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Interested Persons Meeting to Discuss Budget Analyst Report Regarding Ethics Commission Programs

Wednesday, February 27, 2013
3:00 PM to 5:00 PM
Room 400 City Hall

On June 5, 2012, the Budget and Legislative Analyst issued a report to Supervisor Campos comparing programs of the San Francisco Ethics Commission with those of the Los Angeles Ethics Commission.  The Budget Analyst found that neither San Francisco nor Los Angeles is uniformly more or less stringent than the other; but added that “comparing the cities’ policies does provide an opportunity for the City and County of San Francisco to consider alternate policies and approaches to influencing campaign financing, enforcing laws, educating and informing the public, and managing lobbying practices.”  For this reason, staff of the Ethics Commission conducted two Interested Persons (IP) meetings on December 4 and 10, 2012, in order to obtain feedback on the policy options listed by the Budget Analyst, as set forth below.  Staff will conduct one additional IP meeting on February 27, 2013. (Notice of the upcoming meeting was recently sent to all recipient committees, candidates for the November 2013 election who do not have a committee, and major donor and independent expenditure committees.)  The Budget Analyst’s report is available at http://www.sfethics.org/files/report_6.5.12_re_sf_la_ethics.pdf

The following discussion topics were considered at the first two IP meetings.  Staff welcomes your suggestions and comments at the upcoming IP meeting about any or all of the discussion topics set forth below.  If you are unable to attend, please submit your comments to the Ethics Commission at 25 Van Ness Avenue, Suite 220, San Francisco, CA 94102, or by email to [email protected]  

Staff may prepare regulatory proposals for discussion at the IP meeting prior to their presentation to the Commission.  If this occurs, staff will post the proposals on the Commission’s website. 

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Discussion Topics

1. Should San Francisco increase the period during which contractors, subcontractors, principals, etc. may not contribute to political campaigns from six months to twelve months, and prohibit contractors, subcontractors, principals, etc. from fundraising on behalf of candidates?

In Los Angeles, contractors, including their principals and subcontractors, cannot make a contribution to, or fundraise for, a candidate who sits on a City body that will be considering or approved their contract within a 12-month period, if the contract is worth $100,000 or more.  In San Francisco, a contractor, its principals and named subcontractors, may not make such a contribution during the period of negotiations or up to six months after a contract is approved, if the contract is worth $50,000 or more.

2. Should San Francisco explicitly prohibit any political contributions from registered lobbyists?

In Los Angeles, lobbyists cannot make contributions to City officers whose office they are registered to lobby, or to candidates for the office that they are registered to lobby.  San Francisco has no such ban but all lobbyists must report contributions on a monthly basis as well as adhere to all other contribution restrictions and requirements.

3. Should San Francisco increase the frequency with which candidates must report contributions and spending? 

According to the Budget Analyst report, Los Angeles requires candidates to file 12 reports leading up to and including the primary and general election, whereas San Francisco only requires four leading up to and including the general election.  However, the report does not explain that in a single election cycle, Los Angeles has both primary and general elections, whereas San Francisco has a single non-partisan election.  In addition, in concluding that Los Angeles requires the filing of 12 reports, the Budget Analyst’s report included reports for periods that occur before the year of the primary and general elections, whereas in counting the four reports required in San Francisco, the Budget Analyst included only reports that cover the year of the election. When focusing on similar time-frames, there are only two reports that Los Angeles requires that San Francisco does not:  a third pre-election report before any election; and, before a March primary, a quarterly report that covers through September 30 of the prior year. 

Based on recently enacted state legislation, all committees that reach $1,000 in activity will be required to file 24-hour contribution and independent expenditure reports during the 90 days – instead of 16 days – before an election. (See Assembly Bill No. 481, approved and filed September 24, 2012.)  Staff will be interested in obtaining feedback on how this new state law should interact with the third party disclosure requirements under local law.

4. Should San Francisco increase the personal contribution limits in order to offset the influence of “unregulated independent expenditures” on City elections?

In Los Angeles, the current contribution limit from any person is $700 per election to a City Council candidate and $1,300 per election to a candidate for Mayor, City Attorney or Controller.  In San Francisco, the current contribution from any person is $500 per candidate for City elective office.  Both Los Angeles and San Francisco have cumulative contribution limits.

5. Should San Francisco reduce the reporting requirement threshold from $5,000 to $1,000 for independent expenditures by committees or persons on behalf of or against a candidate or measure?

State law requires the supplemental reporting of independent expenditures when the expenditures reach $1,000 or more for a candidate or measure during any reporting period and any time during the 90-day period immediately preceding an election.  Los Angeles additionally requires notification within 24 hours each time that an independent expenditure or member communication reaches $1,000 or more regarding a candidate or measure. 

Except for reporting requirements during the petition circulation period, San Francisco does not have additional reporting requirements regarding expenditures related to measures.  However, San Francisco requires third parties to report spending on candidates as follows:

  1. In races where there is at least one publicly financed candidate or where at least one candidate has accepted the voluntary expenditure ceiling, third parties must file notices within 24 hours of reaching $5,000 per candidate in independent expenditures, member communications or electioneering communications;
  2. Any person who pays for a mass mailing that costs at least $1,000 and that is an independent expenditure regarding one or more candidates must file a report within five business days of the mailing or, if the date of the mailing occurs within the last 16 days before an election, within 48 hours of the date of the mailing;
  3. Any person who pays for an electioneering communication that costs at least $1,000 must file a report within 48 hours of each disclosure date; and
  4. Any person who pays for a persuasion poll must file a report within 48 hours of certain milestones.

6. Should San Francisco reduce the amount of time for which extensions of credit to a campaign are reclassified as contributions from the current six months to one month?

In Los Angeles, extensions of credit, other than loans, for a period of more than 90 days (previously, 30 days) are subject to contribution limits.  In San Francisco, a candidate committee that accepts goods or services on credit must pay for such accrued expenses in full within 180 calendar days to avoid reclassification as a contribution.

7. What changes, if any, should San Francisco adopt to its enforcement policies so that its results more closely match the results in Los Angeles?

The Budget Analyst states that investigations into ethics violations result in significantly different outcomes in San Francisco and Los Angeles, with San Francisco dismissing 76 percent of its cases compared to 19 percent in Los Angeles, and Los Angeles levying higher average fines of $7,746 compared to $6,088 in San Francisco over the seven-year period ending in November 2011.  In discussions with Los Angeles, staff has learned that Los Angeles includes in its count amounts received pursuant to its infractions and disgorgements policies.  Also, Los Angeles staff performs a preliminary evaluation of any complaint to determine whether sufficient evidence exists to move a matter forward to a formal investigation before it deems a complaint a “complaint.”  San Francisco recently adopted preliminary evaluation steps similar to those taken in Los Angeles.  San Francisco has also begun to review campaign reports to identify excess contributions. 

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