Twitter

The lobbyist loophole

Jesse Hawthorne Ficks
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The lobbyist loophole

EDITORIAL As the stories in this issue show, open government laws are critical to democracy. Without the city’s sunshine law, we wouldn’t know how the proposal to give Twitter a tax break ballooned into a major giveaway. Without the sunshine laws, Tim Crews, the embattled publisher of the Sacramento Valley Mirror, wouldn’t have been able to use his small paper to hold public officials accountable.

That’s why the laws on the books need to be enforced — and sometimes strengthened. One example in San Francisco is the lobbyist registration requirement.

Here’s the problem: Former Mayor Willie Brown, who now works for at least two major outfits with business before City Hall. As Tim Redmond reports on page 10, Pacific Gas and Electric Co. paid Brown some $480,000 in 2007 and 2008. And although Brown is a lawyer, nobody can honestly believe that was for legal work. He was clearly paid to give the embattled utility political advice and to pull political strings. And PG&E has major interests at City Hall — San Francisco is trying to set up a community choice aggregation system that PG&E opposes, and (of course) the utility has spent almost 90 years trying to block public power in this town. There are dozens of other city issues, from facility safety to the franchise fee, that affect PG&E’s bottom line.

Has Brown tried to influence city officials on behalf of the utility? The public has no way to know. By law, any individual who lobbies for a private client (and earns more than $3,000 a quarter doing so) has to register with the Ethics Commission, reveal his or her clients, and report on all contacts with city officials. Brown has never done that.

Brown also works for the owners of the Fairmont Hotel, who want the right to convert hotel rooms to condos. Mayor Ed Lee just submitted legislation giving the hoteliers what they want, and Brown is Lee’s political mentor. Connection?

The public has a right to know who’s trying to do what deals behind closed doors; that’s why the city has a lobbyist registration law. The voters have a right to know whether lobbyists are giving money to elected officials; that’s why the law requires registered lobbyists to itemize those contributions. But it’s not always honored — and as Brown shows, it can be openly defied. And nothing happens.

Part of the problem is that the Ethics Commission has been far too lax in pursuing enforcement of the laws. The agency lacks the resources to do serious investigations. As a result, its director John St. Croix told us, all the staff can do is respond to complaints. But even with the limited money it has, the commission can do a lot more. Public hearings on the failures of lobbyist registration and campaign contribution reporting would be a good first step. And how hard would it be to cross-check campaign filings with lobbyist filings to see which lobbyists don’t properly report their contributions? A simple computer program could do that in a few minutes.

The commission also needs to do a better job making its funding case to the supervisors. The utter lack of serious enforcement of laws involving powerful interests doesn’t instill confidence in the agency.

But the law is also vague in parts, and the supervisors need to fix it. A clearer definition of “lobbyist” is a clear mandate. And enforcement needs to be increased. Willful violation of the state’s Political Reform Act is a misdemeanor crime. Violating the city’s lobbyist law should be too.

Editorial: The Willie Brown loophole

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As the stories in this issue show, open government laws are critical to democracy. Without the city’s sunshine law, we wouldn’t know how the proposal to give Twitter a tax break ballooned into a major giveaway. Without the sunshine laws, Tim Crews, the embattled publisher of the Sacramento Valley Mirror, wouldn’t have been able to use his small paper to hold public officials accountable.

That’s why the laws on the books need to be enforced — and sometimes strengthened. One example in San Francisco is the lobbyist registration requirement.

Here’s the problem: Former Mayor Willie Brown, who now works for at least two major outfits with business before City Hall. As Tim Redmond reports on page 10, Pacific Gas and Electric Co. paid Brown some $480,000 in 2007 and 2008. And although Brown is a lawyer, nobody can honestly believe that was for legal work. He was clearly paid to give the embattled utility political advice and to pull political strings. And PG&E has major interests at City Hall — San Francisco is trying to set up a community choice aggregation system that PG&E opposes, and (of course) the utility has spent almost 90 years trying to block public power in this town. There are dozens of other city issues, from facility safety to the franchise fee, that affect PG&E’s bottom line.

Has Brown tried to influence city officials on behalf of the utility? The public has no way to know. By law, any individual who lobbies for a private client (and earns more than $3,000 a quarter doing so) has to register with the Ethics Commission, reveal his or her clients, and report on all contacts with city officials. Brown has never done that.

Brown also works for the owners of the Fairmont Hotel, who want the right to convert hotel rooms to condos. Mayor Ed Lee just submitted legislation giving the hoteliers what they want, and Brown is Lee’s political mentor. Connection?

The public has a right to know who’s trying to do what deals behind closed doors; that’s why the city has a lobbyist registration law. The voters have a right to know whether lobbyists are giving money to elected officials; that’s why the law requires registered lobbyists to itemize those contributions. But it’s not always honored — and as Brown shows, it can be openly defied. And nothing happens.

Part of the problem is that the Ethics Commission has been far too lax in pursuing enforcement of the laws. The agency lacks the resources to do serious investigations. As a result, its director John St. Croix told us, all the staff can do is respond to complaints. But even with the limited money it has, the commission can do a lot more. Public hearings on the failures of lobbyist registration and campaign contribution reporting would be a good first step. And how hard would it be to cross-check campaign filings with lobbyist filings to see which lobbyists don’t properly report their contributions? A simple computer program could do that in a few minutes.

The commission also needs to do a better job making its funding case to the supervisors. The utter lack of serious enforcement of laws involving powerful interests doesn’t instill confidence in the agency.

But the law is also vague in parts, and the supervisors need to fix it. A clearer definition of “lobbyist” is a clear mandate. And enforcement needs to be increased. Willful violation of the state’s Political Reform Act is a misdemeanor crime. Violating the city’s lobbyist law should be too.

 

Newsom’s fancy gift, trip to China

Sasha Cuttler And Mary Magee
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Newsom’s fancy gift, trip to China

The Chronicle’s got a story today about how Lt. Gov. Gavin Newsom’s personal investments and earnings, documented in an economic disclosure form released by the Fair Political Practices Commission (FPPC), make him a lot richer than his boss, Gov. Jerry Brown.

The form also discloses travel payments and gifts Newsom received in 2010, which makes for some interesting reading. For one, San Francisco’s former mayor evidently received a very expensive pen (made by Louis Vuitton and valued at $398) last year from this guy.

The most significant item in the travel and gifts category, of course, was Newsom’s trip to Shanghai last June, valued at $9,082 and paid for by the San Francisco-Shanghai Sister City Committee. He traveled there with former Mayor Willie Brown and some others for San Francisco week at Expo 2010 Shanghai China.

Evidently, it was a week filled with dancing, singing, and celebration. (And dressing to impress. Check out the creamy, eco-friendly suit Brown wore at this “dazzling” event.)

http://www.youtube.com/watch?v=NZ8rKho15dw

Since becoming lieutenant governor of California, Newsom has continued his efforts to improve business relations between China and San Francisco. Just have a look at his recent article in China Brief, a magazine published by the American Chamber of Commerce in the People’s Republic of China (AmCham-China).

In the article, penned in late January of 2011, Newsom wrote:

“China’s central government stresses the importance of developing their innovation industry sectors–including clean-tech, biotech and information technology (IT)—and is projected to commit over $600 million of government funds to support this development. This overlaps with San Francisco’s core industry sectors. With over 500 tech and new media companies (including leaders such as Salesforce.com, Zynga and Twitter), more than 225 clean-tech companies and a worldclass biotech hub (anchored by the University of California San Francisco), San Francisco brings together internationally-recognized leadership in each of these sectors.”

Meanwhile, a few items on that economic disclosure form suggest that what’s good for business in China is also good for Newsom. His wife’s investment portfolio, the Jennifer Siebel Newsom Trust, includes stocks ranging from $10,001 to $100,000 each in China Valves Technology, a for-profit, “e-learning services provider” called  Chinacast, and a Chinese motor manufacturer called Harbin Electric.

Chiu announces run for mayor

Sasha Cuttler
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Board of Supervisors President David Chiu announced his candidacy for mayor today, becoming the eighth major candidate in a field that will likely continue shaking out in the coming months.

Chiu has been considering the move since at least the start of this year, when he played kingmaker as the swing vote to name Ed Lee as interim mayor, parting from his progressive colleagues to do so. With no strong progressive candidate yet in the mayor’s race, the question now is whether Chiu will try to win over the left and if he can be successful in doing so after making several more moderate moves in recent years.

Chiu’s initial political base will be allies of Chinatown Chamber of Commerce boss Rose Pak, who has pledged to block Sen. Leland Yee from becoming mayor, is close to Chiu, and has been courting someone to run. There have even been widespread rumors recently that Pak and ally Willie Brown have been trying to convince Lee to run, a possibility that those in Chiu’s camp dismiss.

Chiu will made his announcement at 11 am on the steps of City Hall. Sources say Chiu has spent weeks lining up support for his run, so it could be telling to see who shares the stage with Chiu beyond Sup. Jane Kim and others from his immediate political circle. Chiu and Kim are sponsoring the mid-Market tax break that the Mayor’s Office crafted to keep Twitter from leaving town, the most controversial legislation of the year, a proposal that has drawn opposition from many progressives. Some other mayoral campaigns have privately started to grumble about the deal, so it could become a mayoral campaign issue, particularly if the Office of Economic Analysis concludes it will be a drain on city coffers when that report is issued by week’s end.

For more on the implications of Chiu’s leap into the race, read this week’s Guardian.

Behind the Twitter tax break deal

Sasha Cuttler
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Behind the Twitter tax break deal

There’s much political intrigue and anticipation swirling around the Central Market Payroll Tax Exclusion, aka the Twitter Tax Break, which the Board of Supervisors will consider next month. This has all the elements of a great story: backroom deals between political and corporate power brokers, the strange argument that Republican-style tax cuts will cure Mid-Market blight, the fact that Twitter executives have uttered nary a tweet about shaking down SF taxpayers, and the role that a pair of supposedly progressive supervisors have played in brokering the deal.

Following up on my Feb. 10 post about how the deal would help Twitter meet the high asking price of politically connected landlord Alvin Dworman for a new mid-Market headquarters, the Bay Citizen yesterday had a great story showing how Dworman gave then-Mayor Gavin Newsom discounted office space for his lieutenant governor bid just as Newsom proposed the tax break that would benefit Dworman and Twitter. The story also includes a nice tick-tock about how this unseemly deal unfolded.

We at the Guardian are currently awaiting a big package of documents from City Hall that we requested on the deal, and sources tell us they’re likely to include some interesting insights and tidbits. For example, are Twitter and Dworman the main beneficiaries of this legislation or are there other corporations (and the politicians they support) who were pushing this plan? Everyone is also waiting to see how the city’s Office of Economic Analysis rates the proposal, and Economic Ted Egan tells us that report should be out by the end of next week or beginning of the following week.

At this point, we have more questions than answers, but that should start changing by next week. Maybe we’ll gain a better understanding of why Sup. Jane Kim is pushing this deal (much to the consternation of some of her former top supporters) or why Randy Shaw, the taxpayer-subsidized blogger and Tenderloin don, strongly backed Kim’s candidacy and attacked her critics with such perplexing ferocity. Will Willie Brown’s name continue popping up? Perhaps we’ll be able to determine whether the Newsom-Dworman pact actually broke campaign finance laws. And we’ll certainly gain some insights into how the Mayor’s Office of Economic and Workforce Development trades away taxpayer money to successful corporations that wield whines and threats of relocation.

If nothing else, we’ll get a peek into modern crony capitalism, San Francisco-style, dressed up in the guise of “saving” the Tenderloin. So, from a strictly journalistic perspective, this should be fun.

Twitter tax break could help a well-connected landlord

Sasha Cuttler
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Opposition to the proposal to give millions of dollars in city payroll tax breaks to Twitter and other companies that open for business in the mid-Market area has focused on the bad precedent of caving into demands for corporate welfare and the lead role that two people who call themselves progressives – Sup. Jane Kim and Board President David Chiu – are taking in pushing the deal.

But behind-the-scenes, there’s another aspect of the deal that is troubling to advocates for transparent government that acts in the broad public interest, rather than that of powerful individuals. And once again, the specter at the center of this insider deal-making is none other that former mayor Willie Brown, whose close allies seem to once again have the run of City Hall.

The mid-Market property that Twitter wants to move into is San Francisco Mart, a million-square-foot building at Market and 9th streets, which sources say has been having a hard time finding tenants to fulfill its ambitious plan to “transition and reinvent” the old furniture outlet as a modern home for high-tech businesses. Most recently, they were unable to seal the deal with Twitter – until the tax break proposal popped up.

The building is owned by millionaire developer Alwin Dworman, founder of the ADCO Group and someone who has had a 30-plus-year friendship with Brown, who sang Dworman’s praises in this 2007 article from the San Francisco Business Times discussing this property and others. The property is also operated by Linda Corso, longtime partner of Warren Hinckle, a local media figure with close ties to Brown (as well as Gavin Newsom, who last year named Hinckle as his alternative representative to the DCCC). Reached by phone yesterday, Corso said she wasn’t directly involved in the negotiations with Twitter and would have someone call us, but nobody did.

Brown’s name has been popping up quite a bit in recent months as he and his allies re-exert their deal-making influence on the city, starting four months ago with his stealth support for Kim’s campaign and continuing with his role in elevating his protege Ed Lee to the interim mayor post (the way the pair ran City Hall when Brown was mayor is also the subject of an investigative report in this week’s Guardian) and placing ally Richard Johns onto the Historic Preservation Commission over progressive objections that he was unqualified.

Reached on his cell phone, Brown refused to comment, telling us, “I don’t want to talk to the the Bay Guardian ever in my life. Goodbye.” There is no indication that Brown or other representatives for Dworman lobbied the supervisors over the deal, and both Kim and Chiu say they weren’t contacted. “I’ve never spoken to the man and I don’t know much about his business,” Chiu said of Dworman, although he said that he was told by people in the Mayor Office, which brokered the deal, that Twitter was looking at moving into Dworman’s building.

Kim has maintained that she has very little contact with Brown and doesn’t know why he supported her candidacy. And she said the benefits for Dworman and other big mid-Market landlords who will profit from her legislation wasn’t a factor in her decision to sponsor it. In a prepared statement to the Guardian, she wrote, “I am not aware of any lobbyists for the Mid-Market legislation and therefore certainly have not met with any.  I have communicated directly with Twitter, who are [sic] excited to be a part of revitalizing the Mid-Market corridor and about partnering with community-based organizations and schools who serve the neighboring communities of SOMA and the Tenderloin.  Our office has convened neighborhood stakeholders who will be directly impacted by this legislation and they are currently committed to being a part of this dialogue over the next month.”

Kim told us last week that she philosophically opposes business tax breaks, but that she wanted to help stimulate the mid-Market area and keep Twitter from following through on its threat to leave town. Despite calling himself a progressive, Chiu has supported using targeted tax breaks as a economic development tool, including the biotech tax credit. And yesterday, he told us, “I would love to bring more companies in the mid-Market area…If we don’t do this policy, we will see future years of zero economic activity in that area.”

But progressives say these tax breaks are nothing but corporate welfare that will exacerbate the city’s budget deficit. During a benefit event for Lyon Martin Health Services last night at the Buck Tavern, which is owned by Kim predecessor Chris Daly, signs plastered throughout the bar urged the public to oppose the Twitter tax break in order to preserve public health and other vital city services.

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