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Watergate-Era Financial Disclosures Aren’t Enough to Keep Local Pols Honest, Experts Say
Sunday, August 07, 2022

Watergate-Era Financial Disclosures Aren’t Enough to Keep Local Pols Honest, Experts Say

Nearly 50 years have passed since Bob Stern helped write the California Political Reform Act, a sweeping set of guidelines designed to improve government transparency and root out public corruption in the wake of Watergate.

But if Stern were writing the landmark state law today, he would do things “very differently,” he said. This is especially true when it comes to the Form 700, a key document that requires public officials to disclose personal financial information—under penalty of perjury—to identify conflicts of interest.

Last week, The Standard published a report on the wealth of San Francisco’s elected officials, some of whom own multiple properties and stock portfolios potentially worth millions of dollars. Some information was available from their Form 700s, but there are numerous exemptions when it comes to the reporting of gifts and properties, such as second homes and any properties outside of San Francisco. The Standard supplemented the report with information from San Francisco property records but was still only able to give a partial picture.

Stern, a key author of a 1974 ballot proposition that created the Political Reform Act and the Fair Political Practices Commission (FPPC), said the purpose of the Form 700 was never to reveal individuals’ wealth, in part due to fears that officials might end up kidnapped. But times have changed.

“I’m not sure I would write it the same way today,” said Stern, who also served as the FPPC’s first general counsel. “We’re finding that people are increasing their wealth substantially while they’re in office. I think that it’s important to find out what somebody’s worth coming into office and what they’re worth coming out of office.”

Many readers expressed outrage on social media about property-owning supervisors blocking efforts to build more housing. Numerous tweets criticized Supervisor Aaron Peskin, who owns four properties around Telegraph Hill worth an estimated $6.8 million, for his housing positions, which have often aimed to add restrictions on home improvements and tear-downs to build more units.

Disdainful tweets also targeted Supervisor Dean Preston, who opposes the creation of market-rate housing. A records search found that Preston and his wife’s family own multiple properties around the city, including two multi-unit buildings and two separate homes each estimated to be worth about $3.5 million. He also took substantial flack for his professed anti-capitalism stances while owning tech stocks that could be worth up to $4 million.

Larry Bush, a San Francisco ethics commissioner who spoke with The Standard outside of his official capacity, said the state should revamp its reporting requirements for Form 700s to create greater transparency. The documents have broad ranges to disclose economic interests, such as between $10,001 and $100,000 or $100,001 and $1 million in stock and no specificity for homes valued at more than a million dollars. 

“My experience with Form 700s is that they give the illusion of disclosure, but are not actual disclosures,” Bush said. “I think we have more work to be done to provide the public with sufficient information to know whether there is influence at work.”

Updating the state’s Political Reform Act and reporting requirements for the conflict-of-interest documents would require new legislation. Tweaks to the reform act are introduced each legislative session—the FPPC itself courts legislators to bring forward some of these new laws—but the last real efforts to expand on personal financial disclosures have been blocked.

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State Sen. Anthony Portantino, a Democrat representing Glendale, introduced AB 2162 as an assemblymember in 2012 to drill down in much more specific detail on the fair-market value of investments and real estate interests. The bill also would have made income sources more exact. Gov. Jerry Brown vetoed the bill after it passed out of both houses of the Legislature.

Portantino, who could not be reached for comment Tuesday, reintroduced a similar bill in the state Senate in late 2016 but it died in a committee.

None of this is to say that officials in San Francisco have entirely skirted accountability for misreporting their economic interests.

Earlier this month, the city’s Ethics Commission hit Darryl Honda, the former president of the city’s Board of Appeals, with a $22,200 fine for failing to properly report his real estate income dozens of times over the course of four years. Gabriela López, one of three school board members recalled in February, was fined $1,400 for similar violations. 

“You’re signing this [Form 700] under penalty of perjury, and I think that’s pretty sobering,” Stern said. “Of course, there are some people that are not disclosing everything just like there are a small number of people robbing banks.”

Josh Koehn can be reached at [email protected].
  • Preston and Peskin are such hypocrites.

    Apparently it’s Capitalism — with substantial private real estate and tech stock equity — for Dean, but Socialism — with no access to generational wealth building and a subsistence reliance on government housing — for the rest of us.

    Likewise with Aaron, he protects and increases the value of his considerable real estate holdings by maintaining scarcity via his anti-housing NIMBY policies

    The corruption runs deep with these two.

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