Former Ethics Commissioners Articulate Basis
for Lobbyist Reform

“If the citizens are to know who is paying to influence City Hall, how much they are paying,
who they seek to influence, and what exactly they seek to influence,
it is the Ethics Commission that must not only generate the reports
but provide them timely and completely for the public benefit.”
– Former Ethics Commissioners Joe Lynn, Bob Planthold, Paul Melbostad,
Bob Dockendorff and Joe Julian.
Photo by Luke Thomas

By Luke Thomas

March 2, 2009

The San Francisco Ethics Commission will continue its review of a lobbying ordinance during its March 9 meeting at City Hall. Attached is a letter to the Commission articulating the basis for lobbyist reform. The letter is co-signed by former Ethics Commissioners Joe Lynn, Bob Planthold, Paul Melbostad, Bob Dockendorff and Joe Julian.

—

Madame Chair, Members of the Commission,

Your discussion on the San Francisco Lobbyist Ordinance is an important and welcome step.

We respectfully suggest that the Commission is being asked to begin its deliberations at the wrong place. Before reviewing specific language in proposed amendments, the Commission needs to adopt a standard as the basis for a review.

The Commission needs to begin this review of the lobbyist law by providing direction to the staff on what result it hopes to accomplish and specifically how it intends for the voters and public to benefit from any changes.

All changes should meet three tests: making decisions and influencing decisions more transparent, making them more accessible and providing them more timely.
Do the reforms provide more transparency? Do they better enable citizens to understand the role of money and contacts to influence local decisions? Do they provide this information in time for it to be useful for citizens participating in the process?

Once it has adopted its standards, the deliberation should begin with whether its policies can be implemented by regulation or whether actual amendments to the law are required. Regulations can be adopted by the Commission acting on its own. Amendments to the law prolong the time required to institute reforms and include reviews by the Board of Supervisors or the voters directly. There is a clear advantage in first considering a regulatory approach.

Importantly, the Commission needs to direct the staff to respond to criticisms of the application of the existing law. A series of specific criticisms have been leveled against the Commission’s handling of the lobbyist law over the past ten years. These criticisms have come from the daily newspaper editorial pages and from interested citizens and public interest groups.

The Commission needs to direct staff to respond with specifics on how any proposed amendments make it more likely than the law’s requirements be applied to unions and collective bargaining organizations. While most lobbying laws exclude reporting on negotiation of collective bargaining agreements, this exclusion does not extend to such activities as lobbying by the firefighters over closing fire stations, or city workers over cuts to the budget. This is an issue that has repeatedly come before the commission, been the subject of news articles faulting the Commission for its record, and several times resulted in the Commission’s educational outreach to unions but with no success.
The Commission is presented now with a slight modification in the existing language of the law, but no information on whether this will provide more effective transparency and reporting.

For the same reason, the Commission needs to direct staff to respond with specifics on why other jurisdictions with identical lobbyist law provisions report that nonprofit organizations are registering and reporting, but that in San Francisco no nonprofit organizations are registering and reporting. In what way will the proposed amendments address this issue?

The Commission needs to direct staff to report on how the proposed amendments will result in compliance with the existing requirement that lobbyists report on the specific administrative or legislative decision involved, the names of the decision-makers contacted, and the results sought from the contact.

The Commission needs to direct staff on compliance with reporting on activity related to city permits, which appear to remain outside the current scope of the Commission staff’s activity. For example, last year it was revealed that Quickly, a tapioca drink emporium, paid $40,000 to expedite permits for new locations, with payments to then-supervisor Ed Jew a sitting elected official and to a consultant. How would the proposed amendments provide public accountability that a company paying for permit assistance should have registered, and that the consultant paid to assist in the permits should have registered and disclosed the payments?

The Commission and the voters have reason to believe that the city has established policies to deal with each of the issues cited, yet there is no record that the Commission staff has taken the necessary steps to implement the will of the Commission.

Until the Commission is provided information from staff regarding the reasons why the existing law appears to the public to lack compliance and enforcement, there will be insufficient information to deliberate on any proposals.

Transparency: the current environment

It is our contention that your deliberations also are best considered in the context of today’s information environment. The resources available to citizens have undergone a revolution, upending traditional venues. Experimental and emerging information resources rapidly alter what we learn and how we learn about government and San Francisco city government in particular.

Ten or even five years ago, the universal avenue was coverage in the daily print media and some television news coverage predominantly consisting of offering viewpoints on City Hall actions.

Today the print media has reduced its reporting staff to a fraction of what it was ten years ago, when this Commission last considered the public needs for information on influence at City Hall. Except for major stories, San Francisco city government news coverage consists of a political gossip column and occasionally amusing collections of paragraphs assembled by a few reporters that may or may not include anything to do with city government.

Consider that in the past five years covering a total of 20 quarterly lobbyists reports, San Francisco’s daily print media has not reported on a single report. Yet from 1995 to the first quarter of 2001, the daily newspapers ran articles on the quarterly reports 18 times.

Consider that as City Hall has deliberated on major new policies and commitments of the city treasury involving votes on the Hunters Point shipyard, there has not been a single article on the money and players seeking to influence those decisions through the lobbying process.

Nothing has emerged to take the place of daily print media and major television broadcast stations. Any coverage most likely takes place in online-only media such as BeyondChron.org, Fog City Journal, the San Francisco Weekly’s online Snitch, or the Bay Guardian’s Politics Blog.

A more personal form of disseminating information and opinions has emerged in the form of blogs, online media, and the growing use of social media such as Facebook, Youtube, Twitter and others. It is a growing list and these venues seek to offer highly focused areas of interest, whether it is about one district or neighborhood, or one topic, or one political perspective.

If the citizens are to know who is paying to influence City Hall, how much they are paying, who they seek to influence, and what exactly they seek to influence, it is the Ethics Commission that must not only generate the reports but provide them timely and completely for the public benefit.

To meet this obligation, the current lobbyist reporting system needs to be strengthened and the Commission itself needs to be timely and complete in the performance of its duties.

As one example, consider the fourth quarter of 2008 reports of lobbyist activities at City Hall. It was a period involving major policy and spending initiatives, including the high profile Potrero Mirant power plant retrofit, the Transbay Terminal plans, banning cigarette sales in pharmacies and drug stores, banning chain stores in Chinatown and parts of the Mission, sewer charge pass through for landlords, congestion toll for driving downtown, and the mayor’s proposed Tenderloin Quality of Life court. Each of these issues was heavily lobbied at City Hall.

Lobbyists were required to file their reports for the benefit of the public by January 15.

As this testimony is submitted a month later, on February 17, the Commission has not posted a summary report or alerted the public that individual reports are available to be downloaded from the Commission’s web site.

It is unsurprising, then, that the news media has not covered what the Commission has not reported.

The third quarter 2008 reports also were untimely in their release. This was particularly troublesome since this quarter coincided with the election to six seats on the Board of Supervisors. The third quarter reports, filed on October 15, 2008, were posted by the Ethics Commission weeks after the November 7 election rather that during the period when they would be of greatest importance to the public.

Importantly, the third quarter 2008 filings show that lobbyist activity reached a near-record level of expenditures, ranking third among all quarters since lobbying reports began in 1995.

When the Commission staff issued its Third Quarter 2008 lobbyist summary, it failed to include the date of when the report was issued. This is inconsistent with good practice and obscures from public view the time staff required to post the information.

A review of the Commission’s web site shows that the Commission stopped issuing press releases on lobbyist quarterly reports in August 2004. Prior to that time, there were press releases issued, usually several times each year. The apparent change in policy coincides with the selection of a new Executive Director in July 2004 and may represent a change in the Commission’s policy to no longer issue press releases on the lobbyist reports. If so, the Commission may want to reconsider directing staff to reinstate the policy of regular, timely press releases on lobbying activity.

Public Accountability: the reason for lobbyist reports

When reports are filed, the public cannot be assured that the Commission staff is upholding the existing reporting requirements. Filings consistently shows that the commission is not enforcing the law requiring full disclosure requiring of the names of City officials contacted, the measure or decision involved, the outcome sought and the date of the contact.

In the past ten years the Commission staff has initiated just one enforcement action alleging a failure to file as a lobbyist or failure to disclose what the law requires. In that case the Commission did not comment as to whether any the lobbyist law has any latent defects not obvious from the public record. Staff should be surveyed on this.

This is unique in the enforcement of city laws, and contrasts sharply with the expectations for enforcement of the disclosure laws on campaign contributions and expenditures.
In effect, San Francisco has the equivalent of a voluntary disclosure system.

The Commission’s starting point should be to determine what information should be disclosed and when it should be disclosed.

We recommend that the Commission adopt the following standard:

· The presumption should be in favor of disclosure rather than exempting categories or contacts.

For example, lobbyists who pay for an expert to provide information should disclose the name of the expert, the amount paid, the contact, the issue and the outcome sought.

Requests for the status of an action should be reported.

Seeking to influence a permit for building or subdivision should be disclosed.

Lobbying on an MOU or collective bargaining agreement, separate from a negotiation, should be disclosed.

Information provided at the request of a city official should be disclosed by lobbyists.

Communications urging that employees or members of an organization contact city officials on a city decision should not be exempted from disclosure.

Currently these contacts are each proposed to be excluded from public disclosure.

· Lobbyists should file contemporaneously with the action they seek to influence.

Current law sets out quarterly reporting requirements, but the Charter language allows the Commission to adopt additional reporting requirements.

Full public disclosure requires notification of lobbying efforts at the time decisions are being made, not months later.

Lobbyists should disclose at a minimum one working day in advance of a pending decision, and also disclose within three working days after a decision with information on who was contacted, the issue, the outcome sought, and who made the contact, as well as on any political contributions to the officeholder who participates in the decision or an entity affiliated with the officeholder.

Lobbyists also should disclose on the same timetable communications to employees or members of an organization urging them to contact city decision-makers regarding a pending decision.

If the law allows for gifts, lobbyists should disclose any gifts made to city officials on the same timetable.

In the case of both Board and commission votes, this three working day disclosure provides an opportunity for the public to have information before a second, final vote takes place or the measure goes to the Board for action.

· The Commission should consider requiring lobbyists to disclose contributions and expenditures to organizations that benefit the city, city departments and city officials.

It is standard practice for lobbyists to contribute or make expenditures to benefit such organizations as Sister City committees and delegations, the city’s Host Committee, nonprofits that exist to benefit specific city departments or department employees either directly or through good will such as Friends of the Planning Department, Friends of Recreation and Parks, Friends of the Library and similar groups.

These organizations exist primarily to provide a public benefit but also underwrite such expenses as travel costs for the mayor, receptions, and improvements and offer support for departmental budget allocations.

As the San Francisco Chronicle reported on March 4, 2007: “Some of the same corporate interests that dominate the Capitol through high-priced lobbyists and campaign donations also bankroll nonprofit organizations that in turn spend tens of thousands of dollars a year entertaining state lawmakers and administration officials far from home — gifts that otherwise would exceed state limits.”

The article further states: “The spending must be reported by the donor and the recipient, but because nonprofits are not required under federal tax codes to disclose their sources of income — voters have no easy way of knowing who is actually picking up the tabs for trips that often cost more than $10,000 per person.

“Corporate executives often accompany officials on the journeys. Sometimes they are participants in the tour or conference agenda; other times they simply meet up with the delegates while on the road, picking up dinner bills and other expenses along the way.

“Although tax codes do not require nonprofits to disclose their benefactors, some organizations released partial donor lists at The Chronicle’s request. Other public documents also shed some light on benefactors, such as state lobbying reports as well as records filed with the state Fair Political Practices Commission.”

“Further, lobbyist reports filed with the state show that some of the same companies got private time with lawmakers and administration officials during foundation tours.

“For instance, a Chevron representative whose name is not required to be included in disclosure forms spent $44 at Harry’s Bar in Rome for Núñez and Assemblyman Lloyd Levine, D-Van Nuys, during a 10-day tour of Italy in 2004 that cost the foundation as much as $10,380 per person.”

During that period, Chevron spent more than $260,000 lobbying state officials on a variety of fuel-related issues.

However, in San Francisco such disclosures are not currently required in the city’s lobbyist law. Nor does San Francisco’s law currently require that the date of contacts be included as the state law does.

· The Commission should consider requiring public disclosure of past business relationships between city decision makers and registered lobbyists.

In one case, an elected city official met the requirement that the elective office be a full-time position by selling prior business interests to another party. That entity then registered to lobby the city official on decisions important to its clients.

In a second case, an elected city official was a consultant in a non-city organization that provided services. A business lobbying for city contracts hired the consulting firm to assist it, which then delegated the assignment to the city official. The official voted in favor of the contract. Because the law considered this to be an arms-length transaction, none of the parties were required to disclose the city official in any official city record.

· The Commission should adopt standards for annual evaluations of the lobbyist law and performance standards for its implementation.

Currently the Commission has adopted no standard for the public disclosure of lobbyist filings with electronic reporting of summaries or the individual reports. The result is that the public is denied easy access to important information on influence on city decisions.

The Department should adopt a standard that quarterly summaries of lobbyist filings will be posted within five working days following the quarterly filing date.

Currently the Commission has adopted no standard for facial reviews of lobbyist submissions to determine if all required disclosures are reported. Until such time as a standard is adopted, the Commission should notify “Interested Persons” on its list when individual filer reports have been posted on the Commission’s web site and request comment from Interested Persons on the filings. Those comments should be submitted to the Commission at the next regular Commission meeting and calendared for discussion.

The Commission should adopt a standard that lobbyist whose report does not comply with the full disclosures be notified within one working day of determining that fact, and that the name of the lobbyist and a copy of the notification be posted on the Commission’s web page the same day.

Currently the Commission has adopted no standard to meet the Charter’s requirement of a July annual report on the city’s lobbyist law. The Commission’s recent view that its minutes over the course of a year meet this requirement lacked the due diligence to be expected of a charter requirement.

The Commission instead should adopt the standard that it will meet the deadline set in the charter and cover the elements needed for city officials and the public to understand how the city’s lobbyist law is meeting its goals and what steps could be taken to improve transparency, accountability and timeliness in disclosures.

The Commission should adopt a standard that the July annual lobbyist report include an overview of five California city lobbyists laws and five additional U.S. city lobbyist laws to determine what improvements in transparency and accountability have been implemented since the prior year’s report. This is modeled on the city’s requirement that the city’s contracts for police, fire and Muni workers include a review of other jurisdictions to be benchmarks for new contracts for San Francisco employees.

We are providing an electronic copy of this testimony to your Executive Director. You may find it more useful in linking to the stories below.

Sfgate.com articles based on the San Francisco Ethics Commission lobbyists reports, 1995 to present:

Eighteen stories between 1995 and 2001, no stories from 2004 to present.

Lobbyists rake in big bucks to win City’s favor
Kandace Bender, Examiner, 07/18/95
A “grass-roots lobbying” coalition that opposes new city taxes and is retained by some of San Francisco’s mega-corporations is among the best-funded of The City’s influence dealers, according to new disclosure reports. San Franciscans for a Sensible…

PUSHING THEIR AGENDA
San Francisco Ethics Commission / EXAMINER GRAPHICS, Examiner, 04/30/96
The lobbyists registered at City Hall who brought in the most money during the first three months of 1996, according to recently released reports: Lobbyist / Amount HMS Associates $119,500 Jack Davis & Associates $12,000 McCarthy & Schwartz $11,476 GCA…

PacTel lobby in S.F. pays off
Rachel Gordon, Examiner, 04/30/96
Pacific Telesis, which is seeking permission from city agencies to erect 200 wireless antennas on San Francisco buildings, spent $142,603 on City Hall lobbying during the first three months of this year. The company’s efforts apparently paid off, with the…

Pay to City Hall lobbyists surged in past quarter
Marsha Ginsburg, Examiner, 07/31/96
Lobbyists trying to sway city officials to their side of the political fence raked in nearly $400,000 from their clients in the past quarter, the highest total in the year since The City began tracking the payments. HMS Associates continued to be the…

S.F. lobbyists’ favorite: Katz
Rachel Gordon, Examiner, 11/03/96
Lobbyists registered to do business at City Hall pumped $288,074 into the coffers of candidates and ballot measures on Tuesday’s ballot. The lobbyists are pushing for issues ranging from building a new 49ers stadium to placing cellular phone antennas…

Ex-Brown aide lobbies his way to new career
Chuck Finnie, Examiner, 08/05/97
Working for businesses chasing city contracts, Mayor Brown’s friend and former aide has become The City’s second highest-paid lobbyist, public records show. William “Billy” Rutland Jr. collected more than a quarter of a million dollars between Jan. 1 and…

Brown’s Crony No. 2 Lobbyist – Ex-aide raked in $660,000 in ’97 talking up clients to city
Edward Epstein, San Francisco Chronicle, 02/11/98
The first two years of Mayor Willie Brown’s administration have been extraordinarily profitable for his friend, lobbyist William Rutland Jr. So profitable, in fact, that since registering as a lobbyist in San Francisco in mid-1996, Rutland has vaulted to…

Unions in S.F. fail to file reports on lobbying efforts
Chuck Finnie, Examiner, 07/30/98
An interest group considered to be the strongest and most effective at getting its way at City Hall – organized labor – doesn’t disclose its lobbying of city officials, despite a 10-year-old law aimed at eliminating back-room deal-making. Union influence…

Lobbyists slip bucks into board campaigns
Rachel Gordon, Examiner, 10/31/98
San Francisco’s registered lobbyists, who do business at City Hall, pumped $22,000 into the campaign war chests of four incumbent supervisors up for election Tuesday, according to new documents on file with The City’s Ethics Commission. The top three…

Business booming for S.F. lobbyists
Chuck Finnie, Examiner, 01/28/99
The lobbying business has exploded under Mayor Willie Brown as corporate and other interests doubled their spending – to more than $3.3 million a year – on hired guns at City Hall, records show. The bulk of the money, described alternately as a scourge on…

Unions drag feet on lobbying disclosures
Chuck Finnie, Examiner, 02/02/99
Labor unions, warned nearly six months ago to start disclosing their lobbying activities, have yet to make public any of their behind-the-scene efforts to sway City Hall decision makers. The government watchdog city Ethics Commission put 57 unions on…

Money rolls in for mayor’s re-election
Gregory Lewis, Examiner, 05/01/99
Although he hasn’t formally announced he’s running for a second term, Mayor Willie Brown’s re-election committee raked in $3,500 in contributions from lobbyists during the first three months of 1999, according to an Ethics Commission report. Brown, who no…

Brown friends thrive as lobbyists
Chuck Finnie and Lance Williams, Examiner, 10/20/99
Three close associates of Mayor Willie Brown raked in more than $2.6 million over the past four years lobbying City Hall – and the mayor himself – on behalf of companies seeking city contracts and permits, city records show. William G. “Billy” Rutland Jr…

L.A. Pals Cash In Big on Connection With Brown
Phillip Matier, San Francisco Chronicle, 10/27/99
When it comes to wheeling and dealing in city contracts, you would be hard pressed to beat the success of Stephen and Jacqueline Besser — a pair of relative newcomers from Los Angeles with long ties to, who else . . . Mayor Willie Brown. Just last month…

Pay for City Hall Lobbyists Hit Record High Last Quarter
Edward Epstein, San Francisco Chronicle, 02/04/00
The last quarter of 1999 was a record period for lobbyists registered to make clients’ cases at San Francisco City Hall, the city Ethics Commission reported yesterday. For the first time since the voter- created commission started making its quarterly…

Lobbyists strike gold at City Hall as Brown spreads welcome mat
Ilene Lelchuk, Examiner, 02/05/00
Lobbying City Hall and Mayor Willie Brown was a booming business in San Francisco last year, when lobbyists earned three times more cash than they raked in four years earlier. The City’s contract lobbyists who work for developers, utility companies and…

New Team in Town Vaults to Top of S.F. Lobbying Ranks – Record $376,000 raked in between April and June
YumWe Wilson, San Francisco Chronicle, 08/07/00
A newly formed team of veteran political consultants wasted no time becoming the highest-paid lobbyists in San Francisco, leading the way in a record-breaking quarter for influence peddling in the city. Barnes, Mosher, Whitehurst and Partners, a firm…

Firm received $38,000 to lobby S.F. against suit – Firms paid thousands to lobby S.F. on suit – City joined lead-paint poisoning case anyway
Scott Winokur, San Francisco Chronicle, 05/06/01
Chemical companies spent nearly $38,000 in a futile attempt to stop San Francisco officials from joining a lead-paint poisoning lawsuit that could cost the industry millions in damages, public records show. Lobbying reports for 2000 and the first three…

Supes’ plan closes city’s back doors – Permit expediters reined in
Rachel Gordon, San Francisco Chronicle, 12/18/01
Hoping to end an era of special treatment for politically connected “permit expediters,’ two San Francisco supervisors yesterday proposed restricting the activities of those hired to help clients maneuver through the City Hall bureaucracy. The measure…

Expediters at center of building agency probe – Move afoot to require registration with ethics board
Ilene Lelchuk, San Francisco Chronicle, 01/08/04
Mayor-elect Gavin Newsom’s plan for a special monitor to conduct an anti-corruption probe of San Francisco’s Department of Building Inspection could give momentum to a two-year-old effort to force private permit expediters who push construction projects…

Signatories
(as of 3/2/09):

Joe Lynn
Commissioner, 2003 – 2006
Staff, 1998 – 2003

Bob Planthold
Commissioner, 2002 – 2004
Chair, 2003 – 2004
Vice-Chair, 2002 – 2003

Paul Melbostad
Commissioner, 1995 – 2003
Chair, 2002 – 2003

Bob Dockendorff
Commissioner, 1996 – 2000

Joe Julian
Commissioner, 1996 – 1997