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How SF’s Anti-Corruption Law Is Causing Fundraising Headaches in All The Wrong Places—and Spurring Backlash From Mayor Breed

Written by Michael BarbaPublished Jun. 17, 2022 • 11:59am
A composite image of San Francisco Mayor London Breed, left, at a press conference in the SoMa district on Wednesday, June 8, 2022 and District 3 Supervisor Aaron Peskin, right, at City Hall of San Francisco on May 3, 2022. | Camille Cohen/The Standard

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San Francisco’s new anti-corruption law is meant to tackle serious bribery—like a city official trading garbage rate hikes for donations from a trash-hauling firm.

But the rules are so strict that a parks official is now barred from asking a person for money if they pulled a permit to throw a kid’s birthday party—and requested enough space to fit a bouncy house.

At least that’s an example Mayor London Breed used to make a point earlier this month when she sent a 14-page letter seeking guidance from City Attorney David Chiu and the Ethics Commission. She posed four dozen hypothetical scenarios, apparently based on real concerns of department heads, in which the new rules could prevent city officials from raising millions of private dollars to benefit kids, the poor and the homeless.

“The City needs direct and uniform guidance from the City Attorney’s Office and the Ethics Commission to navigate this new legislation,” Breed wrote in the letter, which The Standard obtained through a public records request. “The need for guidance is urgent as many impacted programs are imminently threatened if the support on which they depend is restricted.”

Mayor Breed has never supported the new ethics law that emerged in the wake of the corruption scandal surrounding former Public Works head Mohammed Nuru. The law bans officials from asking for funding from their contractors and others they do business with, even if the money is for a good cause. Such donations are commonly known as behested payments, and they have historically been viewed as an avenue for corruption.

After the Board of Supervisors unanimously voted to pass the new behested payments rules last December, Breed returned the legislation unsigned. Then, with the backing of several supervisors who apparently had buyers remorse about supporting the initial legislation, she came out against a June ballot measure that prevented City Hall from loosening the rules without a broad consensus at the Board of Supervisors and Ethics Commission. Voters disagreed with Breed and overwhelmingly approved Proposition E.

Breed argues that the rules are overly broad—and confusing. 

She is so befuddled by the law that last month she ordered all of her department heads to stop raising private dollars until they could get guidance from the city attorney on whether they were unintentionally breaking the law and risking ethics fines of up to $5,000.

Now Breed wants to carve out broad exceptions to the behested payments rules. 

She unveiled a proposal Tuesday to loosen restrictions for certain permit holders and for those who attempt to influence officials, as well as to exempt donations of less than $1,000.

Breed has three paths forward to putting her changes in place. 

She could either bring a measure before voters by using her authority to place a measure directly on the ballot by June 21, or by garnering the support of six supervisors. She would be unable to amend her proposal if she goes the first route. 

The third option, meanwhile, is for the mayor to push her legislation through both the Board of Supervisors and the Ethics Commission. That bill would have to garner more support than usual because voters approved Prop. E earlier this month to keep the rules unchanged.

Mayor London Breed and David Chiu at City Hall. | Paul Chinn/San Francisco Chronicle via Getty Images

‘Going Back to the Old Ways Is a Terrible Idea’

Breed stands at odds with Supervisor Aaron Peskin in her fight to amend the rules. Peskin, who championed the existing law in light of the Nuru scandal, introduced legislation Tuesday with the support of five other supervisors to carve out lesser exceptions to the rules and clarify the law. He crafted the legislation in an agreement with Supervisor Ahsha Safai.

Peskin pushed back on the idea that the law brings “philanthropic giving to the city to a grinding halt.” To the extent that there are issues with the existing rules, Peskin said his legislation will fix them. 

Still, he said department heads should focus on managing their respective divisions and using the city’s $14 billion budget, not “running around with their tin cups.”

“The fundraising that the city does is called spending taxpayers dollars,” Peskin said. “Let’s do that and concentrate on that. This does not eliminate—nor did it ever—fundraising by elected officials or department heads.”

Peskin stressed that Breed did not support the changes in the first place.

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“Ethics law is constantly evolving and when reasonable things come up, making exceptions makes sense, but throwing the baby out with the bathwater and going back to the bad old ways is a terrible idea,” Peskin said. “It’s not as though the mayor has been saying we need to have reform of this behavior, it’s actually coming from a very different place. So I take issue with it.”

‘This Law Needs a Ton of Work’

In her June 2 letter to the City Attorney’s Office and the Ethics Commission, Breed asked whether the law barred officials from soliciting funds from donors who already gave millions if those donors acquired permits or tried to influence them.

The scenarios ranged from seemingly nonsensical to sensational. 

In one example, the mayor asked whether the law would make a donor off limits if they applied for a permit to throw a child’s birthday party at Golden Gate Park and asked for enough space for a bouncy house. In another, the mayor worried about funding from Tipping Point—a significant contributor to efforts to combat homelessness in San Francisco.

The City Attorney’s Office responded Wednesday by confirming that 19 of the 48 scenarios would in fact be prohibited—including the one involving the bouncy house. 

With help from the Ethics Commission, the office is still examining the other scenarios to offer guidance on their legality.

The law does still allow donors to give—just not on behalf of an official who is directly conflicted by issuing a permit or contract to a person, for example.

Jeff Cretan, a spokesperson for Breed, said the mayor wanted to show the ambiguity of the law and the range of fundraising it could prohibit.

“We need some real changes,” Cretan said. “This law needs a ton of work.”

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Michael Barba can be reached at [email protected]


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