent $921.24; balance left to city: $1578.76

Bevan Dufty Spent: $1,927.77; balance left to city $572.23

Scott Weiner Spent: $1111.40; balance left: $1388.60

Jane Kim Spent: $1,071.99; balance left $1,428.01

Mark Farrell Spent: $2,493.41; balance left: $6.69

Malia Cohen Spent: $1,932.57; balance left: $567.43

Learn about San Francisco politics, ethics, money, political consultants, lobbyists, campaigns, City Hall, at Larry Bush’s

May 2011