a settlement where she could pay monetary penalties, or hold a public hearing leading to a determination. >> what is the amount of the penalties here? >> under the charter and local ethics law, the ethics commission has the ability to impose fines for up to $5000 for each violation. it takes into account all sorts of factors in determining the penalty they apply. >> besides the specific ethical requirements that apply to this agency, are there any other sections of the government code or common law that would apply to a determination of whether or not there was compliance with ethical requirements? >> arising out of this gmo

transaction, it's possible. i'm not entirely sure that ms. jordan could have a conflict if in agreement with gmo comes before the retirement board in her the future. i understand the last time the retirement board approved an agreement with gmo was something like 20 years ago. i don't know how many times ms. jordan has recused herself as a board member. i know that supervisor avalos asked for that information a few days ago. this chronicle article referenced other allegations. i don't really have any information to verify that or speak to it. >> and i know that for elected officials and others, the section 1090 of the

government codes requires limitations. >> section 1090 would apply to a commissioner. the political reform act would require her to recuse herself if she's making a decision in her role as a board member that would impact her own financial holdings. an as always, my office works with every board member who want to figure out when to recuse themselves. >> i know there are times when recusal may be necessary for any of us, but many times when a recusal could invalidate the decision of the agency, is there that risk here? >> the law that you referenced, government code section 1090 is the law that

sometimes requires commissioners to step down . it would only require a commissioner step down if he or she has a financial interest in a company that is contracting with her department that her board has to approve and her financial interest in that company doesn't sit within a recognized exception. i haven't looked at that particular question for ms. jordan. i don't think this is the type of transaction that would require stepping down if a gmo contract came to the board in the future, it would require her to recuse herself. >> [inaudible]. >> i hate to predict the future based on the limited

information that i have, but from what i know, the primary allegation is that ms. jordan violated the statement of incompatible activities an we obviously will work closely with her to make sure she recuses herself in any future vote to ensure those votes are not subject to any legal challenge based on a con septd. september. >> thank you very much. what i'd simply say is i don't know what is -- whether or not there's any violation here. you know, i think that you want to be very careful about jumping to any conclusions. what i can say is based on the fact that she was certainly willing to speak to me, i know that she wants the facts to be known and i think you have to give the individual the benefit of the doubt, but i do believe

though that there are enough questions that i don't feel comfortable saying one way or the other here and i would think that the best thing to do with something like this is to give the individual an opportunity to come before the board and answer any questions that we may have and to engage in this kind of discussion so that's what i hope happens. i think that we have an obligation to this individual to make sure we give her that opportunity, but i think we also have an opportunity to the employees an retired employees of the system to make sure that their interests are protected and so i think that to do that, more information is needed and i certainly don't feel comfortable moving forward without getting that additional information. >> thank you supervisor cohen.

>> thank you very much. excuse my back. i have a couple questions. just so we're on the same page. my name's molia and i m i'm appointed by this body and colleagues to sit on this body in the retirement board. i have a couple questions to bring us up to speed on the page on what exactly san francisco retirement board duty is. karen, could you tell us briefly what is the mission of this organization? >> it's to invest the assets prudently and in the best interest of the beneficiaries. >> how many people are on this body. >> seven commissioners. >> how do they get to sit there? >> there are three elected by the retired and active members, three that are

appointed by the mayor and there is one who is appointed by the board of supervisors. >> okay. so some are elected, some are appointed. >> yes. >> oftentimes the word fiduciary is thrown around. could you describe for us what that is? >> fiduciary has the interest to put the interest of their trustees ahead of their personal interest at all times. >> okay. can you give us the background exactly of what the complaint is against her? >> the current complaint relates to ms. jordan's investment in gmo quality fund, a publicly traded mutual fund. the allegation is that because gmo is also an investment manager with retirement system, that that was an

improper investment on her part. there are two sections of the statement of incompatible activities that were referred to in the complaint. the first prohibits, both employees and members of the board, from investing -- it says specifically no officer or employee maize invest money with limited partnerships that are doing business was [inaudible]. because the gmo investment was publicly traded at that section was inapplicable. the one that seems to be of concern here is the second one that says no business opportunity, a personal loan, a favor or anything of that value from any public or private entity or firm doing business with spurs. the allegation is that although ms. jordan received this opportunity before she

was appointed to the board in august 2010, the fact that she exercised the opportunity after the fact was a violation. >> what year did she exercise this? >> 2011. >> 2011. so she's been on the retirement board since 2010 and the allegations -- these charges are brought up against her in 2014. >> correct. >> okay. and correct me if i'm wrong, but there was the -- we fill out a form 700 indicating how much -- where our assets are and where our investment ms are, correct? >> yes. >> and when we file these forms, what happens to them? >> the process has changed recently, but in the past they would be filed directly with the board secretary and she would forward them to the ethics commission and with respect to the retirement commission, the board secretary would file them in house and review them.

>> so she filed on the 700 form that she had this investment? >> yes, it's been disclosed. >> did she or did she not have to disclose that? >> she did not because her investment was a publicly traded mutual fund. >> the law says it will be ill league ague illegal to make an investment in something that's a private entity. so that's good to know. what exactly -- if we were to approve her appointment, is there any recourse that this body has should we find out at a later date that the ethics commission has found her to be in violation? you may not be the best person to answer this question, i'll defer to the city attorney. say the ethics committee

finds her to be in violation, then what? >> deputy city attorney again, the ethics commission typically in that type of situation would impose a monetary penalty. the board secretary would not have any further authority to discipline or remove her. the mayor as the appointing authority has the power to remove the members that he appoints. >> does this body have any power to remove anybody? >> cow do. you do, as you may recall, a number of different appointed and elected officials can be charged with official misconduct and removed for official misconduct. the way that process works is the mayor or appointing authority can suspends the individual, file charges, and the board ultimately decides

to remove the commission. the retirement board is not subject to that portion of the charter. the retirement board members serve at the subject of the mayor and can be removed by the mayor. >> okay. so i'm going to go back to you. can you tell me how long has ms. jordan served? >> she was appointed in august 2010. >> any complaints against her? >> no. other that what surfaced today. >> okay. all right, thank you. so colleagues, i -- this question opportunity for questions have been very helpful. i'm supporting the appointment of p wendy jordan. she's been a fair person, easy to talk to and able to listen. whether she takes a meeting or doesn't take a meeting, that's up to her personal interest. the difference between being a

trustee and a member of the board of supervisors is we are elected to serve people and our constituents and we have the responsibility to be accountable to folks. what's interesting is when you're a fizz fiduciary is you're supposed to be a political. our number one role [inaudible] when we retire. so i'm vested to make sure that this fund grows and i'm sure many of you are interested in making sure this fund grows. i am not interested in scheduling another meeting to sit at a whole. i think if the ethics commission finds her to be in any kind of violation i think we can take up the matter then. i want to reminds people that the ethics commission could take almost a year to review this process so we could be in limbo for a long time. >> thank you supervisor cohen.

supervisor avalos. >> thank you. well, like the ginsu knife there's more to talk about. for instance, gmo had a $10 million threshold for their funds, but having a $10 million threshold, is it really a public fund if you have to have $10 million to invest. you can't by investment for gmo through e trade so

>> i can't really shed a lot of light on that, supervisor. my understanding is that the april 2014 complaint was directed to the executive director of the ethics commission. i know that mr. huish received a copy as well as others. to our knowledge that is pending before the ethics commission. i can say the retirement commission has not been contact td regardsing that. >> that's something that's still in doubt. also the $10 million threshold for investment and she didn't

have to meet that it looks like there's a favor that has been given. whether it's publicly traded or not and she has stock, that's an issue. i don't feel comfortable moving forward and that would be my recommendation that i would ask the mayor to either rescind the appointment and come back in the new year and then there'll be more time to decide. perhaps there could be some effort for the ethics commission to clear her more quickly than they are now. currently right now i don't feel we have enough information to feel that this is the right approach to take. now, i also -- before i get off the mic, i did talk with ms. jordan last week. i know she's very knowledgeable, i recognize she's given quite a lot of time and her service for the retirement board.

i don't want to discount that in any way, but i want to feel comfortable about my vote and that's why i do not feel comfortable to move forward today and we either reject her appointment or ask that it be rescinded and be brought back to another day when we have more time to deliberate on it with input from the ethics commission. >> supervisor breed. >> i want to ask the city attorney for some clarity. in this particular instance in terms of the investment, did ms. jordan break the law? >> city attorney, that's the question that the ethics commission will be determined. the law at issue is the statement of incompatible activities, which is the department by department policy, but that policy has the force of law so the ethics commission could decide you --

that the commissioner received this business opportunity as the moment she invested in the funds for gmo and that would be a violation of the law. that would be a violation of our local campaign and governmental can you be the code. >> so if she's found by the ethics commission to have broken the law, does that present a cause for her to be removed and the process would entail that the mayor would actually need to take action to remove her, correct? >> the mayor could remove his appointees, including ms. jordan, or for no cause. if the ethics commission finds a violation and imposes a penalty, it's within the mayor's discussion whether he'd want to remove her in

that circumstance. it wouldn't be required that he remove her from office. p >> for clarity's sake, i'd like to know when the hearing possibly would take place or if it would take place at all to make a determination as to whether or not she's broken the law. >> that's very hard to predict. we know that there's an ethics complaint pending because the retirement system publicly sent the complaint over to the ethics commission, but if you ask the commission or the staff, you have a complaint, what are you doing with it, they would tell you sorry, we can't comment because the charter makes most of that process entirely confidential. in some cases the ethicings commission receives a complaint, the staff investigates it, the

commission decides to dismiss it and the entire process is confidential, not at public hearing. only if if the

>> what's the value of the assets managed by the board? >> approximately 20 billion. >> and how many employees are impacted, if you will, in terms of the retirement? how many employees are we talking about? >> active and retirees we have over 56,000 members. >> okay. what i would say is i personally think we have a responsibility to these workers, to these retirees to make sure that when you have

people that are part of this seven member body that oversee $20 billion in assets, that the individuals are complying with the highest ethical standards and i think in this case we're not sure one way or the other whether or not the law was violated. and i actually think it's a disservice to those individuals. , and quite frankly a disservice to this individual to move forward without giving the individual the opportunity to say something. i don't think it makes sense for how much we value compliance with ethical standards for us to move forward the application on the idea that if this individual is found to have broken the law then there are some things that we can do at that time. .

i think that the fact that there is this cloud hanging over this individual's head requires at a minimum we hear directly from her an i want to court her that opportunity and so i will make a motion to continue this item to january 7, where i hope we can have a special meeting where we can hear directly from this applicant. >> members of the board would be determined by their vote

to supervisor campos' motion. >> is there a so he could to this motion to continue. is there a second? seconded by supervisor avalos.and why don't we take a roll call vote to continue to this item to january 7. >> now might be the appropriate to take public comment. >> there are folks in the chamber earlier who wish to comment on the reappointment to wendy paskin-jordan. if you'd like to line up you have two minutes to comment. >> it's interesting that despite the statement of some board members they're concerned about proeventing conflicts of interest and any sign of possible ethical going forward with this appointment of wendy paskin-jordan. and there's a national crisis

in this country of corruption, looting of pension funds, pension funds going bankrupt and city workers and public workers losing billions of dollars. what are the reasons that happens is because of these hedge fupdz, as a funds, as a matter of fact. some people thiz thaz're going to get the money. the supervisor said i want to get a lot of money. so do i. thousands of city workers signed petitions saying they don't want their what the city workers think and i think that's a statement really of the problem that we have here. the city workers retirees an active city workers have a right to have a pension fund that is going to be secure and they're very concerned that proposals to turn it into hedge funds will put their pensions in jeopardy and the fact that you have somebody who sells pension funds, who invests in pension funds and is on the board and you're

going to be reappointing this person to a five year term, what does that tell me an otherwise city workers? that you would have somebody that has a personal conflict of information on the pension board, who's questioning we're having a trial. ed lee was informing about this conflict of interest before he reappointed here and he continued to reappoint her. that tell ls me this mayor is not concerned about the retirees and active workers in san francisco. he's more concerned about getting his friends or cronies in positions where he can give money from the pension funds. that has to stop. >> thank you, next speaker please.

>> i think there needs to be an alternative and i think

it's important that the board access it. we have a good retirement system. we're one of the best in the country and i want to keep it that way. i don't think investing in hedge funds in the direction or since we got this new chief investment officer is going and i think it's important to ask the candidate about these questions. thank you for the opportunity to speak. >> i'm also a retiree with the first program system and i just wanted to comment. a few people had said we should be giving her the benefit of the doubt. frankly, having worked as a career traffic engineer in the city we were always told our behavior had to be exemplary. we couldn't have the appearance of impropriety. we're in a fish bowl as public employees. in the retirement system you're really in a fish bowl

so these questions of ethics are important. we have appealed to every who spoke to the board and made some very wonderful presentations. she didn't show so i think she has a lot of explaining to do. i very much would support this motion to have her come to the board and answer these

questions. >> before the next speaker comes up, i'm going to reminds everyone this is about wendy paskin-jordan so just please keep your comments related to her reappointment, but not about in general what the retirement board can or should not do. thank you. next speaker, please. >> i've been a san francisco voter since 1908 and am the city of somebody who will have a city pension in a few years an i know he agrees with me in all this. i want to thank you for your unanimous vote to ask the pension board to invest in the fossil fuels. that was such a different time. during the nearly two years since that spring 2012 vote the retirement board has done