San Francisco Ethics Commission
grossly underfunded by design?
Rules Committee hearing to review problem
March 14, 2007
Politicians can sign all manner of fabulous programs into law.
They can even take credit for doing so. But finding funding for
them is an entirely different matter.
Take George W. Bush, for example. He signed the building of a
wall between the U.S. and Mexico. He created the No Child Left
Behind program. But the wall isn't being built and education hasn't
been improved, at least in part because these programs weren't
Tomorrow, the Rules
Committee holds a hearing at City Hall, Room 263,on whether
the Ethics Commission is adequately funded to discharge its duties.
Although a Civil Grand Jury reported two years ago that the Commission
was grossly underfunded,
the Mayor has added only minimal resources since.
The following is a list of needs that have not been funded:
1. Staffing needed
The Commission itself estimated a need for 27 FTE's (Full Time
Equivalent) exclusive of the new Mayoral Public Finance Program.
It now has around 14. What follows is a review of the laws entrusted
to the Commission. It will show how the Mayor is giving lip service
to the laws rather than any endorsement of good government.
2. Sunshine Ordinance
Ethics is the only agency charged with enforcement power for
the Sunshine Ordinance. These are the laws that allow full public
participation in meetings and review of documents generated by
Ethics has never enforced these laws.
Sunshine has reached a breaking point in the City. Bureaucrats
balk and get citations against them from the Sunshine Ordinance
Task Force, but Ethics does nothing. Someone needs to do a management
audit of the City to bring its business practices into line with
The City Attorney claims
that he has spent hundreds of thousands of dollars on problems
like metadata, problems that could be resolved by city attorneys
not putting privileged advice into the metadata of the electronic
documents. Simple changes to the City's business practices can
resolve most of the issues encountered here, but Ethics doesn't
have anyone on staff to do that.
3. Statements of Economic Interests
Statements of Economic Interests (SEI) disclose possible financial
conflicts that officials might have in the discharge of their
duties. The Civil Grand Jury specifically singled out this program
for criticism in its report of 2005. The Commission has never
audited one SEI. There is no assurance to the public that we are
receiving truthful disclosures.
What's more, many officials get away without filing any such
disclosures at all. The problem is so bad with some departments
that years go by without any disclosure while the officials continue
to hear cases on which there may be a conflict. In one case, a
citizen filed a complaint concerning the Rent Board with the FPPC
bypassing Ethics purposefully because it is underfunded. He has
no confidence in the impartiality of decisions by that important
Thousands of City Employees are required to file SEI's, but Ethics
only checks with their department heads who file self-serving
reports overstating compliance. Last year, one citizen went to
the School Board to check employee SEI's, all filed according
to Superintendent Ackerman's statement under oath. Despite several
visits, the agency could not produce to him one of the dozens
of reports supposedly on file.
4. Lobbyist Regulation
Lobbyists thrive in direct relationship to the amount of dollars
government can distribute. San Francisco and Los Angeles have
roughly equivalent budgets, but Los Angeles has four times the
lobbyists registered here.
San Francisco has seven times the budget of San Diego's but they
have twice as many lobbyists registered. What gives?
Don't expect an answer from Ethics. They aren't funded to get
an answer. Business interests complain that the unions don't file.
Incomplete lobbyist information is posted to the web to save money.
The names of the lobbyists don't appear on the web.
We know, for example, that Barbary
Coast is duly registered, but what are their names? What do
they look like? There is no transparency or enforcement in this
Additionally, the law requires periodic training in the lobbyist
law for the public and the regulated community, but none is given.
5. Campaign Consultant Regulation
Campaign Consultants are required to register and file reports
with the Commission. Yet campaign consultant reports show a strange
development. Amounts reported paid to campaign consultants HAVE
since the high in 2000 of $4,385,648. In 2002, that became $3,243,997.
In 2004, $943,213. In 2006, only $617,275 was reported. What gives?
Ethics won't tell you because they aren't funded for such investigations.
Jim Sutton, one of the biggest names in campaign circles, is not
a registered campaign consultant even though he writes copy for
campaign ads -- definitely not an attorney's function. The only
folks Ethics has pursued have been smaller filers.
6. Campaign Finance Regulation
Last year's campaign for Supervisor in District 6 showed how
our expenditure ceiling needs proactive policing in order not
to be abused. Big money interests concealed spending so that Chris
Daly would be hamstrung
by his promise to honor the expenditure ceiling.
Had savvy campaign folks not put together an overwhelming case,
the expenditure ceiling might not have been lifted until hit pieces
against Daly had taken a fatal toll.
The same thing happened to Jeff Adachi in 2001, except the ceiling
was not lifted then.
In 2003, Kamala Harris claimed to have broken the ceiling in
September. A straight-line projection of expenditures showed she
exceeded it around Aug. 4. It would have also found that she was
understating her expenditures by about $30,000 as she herself
admitted in a post election amendment.
Ethics should not have lifted this ceiling. At the time, Ethics
did not even attempt a modest audit of about 70 expenditures in
her report. The fairness of an election was subordinate to budget
conditions at Ethics. If the law had been enforced and Harris
held to her promise to honor the spending limit, the outcome of
the election would have been different. Instead, she was allowed
to spend additional money in the hundreds of thousands of dollars.
Do we have confidence that Ethics can proactively police this
A few weeks ago, John St. Croix, the Executive Director of the
Ethics Commission, estimated a need for twice the enforcement
staff he has been given. He also needs much more experienced investigators.
The investigators are recent law school graduates with minimal,
if any, litigation experience.
Big problems are beyond their reach. Compare Mayor Newsom's $600,000
of accrued debt from the 2003 election with Schwarzenegger's statewide
accrued debt of $400,000 on his special election ballot measures.
Newsom took three years to retire this accrued debt.
State law requires reporting accrued debt as a contribution,
subject to the $500 contribution limits, when it becomes due and
uncollected for a commercially unreasonable time. In contrast,
Schwarzenegger had retired his debt within a year of the election.
How many vendors would give another candidate that break? Do
folks who buy signs normally purchase on three years credit?
The law needs a sophisticated analysis. This is not unusual for
white-collar crimes. But Ethics is unprepared for that. Instead,
it specializes in going after small filers for late fines: It's
also easier to go after the folks without the resources to push
Frankly, Ethics needs what I call an "H&R Block"
unit by which small filers (campaigns under $75,000) can bring
their checks and deposit slips to Ethics for help in filling out
Campaign reports. The City needs to recognize that these laws
are onerous and reach out to these guys so that political support
remains for regulating big money, the regulation most needed.
7. Audits of campaign finance and governmental ethics
Any campaign that reports more than 1000 pages should be audited.
Campaign reports of a certain size are not transparent. Audits
would make them transparent. Mayor Newsom's reports are thousands
of pages long. The only assurance that we can give the public
of compliance with the law in these reports is through an audit.
Even though Mayor Newsom raised hundreds of thousands of dollars
in 2004, 2005, and 2006, those reports weren't eligible for audit
unlike most of the other committees.
Why? Lack of funding.
Who sets the funding for the Commission? Mayor Newsom.
Right now, Ethics enforcement of the laws is complaint driven.
Someone spots a violation of the law, brings it to Ethics staff,
and they investigate. But this is sporadic enforcement at best:
it takes a professional to recognize a possible breach of the
law. That means big money interests - the ones who can hire professionals
- drive this department. Grass roots activists are the victims
of this process.
We need to fund this division so that it can become proactive
and take the time to spot violations of the law on its own.
9. Provide assistance to others in administering these laws
This is another Charter mandate for Ethics. However, in practice
it is the City Attorney that provides folks with advice on the
law even though the City Attorney is an elected official whose
advice might be shaping the law in a self-serving manner. But
Ethics isn't funded to handle all advice inquiries. Supervisor
Daly knows this. When he asked questions about a journalist's
fundraiser some years ago, he was sent to the City Attorney.
We should fund Ethics so that it, rather than an elected official,
can be responsible for advice on these laws.
10. Making legislative recommendations
Our good government laws are often on the cutting edge of practice.
Some laws work; some don't. If we continue with the ones that
don't work, the system will break down of its own weight. The
folks who founded the Ethics Commission understood this and gave
it a specific mandate to assess the effectiveness of the laws:
The commission shall report to the board of supervisors and
mayor annually concerning the effectiveness of such laws. The
commission shall transmit its first set of recommendations to
the board of supervisors and mayor no later than July 1, 1995.
Twelve years later, the Commission still has not issued such
a report. No funding. As a result, resentment builds against the
laws like the Sunshine Ordinance that need repair. It's hard to
explain to the balking bureaucrats that they should be expressing
their anger to the budget authorities that have failed us.
The public should not have to rely on reporters or citizens to
develop the data by which we can assess the laws. For example,
it should have been Ethics rather than an activist who first reported
the figures above revealing trends in campaign consultant and
lobbyist reporting. Ethics should have a staffer doing that kind
11. The Whistleblower Hotline
Ethics punted this one to the Controller in 2003's Prop C (City
Service Auditor). The Controller's starting budget was $10 million,
more than 30 times what Ethics had been given for the program!
12. Statements of Incompatible Activities (SIA)
Prop E in 2003 set up the system by which each department tells
its employees what kind of activities they should be wary of for
breaching their duty of loyalty arising from their City employment.
Ethics staff made a whopper of a mistake here telling the Controller
that this program would have no budget impact on the Commission.
Swamped by the 2003 crisis in the District Attorney race, staff
didn't even include their budget officer in considering the budget
Ethics is already four years behind schedule right now in implementing
this program. Every month, the Commissioners set aside a half
hour or so to hear from City departments. It is a major drain
on Ethics resources, and Ethics hasn't gotten a penny to do the
Debra Walker, the Chair at the Building Inspection Commission,
set up my model here. She had Ethics hire (at DBI expense) a staffer
to work at DBI and absorb that department's culture so that their
SIA has grounding in the real world. As a result, major changes
have already been made to the SIA originally approved by Ethics
These rules govern inspectors' self-dealing in properties inspected
by the City. That model should be followed in all major departments
if we want to do more than give lip service to limiting employee
self-dealing. The staff at Ethics just doesn't have the business
expertise to spot needed Ethics reforms in City departments. Right
now, the SIA's are mainly concerned with employees using City
printers and computers, taking inconvenient time off, etc. The
SIA's are not addressing much more critical questions, such as
the Mayor's permitting fundraisers to serve on his staff.
13. Creation of appropriate forms
The biggest problem with Ethics forms is that they don't require
reports to be transparent. For example, a committee making candidate
independent expenditures is limited to $500 contributions unless
it meets certain tests. We don't require the committees with contributions
over $500 to report the test they are relying on and the facts
that allow them to do so. If we could fund a staffer on this project,
enforcement of the law would be transparent. That would save the
City thousands of dollars in overseeing our laws.
14. Educational programs
More needs to be done to train reporters and activists in how
to research the data on file. Training in Sunshine is given to
the City Attorney, the agency tasked with preserving City secrets,
in conflict with the bureaucrats' duty to render their data transparent.
15. To hold annual seminars for top official
I've never heard of such seminars. They should be open to the
Why Are We Fooling the Public into Thinking the Laws on Our Book
Unfortunately, no funding is worse than no law. If the Ethics
Commission is not funded to do its work, we might be better off
not having these laws on the books. At least when there is no
law on the books, there is no danger the public will think the
problem has been addressed.
The Board of Supervisors is to be commended for renewing this
dialogue again. The last time there was public discussion of Ethics
funding was in 2005 when Prop C was unsuccessfully proposed to
give Ethics the power to propose its own budget. It was defeated
because the Mayor argued that he would fix the problem. He hasn't
Joe Lynn was the campaign finance and budget officer of
the San Francisco Ethics Commission from 1998 to 2003. From 2003
to 2006, he served as one of the five Ethics Commissioners. The
San Francisco Examiner called him the backbone of the Ethics
Commission. While on staff, he received numerous awards
and has been a speaker at many conferences on Good Government.
He maintains an active interest in good government laws. Email
Joe at firstname.lastname@example.org
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