Ethics Commission

Ethics under attack

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› amanda@sfbg.com

A group of political campaign treasurers who regularly handle the financial nuances of reporting election cash have signed a letter disparaging the operations of San Francisco’s Ethics Commission.

"Fewer and fewer of our members are willing to accept San Francisco local candidates and committees as clients because of the hostile environment that now exists," reads a July 23 missive addressed to the five Ethics commissioners and posted by the Los Angeles–based California Political Treasurers Association.

The letter includes a laundry list of gripes, including that Ethics staff treat treasurers like criminals; the audit, fines, and penalty processes are too slow; forfeitures of campaign donations for minor reporting errors are unfair; penalties for some infractions are unjust; there’s been no guidance on a new law banning donations from corporations; and that when screwups occur the paid, professional treasurers are treated more harshly than volunteers.

Twenty-one CPTA members signed the letter, and several echoed its contents at a Nov. 8 meeting with Ethics staff.

"Honestly, our firm will probably never touch a San Francisco ballot measure again," said Stacy Owens of Oakland’s Henry C. Levy and Co.

However, Ethics staff refuted some of those complaints.

For example, the treasurers universally decried the requirement that a donor have a street address as well as a post office box. "It’s stupid," said Kevin Henegen of the Sutton Law Firm, who did not sign the letter but did attend the Nov. 8 meeting.

But it’s a law throughout California, not just in San Francisco. "The state considers this very serious," said Oliver Luby, the fines collection officer of the Ethics Commission and the most outspoken staffer at the meeting. He pointed out that a street address can be used to verify the physical existence of a donor, while a PO box can easily shield a false identity.

Some of the treasurers said the quick pace of campaigning can turn the search for a simple street address into a battle, and the threat of a fine or forfeiture from the Ethics Commission causes them to consider not reporting the donation at all until after the election, when the address can be less hurriedly determined.

That’s a problem, according to Charles Marsteller, a good-government watchdog instrumental in the drafting of many of San Francisco’s campaign rules. He told us he’d like to see legislation that addresses the treasurers’ concerns while ensuring timely disclosure: "We don’t want to see a situation where two days before the election a large donation is not reported because the donor fails to disclose an address or occupation. This might give a handy excuse to justify not reporting things like large 11th-hour media buys."

The treasurers further complained that their being on the hook for a fine, fee, or forfeiture when a client screws up isn’t fair and that the past errors of a group shouldn’t affect how it’s treated in the future.

If a committee breaks the law and owes money, the treasurer is legally responsible, but these paid professionals could act as filers instead and leave the name of treasurer and any monetary penalties to one of the committee members, as Luby told us.

While the treasurers complained that forfeitures of donations for reporting errors are a penalty that no other California jurisdiction imposes, Luby said that San Francisco hasn’t enforced them since 2002.

He also penned a detailed 17-page memo responding to the CPTA’s complaints, which includes a matrix showing that most of the signers of the letter don’t do business in San Francisco and only 4 of the 21 have had to pay fines here since 2002.

While he argues that those four are disgruntled professionals who have tangled with Ethics in the past, he does not entirely dismiss the CPTA’s observations of serious management inconsistencies at Ethics. In particular, he cites the perception of unfairness when routine late fees and fines, which he handles, are wrapped up in campaign investigations — which are conducted, in secret, by another sector of Ethics and can result in different monetary penalties. Over the years the standards for fines have dissolved as secret deals have been cut to settle investigations.

"Since my arrival in 2002, my mantra for penalties has been consistency, consistency, consistency," Luby writes. "By routinely being a stickler for standards over the years, I have detected the Commission management prefers greater flexibility when regarding when to grant a waiver. In particular, waiver standards have been applied inconsistently when late fees and forfeitures are incorporated with investigative penalties."

The CPTA asked for a task force to fully vet solutions to some of Ethics’ problems, which Commissioner Emi Gusukuma said she’d be willing to join. "This is a great first step," she said of the Nov. 8 meeting, which she and Commissioner Jamienne Studley attended. "But it’s still a big, meaty issue."

John St. Croix, executive director of Ethics, said the agency will be taking these issues seriously. "There’s a lot of frustration because people don’t know what our processes are," he said. "If we are being unfair, we can normalize our processes."

CPTA’s letter to Ethics
Oliver Luby’s Response to CPTA
Luby’s supporting documentation

Money and politics

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› sarah@sfbg.com

The upcoming election hasn’t generated much voter interest, with only a couple of measures that seem likely to have an impact. But corporate interests in San Francisco and beyond are still spending big money — in ways that are secretive, suspicious, and sometimes contradictory — to influence the election and win the gratitude of elected officials.

Although the final preelection campaign statements were due Oct. 25, the money continues to roll in. And perhaps most ominously, many campaign committees are spending far more than they are taking in, effectively using this accrued debt to hide contributors until after the election.

And almost invariably, the person at the center of such schemes — who facilitates the most creative and unsettling spending by downtown political interests — is notorious campaign finance attorney Jim Sutton, who also serves as Mayor Gavin Newsom’s treasurer (and didn’t return our calls for comment by press time).

Political donations are supposed to be transparent and reflect popular support for some campaign. But once again, this election is showing the disproportionate influence that corporations have on local politics and the difficulties faced in trying to accurately trace that influence.

There are "No on K" billboards all over San Francisco, showing a giant image of a man’s empty pocket alongside the dubious claim that "Proposition K will cut $20 million from Muni." The signs were created and funded by Clear Channel Outdoor.

Prop. K is an advisory measure that the Board of Supervisors placed on the ballot this fall to ask whether voters want to restrict advertising on public spaces like bus stops. But it was aimed at Clear Channel Outdoor’s contract to maintain 1,100 city bus shelters and sell advertising on them, which was approved by the Board of Supervisors on Oct. 23. In exchange, the CCO agreed to pay the Metropolitan Transportation Authority $5 million annually, plus 45 percent of its annual revenues from shelter ad revenues.

Nonetheless, the measure would put city voters on record as opposing the CCO’s basic business model, so the company fought back. The "No on K — Citizens to Protect Muni Services" filing suggests that there is no citizen involvement in the No on K campaign. So far, No on K has only received donations from Clear Channel Outdoor, including $120,000 in cash and $55,750 in in-kind contributions of radio time and ad space.

Maybe Clear Channel really is trying to help Muni get more money, rather than pad its own profits. After all, its parent corporation, Clear Channel International, donated $20,000 to support Muni reform measure Proposition A — authored by Board of Supervisors president Aaron Peskin — on Oct. 15, just days before Clear Channel Outdoor won its big bus transit deal with the city.

Yet following the corporate money even further makes it clear that altruism isn’t what motivates corporate spending. No on K also benefited from independent expenditures by the San Francisco Chamber of Commerce 21st Century Committee, a general-purpose committee created in 1999, which received major funding this year from the Gap ($10,000), Pacific Gas and Electric Co. ($7,500), Bechtel ($5,000), Catholic Healthcare West ($5,000), and Clear Channel Outdoor ($1,000).

The 21st Century Committee also spent $716 for newspaper ads opposing Prop. A, which would net the MTA at least $26 million per year from the city’s General Fund. Sutton — a former chair of the California Republican Party — and his associates effectively control the 21st Century Committee, which is also helping Newsom, his top client, avoid facing the Board of Supervisors in public. The committee has made independent expenditures opposing Proposition E, a charter amendment that would require the mayor to make monthly appearances before the board, something voters approved last year as an advisory measure. According to Newsom spokesperson Nathan Ballard, defeating that measure is the mayor’s top priority this election.

"I think he’s focused on his own race and also Question Time. There’s where he’s spending his resources," Ballard said when asked why Newsom isn’t campaigning or fundraising for the Yes on A and No on H campaigns, even though he supports those positions.

The 21st Century Committee has also made independent expenditures in support of Proposition C (which would require public hearings for measures that the board or the mayor places on the ballot), Proposition H (see "Transit or Traffic," page 18), Proposition I (which would establish an Office of Small Business), and Proposition J (Newsom’s wireless Internet advisory measure).

Each of these ballot measures has a committee dedicated to raising funds, but as of Oct. 25, only the Small Business Campaign (Yes on C) appeared to have no outstanding debts, or accrued funds, as they are called in campaign finance circles. Maybe that’s because the Small Business Campaign got $10,000 from the 21st Century Committee, $5,000 from PG&E, $2,500 from AT&T, $8,500 from the SF Small Business Advocates, and $1,000 from the Building Owners and Manufacturers Association of San Francisco’s political action committee.

Yes on C also got a $7,500 contribution from the Committee on Jobs Government Reform Fund, which has ties to Clear Channel, the MTA, and efforts to influence local transportation policy. Records show that on Nov. 4, 2005 — just before the election — the Committee on Jobs Government Reform Fund reported a $6,900 "loan" for radio airtime and production costs from Clear Channel to help defeat a measure that would have split the MTA appointments between the mayor and the Board of Supervisors.

Fast-forward to Oct. 3 of this year, when the Committee on Jobs, which reported its "loan" as accrued funds for almost two years, reported that this debt has now been forgiven. Which is odd, given that, as of Oct. 25, the Committee on Jobs had a cash balance of $778,000 — and had just received $35,000 from financier and Committee on Jobs board member Warren Hellman, $35,000 from AT&T, and $50,000 from the Charles Schwab Corp.

Equally interesting is the fact that the day after the Oct. 25 preelection filing deadline, the Committee on Jobs gave $25,000 to the Sutton-controlled No on E: Let’s Really Work Together Coalition. Such large late contributions require a notice to Ethics that can often escape notice by the media and voters.

The donation perhaps went to help balance the committee’s books; despite receiving $85,084 in monetary contributions, including $10,000 from attorney Joe Cotchett and society maven Dede Wilsey, No on E spent $110,244 before Oct. 25, leaving it with $26,610 in accrued debt.

No on E isn’t the only Sutton-controlled committee whose spending has outpaced donations received: as of Oct. 25 the Yes on H–No on A pro-parking committee and Newsom’s WiFi for All, Yes on J committee, not to mention the Gavin Newsom for Mayor campaign, were all registering large amounts of accrued debt.

Having these debts isn’t illegal. And it’s not unusual for a campaign to have a pile of unpaid bills at the time of its last preelection finance filing. But as Ethics Commission director John St. Croix told the Guardian, accrued funds "shouldn’t be used to hide who your contributors are. The idea of disclosure is to let voters know ahead of elections who is trying to influence their vote."

St. Croix points to the fact that committees are required to make reports every 24 hours in the 16 days before an election "so you know what they are spending on…. But if committees don’t report campaign contributions and people fundraise after the election, that could be a de facto way to hide who the contributors are."

And while Sutton has been characterized by many, including the Guardian (see "The Political Puppeteer," 2/2/04), as the dark prince of campaign finance, St. Croix says he doesn’t automatically suspect something is wrong just because a campaign has a lot of accrued debt.

"But if people suspect that to be the case and they file a complaint, Ethics investigates," St. Croix said, adding that for him, "really massive accrued funds would be a red flag."

Asked what he meant by massive, St. Croix said, "It depends on the office. You might expect a lot more to accrue in a mayor’s race or large campaigns that tend to do a lot of last-minute spending."

As of Oct. 25, Gavin Newsom for Mayor had received $1.1 million and spent $1.3 million, had a cash balance of $457,994 — and was reporting $97,548 in accrued debt, with $46,500 owed to Storefront Political Media, the company run by Newsom’s campaign manager, Eric Jaye.

Noting that Ethics’ job is "to get people to file on time and chase after those who don’t," St. Croix said that those who don’t file and are making major expenditures right before an election are the ones who will face the biggest fines. "They could face $5,000 per violation, which could be $5,000 for every contribution that was made to finance a smear campaign and wasn’t reported," he said.

The biggest fine the Ethics Commission has ever issued was $100,000 for Sutton’s failure to report until after the 2002 election a late $800,000 contribution from PG&E to help defeat a public power measure.

Compared to other years, the amounts of accrued debt in this election may look small, but former Ethics commissioner Joe Lynn points to a disturbing pattern in which Sutton-controlled committees were insolvent before the election, then raised funds later or, as in the case of the Committee on Jobs, magically saw their debts forgiven.

"If I am a candidate running for mayor, like Gavin Newsom, and I personally rake up $100,000 in debt and have a big financial statement, then that means there’s a creditor willing to advance me those funds," Lynn said. "But if the debt has been raked up by a ballot measure committee, then who is responsible? Why would vendors spend $10,000 for that committee unless they knew that debt was wired from the get-go?"

But the result is the same: voters don’t know who donated to the campaign until after the votes have been cast. A clear historical example of this debt scheme can be seen in the June 2006 No on D Laguna Honda campaign. In its last preelection report, No on D had $59,750 in contributions, $18,664 in expenditures — and $130,224 in debt.

But during the 16 days before the election, No on D suddenly got $110,000 in late contributions from the usual suspects downtown, including $2,500 from Hellman, $15,000 from Turner Construction, $10,000 from Wilsey, $2,000 from the San Francisco Chamber of Commerce, and $2,500 from the Building Owners and Manufacturers Association of San Francisco.

As Lynn explains, campaign finance laws only require disclosure of contributions, not expenditures, made in the 16 days before an election — and only $64,000 worth of the contributions used to pay off No on D’s accrued expenses were disclosed, with $10,000 each from the California Pacific Medical Center and Kaiser Permanente trickling in on or after Election Day.

This year campaign finance watchdogs like Lynn note that the Sutton-controlled Yes on H–No on A committee has been hiding its contributors. In its first preelection report, filed Sept. 22, Yes on H showed $113,750 in contributions, $111,376.18 in expenditures, and $69,806.98 in accrued debt.

A month later it has doubled its contributions, tripled its expenditures — and had increased its accrued debt to $77,509. Lynn predicts that Yes on H’s accrued debt will be paid down by late contributions after the election or forgiven later on.

"The solution to the debt scheme is twofold," Lynn said. "Prosecute people doing the scheme and pass a law prohibiting campaigns from making more expenditures than they have contributions. Technically there is nothing illegal about reporting more debt that you have the cash or contributions to pay, but no businessperson regularly offers services in situations where it isn’t clear that they will be paid."

Since the Oct. 25 filing deadline, late contributions have continued to pour into No on E big-time, for a total of $59,500. That includes $25,000 from the Committee on Jobs, $2,500 from Jonathan Holzman, $6,000 from Elaine Tsakopoulos-Kounalakis, $1,000 from Chris Giouzelis, $1,000 from Nick Kontos, $1,000 from Farrah Makras, $1,000 from Victor Makras, $1,000 from Makras Real Estate, $5,000 from John Pakrais, $1,000 from Mike Silva, $1,000 from Western Apartments, $5,000 from Maurice Kanbar, and $5,000 from the San Francisco Apartment Association PAC.

The Yes on A committee hasn’t used the accrued debt scheme, but it has been the second-largest recipient of late contributions. It received $57,000 in late contributions, with donations from Engeo ($1,000), Singer Associates ($2,500), Trinity Management Services ($10,000), Elysian Hotels and Resorts ($5,000), Luxor Cabs ($1,000), Marriott International ($15,000), the SF Police Officers Association ($2,000), Sprinkler Fitters and Apprentices ($1,500), Barbary Coast Consulting ($2,500), and SEIU International ($3,397.14).

No on H (Neighbors Against Traffic and Pollution) received $4,500 in late contributions, with donations from Norcal Carpenters, Alice and William Russell-Shapiro, and Amandeep Jawa. And in what looks like a classic case of hedging bets, Singer Associates has made a $2,500 late contribution to both Yes on H and No on H.

Steven Mele, who is treasurer for Yes on A and No on H, told the Guardian, "There’s some people that time their contributions, but their names are out there, reported on public sites. A lot of corporate money comes in prior to the last deadline, then some afterwards. If campaigns are running with a lot of accrued debt, then those people must have an idea of what money is going to come in."

Unlike the campaigns controlled by the Sutton Law Firm, Mele’s committees, which work with Stearns Consulting, are not carrying massive loads of unpaid debt. Yes on A had received $302,452 and spent $279,890 and had $17,749 in debt as of Oct. 25. No on H had received $134,458 and spent $124,088 and had no debt as of Oct. 25.
Mele also believes that while campaign finance rules were written to make the money trail more transparent, "They’ve resulted in the public being inundated with so much information that they tend to glaze over."

Campaign sewer overflows

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› amanda@sfbg.com

The flow of election cash is often a filthy river that you wouldn’t want to drink from, and a recent local lawsuit, coupled with a new bit of state legislation, has muddied the waters even more.

On Sept. 20, US District Court Judge Jeffery S. White granted a preliminary injunction preventing the city from enforcing key sections of its Campaign Finance Reform Ordinance.

Two local groups with a sordid history of influencing elections with large chunks of cash — the Building Owners and Managers Association and the Committee on Jobs — argued in court that campaign contribution limits violate the First Amendment by financially curbing the ability to communicate a message (see "Pressing the Scales," 8/22/07). The contribution limits of independent-expenditure committees stumping for candidates were set by the voter-passed Proposition O in 2000 after the 1999 reelection of Mayor Willie Brown, in which deep-pocketed business interests backed the mayor in exchange for preferential treatment by city hall.

Prop. O capped contributions to IEs at $500, and people and corporations are allowed to give no more than $3,000 total (e.g., $500 each to six committees).

Those caps are no longer enforceable.

Similar injunctions have been granted in San Jose and Oakland, also destroying local contribution caps in those cities. San Jose appealed to the 9th Circuit Court of Appeals and is waiting for a ruling. Ann O’Leary, a lawyer in City Attorney Dennis Herrera’s office, told us San Francisco is waiting to see what happens in San Jose before making the next move, though an appeal is planned regardless of that outcome. In the past the Supreme Court has ruled that the appearance of corruption in elections is sufficient grounds for restricting campaign contributions, and San Francisco’s history provides ample examples from which to draw to support that decision.

"We don’t know if it will get back to court before November 2008," O’Leary said of the case, "but it’s certainly something to watch in that election."

Meanwhile, over in Sacramento, legislators on cruise control recently passed a bill that may make it impossible for San Francisco to write its election laws anyway. Gov. Arnold Schwarzenegger just signed Assembly Bill 1430, and according to the legislative digest, the new law "prohibits local governments from adopting campaign finance ordinances that restrict communications between an organization and its members unless state law similarly restricts such communications, or by regulation by the Fair Political Practices Commission."

Proponents say the new law will resolve conflicting interpretations of campaign finance regulations, but opponents say it preserves wide-open loopholes in the Political Reform Act that local jurisdictions have tried to close. For example, a person may be prohibited by the city from giving more than $500 to support a certain candidate. That person can, however, give as much as $30,200 to the Democratic Party, which can then "communicate" a message of support for that candidate to its members.

A recent and egregious example: in San Diego the county Republican Party spent almost $1 million on local races in 2006.

The bill was authored by Carlsbad Republican Martin Garrick and flew through the State Assembly unopposed. Assemblymember Mark Leno told us it came to the Elections Committee, on which he sits, with no vocal opposition, so he gave it an aye. One of his aides, however, became concerned and started making calls. Eventually, Common Cause and the League of Women Voters rallied against it, but it only hit a speed bump in the State Senate. There was still too much support from the Democrats to kill it. Leno said, "It’s an uncommon situation to have the left and right supporting something that in fact runs counter to local election laws."

Only nine senators opposed the bill, including Carole Migden and Leland Yee. "She thought it was an end around campaign finance laws," Migden aide Eric Potashner told us.

San Francisco’s Ethics Commission also took a look at the bill and gave it a 5–0 thumbs-down, resolving to send a letter to both the mayor and the Board of Supervisors urging them to speak against it. Neither did. "The Mayor supports AB1430," his press secretary, Nathan Ballard, told us by e-mail. "He has some concerns about the local control issue, but ultimately those concerns are overridden by his belief that groups like labor unions and the Democratic Party should be allowed to communicate directly with their members."

The governor’s signature now makes it more difficult to pass future measures like Prop O.

Neither the injunction nor the new law seems to be affecting the Nov. 6 election — the FPPC won’t be ruling on AB 1430 until January, though the commission is holding a hearing for interested people to speak in Sacramento on Nov. 2.

Though BOMA and the Committee on Jobs stated in their filing for the injunction that the law harms their ability to raise and spend money for candidates in this November’s election, nothing on record with the Ethics Commission shows they’ve been putting up a lot of money for Newsom, Kamala Harris, or Michael Hennessey. But there’s always next year.

When Clear Channel Attacks Prop. K…

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…they do it dirty and big time

A bunch of huge billboards and fliers popped up all over San Francisco yesterday, like some kind of overnight pox, trying to persuade people to vote against Prop. K

Prop. K is an advisory measure on this Novermber’s ballot that adopts a policy of restricting advertising on street furniture and City buildings.

Badflyer.jpg

But until yesterday, when I drove past one of this monster billboards while stuck in traffic, I had never heard of the No on K-Citizens to Protect Muni Services Committee.

What caught my eye, other than the enormous ad, was the line that said “Major Funding by Clear Channel Outdoor and Outdoor Advertisers.”

Clear Channel numbers, of course, among the folk who would lose big time if ads such as these were restricted, so their opposition is predictable.

Clear Channel are also the folks who want to place ads on all the City’s bus shelters, in return for fixing the shelters up and installing new ones.

These are also the folks who argued that they don’t have to tell us their projected profits from coating our shelters with signs, because they are “renting” City space, rather than using it for free.

Curious, I called the Ethics Commission this morning to find out why I had never seen this Committee’s name before.
tThe guy on the other end of the line had never heard of them either, and it took an hour before someone got back to me and said, ‘Wow, How did you find out about them? They only filed with us today. Which is in violation of Ethics’s own rules.”

Turns out that this mystery committee already has $100,000 to play with, so expect to see more of the above ads all over, and expect that Clear Channel isn’t worried about having to pay some piddling, to their mind, fine to Ethics, later on.

PS The treasurer for No on K is Bill Hooper, President/General Manager of Clear Channel Outdoor, Nothern California Region.

Jerry Brown gives City green light to sue Jew

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Jewsmall.jpg
Photo by Charles Russo

The sun may be shining, but it’s raining legal cats and dogs for suspended Sup. Ed Jew.

On the eve of a preliminary hearing by the City’s Ethics Commission into charges of official misconduct by Supervisor Jew, California Attorney General Edmund G. Brown Jr. has granted City Attorney Dennis Herrera’s application for leave to sue in quo warranto to remove Jew from the Board of Supervisors for failure to comply with the City Charter’s residency requirements .

The ruling comes a little more than three weeks after Mayor Gavin Newsom initiated official misconduct proceedings against Jew and suspended the District 4 supervisor, replacing him, at least for now, with political rookie Carmen Chu.

City Attorney Herrera says that in llight of the Ethics Commission’s preliminary hearing tomorrow, he intends, “to carefully evaluate” the legal options.
“In the coming days, I will decide how best to represent the City’s interest in concluding a crisis that has clouded the legitimacy of San Francisco’s representative government for too long,” Herrera said in a press release.

Tomorrow’s preliminary Ethics Commission hearing takes place at 1:30 p.m. in Room 416, City Hall.

Not dead yet

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zombies4.jpg
Guardian photo by Charles Russo
Chicken John Rinaldi’s quest to become the first San Francisco mayoral candidate to qualify for a grant of taxpayer money is still lumbering along like the zombies that attacked him last week, more than a month after the Aug. 28 deadline for raising $25,000 from at least 250 city residents. The Ethics Commission last night voted unanimously to allow Rinaldi one more submission of proof that those who gave to him through PayPal are city residents, overruling Ethics director John St. Croix that Rinaldi doesn’t qualify. At issue are whether to count contributions from city residents whose current addresses doesn’t match their drivers license addresses, a fairly common circumstance for the artists and techies who make up Rinaldi’s base. If the campaign can satisfy Ethics, it gets $50,000, and so its quest inches forward like the undead.

“Public Financing is like Teenage Sex”

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“Public Financing is like teenage sex.”

So says Chicken John Rinaldi, who has just spent the last month running around like the proverbial headless chicken, as he tries to reconcile reality, which is messy and imperfect, with public financing law, which is rigorous and well-ordered.

Rinaldi100_2045_resized.jpg
Chicken John Rinaldi back in the pre-public financing day when he and his fake moustache had time to chill out at the Temple Bar and educate people, including Fog City’s Luke Thomas, on the correct way to pronounce Ri-NAL-di

“When I was 15 years old, I was very aware of what all those girls had, but there was no chance of my getting it,” said Rinaldi, on learning that his application for public financing in the Mayor’s race has been rejected. For now.

Because, and here’s the tease, the Ethics Commission has given Rinaldi another five days to try and satisfy public financing requirements and then, maybe, just maybe, he can get a piece of it.

“I’m reminded of teenage sex, because I am experiencing the same level of frustration,” said Rinaldi, who has spent the last few weeks knocking on contributors’ doors, trying to get photocopies of their driver’s license, so he can prove that those who each gave up to $100 to his campaign actually live in San Francisco.

And then there are his pesky problems with Paypal, since some efilings took over 48 hours to post, thereby blowing public financing deadlines along the way.

“It’s not the Ethics Commission’s fault, but the way the rules are written,” added Rinaldi, who, much like a horny teenage boy, isn’t about to give up on his quest. “Of course, I’m going to refile!”

How wifi might work in SF

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Slate has a great piece by Tim Wu, author of “Who Owns the Internet,” that points out why Mayor Newsom’s public-private partnership idea for municipal wifi will never work.

Wu’s point (also bloggednicely in leftinsf)

“The basic idea of offering Internet access as a public service is sound. The problem is that cities haven’t thought of the Internet as a form of public infrastructure that—like subway lines, sewers, or roads—must be paid for. Instead, cities have labored under the illusion that, somehow, everything could be built easily and for free by private parties. That illusion has run straight into the ancient economics of infrastructure and natural monopoly. The bottom line: City dwellers won’t be able to get high-quality wireless Internet access for free. If they want it, collectively, they’ll have to pay for it.”

And yet, Newsom’s crew are out raising money for a ballot measure, Prop. J, that would lock the city in to a “public-private” free-lunch partnership. I’ve just looked at the Ethics Commission filings on it, and in many ways it’s the usual Newsom bunch: Eric Jaye of Storefront Media, Newsom’s chief consultant, is running the campaign. Jim Sutton is doing the legal work. The money’s come from downtown types (the Orrick, Herrington and Sutcliffe law firm gave $500), Newsom’s father (who gave $1,000) Newsom’s political allies (Assessor Phil TIng gave $250) and labor groups that want to stay on the mayor’s good side or owe him favors (Sign painters, transport workers, and firefighters). What a waste of time and money — unless this whole thing is about providing a back-channel way to give cash to the mayor.

Jew out, Chu in. Who? Chu

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Mayor Gavin Newsom finally stepped up today, filing official misconduct charges against the twice-indicted Sup. Ed Jew, and removing him from office pending permanent removal by the Ethics Commission and Board of Supervisors. A PDF of the charge and related letters is available here. That overdue action was long-anticipated, so the real news today is that he has named his 29-year-old deputy budget director Carmen Chu to fill the slot, starting with today’s board meeting.
Chu is a virtual unknown in local politics, but those who have worked with her tell us that she’s smart, attractive, not very political, and a sort of quiet, behind the scenes policy wonk. Given her age and the huge opportunity that Newsom has just handed her, most people assume that she’ll be a loyal vote for Newsom. Yet Chu did play a role in this year’s divisive and highly politicized budget battle between Newsom and Sup. Chris Daly, serving as the point person on two of Newsom’s most troubling (and ultimately unsuccessful) budget gambits: cutting funding for local AIDS programs and reducing the number of psychiatric beds at General Hospital. It was an understandable role given that she was with the Department of Public Health before moving over to the Budget Office.

Anemic debut for public mayoral financing

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This year offers the first mayor’s race in which candidates can qualify for public financing to supplement their campaign spending. But of the 14 candidates who originally entered the race, only two — Tony Hall and Chicken John Rinaldi — managed to file the financing paperwork by the Aug. 28 deadline.

Two days later, Hall dropped out of the race, leaving Rinaldi as possibly the sole recipient of money from city coffers. Mayor Gavin Newsom doesn’t qualify because he has already exceeded the city’s voluntary $1.37 million spending limit.

"I’m withdrawing because not enough people are willing to stand up and hold this clown Newsom accountable for the mess he has made of this city," Hall told the Guardian the day after he quit. "I am no longer willing to risk the happiness of my family and the welfare of my supporters, who have been intimidated and harassed."

Hall’s withdrawal invalidates his 2007 financing application, in which he claimed to have raised about $27,000 from city residents. To qualify for public financing, candidates must prove that by the Aug. 28 deadline, they received at least $25,000 from 250 local residents, which then qualifies them for $50,000 from the city.

After that step, eligible candidates who can raise $100,000 and meet various conditions can receive up to $400,000 from the city. The next $400,000 that such candidates raise themselves will be matched dollar for dollar by the city, meaning that successful candidates can receive $850,000 in public funds and even more if the $7 million fund isn’t depleted and an opponent raises many millions of dollars.

With all eyes now on Rinaldi, Ethics Commission director John St. Croix told us that his staff is reviewing Rinaldi’s application and should make a decision this week. "But keep in mind that even if Rinaldi doesn’t qualify initially, we’ll show him where the holes in his application are, and he’ll have a chance to fix them," St. Croix added.

If Rinaldi’s roughly $26,000 in local contributions check out, he’ll receive notice that the city is giving him $50,000. If they don’t, he’ll have the option to resubmit new documentation within five days to prove that all of his qualifying contributions were received before the deadline.

Contributions must be accompanied by a copy of the check, a signed contributor card, and a copy of a utility bill or driver’s license to prove the contributor has local residency. After the election, candidates who receive public funds are subject to a mandatory audit of their campaign expenditures and campaign bank account statements.

With so few candidates even potentially qualifying for public financing, is it possible that the $25,000 qualifying threshold for public financing is set too high? Former Ethics Commission member and staffer Joe Lynn said that finding 250 residents with a C-note each to spare isn’t easy for most candidates, especially this early in the race.

"No one has that many friends, and most money comes in the last week of a campaign, when people are placing their bets," said Lynn, who believes that the $25,000 threshold would have been more easily attainable if better-known progressives had gotten into the race.

"And Tony Hall would have had an easier time raising money if there had been a candidate on the left, instead of just one chicken in the pot," Lynn added, recalling how, at the start of an election cycle, all candidates have big eyes and believe they’re going to raise lots of money.

"But this isn’t a free giveaway," Lynn said. He warned that the city also investigates each contribution to verify its authenticity and that candidates who violate the rules face hefty fines. "Once you get into the ring, you’re a serious player — and they’re going to treat you seriously," Lynn said, noting how complicated it is to meet all of the standards for public financing.

Even if no mayoral candidates make it over the public financing hurdles this time around, Lynn believes such funds are essential if San Francisco wants to nurture its grassroots activism — and with it, the people who may have original solutions to the same old problems.

"The function of the grass roots isn’t to win elections but to present the agendas of folks who differ from the Chronicle," Lynn said, noting that of the $7 million in public funds available this year, any money not used will be available in 2011, when more people are expected to run and qualify for funds.

"It was understood that this year there wouldn’t be as many people running," St. Croix said, "because the incumbent is running, but that there will probably be more in 2011, by which time we will have more experience of public financing and the mayor’s race."

Sup. Ross Mirkarimi, who authored San Francisco’s public financing legislation, said the goal of the law is to "equalize the opportunity" of running a campaign.

"It does help if you have name recognition and advanced preparation, but this isn’t about cutting corners," Mirkarimi told us. "It was designed to reward people for organizing efforts that are commensurate with an organized campaign."

Chicken and the pot

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› steve@sfbg.com

Chicken John Rinaldi — the fake-mustachioed showman and arts facilitator who is running for mayor — was late for our Sept. 7 interview, but his roommate let me into the candidate’s César Chávez Street home–office–performance space to wait for him.

Rinaldi was busy at the Ethics Commission office, trying to become the first and only mayoral candidate to qualify for public matching funds, a goal that requires raising at least $25,000 from among 250 city residents — and having the paperwork to prove it, which is proving the hard part for someone traditionally more focused on big ideas than small details. (See sidebar.)

He says he’s raised about $32,000 since getting into the race last month, including $26,700 from city residents, $12,000 of which came in on the deadline date, Aug. 28. It’s an impressive feat that could transform this marginalized, improbable candidate into one of the leading challengers, despite his enigmatic persona, maddeningly elusive platform, and admission that he can’t possibly win.

But Rinaldi, 39, who makes his living from his many performances and projects, isn’t your typical politician, as his history and home demonstrate. The high ceilings hold rigging and pulleys for the regular performances he hosts, although his bar and a pair of church pews were pushed back against one wall this day to make more space for campaign activities. Dammit the Wonder Dog, one of many characters Rinaldi has promoted over the years, slept on a deflated air mattress still dusty from Burning Man.

The red brick walls of his main room looked like an art gallery, with paintings by Ani Lucia Thompkins listing prices of at least $2,000 each and pieces by James McPhee going for less. On another wall hung the massive sign for the Odeon Bar — which Rinaldi owned from 2000 to 2005 — with Odeon spelled diagonally from right to left.

In the kitchen area, just inside the front door, the walls held framed posters from many of his projects — the Life-Sized Game of Mousetrap, Circus Ridickuless (the poster for which, at its center, has Rinaldi’s face and the label "Chicken John, Ringmonster"), the Church of the Subgenius (in which Rinaldi’s eponymous partner on The Ask Dr. Hal Show is some kind of high priest), and "The Cacophony Society Presents Klown Krucifixation" — as well as a framed poster of Pippi Longstocking.

Suddenly, Rinaldi blew in the front door, apologized for his tardiness, and declared, "The fucking Ethics Commission. I’m in so much trouble. I’ve probably already racked up $5,000 in fines."

Nonetheless, he may still qualify for at least $50,000 from the taxpayer-funded mayoral public financing program that debuted this election season, giving his campaign ample resources to promote his message of nurturing San Francisco as a "city of art and innovation."

My first significant interaction with Rinaldi happened about three years ago, when he and fellow Burning Man artist Jim Mason launched a lively rebellion against Black Rock City LLC’s control over the countercultural event (see "State of the Art," 12/1/04) and created a shadow organization, dubbed Borg2, to promote art.

Rinaldi’s focus and rhetoric then — arguing for a "radical democratization" of the art-grant selection process and the creation of a more inclusive discussion of the direction and future of both Black Rock City and San Francisco — are echoed in his current mayoral campaign.

"What I’m talking about now is the same thing I was talking about with Borg2. It’s the same thing," Rinaldi told the Guardian.

It’s about inspiration and participation, he said, about coming up with some kind of vehicle through which to facilitate a public discussion about what San Francisco is, what it ought to be, and the role that can be played by all the Chickens out there, all the people who help make this an interesting city but aren’t usually drawn into political campaigns or other conventional institutions.

"The number one qualification for mayor is you have to be passionate about the city you’re running," Rinaldi said. "The left of San Francisco can’t agree on anything except the idea of San Francisco."

And it is Rinaldi’s San Francisco that helped him transform his pickup truck into a "café racer" that runs on coffee grounds and walnut shells, an alt-fuel project inspired partly by the Green Man theme of this year’s Burning Man. It is the San Francisco that supports his myriad projects — from wacky trips aboard the bus he owns to offbeat performances at his place — and asks for his support with others’.

"This is part of the innovation thing," Rinaldi said of his candidacy. "Take a mayoral campaign and turn it into an artwork project that raises interesting questions and ideas."

But should that be funded by taxpayers? Mayor Gavin Newsom’s campaign manager Eric Jaye said he has concerns about Rinaldi getting money from that source. "It would be interesting to see public money go to someone’s art project," Jaye said. "This is not the intent. The intent was for this to go to a legitimate candidate."

Yet how did Rinaldi raise $12,000 in one day? "I sent out one e-mail," he said. "At one time there were 12 people outside my door, sliding checks through the slot."

Again: How? Why? Rinaldi responded by quoting Albert Einstein, "’There is nothing more powerful than an idea whose time has come.’" But when you try to pin down Rinaldi on what that idea is, why his candidacy seems to have resonated with the underground artists and anarchists and geeks of San Francisco, the answer isn’t entirely clear. And he disputes the idea that this is about him or his connections.

"These aren’t fans," Rinaldi said of his contributors. "They are equals in a city of art and innovation. It’s just my time…. I asked for something, and they gave it to me…. People don’t necessarily support me, my ideas, or my platform."

Among those drawn to Rinaldi’s campaign is Lev Osherovich, a 32-year-old postdoctoral researcher at UC San Francisco who helped with fundraising and administration and eventually became the de facto campaign manager.

"It must be quite a surprise for someone who appears to be a joke candidate to raise so much money and so much awareness," Osherovich told us. "But Chicken has a tremendous energy and a real gift for communication…. Outsider political movements are a great tradition in San Francisco — people using the political process as a vehicle for getting ideas out."

Yet even within his community, Rinaldi has his detractors, such as the anonymous individuals who formed the fake campaign Web sites www.chickenmayor.org and www.voteforchicken.org (Rinaldi’s actual campaign Web site is www.voteforchicken.com, and his personal one is www.chickenjohn.com).

The latter fake campaign site lists Rinaldi’s primary goal as "Chicken John needs attention."

Ask Rinaldi what he does need for this campaign, what his real goals are, and he sounds unlike any politicians I’ve ever heard.

"I don’t need a winning strategy. I don’t need any votes. We just want to raise the level of the conversation," said Rinaldi, who refuses to criticize Newsom on the record, insisting that the incumbent "should be treated with respect and admiration."

That conciliatory treatment has caused some to speculate that Rinaldi is aiming for a job within the Newsom administration, perhaps a staff position on the Arts Commission. But Rinaldi insists that slamming the mayor is an ineffective way to start a productive conversation and that his real goals are less tangible than that.

"The intention of my campaign is inspiration, to leave San Francisco politics better than I found it," Rinaldi said. "When I come out of this experience on the other side, I’ll be smarter…. It’s my intention to get an education and to have the people of San Francisco help give me that education."

As maddening and incomprehensible as that lack of political motivation and policy goals is to seasoned political professionals and journalists, many of his supporters find it refreshing.

"Politicians aren’t the only people who can navigate the world of politics," Rinaldi said, specuutf8g that some of his support comes from people who are disenchanted with conventional politics and drawn to his fresh, outsider approach to the race.

"It’s somewhat different than the usual political campaign," Osherovich said with obvious understatement, noting that the campaign has received so much support from people "because they know Chicken can do great things and great things are going to come out of this."

At the very least, interesting things are bound to come out of this campaign. Rinaldi is deliberately vague about exactly how his campaign will unfold or what his endgame might be, except to remind us that good stories have a beginning, a middle, and an end. And he’s now at the beginning.

"More than half of what I do is a dismal failure," Rinaldi admitted. "But failure is now we learn."

Yet his successful fundraising over the past month is leading some to believe that this campaign won’t be a failure. Rinaldi said he’s been in daily contact with the Ethics Commission and is fairly confident he can satisfy its concerns and win public financing.

"I received a certain amount of funds, and I’m supposed to document where the funds came from by the 5 p.m. deadline. They said it wasn’t good enough, but I now have what’s good enough," Rinaldi said. "They are doing a lot of hand-holding. It’s like the DMV. It’s great."

So now he’s off and running.

"I just hired a staff. This is not a joke anymore. I’m serious," Rinaldi said, later adding an important caveat: "I could definitely go to jail if I do this wrong. I understand that."

PS Rinaldi said he has already booked 12 Galaxies — which has hosted his The Ask Dr. Hal Show and other projects — for his election night party, which he’s dubbed "The Loser’s Ball."

Leno, Migden and Sacramento madness

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migden.jpg leno.jpg
Migden, Leno: Who’s killing the bills?

By Tim Redmond
It’s been a wild few days in Sacramento.

On Thursday afternoon, the state Senate narrowly passed a terrible campaign finance bill that could strictly limit the ability of local governments to control political money. Although Common Cause and the League of Women Voters opposed it (as did San Francisco’s Ethics Commission director, John St. Croix) it had the support of the Democratic Party and had sailed through the Assembly, 77-0. On the Senate floor, Carole Midgen and Sheila Keuhl both made strong speeches against it – and almost, almost convinced enough of their colleagues to vote it down. Instead, it squeaked through 27-9 (needing two-thirds).

Migden at least tried. Good for her. Leland Yee voted the right way. But the arm-twisting by the party was too much.

And frankly, the opponents of the bill weren’t exactly on their game: There was no opposition when the bill went through the Assembly, and when it came to the Senate floor, the good guys were noticably absent.

Meanwhile, Randy Shaw reports on BeyondChron that Migden is making sure some of Assemblymember Mark Leno’s key bills never get a vote on the Senate floor. The reason: Migden (and her ally, state Senate President Don Perata) don’t want Leno to have any legislative success to brag about next spring when he challenges Migden in the Democratic primary.

See, one of Migden’s central arguments is that she’s an effective legislator. Sure, she cuts deals, she compromises – but in the end, she gets things done. And pointing out that none of Leno’s bills for 2007 actually became law would be a powerful campaign theme.

Among the Leno bills held hostage: A measure that would limit toxic chemicals in household furniture (AB 709) and AB 1590, which would allow San Franciscans to vote to raise local car taxes to provide revenue for city services.

Migden’s office insists that Shaw has it wrong: Tracy Fairchild, communications director, told me: “The root cause of Assemblyman Leno’s problems lies not with Senator Migden but rather with the entire Senate, whose bills met with unusually harsh treatment last week in the Assembly Appropriations Committee which he chairs. Rather than tell that truth, Mr. Leno has chosen to disparage Sen. Migden’s reputation by blaming all his problems on her and that is simply not the case.”

But Leno has another take: “Eight of the nine bills by Carole Migden that came to my committee [Appropriations] made it out, and I will make sure that every one of her Senate bills will leave the Assembly floor.” Only five of Leno’s 13 bills went forward, even though the ones that were bottled up had little real opposition.
The one Midgen bill that Leno didn’t let out of committee, interestingly, was SB 11, which would have extended domestic partnership rights to unmarried opposite-sex couples. Leno says the $33 million price tag doomed it, but I think the real problem was that, while I supported the bill and think it’s a fine idea, there wasn’t any real visible upwelling of support for it.

Overall, the Assembly Appropriations Committee let 74 percent of Senate bills out; only 63 percent of Assembly bills made it out of the corresponding Senate committee.

Part of what’s going on here may be the natural tension between the houses, but I think that Perata is sending a message to Leno and his colleagues: Don’t you dare take on an incumbent senator, or your bills will be held hostage.

I suspect that if Migden doesn’t like this message (and she shouldn’t) she could tell Perata to back off, and Leno’s bills would move forward.

Will Gavin debate with Tony Hall out of race?

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by Sarah Phelan

Gav.jpg
While apparently not available for debating, Gavin has been spotted in City Hall like at this Aug. 14 event where he posed with a pretty unidentified brunette.

The day after former supervisor Tony Hall dropped out of the mayoral race, he told me that in the three weeks that
has passed since he filed to run, his campaign offered to meet Newsom, “in any format to have an intelligent informed debate,” but to no avail.

The Guardian has offered to sponsor a debate, but so far Newsom’s camp has not replied to our request.

Newsom’s campaign manager Eric Jaye was quoted in today’s Chronicle as saying Newsom will participate in debates with the other candidates– a promise Jaye also made to us three weeks ago.

Meanwhile, Hall denies that his decision to drop out was connected to a City’s Ethics Commission investigation into allegations that he misused thousands of dollars in contributions to his 2004 re-election campaign, when he was District 7 supervisor.

Ethics equity

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› news@sfbg.com

In the 2003 mayor’s race, Gavin Newsom’s campaign outspent Matt Gonzalez’s nearly six to one, shattering all previous city spending records and leaving the campaign committee with a $600,000 debt that wasn’t cleared for three years.

An apparent plan to pay down that debt illegally with money raised by a separate unregulated inaugural committee was the subject of several Guardian stories at the time (see “Newsom’s Funny Money,” 2/11/04) and corrective actions by Newsom treasurer Jim Sutton, although top San Francisco Ethics Commission officials tried to cover it up rather than investigate it.

It was one of several Newsom-campaign irregularities that raised red flags, including the return of dozens of checks by contributors who had exceeded the $500 limit, the failure to notify regulators in a timely fashion that the campaign had broken a voluntary spending cap, and issues related to whether the heavy campaign debt should have been considered a loan and regulated as such.

So guess whose campaign has recently been investigated and fined? And guess whose has never been scrutinized by Ethics Commission officials, who claim they don’t have enough resources to do a “global canvas” of all the campaigns from 2003, as they’ve traditionally done each year?

Gonzalez campaign treasurers Randy Knox and Enrique Pearce this month agreed to pay $3,300 in penalties to the Ethics Commission over 234 names of contributors that were filed with missing or incomplete donor information, 8 percent of the total. The agency began its review three years after it received an anonymous complaint in the days leading up to the runoff election, exactly when the Newsom camp dished the same allegations to reporters.

“It’s my fault, but it was inadvertent and not deliberate misfeasance,” Knox told the Guardian recently. The Ethics Commission concluded that no evidence proved a willful attempt to defraud the public and that most of the donors had failed to cite their street addresses or to provide complete employer information.

But to Knox and Ethics reformers we’ve interviewed for a recent series on the commission, there’s an important issue of fairness involved in this matter. Gonzalez, who did not return our calls seeking comment, was contemputf8g another run for mayor last year when he was contacted by Ethics officials and threatened with a $30,000 fine for violations that were more than three years old. “It was clearly politically motivated, to clear the field for the mayor’s race,” Knox said.

Yet even if that wasn’t the case, why didn’t Ethics Commission staffers review the Newsom campaign after they decided to pursue Gonzalez? And why did Executive Director John St. Croix order staffers not to do the normal global canvas of campaign documents for 2003 — and only 2003 — claiming the agency didn’t have enough resources and needed to “triage” its work?

“It seems odd that we would allow an anonymous complaint, which is informal, to create an exception to our triage order for 2003, especially since the [percentage] of Gonzalez contributions with info errors was apparently less than the state standard for filing officers to require mandatory amendments,” Ethics officer Oliver Luby noted to agency bosses earlier this month, according to internal memos the Guardian obtained through a Sunshine Ordinance request.

St. Croix, for his part, didn’t take over the agency until a year after the 2003 election. He told the Guardian that dozens of other complaints needed to be investigated too, but his office, with only one investigator, couldn’t do so until years after the fact.

“There was a point in 2006 where I said we’re not going to go back and begin anything new for election years prior to 2004,” St. Croix acknowledged. “We had so many backlogs. We were just hopelessly mired, and we kind of needed a fresh start.”

Sutton did not return our calls for comment, but Newsom’s campaign manager then and now, Eric Jaye, told us, “I’m empathetic to [the Gonzalez campaign]. I’m sure they weren’t intentional errors.”

He added that just because the Ethics Commission didn’t investigate the Newsom campaign after the election doesn’t mean the mayor got a free ride. “I feel like everything we do is audited and scrutinized,” Jaye said, noting that the campaign was fined $2,500 by the California Fair Political Practices Commission during the race for an illegal mailer.

Still, even if the commission won’t disclose ongoing investigations, as far as the public knows right now, the Ethics Commission has repeatedly ignored problems with the 2003 Newsom campaign and others managed by Sutton. Consider:

•Several entities affiliated with a real estate outfit called Olympic View Realty made a total of $14,000 in contributions to the Newsom campaign, but filings didn’t reflect the otherwise clear association. “Newsom’s failure to report correct cumulative-to-date amounts is an ongoing violation of state law,” Luby wrote in the aforementioned memo.

•The Newsom campaign’s $600,000 in postelection debt wasn’t paid off completely until late last year, much of it being carried by Jaye’s consulting firm and Sutton. Former Ethics staffer and commissioner Joe Lynn believes that could amount to an unreported loan to the campaign. “If Ethics was doing its job, it would investigate Newsom’s use of accrued debt,” Lynn told us.

•The Building Owners and Managers Association of San Francisco — a key Newsom supporter — urged members in December 2003 to make unlimited donations to Newsom’s inaugural committee that would also be used, it said, to help cover “transition activities,” which should legally be subject to contribution limits. But Ethics, as far as we can tell, never probed whether inaugural committee funds were used inappropriately for the new mayor’s transition to room 200.

•Newsom may have collected contributions exceeding the legal limit. During runoff elections, candidates are allowed to accept additional contributions from individual donors who have otherwise reached the maximum of $500. The total then permitted would be $750, which can be used to cover debt from the general election. As soon as general-election debt is retired, however, the candidate can no longer take advantage of the increased limit. But as far as the public can tell, there was no analysis conducted by Ethics to determine if Newsom’s campaign continued to collect $750 checks after having paid down its general-election debt.

St. Croix said most pending enforcement cases, more than ever before, were initiated by staff rather than complainants and the ideal scenario would be to emphasize aggressive earlier sweeps of all the campaigns. But unfortunately, he said, “we’re far away from that.”*

 

At the crossroads

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Part three in a Guardian series

› gwschulz@sfbg.com

San Francisco Ethics Commission executive director John St. Croix has admitted that his office knew in 2005 about the alleged laundering of public money into a San Francisco City College bond election campaign — well before the story broke in newspapers in April — but did nothing to investigate.

That startling revelation knits together two concurrent series that the Guardian has been running for the past two weeks: one on City College’s deceptive and unaccountable use of bond money and another on the uneasiness local watchdogs feel about the Ethics Commission’s ability and willingness to mete out balanced punishment to elections-law violators.

When news reports surfaced in April that City College allegedly had diverted up to $30,000 in public money to a bond election campaign committee, Chancellor Phil Day moved quickly to limit the fallout. So did independently elected trustee Rodel Rodis, who along with six other board members is responsible for controlling and managing the San Francisco Community College District.

During meetings organized that month to address the matter, Day came clean and blamed everything on a "relatively new" assistant vice chancellor. At least two trustees, one of whom had been recently elected, still wanted to know more about why it was allowed to happen. Rodis, on the other hand, complained that hiring an independent investigator at a cost of $75,000 to look into the matter was too expensive and framed the stories — written by San Francisco Chronicle investigate reporter Lance Williams — as an unfair attack on the college.

"Let’s be mindful that we’re still in a budget crisis and we still need to watch taxpayer money," Rodis said at one of the meetings.

Unlike Rodis, District Attorney Kamala Harris didn’t treat the allegations as insignificant and is now reportedly probing possible criminal violations in connection with the scandal. The investigation, Williams wrote recently, includes contributions made to the committee by contractors that did recent business with the school.

But where was the Ethics Commission during all of this? The controversy raises serious questions about why the agency never took any action against City College when, as its mission statement declares, its responsibility is to "actively enforce all ethics laws and rules, including campaign finance and open government laws."

Late in the commission’s July 9 meeting, St. Croix made the stunning admission that although his office knew about the allegations surrounding City College’s dubious handling of public funds all the way back in 2005, for some inexplicable reason it did nothing.

Staff shortages and poor financing have plagued the Ethics Commission since voters created it in 1993. Although the number of staffers has doubled during his three-year tenure, St. Croix nonetheless told the Guardian recently that his agency remains dependent on the public to help expose political candidates and campaign committees that break the law.

"We still rely on people and the city being watchdogs," St. Croix told us. "We’re supposed to be the eyes and ears for a lot of things, but we’re still extremely limited."

In this case, however, St. Croix’s office was well aware of allegations that City College bureaucrats had misappropriated public funds. The school’s Board of Trustees, along with Day’s office, created the Committee to Support Our City College in 2005 to convince voters to give the school $246.3 million in bond money to continue with a slate of capital works projects that began in 1997 and now are costing hundreds of millions of dollars more than anticipated.

The owner of a motorcycle training school claimed in a December 2005 letter to the Ethics Commission that he was told by the college to make a rent check for the regular use of school property payable to the committee instead of the school itself. Amazingly, the Ethics Commission pondered contacting the state’s Fair Political Practices Commission to disclose the allegations, which is the least it should have done, but never actually did so, as St. Croix has acknowledged only now.

"I take responsibility for that," St. Croix told us. "I don’t know who actually dropped the ball. But at the time we had less staff and there were a lot of things we were supposed to do and we weren’t doing."

Nor did the Ethics Commission contact the college to demand that it amend its campaign filings from that year to reflect the true source of that $10,000 payment and acknowledge itself rather than the motorcycle training school as a major contributor to the bond committee. St. Croix figured that could happen at the conclusion of the FPPC’s inquiry. Of course, the FPPC didn’t know about the allegations, at least not until the Ethics Commission finally contacted it in May, following the Chronicle‘s front-page stories.

The Ethics Commission’s lax approach to City College oversight also extends to trustees like Rodis, who has his own apparent campaign finance violations from his 2004 reelection campaign. That year, records show, his campaign failed to turn in three key election filings required to ensure that before heading to the ballot box, voters have a chance to see where candidates are getting their campaign money from. The commission sent his campaign several warning letters; just one of the filings finally arrived nine months later.

The trustee pointed to a campaign staffer when we contacted him regarding the tardy campaign statements. "We had someone working on the campaign who was supposed to do that," Rodis told us. "He indicated to us that everything was in order. We relied on him. We paid him. And then we found out later that he didn’t do what he was supposed to do…. It was one of those things that happen when you trust people."

The filing Rodis did manage to turn in shows that of the more than $44,000 he raised for his reelection effort that year, at least $1,700 had no identified donors, and other donations were marred by confusing data entry errors. An internal Ethics memo obtained by the Guardian that discusses the Rodis reelection campaign committee concludes that its poor reporting "appears to be a matter of willfulness and disregard for the law" and what belated filings do exist "present significant data problems." According to the memo, "Based on the record, significant questions remain regarding the true facts of the committee’s financing."

Rodis in 2004 won reelection to the board for the fourth time since he first became a trustee in 1991. According to our conservative estimates based only on the late filings, he could be liable for thousands of dollars in fines. *

Gutting campaign reform

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EDITORIAL A bill that could gut many local campaign finance laws is zipping through the legislature with the support of both the Republican and Democratic parties — and only a few activists seem to be paying attention. We’ve written about the bill, AB 1430 by Assemblymember Martin Garrick (R–San Diego), on the politics blog at www.sfbg.com. It has already cleared the State Assembly, 77–0, and is headed to the State Senate floor, where only one member — Carole Migden of San Francisco — has come out in opposition.

The Republicans and the Democrats love this bill because it would allow their parties to use unlimited amounts of money to support local candidates. That’s become increasingly common in this state; when cities set strict limits on contributions to political candidates, the candidates simply ask their big-money backers to give the money to the state Republican or Democratic Party — which then funnels the laundered, uncontrolled, and often unreported cash into local campaigns.

In fact, the bill comes from the San Diego GOP, which is angry that the San Diego Ethics Commission tried to crack down on nearly a million dollars in unregulated money that went to local races last year.

The bill talks about "membership communications" — as if the parties were simple nonprofits that wanted to send newsletters to their members. That’s not what’s going on at all, and everyone with any sense knows it. Here’s the real story: while the federal and state governments have refused to do any real campaign finance reform, cities and counties all over California have tried to fill the gap. The San Francisco Ethics Commission — for all of its obviously failings (see "Whose Ethics?," 7/11/07) — has the authority and the mandate to regulate local campaigns far more tightly than the state’s Fair Political Practices Commission. So the big donors, working through the state parties, are trying to figure out ways to circumvent local rules.

The conservatives in the State Legislature love to talk about local control when it comes to workplace regulations, environmental protection, and schools — but when a bill like this comes along and threatens to eviscerate local control, they utter not a peep. Nor, for the most part, do the liberals, who are aligned with the Democratic Party and don’t want to defy its mandates.

The San Francisco Ethics Commission has asked Mayor Gavin Newsom and the supervisors to oppose this bill, but the board has taken no action, and the mayor says he actually supports the bill. That’s a disgrace: at the very least, the supervisors should pass a resolution opposing AB 1430 and force the mayor to veto it.

Migden, after talking to the folks at California Common Cause, the public interest campaign organization, took a bold stand against the measure, and she deserves tremendous credit for that. Now the rest of the senate — starting with Leland Yee of San Francisco and President Pro Tem Don Perata of Oakland — needs to go along and kill this monster. *

Some impertinent questions for Chronicle editor Phil Bronstein

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By Bruce B. Brugmann

Chronicle Editor Phil Bronstein says the hope to save the Chronicle from its staggering weekly losses is more local news.

So, after the Chronicle once again blacked out coverage of the “Free Carolyn Knee” ethics case,
I sent over some impertinent questions to him (with copies to the Chronicle reporters and editors who ought to be allowed the cover the story).

Why did the Chronicle not cover the Carolyn Knee/Ethics Commission story and why does the Chronicle not cover the regular doings of the
Sunshine Task Force and the Ethics Commission? I am also curious why the Chronicle still does not cover the PG&E/City Hall/Raker Act scandal story and all of its ramifications, including the Carolyn Knee story as to what happened to the treasurer of the public power campaign against PG&E. Why hasn’t the Chronicle followed up the excellent stories that Susan Sward and Chuck Finnie did on the PG&E scandal only a few years ago.

No answer at blogtime. The point for Phil and the Chronicle: you can’t trumpet local news when you can’t cover the angles of the biggest urban scandal in U.S. history. Much more to come, B3

This campaign money bill is nasty

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By Tim Redmond

Update on the :campaign-finance bill I mentioned a few days ago

This thing is pretty bad, and it’s winging its way through Sacramento with very little opposition. The bill number is AB 1430; it’s sponsored by Assemblymember Martin Garrick, a San Diego Republican who is mad that the San Diego Ethics Commission cracked down on unlimited GOP donations to local candidates.

The bill would limit the ability of local governments to control spending by political parties. Here’s an analysis by San Francisco Ethics Commission Director John St. Croix.

But the Democratic Party likes it, too, so the bill sailed through the state Assembly 77-0, and is headed for the floor of the state Senate. California Common Cause is against it, as is the League of Women Voters. The Ethics Commission has asked the San Francisco supervisors to oppose it, but nothing has happened yet.

The only member of the state Senate to come out against the bill is Carole Migden, who opposed it in committe and told us she will vote against it on the floor.

This one needs some attention, fast.

Whose Ethics?

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Part two in a Guardian series The read part one, click here.

› news@sfbg.com

The San Francisco Ethics Commission is at an important crossroads, facing decisions that could have a profound impact on the city’s political culture: should every violation be treated equally or should this agency focus on the most flagrant efforts to corrupt the political system?

The traditionally anemic agency that regulates campaign spending is just now starting to get the staff and resources it needs to fulfill its mandate. But its aggressive investigation of grassroots treasurer Carolyn Knee (see “The Ethics of Ethics,” 7/4/07) — which concluded July 9 with her being fined just $267 — is raising questions about its focus and mission.

“For the first time in our history, we’re having growing pains,” Ethics Commission executive director John St. Croix told the Guardian, noting that the agency’s 16 staffers (slated to increase to 19 next year) are double what he started with three years ago.

Reformers like Joe Lynn — a former Ethics staffer and later a commissioner — say the commission should do more to help small, all-volunteer campaigns negotiate the Byzantine campaign finance rules, be more forgiving when such campaigns make mistakes, and focus on more significant violations by campaigns that seek to deceive voters and swing elections.

“The traditional thinking is there’s no exception to the law, and that’s been my traditional thinking too,” Lynn said. “But it doesn’t cut the mustard when you see a Carolyn Knee say, ‘I’m not going to do that again.'<\!s>”

At Knee’s June 11 hearing, Doug Comstock — who often does political consulting for small organizations — urged commissioners to reevaluate their mission. “Why are you here?” he asked them. “You’re not here to pick on the little guys.”

Yet St. Croix told us, “That’s not really the way the law is written. Everybody is supposed to be treated the same…. The notion that the Ethics Commission was only created to nail the big guns is not correct.”

That said, St. Croix agrees that regulators should be tougher on willful violators and those who have lots of experience and familiarity with the rules they’re breaking. And he said they do that. But it’s the grassroots campaigns that tend to have the most violations.

“It’s frustrating because the people who make the most mistakes are the ones with the least experience,” St. Croix said, noting that the commission can’t simply ignore violations.

 

A MATTER OF PRIORITIES

But critics of the commission say the problem is one of priorities. Even if there were problems with Knee’s campaign, there was no reason the commission should have launched such an in-depth and expensive investigation four years after the fact. That decision was recently criticized in a resolution approved by the San Francisco Democratic County Central Committee, which argued that the approach discourages citizens from getting politically involved.

“[The] San Francisco Ethics Commission spends an inordinate amount of its meager resources in pursuing petty violations allegedly committed by grassroots campaigns; this disproportionate enforcement against grassroots campaigns is directly contrary to the goal of the Campaign Finance Reform Ordinance,” one “whereas” from the resolution read.

The resolution’s principal sponsor, Robert Haaland, is intimately familiar with the problem. When he ran for supervisor in District 5 two years ago, his treasurer had a doctorate from Stanford and still struggled to understand and comply with the law. But they made a good-faith effort, he said, and shouldn’t be targeted by Ethics.

“It’s sort of like the IRS going after the little guy,” Haaland told us. “The commissioners need to set the direction of the commission for where they’re spending their time and resources.”

Eileen Hansen is perhaps the only member of the five-person commission to really embrace the idea that its mission is to help citizen activists comply with the law and to go after well-funded professionals who seek to skirt it. To do otherwise is to harm San Francisco’s unique grassroots political system.

“It’s true, the law is the law,” Hansen told us. “But I do think the Ethics Commission needs to grapple with how to apply the law in a fair manner.”

Is it fair to apply the same standard to Knee and to the treasurer of the campaign on the other side of the public power measure she was pushing, veteran campaign attorney Jim Sutton, whose failure to report late contributions from Pacific Gas and Electric Co. later triggered a $240,000 fine by Ethics and the California Fair Political Practices Commission, while those contributions might have tipped the outcome of the election?

Sutton gets hired by most of the big-money campaigns in town, such as Mayor Gavin Newsom’s, and has a history of skirting the law, including a recent case of allegedly laundered public funds at City College; coordination of deceptive independent expenditures against Supervisors Chris Daly, Gerardo Sandoval, and Jake McGoldrick; District Attorney Kamala Harris’s violation of her spending-cap pledge in 2003; and an apparent attempt to launder inaugural-committee funds to pay Newsom’s outstanding campaign debts (see “Newsom’s Funny Money,” 2/11/04). Yet the practice of the commission is to ignore that history and treat Sutton, who did not return calls seeking comment, the same as everyone else.

“We all admire and want grassroots organizations to do what they need to do,” Commissioner Emi Gusukuma said. But, she said, “the laws are there for a reason…. We’re supposed to enforce and interpret the law. The law should only apply to big money? The law has to apply to everybody. We can’t pick or choose.”

David Looman, a campaign consultant and treasurer involved in dozens of past elections, put it wryly. “Some people talk as though the grassroots campaigns shouldn’t have to obey the law,” he said of some activists he’s worked for who consider themselves the good guys. He said he reminds them, “This is the act that you helped pass, and now you gotta abide by it.”

“But there ought to be some kind of business sense here. Most regulatory agencies have offenses which they regard as de minimis,” Looman said, meaning “you get a nasty letter that says, ‘Don’t make a habit of it,’ and when you do make a habit of it, stricter penalties come into play.”

His experience with the commission has led him to believe there’s no sense of priorities when it comes to what Ethics pursues. Many of the small campaign committees Looman represents have been audited to what he feels is a ridiculous extent.

In one case, he told us, he took over the management of the Bernal Heights Democratic Club and discovered that it hadn’t been filing certain documents for years. He ended up paying $10,000 out of his own pocket to cover Ethics fines just because his name was now on the dotted line.

“Yes, the Bernal Heights Democratic Club was in complete violation of the law. They deserved to pay a penalty, but it was so far out of proportion. It was two times our yearly income. I think that’s inappropriate,” Looman told us.

 

THE GRASSROOTS CULTURE

Some say the whole idea of local campaign reform is to nurture an important and unique aspect of San Francisco: its vibrant and diverse grassroots political culture. “For every two committees in LA, there are three in San Francisco,” Lynn said, adding that it used to be a more extreme, two-to-one ratio. Larger cities often have more professionals involved, he said. “San Francisco has a unique political culture, very heavy on the grass roots.”

Yet the Ethics Commission doesn’t see protection of the little person as part of its mission.

“The fundamental problem with Ethics is it is not staffed by people who have been advocates for good government reforms,” Lynn said. “The Ethics Commission needs to come to grips with the fact that they’re tampering with the grassroots political culture of San Francisco.”

Lynn would like the commission to direct some resources toward hiring assistants to staff the office during the two or three weeks prior to Election Day, a crew that would help prevent violations and inoculate campaigns against being fined for errors that do occur.

“If you looked at the money that the Ethics Commission is spending going after citizen filers and reallocated it toward a staff of clerks, the cost to the city would be minimal,” Lynn said, estimating it at about $100,000.

Calling it the “H&R Block Unit,” Lynn thinks a staff of 10 to 15 clerks could be trained to assist small campaigns, individuals, and first-time filers who would come in and be walked through the complex paperwork.

St. Croix said such services are available now to inexperienced treasurers and those who ask for help — although not nearly as extensive as Lynn envisions — and he’d like to expand them in the future. But he said there are legal and practical complications to giving campaigns formal advice in letters that they might later use in their defense.

“I think it’s a lofty goal to educate people,” commission chair Susan Harriman told us. “We have staff with the sole job to keep people educated.” She said she’s attended meetings at which outreach occurred between the commission and community, but only as an observer. She thinks it’s the job of the staff to take an active community role, although St. Croix said that’s a resource issue.

Commissioner Emi Gusukuma thinks the appointed commissioners should be more involved. “I would be happy to be part of that team,” she said of joining any Ethics community outreach. “Going to clubs — I would definitely be willing to do that.” She noted that she and her fellow commissioners are all very busy, but she still thinks the educational aspect of their role is important.

Hansen also noted that a commission filled with relatively new appointees needs to hear more about the real-world impacts of its policies. “The public can educate the commissioners, and right now the commissioners are not educated on these issues,” Hansen said.

She and other reformers would like to see St. Croix facilitate a discussion of what the commission’s enforcement history has been and where the focus should be going forward.

“The perception is all we ever do is go after the small guys, but I don’t know if that’s really true,” Gusukuma said. She’s pushing staff to do more research into past enforcement actions “so we can tell the staff … not who to prosecute but what kinds of cases are important. We haven’t been able to get that analysis yet.”

Lynn said another key component in the education campaign would be to televise Ethics Commission hearings, which would help people become more engaged with the agency’s work. Commissioners Hansen and Gusukuma agreed, endorsing the proposal in this year’s budget cycle and winning the support of Sup. Chris Daly before he was ousted as chair of the Budget and Finance Committee, after which the expenditure (estimated at about $30,000 per year) was removed from the budget.

Harriman is opposed to televising hearings and thinks the money should be spent elsewhere. “I don’t think it’s a good idea. I think interested people who are interested in items on the agenda will appear. I think it’s a waste of city funds to televise something.”

Lynn said that attitude is the problem.

“The Ethics Commission doesn’t want to be televised, which is the reason to televise them,” he said. “They don’t want it because they’re trained that they are quasi-judicial and you don’t have cameras in courtrooms. Right now Ethics is invisible. The only way it can build a constituency is if it’s visible.”

Bob Planthold, another former commissioner, agreed. “Ethics doesn’t make friends,” he said. “It doesn’t have a constituency of positive advocates, and you need that at City Hall to get money and resources.”<\!s>*

 

Carolyn Knee is free! Finally, after five years, the poster girl for ethics reform has been freed by the Unethical Commission

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By Bruce B. Brugmann

Rick Knee flashed the word from City Hall about 6:35 p.m. Monday (July 9): Carolyn Knee is free!.

In a follow up email that was uncharacteristically short, Carolyn’s husband wrote, “The Ethics Commission voted unanimously Monday evening to accept the $267 settlement that staff members and Carolyn’s attorney reached.
This concludes the case.”

Well, this case may be closed and the long nightmare and high drama may be over for the Knees, who took the brunt of the commission’s wrath for the 2002 grassroots public power campaign that damn near kicked PG&E out of City Hall, but their fight was well worth it and the battle for ethics reform goes on. Carolyn’s rousing defense even made nice folks out of the commission and staff, at least for one hearing.

SOS: The Unethical Commission goes into session Monday night on the Case of the Grassroots Treasurer who went up against PG&E in a tight public power campaign. Come and support Carolyn Knee at the Ethics meeting at 5:30 p.m. in City Hall room 408

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By Bruce B. Brugmann

Carolyn Knee, the poster girl for how the Ethics Commission is unethically treating treasurers of grassroots campaigns, goes once more before the Ethics Commission at a hearing starting at 5:30 p.m. Monday (July 9) in Room 408 in City Hall.

Carolyn and her attorney have reached a settlement of $267 with the commission’s enforcement division, which is one per cent of the amount the staff originally recommended.
But public power supporters fear that the reason her case is on the agenda once again is because at least two commissioners intend to raise questions about the recommended amount.

Carolyn, a retiree on a fixed income, found herself threatened with $26,700 in fines by the Ethics Commission for several alleged violations of campaign finance laws during a random audit of San Franciscans for Affordable Clean Energy, the grassroots group that forced PG&E to the ballot in the 2002 public power campaign.
The point: SFACE raised peanuts during the campaign (a little more than $l00,000) while PG&E spent more than $2 million to defeat the initiative, $800,000 in the final days of the campaign (and PG&E didn’t report this critical amount until nearly a month after the election.) Knee was fined l4 times what James Sutton, treasurer of PG&E’s front group, was fined. And the commission hassled and hounded her for the past five years or so. (See Amanda Witherell’s excellent story, “The ethics of Ethics,” in the Guardian and on our website and an earlier Bruce blog headed “Free Carolyn Knee! Free Carolyn Knee from the Clutches of the Unethical Commission.”)

The ethics of Ethics

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Part one in a Guardian series

› amanda@sfbg.com

Back in 2002, Carolyn Knee did what many other citizens of San Francisco were doing — she volunteered her time and energy campaigning for a ballot measure she hoped would pass.

Five years later the retiree living on a fixed income has found herself threatened with $26,700 in fines levied by the Ethics Commission enforcement staff, who turned up several alleged violations of campaign finance laws during a random audit of San Franciscans for Affordable Clean Energy, the committee for which Knee was a volunteer treasurer.

At a June 11 probable cause hearing before the Ethics Commission, investigator Richard Mo itemized several infractions, including failure to report $19,761 in contributions on time, in addition to another $9,500 that came in right before the election but wasn’t reported until afterward; failing to notify two organizations that they were major donors who needed to file as such (one of which was the Guardian); not providing all the required information about two donors; and disparities between bank account statements and campaign finance reports.

Mo alleged Knee had "cooked the books," saying she "takes no responsibility" and "claims she was ignorant of the law, passes the blame on to her personal accountant. She cites her inexperience as a treasurer when in fact she served as treasurer for one prior committee."

It sounds like a litany of campaign crime, with Knee as the linchpin, but she maintains that none of it was intentional and that many of the reporting mistakes were made by her accountant, Renita Lloyd-Smith of the Simon Group, a company she’d hired to handle the complicated ledger of campaign finance reports. "Perhaps I was wrong in placing confidence in someone I had to hire because I didn’t know the rules," Knee told the Ethics Commission. "It was all in good faith. It was all done in love of my city. But I’ll never do it again."

Those words have a dual meaning: Knee hopes never to make another financial mistake, and she’ll never again take on the risk of steering the financial helm of a grassroots campaign.

Ethics Commission hearings such as this are usually held in closed session, but this one was opened at Knee’s insistence because she suspected she’s not the only one who’s had difficulties handling campaign finance laws or negotiating fair settlements. It was the first publicly aired probable cause hearing in the commission’s 13-year history, and both commissioners and attendees walked away with questions after issues of perceived bias and a lack of timeliness in the investigation were raised, as well as the possibility that the fines being threatened are inflated and arbitrary.

"There’s only one department in the city and county of San Francisco with no oversight — Ethics," Joe Lynn told the Guardian. Lynn is a former Ethics commissioner and staffer who still watchdogs the agency and has been openly critical of the laxness he perceives there.

His question is one of many about the commission: How does the staff conduct its investigations? Should smaller campaigns staffed with volunteers be handled differently than larger, more professionally managed operations? If resources are tight, should Ethics be more focused on going after the big guys? If the commission had more resources, would the public benefit from both a greater understanding of campaign laws and a more open, honest, and just government?

SFACE raised a little more than $100,000 during the 2002 election season (including about $29,000 from the Guardian and editor and publisher Bruce B. Brugmann), but the measure it supported — Proposition D, which would have allowed the city to set up its own public power system and break ties with Pacific Gas and Electric Co. — failed.

PG&E spent more than $2 million defeating Prop. D, $800,000 of it in the final days of the race, which campaign attorney James Sutton, the treasurer of the utility’s front group, San Franciscans Against the Blank Check, didn’t report until nearly a month after election day, a violation of campaign finance laws. That act likely scored SFACE’s opponents the win.

The Ethics Commission staff launched an investigation, and in 2004, Sutton’s old law firm was fined $100,000 — the largest amount ever levied by the city for breaking election laws. The state Fair Political Practices Commission also slapped Sutton with $140,000 in fines for vioutf8g the Political Reform Act (see "Repeat Offender," 10/27/04).

At Knee’s recent hearing, Lynn, who was once a finance officer for the Ethics Commission, pointed out she was being fined 14 times what Sutton was fined, and if the same formula had been applied, his fine would have been nearly $1.5 million. "You can’t change the standards arbitrarily," Lynn cautioned the five commissioners. "You need to establish standards for these fines, and you need to keep them across the board."

According to the governing law, which mirrors state mandates at the FPPC, commissioners may levy a fine of up to $5,000 or three times the amount of the violation, whichever is greater. Knee’s fine could be as much as $230,000, and Sutton’s could have been $2.4 million — about the same amount that it costs to run the Ethics office for a year.

The Ethics Commission has never imposed the maximum fine, and executive director John St. Croix doesn’t like to draw comparisons between campaigns. "They’re like snowflakes, very different," he said.

A review of the past three years of enforcement history, posted on the commission’s Web site, bears out this truth and shows fines ranging from a sliver to as much as half of the contested amount. In many cases, fines are dismissed completely for financial hardship reasons. The commission does not abide by a formula, fearing that would handicap it during negotiations, but a number of considerations are weighed, including the experience of the campaign treasurer, the appearance of intent, the overall outcome of the election, and a willingness to make right.

Eric Friedman, spokesperson for New York City’s Campaign Finance Board, considered by many good-government activists to be the national gold standard for ethics groups, said its members use similar tactics for settlements, but "the structure that they follow is precedent. They’ve seen pretty much everything at this point." New York’s board is about five years older than San Francisco’s and audits all campaigns.

According to investigator Mo, the $26,700 in fines pointed at Knee was an "opening salvo" designed to inspire negotiations, which have not been smooth. Knee and her pro bono lawyer, David Waggoner, initially offered $500 to settle. Ethics continued to press for more, but Knee didn’t flinch. "I don’t think I should have to pay anything," she said, pointing out that Oliver Luby, the commission’s current fines officer, recommended a complete waiver of all fines. St. Croix said Luby doesn’t work in the enforcement division and doesn’t know all the facts of the case. The current settlement offer from Ethics is $267, which Knee is willing to accept if the commissioners agree.

It’s unclear how often such hardball is played. "Frankly, we took that settlement because that’s what they were willing to pay," St. Croix said of the Sutton case. So too with a $17,000 fine imposed on Andrew Lee for a variety of campaign finance violations (see "Enforcing Equity," 5/2/07). St. Croix said that was what Lee was willing to pay on the spot.

"I’m not sure we could set a standard," said Commissioner Eileen Hansen, who thought both the Lee and the PG&E fines were too low and said if that’s the bar, it should be raised. She pointed out that the law does provide guidance, but read literally, it could mean exorbitant fines for the same slipup echoed through a whole season of paperwork. "I think it’s a good thing to have the law," she said, but "some should pay the maximum amount and some should pay less."

"I’m happy to pay $250 to get it out of the way," Knee said. "This has taken so much of my time and energy." When asked about her audit experience, she replied, "I would never do this again. It totally discourages grassroots" campaigns.

A legal assistant for 25 years, Knee was not a professional accountant but did have experience doing some bookkeeping. "The IRS is like kindergarten compared to the Ethics Commission," she said.

David Looman, a professional treasurer who’s currently managing about 10 campaign accounts and undergoing three audits by the Ethics Commission, agrees that the potential liability is a huge risk. "Twenty years ago when I started in politics in this town, nobody paid for a treasurer. Nobody had a lawyer. Nowadays you’d be crazy not to do both," he said.

The audits in Looman’s cases involve small grassroots campaigns similar to the one Knee oversaw. "There’s no good business principle for why these people should be audited," Looman said. "The fewer resources you have to employ, the more intelligent your decisions should be for how to employ them. Here they are auditing my $12,000 committee when there are clear miscreants running around."

Part of the Ethics Commission’s charter calls for mandatory audits of all publicly financed campaigns, and St. Croix said the agency does as many random audits as resources allow. Last year, he recalled, more than a dozen were completed. With full financial backing, St. Croix said, he would audit all campaigns. He said, "It’s funny. People know they’re going to get audited and they still try to get away with stuff."<\!s>*

Next: what does the Ethics Commission need to rein in the most frequent and flagrant violators?

How to remove Jew

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Jewsmall.jpg
Photo by Charles Russo

By Steven T. Jones
Why can’t all of Ed Jew’s persecutors just get along? And who is going to finally force the hopelessly tarnished supervisor from office: City Attorney Dennis Herrera, District Attorney Kamala Harris, Attorney General Jerry Brown, the FBI and U.S. Attorney’s Office, Mayor Gavin Newsom, the Ethics Commission, or the Board of Supervisors? Those are just a couple of the many questions that I’ve been seeking answers to over the last few days as I interviewed people close to the case and read the relevant documents, including the voluminous criminal complaint.

What I’ve discovered is that while Harris may have leapfrogged past Herrera (whose deadline for Jew to comply with his requests for information and an interview is tomorrow) and the feds into the lead role, it’s an open question whether her criminal case will convince a jury to convict on most counts, and if there is a conviction, whether Jew will still be a sitting supervisor by then.

Free Carolyn Knee! Free Carolyn Knee from the unethical clutches of the Ethics Commission!

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By Bruce B. Brugmann

There is a phrase I like to use to describe the power that PG&E has exercised in City Hall since the beginning of time, or at least since the federal Raker Act was passed in l9l3 mandating that San Francisco get public power from its Hetch Hetchy dam.

When PG&E spits, City Hall swims.

That is the phrase I used when I testified Monday night June ll at the Ethics Commission hearing in the infamous Carolyn Knee case. “You’re all swimming in it,” I told the commission.

I was trying to illustrate my key point: that the Commission, which had been created to expose and penalize the campaign and financial muscling of PG&E and the big guys in town, was now picking on the little guy, in this case Carolyn Knee, the woman who volunteered for the thankless job of being the treasurer of two citizens’ groups that put initiatives on the ballot in 200l and 2002 to do what the city had never done. And that was to kick PG&E out of City Hall, enforce the public power mandates of the Raker Act, and bring our own cheap green Hetch Hetchy public power to the residents and businesses of San Francisco. PG&E, the groups maintained, had an illegal private power monopoly and the citizens were forced to take this law and order issue into their own hands and go to war with PG&E.

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