Ethics under attack

Ethics under attack

Campaign group claims city agency is harsh and inconsistent

By Amanda Witherell

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.”

Originally published November 14, 2007 in the San Francisco Bay Guardian

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