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What Ethics Chair Ben Hur Didn’t Know

by Larry Bush on 09/26/2012

in Paper Trails

 “Indeed, granting the Sheriff’s request (for a post-election delay) could cause the Commission to engage in the type of political maneuvering that it seeks to avoid.”

Ben Hur, Ethics Commission Chair, denying a delay.

As the months-long process of Ethics Commission hearings unwound, Commission Chair Ben Hur demonstrated the demeanor and familiarity with the legal process the public deserved. He skillfully led the commission through challenges from both sides, and elevated the process.

CitiReport, with the astute analysis of former Ethics Commission staffer and fines officer Oliver Luby, now examines the case through a different lens – whether the decision not to delay the case until after the election was based on a desire for impartiality or based on a lack of understanding of the Commission’s own political maneuvering that too often benefitted politically powerful candidates at crucial moments in their elections.

“In fact, my sense is that Ethics has repeatedly delayed acting on enforcement matters against candidates and officeholders in the middle of their election campaigns,” writes Luby (see full Luby analysis below)

“Due to the confidentiality restrictions applicable to records of the Ethics enforcement program, I am not permitted to give any non-public details I was privy to.  However, I will repeat what I publicly told the Board of Supervisors Rules Committee in June of this year, a view that has long been held by myself and others closely following Ethics, such as the late Joe Lynn: the Ethics enforcement program must be independently audited, including publicly releasing all closed files (with confidential witness names and so forth redacted as appropriate), so that the public can see what Ethics has done over the years in their name,” concludes Luby.

Public Unconvinced By Ethics Verdict

A recent poll funded by opponents to Sheriff Ross Mirkarimi showed that only nine percent of the respondents based their view on the sheriff’s ouster on the findings of the Commission.

For some, there was disappointment that the Commission appeared uncomfortable with delving into issues beyond judicial precedence. The Commission operated on an assumption regarding the definition of “Official Misconduct” and its wording without reviewing the public record of the Charter Task Force where the point was openly discussed – and which had a different interpretation of its intent than the Commission claimed. The Charter rewrite committee sought to narrow, not broaden, when Official Misconduct would apply.

The Commission also shied away from questioning the mayor about his claim to have complete discretion on whether to file Official Misconduct charges, a claim so broad and far-reaching in its consequences that it led Hur himself to vote against its use to find Sheriff Mirkarimi to have committed official misconduct.

In fact, Mayor Lee was the only person to testify before the commission who was not asked any questions by the commissioners. Given his unprecedented claim of authority and his admission that he had not studied the charter’s provision, this was a missed opportunity to further establish the record.

At the same time, the Commission declined to consider a request to hear witnesses on whether the Mayor had committed perjury in his testimony, stating that this was not relevant to the issue of Sheriff Mirkarimi’s conduct. Whatever the merits of that conclusion, the Commission also did not refer the issue to the District Attorney for a formal investigation of such a weighty charge.

A blogger using the identify “rjechronicle” posted an extensive analysis of the Commission’s proceedings, concluding as did Hur that removing Sheriff Mirkarimi would create a powerful tool for future mayors that could now easily be abused. His full analysis is at: http://rjemirkarimi.blogspot.com/2012_09_01_archive.html

Ethics Record of Political Maneuvering

Ethics Commission Chair Ben Hur stakes out a role for his Commission that stands aside from the political give-and-take and seeks to be impartial.

Unfortunately, as former Ethics Commission fines officer Oliver Luby documents in this erudite overview of the Commission’s past decisions, many of its decisions fail the standard that Hur seeks to uphold.

In fact, as Luby runs through the evidence, the Ethics Commission is replete with examples of the Commission showing strong partiality and even bias.

CitiReport posts Luby’s full review, and introduces it with the highlights:

  • In 2003 then-supervisor and mayoral candidate Gavin Newsom failed to disclose millions in real estate and business loans, including from billionaire oil heir Gordon Getty. Ethics choose not to enforce sanctions against the violations, which could have been triple the value of the unreported income sources.
  •  ”Newly elected mayor Gavin Newsom benefitted again in 2004 when Ethics decided not to even request that Newsom file disclosure amendments showing that contributions he reported as independent $500 amounts from various business entities in fact aggregated to $14,000 from a single source.” St. Croix claimed that a short staff meant cancelling all audits of 2003 campaigns – except for the audit of Matt Gonzalez, who was the top contender with Newsom to be elected mayor. Ethics fined Gonzalez for incomplete identification of some contributors.
  • In 2003 Kamala Harris signed a pledge to abide by a campaign spending limit in her race to be elected District Attorney, but found she would have to throttle back her spending until another candidate broke the limit and thus allowed her the same privilege. She appealed to the Ethics Commission and the Commission released her despite the rules. After a public outcry, Ethics authorized enforcement but under conditions that helped Harris’ candidacy by allowing a year-long installment plan and allowing her to use a door hanger promoting her candidacy to do double-duty as a small type admission of her violation. The result was that Harris did not have to take campaign funds during the election cycle to pay off a $19,000 fine
  • In 2004, Supervisor Sean Elsbernd was eased into the seat held by outgoing Supervisor Tony Hall after the Ethics Commission rushed through a meeting that cleared the way. The Commission’s haste was not only unseemly but also violated the Sunshine Ordinance according to an official finding. The benefit to Elsbernd is that it allowed him to file as the incumbent, something he could not have done just two days later, and avoid a strong challenge. The Commission chair at the time was Mike Garcia who this year has Elsbernd’s endorsement for election to the same District 7 seat.
  • In 2006, when then-supervisor Michela Alioto-Pier was seeking election to the seat she first held by appointment, an Ethics Commission review uncovered that she faced $12,000 in forfeiture fines for contributions in excess of $500 to her 2004 committee.  Then that was compounded when a filing deadline was missed. Ethics Executive Director John St. Croix directed staff not to send her a delinquency notice prior to the election. St. Croix finally authorized the notice two days after the 2006 election.  It wasn’t for a year or more, in 2007, that St. Croix authorized a forfeiture letter, years after every other committee received such notices.
  • In 2009, as then-Mayor Gavin Newsom had launched a campaign to be elected Governor, the Ethics Commission quietly proposed rewriting the city’s campaign law to allow contractors with “state” agencies such as Redevelopment and the Treasure Island Development Authority to donate to San Francisco campaigns. The major beneficiary would be Gavin Newsom, who earlier benefitted from a fundraiser by Treasure Island developers in a similar scheme. The Board did not pass the proposal.

Ethics Commission ignores precedent – won’t take election into account in Mirkarimi case

 by Oliver Luby

As reported by the San Francisco Bay Guardian on September 13, the Chair of the San Francisco Ethics Commission, Benedict Hur, “rejected a request by attorneys for suspended Sheriff Ross Mirkarimi to delay transfer of his official misconduct case to the Board of Supervisors until after the Nov. 6 election.”

Mirkarimi’s request for a continuance until after the election was made due to reported political pressure facing Supervisors, some of whom are running for re-election this November.  In the written request to the Ethics Commission, David Waggoner, an attorney representing Mirkarimi, noted “The fate of the sheriff has been made a key political issue in the election” and that a continuance was necessary to ensure a fair adjudication of Mirkarimi by the Supervisors.

Despite providing eight exhibits of press articles and campaign communications regarding the effect of the Mirkarimi case on the election, Chair Hur was not persuaded, even though he was the dissenting vote in the Ethics Commission decision to recommend removal of Mirkarimi.

In rejecting Mirkarimi’s request, Hur dismissed the claim that politics could affect the Supervisor votes as “speculation,” writing, “There is no evidence suggesting that any member of the Board of Supervisors will disregard the facts and the law and instead vote to sustain the charges based upon perceived political pressure.”

Hur further wrote that “granting the Sheriff’s request would cause the Commission to engage in the type of political maneuvering that it seeks to avoid. The commission will not manipulate the timing of the Board’s decision in a misguided attempt to predict the nadir of public pressure on the Supervisors.”

Hur’s claim that there is no evidence that political pressure could sway the votes of Supervisors clashes with the fact that judges may draw reasonable inferences regarding things such as the presence of bias, using evidence such as that provided by Mirkarimi.  Judges also have broad discretion with regard to granting trial continuances.

Moreover, the U.S. Supreme Court ruled in 2009 in the Caperton v. A. T. Massey Coal Co. case that Due Process requires a judge to recuse him or herself not only when actual bias or an economic interest in the case has been demonstrated but also when “extreme facts” create a “probability of actual bias.”

Like the members of the Board of Supervisors, the judge at issue in Caperton was up for re-election.

In addition, Hur’s use of the phrase “public pressure” is interesting, as it appears to have the aim of characterizing the “political pressure” at issue as the amorphous influence of the general public, a diffuse concept beyond the adjudicator’s gauge.

However, Hur’s characterization ignores that the relevant “political pressure” consists of the campaign tactics reality on the ground, such as the political attack ads paid for by campaign contributions, which will predictably highlight any votes made by Supervisors against dismissing Mirkarimi as ammunition to convince voters to unseat incumbent Supervisors.

Any detailed review of San Francisco’s past elections shows that history is replete with examples of the exploitation if not deliberate injection of controversy into the public domain to create wedge issues between candidates.  Any campaign consultant worth their salt is intimately familiar with such tactics.

Additionally, Hur’s reasoning that officials presumptively rely on only facts and the law is curious, and not just because of the naive statement about human nature that can be inferred from it.

As the Chair of an agency charged with safeguarding both the public’s right to know about the influences over government and barriers between officials and temptation, surely Hur should know that the workings of government consist of more than just “facts and the law.”  The main campaign finance law under Hur’s jurisdiction is predicated on the basis that election campaign contributions cause “the problem of improper influence, real or potential, exercised by campaign contributors over elected officials,” “have a corrupting influence,” and “undermine the integrity of the government process,” as noted by the Purpose section of the San Francisco Campaign Finance Reform Ordinance itself.  The system of campaign funding also “erodes public confidence in local officials by creating the appearance that elected officials may be unduly influenced by contributors.”

If such influences warrant disclosure of campaign funding before an election, should not they also warrant the two-month delay of unusual adjudications by elected officials in order to remove any election campaign impact on the adjudication?

After all, even Supreme Court Justice Brennan, when quizzing his clerks on what was the most important factor for the Supreme Court, famously corrected them that it was not principles such as justice or the like but rather the “Rule of Five,” the number of justices needed to render a majority opinion applicable to the entire country.  With Hur and his own colleagues on Ethics reaching opposite conclusions about “facts and the law,” Brennan’s observation well reminds us that, ultimately, the facts and the law will not be what decides Mirkarimi’s fate before the Board of Supervisors – the number of votes for and against him will.

However, Hur’s curious reasoning for denying the delay of the Sheriff’s removal adjudication is not what is most surprising about his decision.

Hur’s decision conflicts with precedent, in the form of a pattern by the Ethics Commission of delaying actions so as to avoid influencing an upcoming election.

Furthermore, the validity of Hur’s claim that the Commission must not delay the decision because it avoids “political maneuvering” is tarnished by the Commission repeatedly and deliberately engaging in the very “political maneuvering” that Hur incorrectly claims the Commission avoids.

Examples of Ethics delaying actions so as to avoid influencing an upcoming election

A fortunate aspect of the work of the Ethics Commission’s Fines Collection Officer is that the various administrative penalty assessments and reductions performed by the position are subject to robust public disclosure, unlike with the enforcement division of the agency.  I served in the position for many years.  In 2006, I encountered an example of the Commission delaying an action to avoid influencing an election.

Well after the close of the 2004 election cycle, I was tasked with the project of identifying campaign contributions which were subject to forfeiture by law due to either being made in excess of applicable limits or received without complete information identifying the contributor.  After a lengthy, systematic review, I turned in my findings to Ethics Commission management in early August of 2006.  Correspondence to campaigns which owed the City money was ready to go, pending management’s approval.

The usual practice with such penalty assessments was to issue any viable assessments without delay.  However, management curiously delayed assessment of the forfeitures.

Of the 2004 committees that had incurred forfeitures, the worst offender was Alioto-Pier for Supervisor, which had racked up over $12,000 in forfeitures, mostly due to receiving contributions in excess of the limit of $500 per donor.  Incidentally, the treasurer of Alioto-Pier’s 2004 campaign was none other than Kinde Durkee, the now disgraced campaign accountant who was found to have stolen over $7 million  from at least 50 clients, including Senator Diane Feinstein.

At the time I provided the forfeiture assessments to Ethics management, Supervisor Alioto-Pier was running her re-election campaign for the November 2006 election.   Later that same month of August 2006, I alerted management that a filing delinquency of the Alioto-Pier’s 2006 campaign had been missed by the standard surveys done by campaign finance staff at Ethics.

The usual practice of the agency was to alert campaigns regarding filing delinquencies as soon as they were detected by Ethics staff.  In fact, the law requires Ethics to do just that.

However, Ethics management, including Director John St. Croix, refused to authorize issuing not only the forfeiture assessments but also a standard filing delinquency letter regarding Alioto-Pier’s committees.  After making various reminders to management about the forfeitures and filing delinquency, Ethics managers eventually informed me that we would not ding Alioto-Pier before the November 2006 election.  The apparent justification of this delay by Ethics was to avoid prejudicing Alioto-Pier’s performance in the election.  Amazingly, Ethics management would not even require Alioto-Pier’s 2006 committee to complete filing of its 2006 disclosure reports before the election!

On November 9, 2006, two days after the election, Ethics management finally authorized the issuance of a delinquency notice to Alioto-Pier regarding the gap in her 2006 disclosure reports.  Not until another year had passed, in November of 2007, did Ethics management authorize issuing a forfeiture assessment letter regarding Alioto-Pier’s 2004 campaign, the last of the 2004 committees to receive notice of a forfeiture assessment.  In fact, every single other 2004 committee for which the Ethics Commission assessed forfeitures received their assessment notice before 2007.  Of those, all but one received the assessment before the November 7, 2006 election.  Moreover, Ethics management refused to authorize the vast majority of forfeitures incurred by Alioto-Pier, assessing only $1,600 in forfeitures against her campaign and waiving the vast majority of the forfeitures applicable due to violations of the $500 contribution limit.  Ethics’ official audit report of Alioto-Pier’s 2004 committee even omitted mentioning most of the limit violations. (A complete examination of Ethics management’s rather suspicious reasons for drastically reducing Alioto-Pier’s penalties is beyond the scope of this article.)

The 2006 instances involving Supervisor Alioto-Pier were not the first time that the Ethics Commission deigned to avoid enforcing the law at time when it might have affected a candidate’s performance in an election.  For instance, the San Francisco Chronicle reported (here and here) in early 2003 that Supervisor and mayoral candidate Newsom had failed to disclose millions in real estate and business loans, including from billionaire oil heir Gordon Getty (under state law, officials are required to disclose their economic interests).  Though charged with enforcing penalties for such infractions, with public support for the law so serious that applicable penalties were as high as triple the amount not disclosed, and no other sitting elected official in San Francisco having committed such a serious disclosure violation, Ethics choose not to ding Newsom, as apparent from the absence of public enforcement records about the matter.  By contrast, the California Fair Political Practices Commission has repeatedly fined state candidates for failure to disclosure their economic interests.

In fact, my sense is that Ethics has repeatedly delayed acting on enforcement matters against candidates and officeholders in the middle of their election campaigns.  Due to the confidentiality restrictions applicable to records of the Ethics enforcement program, I am not permitted to give any non-public details I was privy to.  However, I will repeat what I publicly told the Board of Supervisors Rules Committee in June of this year, a view that has long been held by myself and others closely following Ethics, such as the late Joe Lynn: the Ethics enforcement program must be independently audited, including publicly releasing all closed files (with confidential witness names and so forth redacted as appropriate), so that the public can see what Ethics has done over the years in their name.

Examples of Ethics deliberately engaging in political maneuvering that impacts an upcoming election

In addition to the above-noted examples of Ethics going to great lengths to avoid impacting an election, Ethics has engaged in political maneuvering regarding elections.  Not only has such conduct occurred despite Chair Hur’s claims that Ethics seeks to avoid it but its character has been markedly partisan.

First example: After Mayor Gavin Newsom launched his campaign for Governor of California, the Ethics Commission’s directors quietly proposed in early 2009 an alteration to the law to allow contractors with San Francisco’s “state” agencies, such as the Redevelopment Agency and the Treasure Island Development Authority (TIDA), to donate to San Francisco candidate campaigns.  This change would have allowed contractors with Redevelopment and TIDA, whose Boards were appointed by the Mayor, to donate to Newsom’s campaign for Governor.  Former Supervisor Joe Lynn called the scheme “The Eric Jaye Economic Stimulus Act,” after Newsom’s former campaign consultant.  Thanks to public outcry and strong opposition by one of the Ethics Commissioners at the time (Eileen Hansen), the Commissioners did not approve the proposal.

Unfortunately, partisan proposals were approved by the Ethics Commission in other instances.  In 2004, the Ethics Commission performed the Mayor’s bidding with the infamous Newsom “triple play.”

In order to be able to appoint Sean Elsbernd to an open Supervisor seat in time for Elsbernd to register his 2004 candidacy by the incumbent filing deadline at the Department of Elections, Newsom needed to move Supervisor Tony Hall to the TIDA, which required a waiver of post-employment restrictions applicable to elected officials such as Hall by the Ethics Commission.

The Ethics Commission was under pressure by the Mayor’s office to make this happen before the incumbent deadline passed, since Elsbernd’s filing after that deadline would have granted additional time for other candidates to file with the Elections to run for the District 7 seat, thereby significantly increasing the competition against Elsbernd.

The pressure on Ethics was so strong that they proceeded with an illegally noticed meeting, which was later found in violation by the Sunshine Ordinance Task Force.  The Ethics Commission Chair presiding over the illegal Ethics meeting was none other than Mike Garcia, a current candidate for District 7.

Another instance of notorious partisan behavior by the Ethics Commission involved Kamala Harris’ first campaign for San Francisco District Attorney.

The Commission’s Director released Harris from her original spending limit pledge, based on the flimsy pretext that the law had been amended.  Had the limit remained enforced, Harris’ campaign would have been forced to cease spending until the candidate in race who had not agreed to the limits, Bill Fazio, spent enough to release Harris and her opponent Terence Hallinan from their pledges, which might have crippled Harris’ outreach to voters during a critical period of the election campaign.

Despite massive public outcry, the Ethics Commissioners refused to undo the damage done by their Director to the integrity of the spending limits.  While Ethics authorized enforcement against Harris for violating the law, Ethics interpreted the settlement agreement approved in October of 2003 in a manner that favored Harris.

Two penalties were authorized against Harris: (1) that she spend a specified amount on corrective measures designed to inform voters that she had not actually agreed to spending pledge, despite being so identified in the Voter Handbook; (2) that she pay a penalty of over $19,000 to the City & County of San Francisco.

With regard to the corrective measures, the Ethics Commission allowed Harris to satisfy the requirement by purchasing door hanger ads trumpeting her candidacy – the notice to the voters about the incorrect spending pledge  information in the Voter Hand book was in the fine print of the top-most hook part of the paper door hangers, which was easily tore off and went unnoticed when members of the public grabbed the hangers off of their doors.

As for the administrative penalties, records of the Ethics Commission show that Ethics allowed Harris to pay the $19,000 in installments over the course of nearly a year.  The Harris campaign paid just $3,000 before the November 2003 general election and just $2,035.28 more before the December 2003 run-off election.

The Harris campaign had more than enough to cash to pay the entire penalty in October, yet Ethics granted campaign attorney Jim Sutton’s request for delayed payment.  The sole effect of this act by Ethics was to grant Harris additional spending firepower during the election season.

Last example: Besides restraining their enforcement against former Mayor Newsom, Ethics also helped Newsom out legislatively in the middle of an election.

In mid-2003 and under pressure to fix a loophole in state law that only affected local committees, a law proposed by Ethics was passed by the Board of Supervisors.  The law copied a state law applicable only to state candidates, providing “affiliated entity” rules for San Francisco campaign contributors.

These laws work to prevent circumvention of contribution limits via using business entities.  Under these rules, an individual and a corporation or other entity that the individual owns or controls are considered the same person for purposes of the $500 contribution limit to SF candidates.

Likewise, two entities controlled by the same person or group of persons are considered to cumulatively subject to a $500 limit on donations to candidates.  Without affiliated entity rules, a wealthy person can funnel multiple $500 contributions to a single candidate by using various shell entities.

In fact, donors to Newsom for Mayor did just that.  Years later, the Bay Guardian uncovered that multiple entities affiliated with Olympic View Realty contributed a total of $14,000 to Newsom.  A Major Donor report filed by Olympic View Realty revealed that Olympic View Realty had used multiple separate legal entities (such as Limited Liability Companies, often associated with a single property) to funnel multiple $500 payments to Newsom.

Though these contributions were well over the $500 limit (and would be subject to a $13,500 forfeiture to the City & County if made today), they were technically not illegal in 2003, because Ethics specifically wrote language into the 2003 affiliated entity law providing that it not become active until January 1, 2004 even though it was passed in the middle of 2003.  The message: Promptly closing a loophole is not as important as avoiding burdening the regulated currently involved in an election season.

However, Newsom’s failure to report the correct cumulative total received from Olympic View Realty and its affiliates was illegal in 2003.  Of course, Ethics did nothing to address the reporting violation, as reported in the Guardian article.  Ethics could not even be bothered to request that Newsom file amendments to correct the reporting.  (Ethics Director St. Croix later declared the agency in triage, due to work backlogs, canceling all audits of the 2003 committees, except that of Newsom-opponent and mayoral candidate Matt Gonzalez, whom St. Croix singled out for fines for non-exceptional contributor information reporting deficiencies.)

When such acts by the Ethics Commission impacting past elections are contrasted with Hur’s decision impacting the current election campaigns of Supervisors voting in the Mirkarimi case, it becomes apparent that Commission’s well-documented record of inconsistent treatment of campaigns is not only limited to the amounts of penalty assessments but also the timing of decisions affecting election outcomes.  Benedict Hur was appointed to the Ethics Commission on March 2, 2010 by San Francisco Assessor Phil Ting and is a partner at the law firm of Keker & Van Nest LLP.  Hur was appointed at the same time that a supervising partner of the firm, mayoral appointee Susan Harriman, was on the Ethics Commission, raising concern from former Fair Political Practices Commission general counsel and Center for Governmental Studies president Bob Stern about the independence of Hur’s voting from Harriman’s views.  Hur’s appointing authority, Ting, was first appointed to the Assessor office by Mayor Gavin Newsom.  Harriman was also appointed by Newsom.

Oliver Luby assisted the San Francisco Ethics Commission’s enforcement investigations from 2000 to 2001.  Mr. Luby was the Commission’s Fines Collection Officer from 2002 to 2010.

{ 2 comments… read them below or add one }

Derek Kerr September 27, 2012 at 2:38 am

Another way the Ethics Commission staff give “more time” to favored officials is by burying whistleblower complaints against high-level City officers. Our complaints about Department of Public Health contracts tainted by conflicts of interest took over TWO YEARS to adjudicate. By then, the involved officials had left San Francisco.

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Aurora Grajeda September 29, 2012 at 10:36 pm

I found this post to be an excellent analyses with brief descriptions of specific incidents showing the inconsistent manner in which the Ethics Commission has acted, or failed to act, whichever was the case.

“A must read” Is a phrase that as a self-imposed rule of not using I apply to my suggestions or recommendations on highly informative items; however, this is an item where I’m satisfied to validate my own rule by applying the required exception for it to be valid.

THIS IS “A MUST READ” ARTICLE.

Well done Larry, thanks. And special thanks for Mr. Luby,

Cheers!

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