>> >> city of san francisco

>> june 5, 2015, >> city of san francisco ethics commission >> is under the weather and

unable to appear today to the extent there needs. the deputy executive director

will serve in that roll. item no. 2. which is the principal agenda item which initially when this agenda discussed is a presentation regarding the potential need for an implications of imposing limitations on candidates and controlled ballot measure committees and/or legal defense fund. i believe we have some guest who are going to provide us with some input. thank you. >> that's correct. good afternoon commissioners, jessie, menary deputy director. as you recall earlier this year the commission investigated a

ballot measure which are not directly related to campaign office. this is ballot committees which raise fund for ballot measures. the purpose ballot measure committees which raise funds for and opposition to varied unspecified measures usually a number of election cycles. and three, legal defense funds which allow candidates to raise funds for legal expenses to be candidacy. there is no limit on how much they may raise although some are prohibited from contributing. campaigns, may generally

make contributions to committees. this item today is part of due diligence in further exploration of this issue. we have two people here to tell us about this and depending on the matter certain restrictions maybe advisable. our speak er is bob stern. a co-op of proposition 9, the political reform act of 1974 which continues the campaign disclosure and san francisco laws and ethics and public campaign financing laws. bob served as the first general council as the fair and political practices and the president of the center for governmental studies in los angeles. bob has been honored for his

service by a number of groups including the league of women voters, pomona college and government on ethics law. bob is a graduate of stanford law school. our second speaker is corey cook. he's an associate professor at the department of politics at the university in san francisco and also served at the center for service and common grood. -- good. he teaches courses in political institutions. his early work concerned campaign finance reform and election results in california. corey is considered and expert in san francisco politics. he is widely quoted by national and

local publications including the new york chronicle and san francisco times. he was named the dean of boise state of college public service and will assume that position this summer. each of the speakers is going to make a presentation and then we'll take questions from the commission in order. we'll start with bob stern. >> thank you very much, mr. chairman and chairman of the commission. it's a great day. now that the clippers aren't in the playoffs, i will root for the warriors. as indicated i have worked for the fpcc for 9 years and since 1983 center for governmental studies that studied campaign financing

and process and redistricting and term limits and came out with a report for how to improve campaign financing. one of our reports, money and politics, the golden state we study san francisco, los angeles and 18 cities and counties throughout california in terms of their campaign financing. this was in 1989 that we came out with the report. as far as we know it was the first book that ever looked at city and county on financing and we went for -- it it was biggest expense. we went to make many changes in the law and after a scandal involving the mayor came to public financing based on our book. cgf closed 4 years ago and i have been

semi retired then working as a consultant occasionally and appear as a speaker at several events. about 4-year ago cgs came out with a control to be ballot committees and that they have contribution limits. they adopted this but chuck bell challenged the regulation in court and the court rules that the fpcc did not have authority. that the commission didn't have the authority. as far as i know, no other jurisdiction has adopted a contribution on a ballot measure control committee. i think they should and i think you should consider it. the purpose of contribution

limits is to reduce the actual corruption or reduce the appearance of corruption when candidates campaign. there is no difference between a candidate and officeholder raising money for his or her own campaign as compared to a candidate officeholder raising money for a ballot measure if that candidate controls that ballot measure committee. a donor giving doesn't really care how the money is used. the donor only cares for the gratitude for giving. the donor at least wants access, an hour of time. at the most, the donor wants a decision in his or her favor. although none of

the contribution will go towards the decision. it's our estimate when i was at cgs we studied campaign financing statements and that 90% of campaign money comes from people who want something from government. a decision or time with the official. of course there are kind contributions from relatives or friends that want to support. but that's the majority of money. most of the people want something from government. campaigns funds come from labor unions, from developers, asking for permits or variances. campaign money comes from businesses seeking tax breaks. campaigns come from companies bidding on contracts. all of them want the support or at least the ear of the official. if you allow

unlimited contributions to allow to committee this is the way to controlled committees. a lot of people get involved in ballot measures for a lot of reasons. sometimes to improve their issue or stand in the way of their constituents or voters, sometimes ways to raise money from special interest. a contributor to a candidate controlled ballot committee may not even care about the ballot measure. the contributor only cares about his or her relationship with the individual. in some cases the contributor has no idea what the campaign is about, but will give the money because they ask for it. some think it's unfair and that it should have limits whereas

non-candidate committees don't have limits. in the ruling in the 80s, the ballot committees cannot be corrupted. it's unfair to the candidate or officeholder but also unfair that candidate and elected officials can raise money for people who want to improve the candidacy or official as opposed to opposed the ballot measure. let's turn to legal defense funds. i'm less concerned about legal defense funds since the fppc has some rules about how it can be spent. you have to have a pending investigation or case against you. you can raise funds in anticipation of something in the future. still they have access to money that you and i don't have. if i were sued today before you i couldn't go to special interest and ask for

financial support. they would laugh at me. but if i were an officeholder, the special interest would be lining up at the doog -- door to support my legal defense funds. i think legal defense funds should be strictly limited. they should have the same limits as the candidates committees. if you want to have meaningful contribution for candidates, you need to support a limit on ballot committees and a limit on contributions to legal defense funds. any committee t officeholder or candidate controls should have contribution limits. so i would be happy to answer any questions or respond to any comments you might have on my remarks. >> mr. stern, i do have one question and i just want to get a definition

under stood. when there is a ballot on the committee, is that focused on a specific ballot measure or are we talking about some general fund that the candidate sets up a committee and says i want money so i can decide which ballot measures i want to make contributions to? >> either way. any committee the candidate controls should be subject to -- contribution limits. >> it's the candidate who has the ability to direct where the funds go? >> yes, that's correct. >> would you be comfortable with different limits with legal

defense funds, candidate committees or campaign that there are no limits. >> i would prefer they be the same because you have already indicated what the limit should be for the candidate control committee. i would make it the same limit to apply to everything. but there will be no ordinance and no law. i would go to a higher limit. if you decide what the limit is going to be for a candidate control committee, it's going to be the limit for any committee whether it's a ballot measure. i know in some levels there is no limit for legal defense fund. if this was not what i wrote, this would be in the format, this was several years later that they imposed this. but i would impose limits at the state level as well on the defense funds. any of the candidate controls, no matter

what it is whether it's ballot committee, general purpose committee. anybody should have limits as long as the commission controls it. >> do you think that a limit on legal defense funds will deter in anyway good folks from running for office? >> no. >> if they are facing some frivolous lawsuit that they can't take money to defend while they are earning a salary to provide a public service, isn't that a problem. >> i would assume most people don't think they are going to have a legal problem if they run for office. secondly, if that person loses that person is not going to be able to raise money other than from friends

or relatives. it's only those who win. my guess would be that if you impose contribution limits on ballot measure committees, the candidate won't control the ballot committee. it won't be a major problem. but the symbol of it almost where a candidate should not be raising money for committees they control beyond the contribution limits. >> mr. stern, do you have an outstanding example of someone who possibly participated in this kind of activity and what was the outcome. an example stick out to you either on either of the campaigns. the candidate controlled committee or the legal defense. >> yeah. i will let mr. cook

talk about san francisco because i'm not that familiar. but mayor villaraigoza raised money for the ballot measure and would not be allowed to do that if it were his own committee. he was raising $25,000 from the same that would have given money to his campaign. governor schwarzenegger in 2005 was taking substantial amount of money for his ballot measure and well above the limits from the special interest. again, i think in many cases, not in all cases, but in many cases these contributors would not be giving to the ballot measure except for the fact that they were asking for that money. that's the problem. >> how is it any different than

if the candidate told these donors, i want you to contribute to this campaign and they go ahead and do it. isn't he getting the same benefit? >> that's a really good question. you are absolutely right. he's almost getting the same benefit. the difference is when they give to the ballot measure committee, the candidate doesn't control the expenditures of that committee. no. 2, the candidate doesn't get the benefit of perhaps other experiences being made by that committee for lawyers and for things that might help the candidate as well. but you are right, if the candidate ask you to give to another committee that you don't control, you may feel obligated to do that. i see a committee that is controlled by the candidate and what is not controlled by the candidate. it's a step in the right direction. if i were saying it, the

candidate should not accept funds at all. >> how common is it in california, fixed, at the local level like san francisco, l.a., any others where these separate committees are set up, candidate controlled committees for ballot measures. my information was that we only have one in san francisco and that's the mayor who has one. but how common is it that these are done? >> i don't think it's terribly common but seems like mayor's and governors like to do the same thing. i think if there are no restrictions placed on candidate control committees you will see more of it happening. that's why i think you should step in and say no, we don't think this should happen in san francisco. >> you said when you tried do it at the fppc level you were told you can't do it. why do we have the power

that the fppc did not have? >> you don't have the power to do it by regulation. i don't think. you do have the power to put it on the ballot and have the voters approve it and put it on the charter and that would be a different occasion. that would be okay. the department couldn't do it by regulation because the statute didn't talk about ballot measure committees. if the statute does, then the statute, it's not your power, it's part of the statute or the ordinance or the charter amendment. >> any other questions of any of the other commissioners? >> we've got some time limits partly due to the room accommodations here in the city hall, but i will try

to have public comment limited just to the testimony of mr. stern so that you can respond to it so that, but it should be limited just to questions or comments addressed to the speaker. do i have any public comment on that, on mr. stern's comments? >> if i might just say, chair, renne, thank you for your time. your name is often invoked here and it was a pleasure to finally hear you speak. >> charles mars ler speaking for ethics, mr. stern is my political mentor of about 20 years. so it's good to see him. i did have an

indirect question and wonder if there is an analogy between the need to impose loan limits for loans to candidates in a contest. and other types of issues that might a risen with legal defense funds or other types of entities that candidates might invoke that essentially have the net effect of obligating them in the future of a party. that is why this party back in 2000 put loan limits on the ballot with prop o's revision. and it's pointed out that loan limits if they are not capped might in fact obligate a candidate who is running for election if they are

elected to be holding special interest and raise money essentially in a way after the election when they might have more cashe to do so to payback their loans. or otherwise be obligated to the person they are be holding to. that's why i wonder if there is an analogy to be drawn between say legal defense committees and loan limits or contribution limits on loans to candidates. >> thank you, any other public comment? larry bush also from friends of ethics. i want to touch on 2 points that mr. stern raised. one is to have a

committee like this than to give directly. if you have a committee like this, it allows to have intact the structure. for lawyers, paying for polling and also making a decision yourself as to whether to place ads and where you are likely to have a good relationship with. that's what we have seen with mayor ed lee with san francisco committee because unlike the other three that i was able to identify in 2007 that was a committee that was involved in supporting a number of ballot measures. so any donor could have given to any ballot measure directly but instead gave it to mayor lee committee who then gave it to the other ballot measure committees. you have to ask yourself what was the advantage of that. and as i have given you a spreadsheet how much

money was contributed and the contribution were higher than $1,000 and $65000. that's a lot of money for someone who has strong interest. so i support all the things that mr. stern said and i have 30 years experience. >> thank you. >> good afternoon, commissioners, anita mayor from the lawfirm. i would

like to make a few comments on controlled contributions for the ballot committees. based on case law, limited contributions of candidate controlled ballot are unconstitutional. the rent control city limits that lenders of contribution to committees for ballot measures violates 1st amendment. in reaching this conclusion, the practice of persons sharing common views abandoning together to achieve a common end is deeply embedded in the american political process. two, the freedom of association is diluted if it does not include the right to pull money through contributions since funds are essential of advocacy to be affected. 3 to place a limit on those wishing to band together wishing their views and while not acting alone is a strain on the rights of the