on-line web forum, but we use multiple intake channels to make sure that it's accessible with any reporters. regardless that the reporting channel that the reporters use, each report is assigned a unique tracking number so it can be reviewed as quickly as possible. one of the our new features is we've allowed the implementation of walk-in complaints. next slide, please. the whistleblower program closed 585 reports in fiscal year 19-20, and we did see in an average of 64 days. the program closed 75% of those

585 reports within 30 days of receipts. we recognize if approximate we do not resolve reports in a timely manner people don't feel that their investigations are being investigated seriously. there are a number of factors that we believe that influence a report closing in time, including the type of allegations, the sheer number of allegations made in the report [inaudible] and the availability of city employees to be able to work from home during this time of covid [inaudible] next slide, please. of the 585 reports we've closed, over half, or 381, reach closure after an investigation. an investigation includes research and other preliminary information developed in determining whether a full [inaudible] investigation is warranted or possible. whistleblower staff will lead

certain investigations whereas other departments can head certain investigations or have further city oversight in the investigation and response. further city ordinance utilizes all [inaudible] involved [inaudible] must respond to the whistleblower program on any actions taken in response. all responses are reviewed by the program before any case can be considered closed. next slide. this chart summarizes the disposition of closed complaint is dating back to fiscal -- complaints dating back to fiscal year 16-17. [inaudible] but having this whistleblower program as a city central point ensures that systemic issues and risk trends are identified promptly so that

city management can address them. jeff talked about the close working relationship we have with the ethics commission and their staff. we also work very closely with the city attorney ease office and district attorney's office to review complaints and make sure that we get them where they need to go for whistleblower investigations. 106 investigations resulted in the department taking corrective or preventative action, and we believe that the factor substantiation is increased when well informed reporters make [inaudible] that are investigated effectively and timely. the program has reissued a

[inaudible] grant misuse, split purchases, and miss characterized expenses. -- mischaracterized expenses. next slide. of the 130 reports open on june 30, 43, or 41% were 90 days or older at that time. the whistleblower investigators delays that affect closure and worked with leadership to improve these issues. [inaudible] they increase the investigative skill kesets of these employees [inaudible] and just recently on tuesday, we had our annual deputy liaison training that was attended by

over 90 members of the city family. all right. and in the next and concluding slide, we've got our fiscal 19-2020 initiatives. we're hoping to close out 90% of our whistleblower cases within 90 days. we continue to issue reports on the issue of our fairness reporting activities, and we are hopeful and it is our plan to have the q-1 report issued by the end of this month. additionally, we'll be hosting two webinars to instruct on [inaudible] and hosting techniques. we had an attendee from the northern marianas last time. we implemented a new case management system that we began testing yesterday, training our

department liaison on how to conduct remote investigations, which is what we discussed on our tuesday meeting, and then [inaudible] from our peer jurisdictions. so these are some of the things that we're doing, and we hope to continue providing san francisco one of the better known and better considered whistleblower hotline programs. this concludes what i have prepared to present to you today. happy to answer any questions that you might have. >> chair ambrose: thanks, dave. nice to see you, and appreciate you and your report. commissioner, do any of you have your hand up to ask a question now? i think commissioner bush or was that up from previous? >> commissioner bush: no, it's current, thank you. >> chair ambrose: okay.

if you could, please. bu>> commissioner bush: there' some background to the whistleblower program that gives some resonance to what we're facing now. the program was actually begun in 1990 by then-mayor agnos, and the first whistleblower was a guy named ed lee, who went onto become mayor of the city. it stayed in the mayor's office until mayor jordan became mayor, and he transferred it out of the mayor's office and over to ethics, and then, ethics took responsibility for the program but didn't implement anything with it, and it was in 2003 that ed harrington, as controller, helped draft a charter amendment, which was the 2003 prop c that made the whistleblower program split in

half, part back to ethics. the first thing that started it in 1990 were problems at the department of human resources. shows that some problems last a long time. when you come back to overall questions, i have a series of questions i want to ask about the whistleblower program now. thank you. >> chair ambrose: all right. thanks for that. i'm wondering, again, if we shouldn't see if there's any members of the public that have any comments before we get into questions with the controller's office staff, so actually, moderator, if you could please find out if there are any public callers in the queue. >> operator: madam president,

we are checking to see if there are any callers in the queue. for those of you wishing to speak in public comment, we have just finished the presentation on item 5, discussion and possible action on presentation by controller's office whistleblower paragraph staff on annual report of whistleblower program for fiscal year 2019-20. you will have three minutes to present your public comment, six minutes if you are using an interpreter. please hold. madam chair, there are no callers in the queue. >> chair ambrose: all right then. public comment is closed. i'm going to go back to the commissioners. commissioner lee, i see your hand up, so i'm going to look

and see if you have a text -- you're typing. all right. while you're doing that, i'll go ahead and let commissioner bush pose his questions, please. >> commissioner bush: thank you. i have a series of questions, most of which can be answered quickly. the whistle blower program seems to have handled its cases in a period of 50 to 64 days, which is quicker than what we've been able to do on ethics. what has made it rapid from the filing of a complaint to conclusion, the whistleblower program? >> not knowing the specific inner workings of ethics, i can tell you what might be

applicable. we have three full time investigators working 40 hours a week, and then, we have three part-timers usually working with 10 to 15 hours -- about 10 to 15 hours, so i think we're pretty well staffed. one other thing that allows us to close complaints out quickly is the quality of the complaint that we receive. the whistleblower's office is open 24 hours a day, seven days a week, 365. we'll close something out 15 days, two weeks of receiving it, rather than keep something open, so i think that might be one of the things that allows us to close things out quicker

than staffers at ethics do b. h >> commissioner bush: i don't think we have three people who are involved in investigating complaints with us. >> through the chair, i wonder if i might offer some additional perspective on that question. >> commissioner bush: yes. >> chair ambrose: please. >> i think the whistle blower program certainly operates with tremendous professionalism, and the work that they do to move quickly through those reports is commendable. i would add a couple of distinctions to what dave said. one enables the charter whistleblower program, as dave described, to refer complaints to the subject departments, so

the investigative staff at the whistleblower program, which is larger than the ethics investigative staff investigates some but not all of the complaints. so the 90 or so departmental liaisons that we met with on tuesday also conduct quite a number of the investigations on reports that come through that office. a second distinction that i might offer would be that when the whistleblower program closes an investigation, it does so with a series of recommendations, so neither the charter nor the campaign and governmental conduct code provides remedial powers to the whistleblower program, and in contrast, the ethics commission, it does retain remedial powers, which means when we endeavor to close an investigation, it -- it may -- it may include what can be an elaborate process either to

settle a case with a respondent or to engage in administrative proceedings, effectively administrative litigation, which, as you know, itself can be a very lengthy process. so the numbers that we track include quite a number of layers of process that don't apply in the context of the whistleblower program. and so as i mentioned, the work that they do and the speed with which they work is really extraordinary, and we are endeavoring to increase our speed and better resemble the work that we do, but i would offer those clarifications to explain that the numbers, they don't lineup because the systems and the programs are different. >> commissioner bush: thank you. that delineates things further. it still goes back to you could

use more resources than what you've got now. for dave, do you have a dollar value on how much was involved and impacts to the budget the whistleblower program had? one of the ways to measure the success of a program is money saved because it tracks down waste and fraud. >> we have not tracked that because in our process, that's not something we can attach a dollar figure to. where we get an indication, might be theft of goods, or time, we might be able to quantify that, but many of the cases that we process each year don't involve things that we

could easily quantify with a dollar amount. so in some cases, we're able to attach a dollar figure, but many of the cases that we work on, including if somebody has a complaint that a bus driver was discourteous to them, i'm sorry that happened to you, but i would struggle to find a way to equate that in economic terms, and that's one of the reasons why we have not looked to do that in the past. >> commissioner bush: well, i think to the way that it can be done, it would be a useful method to look at. i noticed in the complaints that you reported, there are only two complaints that resulted in action at the police department and five at the sheriff's department and two at the department of human resources, and those are departments where there have been a lot of controversy and lawsuits filed about

wrongdoing. how does your report lineup with court cases, for example? are we seeing cases go to court that are involved in the whistleblower program? >> i think those are both remedies that are being used. we are limited in our ability to conduct investigations by the police department, for example, by the charter jurisdiction given by the department of police accountability. so when we have an investigation of that type, we would not investigate it, we would report it out. with the sheriff's office, we had several allegations, but after investigation, they were found not to be sustained. >> commissioner bush: weren't there some civil rights

violations, treatment of inmates at the jail? >> there was, and the sheriff is a little bit different because of union contracts which allow their employees more extensive rights and typical regulations than what we would operate under. so if you're reading about something in june, it might not hit one of our quarterly reports until a year afterwards, and so that would be some of the reasons that i see, particularly with the d.h.r., which is happening in a more current time frame, which is why we're not seeing a number in ta -- an extension in the number of sustained findings. >> commissioner bush: in your report, there is a number

[inaudible] i know in other jurisdictions, those situations do provide protections to the whistleblower. does our program allow protections like that? >> this is something i would like to confer with our city attorney. rather than give an incorrect answer to you, i would like to consult with the city attorney to see what information we can provide. >> commissioner bush: okay. there's another part to my question. what about retaliation? >> that question would be

better answered by jeff pierce, and he would be better able to answer that. >> commissioner bush: all right. >> well, i can try to answer both questions, but deputy city attorney givner is welcome to jump in. [inaudible] they're available to whistleblowers who made a complaint in good faith to the wrong office. so conceivably, if someone complains to the board of supervisors, they might receive protections under the language of our ordinance if we could establish in that case that they believed that that was the appropriate avenue to do so. i think it may be a harder question to evaluate, whether bringing a complaint to, say, a federal agency would result in

local protection, conceivably they would receive -- a number of times, it's really a question of policy, and i think you're aware that under existing law, even as amended a couple years ago, those whistleblowers do not receive protections under the law, meaning, my office would not be empowered to investigate and offer protections to those individuals, but the federal and state constitution offers protections to those individuals under their first amendment rights, and they could seek remedies against the government for retailiation in ways effectively that far exceed the protections that we

can offer them. and as a matter of policy, it's certainly credible for the city and county to decide that they wish to offer protections that encourage people to report in and not strictly to offer protections above and beyond those that already exist in the constitution that would encourage people to vote or to report out. but i can pause there before turning to the second question if givner wants to jump in. >> mr. givner: i don't have anything to add on those. thank you. >> sure. so to your second question, commissioner bush, what the consequences might be, the commission retains authority to impose financial penalties against a respondent who is found, after a hearing on the merits, to have committed retaliation. and under the charter, those

penalties can be up to $5,000. i think there has been some conversation whether that respondent would be personally liable for that $5,000 penalty or whether they were acting within the scope of employment and that somehow the city would pay the penalty, but that remains to be seen. beyond that, you may know that the whistleblower protection ordinance empowers the commission to do two more things, but those two additional things are recommendations only. one is to suggest, to recommend, that the subject department impose discipline on the employer who took the negative action, and the other is to recommend that the subject department unwind that negative action and restore the whistleblower to their preretaliation status, whether that's undoing a transfer, undoing a termination, revising

a performance evaluation, but again, these are recommendations only, and they're subject to the civil service rules, union protections, and everything else in the labor context. >> commissioner bush: thank you. what i'm getting at is san francisco would not face a situation like we've seen in washington where federal employees testified before congress under subpoena and did so under oath and then later lost their jobs without apparent consequences for the people who fired them. and i just want to make it clear in the presentation today that that situation would not happen in san francisco. am i correct? >> are you correct that

employers who -- who took or required an adverse action to get rid of the whistleblower would face no consequence? [please stand by]

and looking at the supervising branch, the elected official for any of those departments, one would hope that they would create a culture where retaliation wasn't tolerated. again, that goes back to training issues and support from d.h.r. and other entities in addressing what the appropriate way of dealing with it. before i ask any other further questions, i have questions from commissioner lee that i'd like to present. commissioner bush, is that ok or did you have another follow-up question?

>> no, i'm fine, thank you. >> commissioner lee, she asks regarding the tip line, how does the number of complaints compare, say, with other cities? are we get agro bust number? she notes that the number of complaints seems low. >> i am working a you have of memory here and whatever call is, when we have take and look at other jurisdictions with tip lines, we're actually overperforming and receiving more complaints than they are. as of sheer volume. the last comparison recall hearing was with san diego and we were receiving more complaints per employee than san diego was. it may look small in number, but i would also point out that

ier single year since 12-13, we've received an increased rate. we're doing something right as an avenue to report wrongdoing and [inaudible] fraud and abuse. can we do more? we can always do more. but as a comparison, it is my recollection that we're overperforming some of the comparable jurisdictions with comparable programmes. >> and this is my question as a follow-on to commissioner lee's question about the tip line. do we do outreach to our contractor community about tip lines in the same way that every city employee, you know, sees >> portia:ing in the break room and get regular information about the availability of our programs. what about our contracting community? >> about this time last year,

if we're engaged in a process with d.h.r. and also an aught reach to contractor, we put a pause on that once covid hit. but it would be great to see where we are now in that outreach effort. >> because of all if you look at the city's budget, a considerable amount of work done through the employee programmes, we also have literally billions of dollars of city business done by outside contractors. do you have a demographic breakdown on complaints and do they correspond to the city's workforce demographic break-up? >> we do not collect that information from our reporters. most of our reporters present

anonymously. that is not something we have asked of them in the past. >> all right. i understand your reasoning. i will allow commissioner lee would like, she can raise her hand again. any other comments from commissioners? i have one quick one. one of the things that is kind of interesting is that in this covid world where you have -- i don't know what percentage, but some people are out to the show up on the job. a good number of city employees are looking remotely. has that made it more challenging for you to do investigations? have you seen more complaints around the changing circumstances related to covid?

>> i think i would answer that question in two parts. the first part being operationally. how have we been able to respond? we hit the ground working remotely on march 13. now seven months aing and haven't lost too much traction in our ability to do this work. where we've seen some issues with other departments that haven't been ready to work remotely and that has delayed the responses as a matter of course. there have been some delays due to covid and people working remotely and not able to have the tools to do the work we're asking them to do. but that hasn't been the case. we did see a dramatic downturn

from quarter 3 to quarter 4 of last year. we were on track to receive almost 200 complaints but i think it was 99 so half of what we were thinking we might see came in. and that is probably a result of people interacting with each other in the workplace. people having to complain there and the type of complaint. right after everybody started sheltering in place, some people were essential. some people were not. some people have complaints that they were essential. some people have complaints that they weren't essential. and those have dried up now. but we saw a rash of complains about working conditions when people still had to go into work. people had concerns about masking. some people were masking and

some people weren't. some people had adequate cleaning supplies and some people didn't. when we went through that procedure of figuring out how do we work remotely and safely, the number of complains is about workplace environment complaints have dried up. i think we've come through it in the sense that we're getting more complaints about the things we were seeing a year ago in a way that six months aing we were seeing a difference type of complaint. we're still getting occasional complaints about people failing to mask and make sure to get those through to investigation within 24 hours of receipt because that helps with our employees.

>> it has been interesting to see the array of complaints. i think one thing that came up and we noted one of the earlier reports the number of additional complaints that you got just as the mohammad neru corruption indictment came down. i'm sure those whistleblower complaints or tips have been refered to the appropriate authority or division. so hopefully you'll continue to encourage and receive that participation. for our part, i appreciate the work that we want to get the

word out that we'll give them our full attention as they're brought to us. i don't know if anyone else from the department had any comments because, if not, i'm going to go on to the next agenda item. we have a full agenda today. >> no further comments, but i'd like to thank dave and steve and mark for joining us today. >> absolutely. >> absolutely. with, that i'll close agenda item number 5 and call agenda number 6, which is discussion and possible action on staff report on phase one of the government ethics and conflict of interest review. i'm going to ask patrick forge to give us a presentation on

this agenda item. >> thank you. >> pat ford, legislative chairs council. -- counsel. this agenda item is the first set of findings and recommendations as part of the commission's ongoing review of the city's conflict of interest in government ethics laws. at the commission meeting in september, this was identified as the top priority. the reason for that is pretty obvious but i'll state it here which is that there are multiple, serious, ongoing corruption investigations in san francisco. you heard about the work that the controller's office is doing earlier tooful and the f.d.i. made multiple arrests of both city officials and city contractors.

some of those individuals already pled guilty to federal charges. and on top of that, the city attorney's office is also [inaudible] that they hear about. they suspected departments, both profit and nonprofit. so, we're continuing to learn more all the time as these reports come out. essentially the goal is to and lie and interim what we're learning from the various agencies that are conducting investigations and to identify policy approaches to prevent future incidents. the reason that is so important is, number one, to restore the public's trust. anytime these scandals happen, it has a severely negative impacts on the way that people view city government and it's vital as a city and in particular as an ethics

commission that we show that we are very attendive to this and high priority to learn from these experiences and to make the changes that we need to prevent them. they are phrasing this as tone at the top. it is a huge issue. and i think that will be a major theme as well, how do we change for the better the tone at the top in the city. so, the project is being undertaken in multiple phases. the first is at behest of payments and the report attached to this agenda item provides staff findings and recommendations about this phase, about behest of payments. i'll give a quick presentation

about what staff recommendations to the commission is at this time and then be glad to answer any questions. first of all, behest payments is essentially made at the behest of a government official or employee. and usually that is an official asking for a cash payment to an organization. lots of times it is a nonprofit organization. currently, behest payments are defined in the law, in california state law. and both the state and san francisco require disclosure of certain behested payments. not all. kis closure is the extent of existing clause. existing clause is not to limit the kind of behest of payments that can occur. but officials can can for through disclosure only regime.

the reason it is focusing on behest of payments is number one we have learned that it involves significant ethics issues from that we believe that basic guardrails on this practice are needed to bring it more in line with existing laws on gifts and political contributions. in the second report, the controller's office recommended a substantially similar rule so we wanted to address that recommendation to us and also supervisor haney has introduced legislation that contains this kind of rule as well. it seemed timely to approach this part of the project first. essentially what we learned about behest of payments through the work of the controller's office, and the work of the f.b.i. is that there is a documented practice

amid employees of san francisco asking members of the public seeking to input them to make cash payments to third parties and we'll discuss shortly some of the exams that we have of that and this practice is problematic. for one, it carries a major risk of pay to play. pay to play is when there is an understanding that those who seek things from the city have to essentially pay for that. but pay to play is when people believe they are required to make a payment in order to extract favorable outcomes from government and severely undermines the merit-based trust of government and should generally be prevented in all cases. the tuberculosising problematic because they can be a conduit for outright bribery.

if a quid pro quo does, in fact, exist. we'll talk about that momentarily as well. and another thing that we learned through these investigations about behest of payments, officials [inaudible] behest of payments in ways that benefit them. the official will get some kind of benefit from the behested payment and, again, that carris the risk of pay to play since there is an elements of self-enrichment and undermines existing gift rules and contribution rules that limit the gifts and contributions that public servants can receive if they're ultimately able to financially benefit from a behested payment, it can be a work-around to those rules. these policy goals are not new. in this review, we were looking to existing gift rules and contribution rules to understand what the policy goals for those rules were and

to understand whether or not they apply to these payments and they do. they need to be included in the same kind of rules that apply to contributions. uno i want to give a quick overview of some of the examples that -- what we learned from the ongoing corruption investigations that learned that these kind of rules are warranted. first of all, as i mentioned, the f.b.i. isen gauged in a major corruption investigation in f.b.i. one of incidents we learned about in january in the complaint against mohammad neru and city contractor nick davis is that neru engaged in a conspiracy to bribe an airport commissioner on behalf of two individuals who were seeking a

concessions contract in s.f.o.en they turned out to be f.b.i. informants and had involved an undercover officer so they were secretly recording conversations and in one of those conversations it is xlaoer that they were coaching these individuals on how to use a behest payment as a way to bribe the appropriate commissioner. they instructioned them they would find out which organisations the airport commissioner would like them to donate to and then by making the donations they would secure that commissioner's support for their contract. that >> connie: taouts a bribe and even absent quid pro quo it would still be pay to play. because people think that by making the payment, they are securing favorable treatment. another example that we've learned about, and this comes

from investigative reporting, we learned that public works have an ongoing practice of asking contractors doing business with their department to make behested payments. the most notable examples are the garbage contractors that handle the city's waste and also, of course, public works plays a major role in setting the rates for that garbage contract. so definitely an organization that has a lot of financial interest at stake. and also major construction companies like clark, also making payments at the behest of mohammad neru and other high-level employees within the department. again, that is problematic

because there is a risk of pay to play. that i that ear getting contracts and these rates are being set in large part by the director of public works. many of these were going to accounts and ultimately to public works employees. so, perks alliance was one organization. so, public works employees were directing the payments to parks alliance and then the parks a alliance account where this money was heading held was under the control of public works employees. they were making direct payments to themselves. they appeared to be reimbursements for departmental costs >> however, in any situation

that that was not the case, that would be a gift and that was a major problem. the other thing that we learned is that the public works employees were directing payments through a nonprofit that was not only providing services to children, giving them sporting equipment, but we know from investigative journalism done on this, it was spending money on holiday parties that cost $30,000 or $40,000 so it was ultimately benefiting the very people who are asking for it. that is problematic because it can carry a major risk of pay to play.

another thing we learned is that there are documented incidents, according to our review of at least one lexed official in multiple cases acting for behested payments from restrictive sources. our review was limited, necessarily limited. we had to pick a certain group of filings to look at because there are many. what we decided to look at were behested payment filings by mark ferrell during the review period was a member of the board of supervisors representing district two and we compared those filings gwen existing lobbyist disclosures and essentially what we were trying to see is whether or not supervisor ferrell was asking people who were either lobbying him, meaning the lobbyists, or the people paying those lobbyists to lobby him. they asked him to make behest

of payments. the reason we looked at that is that those individuals would constitute restricted sources under city law. meaning they could not give supervisor ferrell a gift. existing gift rules prohibit restrictive sources for giving gifts, restricted sources are those who are either doing business with the officials department or who have sought to influence the official in the last 12 months. so, obviously if you are lobbying somebody and reported that lobbying contact, you [inaudible]. not to say that this would have been unlawful for supervisor ferrell to solicit these. this is part of the point of this project. there is a loophole here in the law and that is what we're hoping to demonstrate with this review. so, we reviewed documents from april 2015 to june 2018 because those are dates when we have electronic data for behested payment filings and, in that

period alone, about three years, we found four instances where supervisor ferrell asked entities or individuals to make behested payments who are lobbying him. and those instances are detailed in the report and we'll go through each of them right now. but you can see who they were and what the dates and amount were in the report and we believe that this is problematic because, number one, it clearly undermines existing gift rules. you cannot accept a gift from someone, but you can ask them to make a behested payment, arguably the policy purpose for the gift rule is not being served. there is a way to get around it. and there is a clear risk of pay to play. if somebody is coming to a public official asking them to do something, in their official capacity and then in that same sense the official is asking them to make a payment, it definitely creates a [inaudible] that the payment is required in other words for the favorable outcome. there is also two other incidents in other

jurisdictions that i noted in the report. both of these come to us from two separate f.b.i. investigations. the first one is from the ongoing f.b.i. investigation in los angeles and involves a number of people for whom have pled guilty. but the main defendant involved is council member of the los angeles city council and he, at this point, has been charged with bribery, extortion, money laundering and on the services fraud. one of the schemes that's discussed in the f.b.i.'s complaint against him is that he was soliciting behested payments from partis that had matters before him. he was the chair of the land use management committee t committee of the l.a. city council that looks at large development agreements. he was asking those developers to make behested payments and, in some instances, he was asking them to donate to a private high school that

employed his spouse as a paid fundraiser. so, in this fact pattern, we have both kinds of harms that we looked that -- at in this report. you have a public official asking somebody who has business before them and trying to influence them to make a behested payment and that brings the issues of pay to play, potential bribery and then you also have an official directing organisations to give him a potential benefit through the income paid to his spouse and that could be an end run around gift rules and have serious pay to play implications. another incident we know about through the f.b.i.'s work involves former state senator ron calderone. this took place in 2014. he asked two individuals that he thought were filmmakers to direct behested payments to a

particular nonprofit organization and there was an explicit quid pro quo that because of those behested payments he would support favorable tax legislation for those individuals. the payments were made to a nonprofit that his brother was in control of and ultimately those funds went directly to ron and tom calderon. so they were bribes through this organization and turned out that the two filmmakers were undercover f.b.i. agents and senator calderon was ultimately charged, pled guilty to bribery, money laundering and honest services fraud for this and a number of other schemes. and was sentenced to a term in federal prison. so, both of these inens stas, again, very problematic from the perspective of pay to play and the worst case is actual bribery, when there is a quid pro quo established and clearly is a way to circumvent gift

rules. that is a summary of what we know now, what we learned in the last couple of years of behest of payments and problems that can arise from them. the recommendations we're making in the report are two. first we recommend that san francisco create a rule prohibiting officials and employees from asking interested parties to make behested payments. interested party, essentially somebody seeking to influence that official or obtain the official's action on something. and there are four types of people that we identify as interested parties. first, people who are parties to certain proceedings in the city. people seeking permits, licenses, contracts. we identify contractors and their affiliates as interested parties. so, bhaoem are doing business with the officials department, people who are directors of

that contractor entity. major shore ha*ildsers of the entity, etc. we identify interested lobbyists who may not give gifts to officials so we believe that officials should not be able to make them behested payments and also discussed this earlier, restricted sources, we believe, are also interested parties. again, these are people either doing business with the officials department or who have sought to influence the official or employee in the last 12 months. notably the recommendation that we're making would still allow behested payments to the city. so, if the official or employee were asking somebody and including an interested party to make a behested payment to a city fund, that would be ok. and that is in line with the controller has shown in their report that it's really noncity accounts that are the issue. when it's a account subject to

all the controller's accounting processes and audit processors so we don't have the same dangers there with pay to play and self-enrichment. we believe this rule is important because it could serve as a basic guardrail on the practice of behested payments. none really exist at this time. although gifts and contributions are regulated and defined certain amount of them as problematic and we prohibit them. we do not do the same thing for behested payments. this recommendation would still leave untouched the vast majority of fund raising. by looking at the existing disclosures in san francisco, it's pretty apparent that behested payments from interested parties are a nicer row slice of the overall fundraising that government officials do.

in the last two years, we've only gotten 29 filings that represent $300,000 payments to nonprofits. annual lieed, that is an average of $150,000 per yore. not very much money at all. i would create an important safeguard and a guide post for officials to know that we cannot ask interested pears to make these payments. the other rule that we recommend is that officials and employees not be allowed to direct behested payments to organizations that are a source of income. through that official or employee and that would include the official and employee's spouse as well. just under state law, spouse solve income is considered personal income.

the reason is to prevent the circumvention of gift rules. again f you can't accept a gift from somebody, it doesn't make sense that you could ask that person to make a payment to an organization that will ultimately pay you. that is an end run around the rules and it avoids the danger of pay to play and bribes as well. we believe this recommendation builds on the controller's recommendations regarding [inaudible] accounts. the controller recommended that noncity accounts come under the city's audit processes. and we believe that that means that if it means an organization is going to pay income to the official or employee, that means that it's not an appropriate, noncity account for them to be sending behested payments to. so, that practice should not be allowed. so, in conclusion, what we're

recommending for today's meeting is, of course, that you be able to ask questions about this recommendation and about both recommendations and the review process. i hope that you'll have a policy discussion about the recommendations and even though i recommend that the commission, assuming that you do agree with these recommendations, has a motion that essentially endorses the recommendations. the context is that point of views sort haney, as i mentioned, has have deuced legislation that contains a rule substantially similar to staff's first recommendation that city officers not be allowed to solicit behest of payments from interested parties. the commission's approval is actually not required. this rule is in a chapter of

the campaign and governmenttal conduct code that can be amended by the board and acting alone. the vast majority of policy projects, of legislative projects, the commission's approval is required. usually the recommendation is that you review the recommendations and that staff will then work with the city's attorney office to draft legislation. the legislation will come to you and your approval is required in order to move forward. that is not the case with this ordinance. so i think my recommendation envisions that if you were to approve motion endorsing some form of these recommendations, that then that would be direction to supervisor haney's office as to what your preferences are and hopefully he would follow those recommendations. and also that would be a good direction to me of how i can engage with supervisor haney's office and other members of the board on this legislation to

further your policy determinations on this. however, obviously future agenda items could be agdsized. this could come before you again if you wanted that or you feel like you will have a consensus on what you think the best outcome is, you could communicate that through a motion and i will do my best with the board to carry that out. that wraps up what i wanted to present to you and i'm glad to answer any questions that you might have. >> thank you, pat. what i would like to do, because you do have two very specific recommendations for us to consider, aye like to take them separately so that we have a very clear and complete discussion about your proposal -- >> [inaudible]. >> city officials and employees from soliciting behested payments from interested parties which i think is

something we have seen similar in the legislation that supervisor haney had initially introduced and then, second, take your recommendation that we expand our behest of payment regulations to include nots the city officials and those elected and appointed as well as employees by restricting third-party recipients of the -- i think how you would characterize this by saying that if a particular nonprofit was a source of income to either the employee or their spouse, that the employee would not be allowed to solicit gifts to that nonprofit. so, i want to start with the

first one, which is prohibiting city officials and employees from soliciting behest of payments from interested parties. i see hands up from commissioner bush and chiu and i'm sorry i don't know who had their hand up first. commissioner f you want to go first because you're -- >> sure. thank you, chair. i had a procedural question and just from my own understanding. when the ordinance was initially passed it required a super majority approval of both the commission and the board of supervisors. and so now, however, we -- changes to the ordinance can be made by aprove al through just the board of supervisors and the mayor. how did that come to be? >> the reason is that -- and i assume you're tucking about the accountability arm. that ordinance contained provisions that affected both

the behested payment rules which are article three, chapter six, which does not require commission approval and changes to article three, chapter two, which does require aprove al. so, stlins were elements that required commission approval, the ordinance itself required commission approval. this one does not blend elements to chapters. it's only in that chapter that does not require commissioner approval. >> so it is entirely possible then that the board of supervisors -- we can provide our input to the board of supervisors, but there is no -- they could or could not take it. >> that is correct. yeah. and that is why the recommendation is still -- procedurally a little odd because it's difference than every other policy project that we've done. but i will say that i have been working very closely with courtney mcdonald, a

legislative aid to supervise source haney and she is here today. so she's prepared to talk with you and answer questions that you have. but thus far they have been very, you know, open and responsive partners on this. so she can talk about the supervisor's plan moving forward with legislation. but i would hope that that relationship would continue as it has been. >> thank you. >> all right. commissioner bush, then, if you want to ask your question. >> i have a couple of questions. but before i do that, i want to congratulate mr. ford for what i consider to be one of the best reports that i have ever seen come out of ethics commission. it covers a wide range of issues and it does so with details and examples from other jurisdictions. kudos to you.

>> thank you. i will say that that thanks also due to all the folks that i cite in this. the controller's office, the f.b.i., the investigative journalists. they did a lot of the leg work to unearth these things. >> it speaks well that you acknowledge others. how many other states have the equivalent of behest of payments? >> do you mean regulations? >> i mean how many allow officials to solicit contributions for a third party, even from people who have business before their jurisdiction. >> i don't know. i don't know how many allow it. but what i do know is that there are a number of jurisdictions, both cities and states that prohibit the practice of asking for behest

of payments from interested parties. some of the examples are listed in the memo. the states in maryland, new york, new mexico and alberta and there are also rules in the fe ral executive branch and both houses of congress. number of proposals that you have, the money should not go to an entity that pays them. >> soish -- sorry about that. they also go for governmenttal purposes, not just to a nonprofit. in some case, we have seen

elected officials hiring staff for themselves or buying office furniture. being funded through behest of payments. envision covering those situations as well? there is not a direct personal benefit. for example, the america's cup. i was chaired by the president of the rec and park commission who was overseeing property that was going to be involved in the america's cup. the mayors decision at the time.

>> it highlights what i think is a really tricky part of this, which is where the public official has some degree of control over the funds. so on the one hand, we want to aed dress situations where that control leads to self-enrichment, which i think is the core issue. but still allow instances for the official to be involved in worthy nonprofit causes, civic projects like you mentioned in the america's cup. looking for staff or fortunate irn ishing government facilities. i think the distinction that i tried to draw here is when the organization to which the behest of payments are growing is actually the city. versus when it is an independent third-party organization. be it nonprofit or otherwise.

the reason being that the official would not have full control. anytime you have going through the city, the controller's office is ultimately in charge. they have processes in place to ensure that the money is misappropriated and that it is documented. etc. >> this is spoken about some of the gaps that exist in current law. one of gaps that i see, certainly legal as i understand it, to seek behest of payments and go to a nonprofit and do not register as lobbyists. and so as an advocacy group, they approach the same elected officials. to adopt policies that favour their industry. and that certainly happened

with a number of indices that exist in this city. so there may not be a personal financial benefit but you are, in effect, fertilizing an existing structure that turns around and, with those resource, advocates official actions and by law we have said that groups like that do not lobby. how do you cover that? that is a classic example of corruption in the city. >> to me that speaks more to the first recommendation that if an organization or person were attempting to influence an official, that would make that

person a restricted source under existing law and prohibit them from making a gift. >> how would you know they were attempting to influence the person? because since they're not a lobby, they don't haves to disclose who they meet with. who knows how much they're spending to do that. >> that is exactly right. persistent sources are not always identifiable through public documents. it's true. it's true talking about lobbyists and clients that are have documented lobbying contact, that is very clear to see and why we focused on the end of report. but there are instances where people attempted to influence government officials or xwraoeps and that is not subject to an existing disclosure. that would be highly fact dements and essentially something we would have to educate people about, of how to know what constitutes a restricted source and never to accept gifts nor ask for behested payments from such

people and we would have to factor this into our enforcement divisions of how to detect and penalize that conduct. >> well, i'm hoping for a full loaf and not a half loaf when i comes to these issues. >> can i interject here because i want to make sure that we're really clear about the different categories of the people asking for who they're asking and who's receiving it. when you were talking about these various nonprofit organisations whose nonprofit mission is to influence government, that is also -- their activitis are under our constitution recognizes the abilities to petition your government for redress, to engage in public discourse, about policies. so, we're not saying that, you

know, we're -- we have a problem with the fact that these organisations engage in policy discussions or contact supervisors about their problems with the ordinance or something. what we're saying is -- i think what i hear you saying is that if they are attempting to influence -- this is where i think we also need to get clear. because what we're proposing is changing. right now it is lexed officials. we've added commissioners and now you're proposing to add all employees who file form 700. i think by aeding a ul of those potential people who were subject to this rule, and then broadening -- i totally understand anyone who has as a, quote, interested party, as a

contract, has a pending permit application, that that employee is involved in. what i don't want to do is create rules that are ambiguous, where we're nots seeing perfectly legitimate engagement in fundraising for nonprofit organisations of which, for example, can be many schools and hospitals. we want to encourage people to support in our community. so, let's just be really clear about that. in terms of restricted sources, including persons who have sought within the last 12 months to influence the legislative or administrative action of the employee in question, when you say legislative action, so if you have whatever, a nonprofit

organization who writes a letter to the board of supervisors and says i really hope you find these resources for p.p.e., for grocery store workers or whatever, those are -- that doesn't mean that, you know, that entity wouldn't be allowed to -- that somebody who was an employee of the city would be ahowed to support that organization who made that request. i just want to be careful as we expand the skoem of this, that we're not unnecessarily capturing people who are engaging in perfectly legitimate activities. >> to answer that question. so part of the benefit of kind of -- to keep backing this rule on to existing rules like the

restrixed service rule is we benefit from all the regulations, advice, etc., this has been developed on those rules? there is an issue that you're talking about that says that the following shall not be deemed an attempt to influence an office or employee. one of them in the list is oral or written comment that becomes par of the record at a public hearing. that is not attempts to influence legislative action that makes you a restrictive source. so we would read that directly into this rule as well. that would mean that just by giving written public comment or oral public comment at a hearing, that would not make you a restricted source. it would have to be something more direct or something that is not public. >> ok. and right now when folks -- i mean, right now this rule applis to elected officials and

bores of governance and by expanding it to employees, what do we say we have? 3600, something like that, form 700 filers. who answers those questions? so before i send out that letter to all my friends and family and ask them to buy raffle tickets for my kids' schools fund raiser, who do i check with to make sure that, you know, my kid's school is not seeking a permit for, you know, new building or whatever. >> just to clarify on that fact pattern, i wouldn't matter whether the school was seeking a permit. this rule would not prohibit you from behesting money to an interested party, but it would prohibit you from soliciting money from the interested pear. what you want to look at is

whether or not the people you are asking to make the payment are interested parties. so for that, you would want to ask the ethics commission and contact us and we would be producing compliance tellser and helping to educate employees and officers about how to go through that inquiry and also the city attorney's office is always resource as well. >> there going to be a list of every entity that is a contractor? maybe there is another exception. the other exception is that applies in certain circumstances. if you do a general solicitation to a certain number of members of the public at large and, as opposed to a phone call to some particular specific interested party, then you are not subject to the constraint. >> that is right. in the code, that is called a public appeal.

and the fact pattern that you are describing would probably be a public appeal. if you send out enough. solicitations. i'd have to look to see what the number is. if you ask enough people at the same time, it is a public appeal and it is not considered a behest under the code so that would aply here as well. >> ok. and then finally, if this amendment does extend to the 360 filers, i'm assuming that is an m.o.u. issue that requires meet and confer. >> it does. >> and then yvonne lee's question is railroads regarding the source of income ban, you proposed adding spouses to the ban. any legal reason not to expand

the probative list not to be immediate family members, spouse, children, siblings, parents? so that will be -- actually now that i think about it, that will come up when we talk about your second recommendations. so, a imgoing to go back on the recommend diagnosis prohibit city officials and employees from sewly sitting behested payments from interested parties with the definitions that had outlined. are there any other questions or comments about that particular recommendation? and i see hands up but i don't know if that was from before. do you have any questions about that particular item? with that, i ament going to jump to the -- what we'll do is talk about each one of these separately and then ask for public comment and then ask for a motion after public comment

is closed. or maybe i should ask for a motion before we go to public comment. on the second one, on the behest of payments that is an entity that is a source of income for the official as commissioner lee inquired would also be the official and their spouse or also potentially immediate family members, sibling, children, parents. this would prevent sewly sitting behest of payments from any source the an entity that is the source of income for the official or the official spouse. defining officials including elected officials, members of boards and commissions and department heads, employees as all form 700 filers and income means any economic interests, reportable on form 700.

i noted in the start. in your contacts with other state and local government, you do regulate these kinds of precipitations that there are a number of them that do restrict the recipient of behested gifts. or behested payments. and i'm just curious who -- in those circumstances if you know, what is the universe of people that that rule applis to? one -- just to put it all out there, one of concerns that i have, having been an attorney for a number of commissions many my career in the city

attorney's office, we have a citizen form of government. we have literally now probably 100 commissions and numerous commissioners who, because of the way that the charter divides legislative and executive power between the board of supervisors and the mayor and the commissions, we have a lot of commissioners who -- whose spouses do work for nonprofit organisations. and in my experience, they are clearly some of the most ethical and beneficial donors to the city's public engagement by serving on these commissions. i am, frankly, worried about

the idea not that these people whose -- who themselves are, you know, executive directors of nonprofits and whose spouse may be a executive director of a nonprof. clearly i agree that they shouldn't be able to solicit contributions from a restricted source. [please stand by] [please stand by]

>> without knowing what the supervisors are going to propose and the public testimony at the board, i myself, would hold back on making that recommendation until we hear from folks. we're not getting lot of public participation in this meeting. you have a stakeholder groups that are following what we're doing and what we're recommending. i don't know if there's an opportunity for them to have gotten the agenda and really

understood what the recommendation is. that's my set of concerns about the second piece of it and now i'm going to look and see if anything has any comments or questions for you as well on this part of it. >> i think you mentioned the question from commissioner lee. i can answer. the reason why i limited the recommendation to only the spouse of the employee, under california law, only the spouse's income is considered the income of the official employee. when i file my form 700, i report my spouse's income. i don't report any other family member's income. that's most likely a feature of california's community property law that i have a community property interest in my spouse's

income. half of that income is my property. i tailored the recommendation to that. one because there's no illegal interest in the spouse's income and also because from a compliance and enforcement perspective, to have that income already reported on form 700 i think it's really crucial if the official employee has that documented, it's easy for them to know that this is the source of income for me. they have to think about their brother's income and child income, it can get very complicated for them. i did not include that. i would argue not to the same extent as it would with the spouse. >> if i can chime in. there are issues here that are

not theoretical but based in the fact. we have had elected officials who created a nonprofit and put their own political consultant as executive director who went out and raised funds from entities. shouldn't you cover naming a staff member who is going to be paid from this nonprofit? it's another way of providing a stipend to the staff member. second thing is, when an appointee official is asked to chair something, they're in position to say no. they are pretty well coerced, if they say no, they may lose sitting on the commission. yet, they are soliciting money from people who may have issues before the city. we see both of those things

happening. we saw it with the super bowl l. we saw it with the san francisco city hall centennial. we seen it with the conference of mayors meeting in san francisco. all of those were one-time nonprofit set up by the mayor and by his appointees and staff. it's not any secret to the people of san francisco that this is how the game is played here. for us to pretend it's not played that way, not addressing it is wrong. in my view. >> i like to understand better under the proposed rule of prohibiting officials and employees from soliciting from interested