A 'Gold Mine' Denied: Ethics Commission Spurns Rule Changes That Would Have Eased Big Donations -- For Now

Like a bloody steak, the Ethics Commission earlier this week sent back a bevy of proposed rule changes for more cooking and seasoning.

Along with good government types, even some members of the commission were flummoxed by the staff-generated proposed changes to the Campaign Finance Reform Ordinance -- all of which would have loosened the scrutiny applied to large contributions to politicians and allowed many more entities contracting with the city government to donate money to the elected officials who oversee them.

All of the propositions "played to big donors, to loosening the requirements, or to having less transparency," summed up Ethics Commission member Eileen Hansen.

Among the proposed changes up for a vote at Monday night's meeting:

  • Any entity negotiating or hold ing a city contract worth more than $50,000 is forbidden from giving money to the elected officer authorized to review and vote on the contract. The rule change proposed bumping that contract value to $100,000;

  • Those owning 20 percent or more of a contracted entity are forbidden to make contributions. The proposed rule change would lift that percentage up to 50 percent;

  • Lift the ban on those negotiating or holding a contract with state boards -- whose members are appointed by the mayor or other city officials -- contributing money to city politicians. Such state boads include the Treasure Island Development Association, The San Francisco Parking Authority, The San Francisco Health Authority, The San Francisco Redevelopment Agency, and others.  
This last one is the big one; Hansen notes that state boards "Are where all the really big contracts are." Former Ethics Commissioner Joe Lynn notes that, if this rule change had been approved, a company such as, say, Lennar could have started making donations to Mayor Gavin Newsom's gubernatorial campaign. "This would have opened a gold mine for Newsom," Lynn said.

Hansen predicts the rule changes may be re-introduced by the commission's staff in April. You can read the suggestions the commission voted down this week in reasonably decipherable english right here:

memo to EC 2.09.pdf

Multiple calls and e-mails to Ethics Commission Executive Director John St. Croix and his deputy, Mabel Ng, have not been returned. So, for now, there is no solid answer to the questions Hansen (and others) are asking: Why are changes that potentially would have allowed big donors to shower Newsom and others with donations "coming up now? That begs the question -- who is behind this? What pressure is being brought to bear to bring these things up?"

The Ethics Commission's many critics aren't waiting for a pro-forma answer. "If it wasn't clear before, it's clear now who is pulling the strings at Ethics in terms of their staff. These proposals are transparently there to benefit big contributors," says David Waggoner, an attorney who has successfully fought several cases in front of the commission.

An aside: While Newsom and his consultants argue that city contribution laws cannot affect donations to the would-be governor's state political action committee, Deputy City Attorney Andrew Shen told SF Weekly differently last year in this article:

"[Shen] argues no city officeholder is entitled to take money from parties who require his or her approval to receive a city contract -- even if the donation was intended to support a run for state office. John St. Croix, the executive director of San Francisco's Ethics Commission, agreed: "A banned contribution is a banned contribution."
Whatever ambiguity there is would have ostensibly been cleared up -- in a way Newsom would like -- by those proposed rule changes.

Even if the Ethics Commission had approved all of the proposed changes, the new rules don't take effect until approval by the Board of Supervisors. Former Board President Aaron Peskin laughed when the proposals were described to him. "I don't think those are good ideas," he deadpanned. "Rather than tightening the laws, it sounds like the're trying to broaden them. I cannot imagine this Board of Supervisors in its right mind going for something like this."

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