Our system is ugly. As times, it has been d. B. I. Staff and management, and at other times, its been the developers, contractors, and consultants who are seeking permit approvals. In 2001, a d. B. I. Survey called for a culture of preferential treatment and called for an overhaul of the department. In 2004, Marcus Armstrong and a d. B. I. Investigator plead guilty for taking bribes. In 2010, permit expediter jimmy jen was jailed on 232 felony fraud counts brought by District Attorney and Vice President elect kamala harris. In may 2020, Rodrigo Santos, a former Building Inspections commissioner was arrested by the f. B. I. And charged with bank fraud. The City Attorney already had a pending civil complaint against santos from several years ago for endangering the city and the public by skirting requirements on several properties. A Mission Local article this september told the story of a district nine constituent whose neighbor was doing structural or demolition work that was causing serious flooding onto his own property. He was visited by sontose who was representing the neighbor, but not until he googled Santos Santos who was representing the neighbor, but not until he googled santos did he realize he was involved in these matters. It for over a year, my office has been working with neighborhoods, city department, and the City Attorney on a project in the portola where the Developers Got a permit for building ten units and built 30, this, causing a mass scramble to protect the tenants who are in these unpermitted units, creating life safety situations so dire, that the owners were forced to install a temporary fire escape which complicated the process to permit this project. In just over a year ago, in 2019, one man paid the city 1. 2 million to settle a civil lawsuit for unpermitted work on several properties, four of them in bernal heights. For months, ive been hearing from neighbors about damage to their home on work that he was doing adjacent to those properties not within the scope of the permit. They are truly the tip of a deep iceberg, and while they show flagrant disregard for laws, we need to understand where the city could have been more active. Were there members of project teams with priority history of misdoings . Were there red flags in the permit applications . Frankly, this has been going on so long that it seems to me that d. B. I. Has taken an ineffective laws on what is an attack on our laws, our regulations, and our code. The stories go back years, and i know that d. B. I. Leadership is putting an end to this, so i am looking ifforward to hearin from them today and working together to craft legislation to make sure that these most egregious violations dont happen again. And with that, chair mar, im looking forward to hearing from d. B. I. , but im sure that some of my colleagues also have opening comments. Chair mar thank you so much, supervisor ronen. Supervisor haney . Supervisor haney yes, thank you, chair mar, and thank you, supervisor ronen, for calling this hearing. You know, i think this really strikes at good, comp tent, Effective Governance and the trust that we must have with our residents. This episode of corruption that our city has experienced over the last now about eight months actually, the acts before that has unearthed in our city the individual corruption but also the inadequate laws and oversight that prevent corrupt behavior. I want to appreciate the role that this committee has plays with supervisor peskin and has played with supervisor peskin and chair mar. This is a critical piece of the puzzle and a role of d. B. I. Specifically was a concern we actually had a conversation about this with the City Attorney a number of weeks ago as it was connected to another matter, and im really hopeful that we can come out of this with some clear next steps to provide stronger and more effective regulation, which is really about protecting orresidents and protecting our people who do business here, and people who may have everything that they own at stake, and they trust our City Government, when we give out a permit, when we put our stamp on something, thats our City Government giving our approval on all of our behalf, and we should do that with the utmost sensitivity and intensality around in sensitivity around what we do and who we do that for. So thank you, supervisor ronen and also the other folks who called the hearing, supervisor peskin, and supervisor mar, and im looking forward to what we can get out of this to improve things for for our city. Supervisor mar thank you, supervisor haney. Supervisor peskin . Supervisor peskin thank you, chair mar, and yeah, let me join in appreciating supervisor ronen for bringing this hearing. This has been a perennial issue, and we take one step forward and two steps back and one step forward and two steps back. This has been going on forever, and it leads to a denigration in the trust of the city at large, and frankly the tacit approval of illegal construction methods. So once again, the board has to step in, and its pretty outlandish. We know the names. Supervisor ronen just said the names, and theres more names on that list. The department knows the names. The public knows the names, inasmuch as theyve been reported on by the media in a manner which frankly is an outright embarrassment to the city. D. B. I. Is aware, and were all aware, and the employees are all aware that Rodrigo Santos continues to be a contractor permit inspector in the city despite all of these allegations. I understand that we are constrained by certain pieces of state law, but theres also a lot of things that we can do. And quite frankly as i have been able to determine, the department could have done earlier and are doing a little bit on already and i dont want to beat up on the department, but well get to the bottom of that in over the course of this hearing. Thank you. Chair mar thank you, supervisor peskin. You know, colleagues, i just wanted to add, that in addition to to, you know, the information and the very good points that youve all touched on regarding the sordid history of corruption and favortism in d. B. I. That expediters have plafed a played and continue to play this year, this is an important issue for us to address in terms of restoring trust in d. B. I. In our city. Theres also been growing frustration that ive heard from my constituents, that theres things that arent being scheduled and even Small Business owners, for small projects, and the extremely long delays in getting their permit considered, and its causing hardship, particularly for the Business Owners that need to make changes to their storefronts. I think when they read about and hear about the favortism that happens and continues to happen at d. B. I. , i think that just erodes confidence in our City Government, so thanks so much, supervisor ronen, for your calling for this hearing, and yeah, i would turn it back to you. Supervisor ronen thank you. Next in this hearing, were going to hear from d. B. I. , and i dont know who were going to hear from, but whoever is here, go ahead. Good morning, supervisors. My name is christine [inaudible] and i am the assistant director of the department of building inspector. Im here with our chief building inspector, joe duffy. Joe has been with d. B. I. For the past 21e years, and hell byebye able to answer all of your questions. So thank you for joining us today. I am going to share my screen and go through a presentation. Can you see that . Supervisor mar yes, we can see it. Great. Okay. So we put together some slides to help explain d. B. I. S role in building safety and the project consultants, which is the purpose of the permitting process, and tools that we have in place to ensure compliance with the code. D. B. I. Provides critical Building Services to ensure the safety and habitability of San Franciscos more than 200,000 commercial and residential buildings. We have nearly 300 employees, including plan reviewers, inspectors, and Code Enforcement and site inspectors. And we issue 70,000 permits annually. We perform plumbing, mechanical, and electrical inspections, we conduct housing inspections to ensure the Property Owners are maintaining habitable housing conditions. We conduct approximately 70,000, as i said, inspections every year, and then, we provide Code Enforcement services. Interim director oriordan was appointed in march of this year, and i can say that its really a new day here at d. B. I. Hes made it clear to staff what the values are, the transparency and accountability, and that theres really zero tolerance for looking the other way during inspections, or not performing an honest land review, just zero tolerance, and weve been currently working with our h. R. Department and the City Attorneys office on several investigations which, you know, i cant discuss in the open forum, but weve been reviewing records regarding specific projects of concern that were brought up earlier, and i can assure you that we are actively addressing this issue. So this slide includes hang from the San Francisco Ethics Commission defining what a permit consultant is and what their permit duties are. Its someone who works with a Property Owner to get their construction approved so that construction can begin. And according to the Ethics Commission and the roles that were codified in 2018, a permit consultant would be consulted with Property Values 250,000 or more. Just to be clear, an engineer or an architect or a contractor working on the project is not considered a permit consultant in these guidelines. We rely on licenses Design Professionals to certify that theres submitted applications and plans, and our staff reviews the materials to verify theyre code compliant, and as the work continues and is performed on the job, our inspectors go and verify that that work is being done according to approved plans and in accordance with code. And so the permit application process includes filing a permit application and, when required, submitting plans for review. And sometimes those plans are reviewed by several city departmenting, such as the Planning Department, the Fire Department, p. U. C. , Public Health, and depending on the complexity of the project, sometimes multiple plan reviewers in our own department are reviewing the plans, such as giving it a structural review or a plan review. And the consultant may note comments. Once the plans are approved, the permit can be issued. Once the permit is issued, contractors are scheduled throughout the project to ensure code compliance, and throughout the process, we might issue a certificate of final completion or just a final signoff. So for the Code Enforcement project, i want to say the vast majority of Property Owners and their agents abide by the permit process and perform work according to code, but we have those applicants that dont comply occasionally, and we have a process in place to force them to comply. This is usually triggered by an inspector going to a job site and finding a violation and writing up a notice of violation, or sometimes its triggered by a complaint made by someone, such as a neighbor. [please stand by] it is chief code compliance, not punitive or to punish. It is to ensure the buildings are safe and this helps us do that. Sometimes the more serious cases we participate in the coordinated task force of potentially dangerous property conditions. Those are made up of the Fire Department or Public Health and even the Task Force Includes multiple people from d. B. I. Maybe it would include the plumbing inspector and electrical and building inspectors. They are coordinated by the City Attorney, and that is for properties where there are violations of multiple city codes. You brought up earlier repeat violators. We have put tools in place to address repeat violators. We have various methods to address repeat violators for noncompliance with Building Code requirements. One is to incruise scrutiny of increase scrutiny of the projects. We have lagged them in the database to practhe permit issue answer approval. Something that is flagged in the tracking system as repeat violators. That means that if a plan checker is looking at the plans submitted before that permit can be issued, a senior plan checker would have to do a Second Review to ensure that that review has been correct and thorough. We refer repeat violators to outside agencies including City Attorney and state licensing board in coordination with the City Attorney. We developed an administrative bulletin to outline that process for how we report to the state agencies. Now, in this hearing it was specifically called out consultants charged with criminal conduct. I want to address that specifically. It is our understanding as the department that serves the public we cannot refuse the services to the public. We can escort customers out of the building if disorderly. We cannot permanently ban a member of the public from the believe. It is our understanding we cannot deny service to a valid licensed professional if they are filing in their professional capacity. State law does not allow us to deny a professional from doing their work pursuant to their state issued license. What we can do is take steps to ensure the permit applications are accurate and put in extra level of scrutiny on those specific individuals. Recently what we call expanded Quality Control process. That is for repeat violators associated with at least three serious modes of violation in 18 months. These individuals are flagged and subject to increased scrutiny. The types of violations that would put somebody on the list misrepresenting existing conditions, structural work beyond the scope of permit or over demolition. The other violations that we deem egregious and we allow discretion in that list. This is a policy we added to the Building Inspection Services Office Policy procedures manual. The actions we take when we flag individuals for the Quality Control are, one, require all applications submitted by or on behalf of the individual to be reviewed a second time by senior manual of plan review services staff. A line staff doing the plan review check. That would go to a senior person to do a second plan review. Two, we are going to require site inspections prior to permit issuance to confirm the existing conditions. Three, dedicated a Senior Inspector for the project site. We can refer them to the Regulatory Agency or City Attorney for further action as we have done in the past. Once these people get on the list for expanded Quality Control for two years. If that individual receives another serious violation during that period the clock would start over. The department is implements new procedures to identify violators early in the complaint process. That means supervisor ronen, you referred to a neighbor calling in a complaint and that wasnt responded to quickly enough. What we are going to do to make sure our line staff are answering the phone they know who these folks are so they can immediately escalate that to Senior Inspector or chief building inspector to address that quickly, as quickly as possible. We are continuing to review policies and look for our safeguards to implement. We look forward to working with you to address and implement any additional controls to ensure the agents are complying with the Building Code requirements. That concludes my presentation. We will take questions. Through the chair, thank you so much. I do want to appreciate the direction you are heading in as a department and the different changes and procedures in place. I have been working with the City Attorney to prepare legislation to strengthen d. B. I. s ability to turn around the culture of favoritism and fraud. I do think this is a good start, i think that it is critical that we further enhance this work through legislation with clear regulations to ensure implementation enforcement, periodic reporting and puckly accountability. I have a few questions and my colleagues do as well. I havent told that d. B. I. Has an informal list of bad actors. I know that supervisor peskin has already mentioned that he wanted to have this list of those folks that are publicly acceptable who have been caught defrauding the public or doing shoddy work. I am wondering, you know, a few things about this informal list. How long is the list . Does it include developers, engineers, consultants . Who determines who is on the list and the level of additional scrutiny, who informs staff . Who enforces the staff review of the applications . In short, how is it that what you are proposing now that is different from what d. B. I. Has been doing which failed to stop egregious violations like santos or 2861 san bruno avenue proje project . I think is question is whether we are publish everythinpublishing thelist . We know you have a list. We want to understand more about what that looks like. Is it a the series of questions. How does that informal list we know yo you are not publishing. How does it work within d. B. I. . I will answer your questions. The list in the past is more informal list where someone is like on the permit tracking system and that is determined by the chief building in, Deputy Inspector for services who see the same names appearing again and again. That flagged the tracking system. What we are doing now with the new policy we are putting in place is making that a more formal process. There is cry steeria we are establish criteria and more formal how we review and maintain and make sure those people are getting the extra level of scrutiny. Do you want to add to that . Good afternoon, supervisors. Joe duffy, chief building inspector. When ever we see a problem projector have the ability to put address restriction on it, that sometimes gets our attention. No future permits could be issued. We probably have a notice of violation on the property. I wont say as well in addition to the presentation here as a previous senior building inspector. When we come across these serious violations where someone has taken out a Building Permit and gone and knew what they were doing. We got a call from the neighbor and give a stop work order. The homeowner have been sold goods. I find from speaking to homeowners there is a lot of that going on. I do think the steps we are putting in now will definitely help, and the more help from the City Attorney and other city agencies will help. I find a big improvement in the last 12 months, and i havent personally seen as many across our desk. Christine touched on it, one of the most important things we are educating more on the people that answer the phone. If someone calls in a complaint and a name comes up to raise a red flag. Keywords, demolition, serious flooding. That would be an emergency one. I do know what happened to the one supervisor ronen spoke about. I am not making excuses but we did respond immediately to the homeowner. Christine, i am available for questions as well. Thank you. Just to be clear. Is it develop pers, engineers and consultants that get on the informal list or just one or the other . Does everyone in the process, you know you outlined the three sort of entities able to act on behalf of the Property Owner. Are all three of those on the list . Yes. Okay. This might be more a question for the deputy City Attorney, is ms. Pearson here . Yes, i am here. Good afternoon. I know that there are some legal issues with having a publicly accessible list. I am wondering if there is anything that would prevent d. B. I. They debt an application they get an application with a name of developer, engineer, consultant that d. B. I. Knows has either defrauded or done shoddy work. There is some issue with them. Is there any issue with d. B. I. Informing that Property Owner who is using that person that that person has x of violation or that, you know, they have been caught up in an indictment or any of the above . Well, i think that type of system might raise some of the same concerns about publishing the list. You want to make sure any information is absolutely accurate because there will be serious consequences for the individual to appear on it. We would want to take a look at what, if any, information the department could share with the homeowner or project owner on whose behalf it is pulled because we would need to make sure that information is absolutely accurate. That is something we are happy to look into. I know that d. B. I. Has been using the sort of informal list for some time now. As they have more checks and balances to the informal list, i wonder with that additional scrutiny and criteria could we do something to make it public. In the santos case, he is still out there, you know, and he is very good at sweet talking and defrauding individuals. There should be some way that we can in addition to not aiding and abetting that fraud through the department. We should be doing a Public Service of informing residents to be very careful themselves. Certainly, some of the information held by the department is subject to disclosure under the sunshine ordinance. We want to work closely with the department if it were to contemplate is system where it was proactively publishing that information. I think we have a request to you to draft legislation along those lines. I really, you know, think this is urgent. To the extent that we could make public or if it is not publicly acceptable at least when d. B. I. Gets an application from someone flagged already in the system, then that individual at least has a right to know that there is a flag in the system. I know you can look on the contractors state licensing board to see if there is comappliance and things like that. That takes pro activity and some knowledge on the part of homeowners who dont make a living in this field and might not know those tools are available to them. That is something that we will continue to work with you all on. Thank you for that. I just have one more question before opening up to my colleagues. And following up on this issue as a professional state licensing board, correct me if i am wrong. We dont have the authority specifically to impose restrictions like a professionally licensing board. Are these permit consultants licensed by anybody . I dont believe so. My understanding they are required to register with us as a commission. Maybe this is for ms. Pearson. I understand with architects engineers, contractors there are limits to our ability to add additional requirements on them. When it comes to permit consultants specifically because they arent there is no state entity that oversees their professional conduct, could we create further controls over these consultants . You are right the state contractors law regulates contractors in california. It goes from establishing additional qualifications for those licensed individuals. To the extent this class of person does not have a state license, it might be no preemption issue and we can add to the list of things we look to as we look at the policy options you are considering. To ms. Gaseric, is there anything that you do in d. B. I. That is special or different with the permit consultants given there is not a state control or licensing board overseeing their conduct. This goes to preferential treatment. In our code of conduct we treat everyone equally. We do treat all applicants equally. That is expected of our employees. Nobody is allowed preferential treatment or in the reverse discriminated against in any way. These are areas that i am continuing to work with you all on putting in some additional controls because we are having problem after problem with these consultants, whether it is, you know, in the case of money, in other cases, you know, of engaging in illegal contact leading to f. B. I. Investigations, you know, there is more that i believe we can be doing internally to prevent some of this illegal activity. With that, chair mar, i am done with my questions. Thank you. Thank you, supervisor roman and i appreciate your focus on these issues and focus on having d. B. I. Have a list of bad actors and using that internally for d. B. I. Purposes as well as making it known to the public so that they can know to avoid them. I have a few questions. I am trying to understand the scope of the problem more with regard to the bad actors. Is there i understand that d. B. I. Has your response to supervisor ronen has an informal list already. I know you cant speak to names on the list, but how many individuals or businesses are on the list roughly . What is the relative proportion of permit consultants versus more licensed architects and contractors . Joe, do you want to take this one . In regards to informal list from my experiences in building inspection and notices of violation we deal with, i dont think there is that many bad actors to be honest with you. It is a limited few. We see repeat people. Less than 10 that i would say, maybe not even that high. That would be this is more of a discussion among Building Inspection Division and Code Enforcement. When things come up we notice that in the last couple years that we did see repeat ones and they were referred to the City Attorneys office and we had stop work orders. There were a number of them. It is not a huge number. What was the other question . It is more straightforward to identify contractors with repeat violations of permit or construction. What about are there many currently many permit consultants that are on the bad actor list . I have to say personally my experience with permit consultants is pretty positive. There are a few of them in San Francisco and i know this from working here. The public are hiring people to do the permits. Most of the people are honest upstanding people and i do think there is a few bad actors selling these people with the option to get around planning and building. Those ar are the the ones we neo after. Overall on the permit consulting business, i dont see dishonesty or any types of audit. As a matter of fact sometimes it is helpful for someone to have a permit consultant in my opinion. Would you say there are permit consultants. You did state you feel they are bad actors and the department has identified them as problematic . I think we have heard that already. Yes, when you use the word permit consultants you are going a broad reign there. That could be a developer, architect or engineer or homeowner. This is a person someone hires to get the permit started and watch it go through the approval process and sometimes to the finish. We talked about this before the meeting. There is a broad range. It might be a engineer doing this more and other engineers. I have spoken to a lot of the engineering associations in San Francisco. They are disgusted by some of the behavior of the people out of state license. When you see the issue over 70,000 permits a year, most people are doing it right and they want to do it right. Occasionally projects run into problems. That doesnt mean they are a bad person. One time question. Of the 70,000 permits per year, how many or what proportion would you estimate used a permit consultant . That i dont have that information, i am sorry. We would need to research that for you. I dont have that toed. We would have to pull that data. I dont have that at hand. I would be interested in seeing that. Supervisor peskin. Thank you, chair mar. Let me start by agreeing that the vast majority of folks d. B. I. Deals with and vast majority of employees and colleagues and Department Heads are honest, decent, hardworking people. It only takes one to make us all look terrible. Only one santos who used to be on the d. B. I. Commission to lose the public trust and faith, not only in d. B. I. But the entire government that i have spent 20 years to be more efficient and look good. Our job, unfortunately, isnt about dealing with 98 of good people. Our job is about making sure that 2 of dingdongs who ruin it for everybody else are regulated against. Some of that can be done internally in d. B. I. As the informal list you are coming along with that we will talk about a little bit. Some of it you cant do even though the best thing would be to say mr. Santos, sorry, you are on the black list. You cant get a permit. I realize that you cannot do that because of state law preemption. I realize we have due process considerations and i will get to that in a second. There are some things that the prerogative of the law making branch of government of which supervisor ronen is working on and i look forward to working with her on that and our staffs have had good conversations about this thing that has been kicking around for a year at least. Let me get to some of my questions here, which is, yes, d. B. I. Does have the authority and is the first responder, if you will, when you know you have a bad apple. One of the things in the slide show says report them to the state licensing board. It is a very different thing when a Government Agency goes to at Government Agency and says we have a problem as compared to what happens in state licensing things which is when the client got screwed they go to the state licensing board and say, boy, this engineer didnt know what he was doing or ripped off my check to d. B. I. Or whatever. How often do you do that . [please stand by] we havent of the time that we have reported either contractors or engineers to the state licensing board, i dont know that theyve ever taken action. Is this how many times have you done that in the last year, last five years, last ten years . Im not sure i have 100 accurate information, bus im new here. We have done it at least four times, in the last several years. Supervisor peskin i dont know if this is to you, ms. Gasparac or deputy City Attorney pearson, i assume when you do that, its Public Record . Pursuant to my Unlimited Power of inquiry or a member of the public pursuant to their rights under chapter 67 of the administrative code, could garner that information . I think thats for the City Attorney. Supervisor peskin youre asking whether its a matter of Public Record if d. B. I. Hold as record that theyve made a referral to the state board . Commissioner peskin yes. Yes. I would presume that it is. I would have to look at the law governing complaints made to the state board to see if any protections made for that information, for any period of time. I dont know off hand. I would assume, as you have suggested, it would be a Public Record, but i will confirm. Commissioner peskin i dont care about the stateside. I care about the local side, which i assume is once our departments in writing or electronically or on a computer or typewriter, its local Public Record, subject to local disclosure requirements. I dont think the state can regulate that . Right. But, while weve got you, relative to the creation of this informal list, which i think when supervisor ronen and i and the board are done will be a formal list. You spoke to the need for accuracy on that list and that the policy concern was that people who are on that list are appropriately on that list, right. Is it an accuracy or a due process issue . Isnt the issue how you the slide presentation says how you got on the list and not how you got off the list. And what the procedures are for challenging whether you should be on the list or not. Well, i think its both an accuracy issue and a due process issue. Its triggered because if the information is accurate, there could be harm to this individual from the government action. I do think i mean, i would say that my understanding of the list is not so much that its a bad actor list, but its a list of actors that require heightened scrutiny by d. B. I. And i do think that if the city were to affirmatively publish that information or affirmatively reach out to individuals to advice them of the presence or information on that list, it might be appropriate for there to be an n. O. V. Issued to people on the list, so that they had an opportunity to challenge the underlying determination that got them there. Commissioner peskin okay. Thats the due process consideration. And then back to d. B. I. , if you are on the heightened scrutiny list, presumably you are causing this cost of covering agency more money by virtue of the fact that youre causing the agency more money. Does that get accompanied with larger fees, insofar as it causes d. B. I. To give them the higher level of scrutiny . So there are fees associated with doing extra inspections. Joe, do you want to take that and answer that question . Yeah. You know, if the department has to spend more time on a project, for example, an extra inspections we can charge reinspection fees. Absolutely. The other thing about that is we can recoup costs with a notice of a violation, once they go to the cold Code Enforcement. We refer to the City Attorneys Litigation Committee and a lot more costs can be taken back and charged to the offender. Thats my knowledge of it. Commissioner peskin thank you, joe. And then i guess maybe to supervisor ronen, but to everybody involved in this meeting. I think its also really important that contractors, who rely on this handful of bad actors, who require heightened scrutiny, and project sponsors, around im not talking about the mom and pop, who needs to figure out how to navigate a building process. Its complicated not because of politics. Its complicated because our Building Codes, our fire codes are complicated, which we all dont burn to death and have sprinklers and all the rest of it. Particularly project sponsors who are professional project sponsors. Im not talking about when, you know, mr. Jones or mrs. Smith want to do a project on their house. Im talking about project sponsors who do multiple proje projects. They need to share in this liability, too. Contractors and professional project sponsors, that rely on the rights of, yes, i will say it, Rodrigo Santos or his ilk, need to share in this liability, too. I want to put that on the record. Im sure supervisor ronen and i and the staff and the City Attorney will put that into whatever we come up with quick. Thank you, chair mar. Chair mar thank you, supervisor peskin. Supervisor haney. Supervisor haney thank you. Many of the questions i was going to ask were asked. I a couple a little bit more specific ones. In terms of what were allowed to share publicly or disclose or do any sort of maybe even more intentional outreach to individuals who may be, you know, working with or signed up with one of these individuals, that were concerned about. Is any of that changed, if that person has been indicted criminally . Is there anything that we can do in that case . I mean, you know, if somebody is working with Rodrigo Santos, for example, or somebody in that situation, can we disclose more proactively to them or to to their clients or potential clients that he has been criminally indicted. Does that change what were able to do at all from a due process perspective . I think the information that the city would be sharing would be information that has caused the city to become concerned about concerned about these advices, which is based on a review of the violations they might have been associated with. And so the city would be putting together a list, based on of individuals who require heightened concern because of the violations. And in that case, the city has information about the violations. It has the state found them to be it has you know, investigated them, they have the information. And they would be putting them on the list on that basis. Indictments are noninformation its not information thats within the control of the city. I dont know that that the city should be making disclosures based on the fact that an individual has been indicted. That is a separate process thats being undertaken and prosecuted by somebody else and not the city. Supervisor haney but you can [indiscernible] so from a legal perspective, in your view, in terms of what we could disclose or how or what, that were actually in a better position to disclose things that we have our own kind of personal knowledge or experience of not personal, but as a city, thats been developed through our own analysis of things that have come through the city and associated violations, as opposed to the criminal indictment aspect of it . Thats right. Supervisor haney okay. Got it. I had a question about the permit peters, peters and people hired to work with our departments on behalf of various folks. It sounds like there may be need to be greater regulation, also via the Ethics Commission and youre looking at, supervisor row then. What are they able to do on someones behalf . So they sign something and basically all of the interactions with our department, they get to act as an agent in some way . Is that essentially what they do . They can sign things on behalf, they can i mean, is it is it just sort of give them Carte Blanche to act on their client, whoever their client is . Joe, you want to take that. Yes. Of course, supervisor haney, you know, on a Building Permit application on the bottom retorner, theres six boxes. If you take one of the boxes as agent, you can get the authority of the owner of the property, to obtain the permit as the opener of the property. And deal with the agencies, the relevant agencies, whether its building, planner, d. P. W. , Fire Department. A lot of people some people in San Francisco like to do that. They dont want to do it themselves. That gives us the authority. Ab engineer obtaining a property. A lot of times at d. B. I. , Central Bureau deals with the legal part of it. Whereas obtaining a permit on behalf of someone. Supervisor haney got it. And it sounds like in order tonight person who is the agent, you have to register with the Ethics Commission, or can anybody do it . I can answer it briefly, with my knowledge on that part of it. There is a law in effect over the city that a permit peter must register with the ethicsess commission is not a part of that. Probably would be very hard to oversee, because im im getting a permit from a neighbor, for example, you ask them can somebody obtain this permit on my behalf. I see that a lot. Someone represents someone, theyre not an expediter. Supervisor haney got it. People make an entire business out of doing this. The concerns if we dont really know who those folks are, we dont know what kind of promises they may be making. They may be exploiting people. They may be using or accessing undue influence. I mean, i think theres a perception, im sure, ive heard it. This is what you do on a regular basis. Theres a perception if you want to get something done in the city or get your permit quicker or whatever it is, that you hire one of these people. And they have political access and influence. And theyre able to get it done for you. That, you know, whether thats true or not, theres a perception of that. And some people are selling their Services Based on that perception. Theyre saying that they can get things done quicker for you and if those people are not being required to disclose certain things or register in all cases. You know, that can lead to a situation of that could create problems. So i just want to flag all of that. I dont know, supervisor ronen, if thats part of what youre looking at, sort of this larger set of regulations or lack thereof over who can act on someones behalf in these processes. But there are people who are essentially selling this perception that their access to power and maybe even the relationships that they have and that theyve good morning garnered via political access, will they ge get them favorae treatment and they sell that to people. Thats basically one of the things that rodrigo was doing, right, mr. Santos. But there are other people who do that as well. So i dont know whether this is an Ethics Commission thing or d. B. I. Thing. It does seem like an area, especially if these people arent licensed necessarily and they have to put their name down. Supervisor ronen if i may respond through the chair. I could not agree with you more, supervisor haney. The fact that these permit consultants exist, shows something is fundamentally broke been ouin our system. It should be straightforward enough, that functions, you know, staffed enough so theres not a market for individuals to claim a specific, you know, knowledge that others cant get or as supervisor haney says, more often this inside track with relationships. That any member of the public couldnt get. And if we do our job right, and if we have a d. B. I. Thats truly functioning the way it should be, then the market for these expediters should disappear all together. But in the meantime, before we get there, we certainly should be putting protections in place in the first place, where there are none at the moment. I mean, there is this informal system that you created. But it lacks structure and it lacks, you know, public access. And so we need to create some of that. But ultimately we need to get d. B. I. To a state where it functions so easily and so well that we eliminate the market for these individuals that have taken advantage of the fact that the system is not working optimally. If i may, i want to say a couple of things about that. One is that we have brought on we are bringing on, were in the process of hiring an executivelevel permit services administrator, because we recognize the need to streamline and make our process easier. The city has also, you know, put a lot of resources into this permit center idea, which is getting all the permitting departments together on one floor and making it an easier system to navigate. And so we are trying to address that bigger question of its a complex process, a lot of people hire these permit consultants because they know their way around the building. They know who to call, you know, when something gets stuck. And thats not easy for the average person. And so it is totally agree. Its incumbent on us to make the process easier for folks. And to, you know, and to streamline the whole process, so the average person can come in here and figure it out. Supervisor ronen right. Sorry, is it okay . I was going to go on about, christine, just that supervisor haney just pointed out that in the building d. B. I. Obviously are the Building Permit. The permit consultants a lot of people use them for the variances, the notifications, a lot of Planning Department stuff, thats looked at before you even get to the d. B. I. Review. I think its a lot to do with the bigger theres a culture right there, where people do not want to deal with that process. Whatever a conditional use. Theres a business for that. I keep celebrating the good people doing it. Were talking about the turn to the bad people, who are selling people or just get a Kitchen Remodel permit. You go and dig out the house. We need to focus on that. Supervisor haney right. And i would also say that some people are probably just selling theyre selling nothing. Theyre saying you need to hire me and pay me, you know, 20,000 or something. Or youre not going to get a permit. They go in and do the same thing that anybody can do themselves. And, you know, i think in that case, we have the responsibility at some level to protect the consumers, you know, and the residents who are being taken advantage of here. Not all are. I think a lot of people the bigger developers kind of knows what theyre getting to. Definitely not a good if people have the sense that in order to get things done in our city, you need to hire someone who has some sort of political power, influence to get through what should be a transparent, fair and Accessible Government Service is a problem. And it creates its own set of problems as weve seen in these indictments and everything else. Chair mar thank you, supervisor haney. And also just want to thank miss gasparac and mr. Duffy for engaging in this important discussion with us today. Colleagues, before we go to Public Comment, do you have any sort of final questions or remarks . Supervisor ronen through the chair, supervisor mar, i want to thank you for holding this hearing. Im really looking forward to working with all of you, supervisor peskin, haney and mar, as well as our City Attorneys office and miss gasparac and mr. Duffy. I think we can i think we can make some positive policy and Good Progress here. And im looking forward to continuing this conversation and culminating it in the form of legislation, that helps move us forward as a city, thats more fair, transparent and free from corruption. And, you know, influence that isnt well meaning. So thanks again. And look forward to Public Comment. Chair mar thanks, supervisor ronen. So why dont we go to Public Comment. Mr. Clerk, are there any caller on the line . Clerk thank you, madam chair. Mr. Coup, please let us know if we have callers ready. Please press star followed by 3 to be added to the queue. If you wish to speak for this hearing. This foes already on hold in the queue, please continue to wait until you are prompted to begin. You will hear a prompt that informs you that your line has been unmuted. Thats your opportunity to provide your comments. For those watching on cable channel 26 or through sfgovtv. Org, if you wish to speak on this item, please call by following the instructions displaying on your screen. That would be by dialing 415 6550001. Then by entering the meeting i. D. Of 146 1915 2214 followed by pressing the pound symbol twice and star then. Youll enter the queue to speak. Mr. Coup, could you please connect us to our first caller. Clerk i hear someone on the line that may want to mute the streaming device or television. Caller okay. Is this okay . Hello . Clerk yes. Your time begins. Caller okay. This is bob mason. And i had unfortunate series of monthslong exposure to mr. Santos behavior. And i just wanted to say that there is some gaps in, you know, how things work. In other words, mr. Santos was supposedly put on this list, as i understand it, that he was suppose to be inspected and red flagged and whatever. Well, he already had a permit in the system and working illegally. It was filed but not approved. But he was working on it next door to me. When i looked that up and saw that, i didnt quite understand the citys explanation, of course. I told them eight times, i contacted d. B. I. Between june and september and contrary to what mr. Duffy said, he did not get back to me until the newspaper article came out. I also wanted to say and glad to the City Attorney person said, the city itself had indicted santos and published like a 30page screamingly negative indictment on the web about him. So it seems to me if the city can do that, it can also let its citizens and homeowners know what theyre getting involved with. Thank you. Clerk thank you for your comments. Can we get the next caller, please. Caller hi, there. I just wanted to say that getting rid of a few bad actors should not prevent d. B. I. From issuing permits. People cant get permit numbers and wait person is now in 2021. What happened to a softer system, that was suppose to stop all of this from happening . I think there are solutions out there that d. B. I. Needs to quickly put in place, especially as we move towards an economic recovery. Thank you. Clerk thank you for sharing your comments. Operator mr. Chair, that completes the queue. Chair mar thank you, operations. Public comment is now closed. Thanks again, supervisor ronen, for your liquor on these important issue for your leadership on these important issues. Very much look forward to following up with you on supporting the legislation to come to address these problems. Yeah. I guess if its okay with you, i would like to move that we file this hearing. Supervisor ronen thats fine. Next up, hopefully well have legislation. Chair mar okay. All right. So, yeah, i move that we file this hearing. On the motion offered by chair martha this hearing be filed, vice chair peskin. Supervisor peskin aye. Clerk chair mar. Chair mar aye. Mr. Chair, there are three ayes. Chair mar thanks. Thanks, supervisor ronen. Thanks, miss gasparac and mr. Duffy, for joining us. Mr. Clerk, can you please call item number 10. Clerk agenda item number 10 is the hearing on the findings and recommendations of the budget and legislative analysts performance. The callin Public Comment number is 415 6550001. After you dialed that number, you will want to enter the meeting i. D. For this meeting, that is 146 195 2214. Following that press the pound symbol twice to connect to the meeting. And then press the star key followed by the number 3 to enter the queue to speak. The symptom prompt will indicate that you have raised your hand. Please wait until the system indicates you have been unmuted. Thats your opportunity to begin your comments. Chair mar thank you, mr. Clerk. Colleagues, i called for this hearing because of the seriousness and urgency of the subject of this audit. Just yesterday criminal charges were released against paul justy, a former Government Affairs executive for bribery and concealing Money Laundering to the tune of more than 1 million. These are only the latest criminal charges resulting from the still unfolding public Corruption Scandal thats led to a crisis of confidence in local government, and into the compliance and enforcement of our ethics laws. Recent investigations into public corruption have reached the city administrators office, the department of public works, the department of building inspection, the Public Utilities commission, the Planning Department, the Mayors Office of neighborhood services, the airport commission, and the department of Public Health. In the last two years, allegations, charges and indictments for public corruption, bribery or conflicts of interest have led to the ouster of four Department Heads, and implicated three city contractors, permit expediter, a billionaire developer and multiple appointed commissioners. Now also an executive at recology. Not one of these investigations came from the Ethics Commission, whose performance we will be discussing today. As public officials, we have a responsibility to earn and safeguard the trust of the public, as weve been discussing with respect to d. B. I. For the last hour plus. And we have a responsibility to hold power to account on behalf of our constituents. So as the chair of the government audit and oversight committee, this is the responsibility i take incredibly seriously. So im grateful to president yee for requesting this audit of the Ethics Commission, a body whose responsibilities include investigating ethics complaints, administering the citys Campaign Finance, conflict of interest, lobbying and whistleblower laws and investigating and enforcing violations of these laws. Our city Charter States that Public Office is a public trust and all officers and employees of the city and county shall exercise their duty in a manner consistent with its trust. As a city, we have failed that trust. And we failed it over days, years, and decades, when corruption has continued unfettered. So today im hopeful we can have a frank and open dialogue about the Ethics Commission, how this crucial city body has progressed or improved, and where it has fallen short in meeting its duties. And why. Well begin this hearing with a presentation from the budget and legislative Analyst Office on the audit and the executive director Leanne Pelham is also here with us to share her insights and answer our questions. Before we go to the presentation, colleagues, i just wanted to see if you might have any opening remarks. I know supervisor peskin, we might be losing you pretty soon, right . Yeah. Maybe we could just go to the presentations. So id like to first welcome up southern campbell from the b. L. A. s office. Ms. Campbell, the floor is yours. Good afternoon, supervisor mar, members of the committee. Southern campbell from the budget legislative analysts office. Well be presenting a brief overview of the audit findings and recommendations. I want to acknowledge the two staff people who work on this audit. And i want to thank members of the commission that, you know, gave provided us with information. But at this point, unless you have questions, id like to turn it over to christina malmutt and have her give the presentation. Chair mar sounds good. Good afternoon. Bear with me oil while i pul up my preparation. There we go. Good afternoon, chair mar, members of the committee. Im christina malmutt from the budget and legislative analysts office. Im here to give you a summary of our performance audit of the Ethics Commission, which was released in august of this year. The Ethics Commission was created by San Francisco voters in 1993 to administer the citys campaign contribution, conflict of interest, lobbying and whistleblower laws and to investigate violations of these laws and assess penalties. The scope of our audit covered all of the permit operations, including the departments compliance, audit and investigation programs. So now ill go over our five key findings areas and recommendations. Our first findings is that tools to assess the effectiveness and risk of ethics programs are needed. At the time of the audience, an annual report was not produced. Although i understand theyve released one in september. And they had also not implemented consistent methods for performance reporting. These tools are really important because they allow staff and members of the public to assess the effectiveness of Core Functions and also show progress towards department goals. We also looked at the departments approach to providing training on ethics law to City Employees. These trainings are important, because they help promote voluntary compliance with law, reducing the need for enforcement efforts against those who want to comply with ethics laws. We found that the department does not assess Training Needs with City Employees and officials based on risk and develop targeted trainings to address areas of risk. Both the department and the City Attorneys office may provide trainings on Ethics Commission departments to the departments at their request. In addition, i understand that the departments provides training to particular employees that are member of a particular bargaining unit. But if youre a city employee, thats not a member of a department thats requesting these trainings or a member of the bargaining agreement, you might not be receiving targeted trainings from the Ethics Commission. So a recommendations in these areas include that the executive director produce an annual report. And also formalize and Document Processes to providing training on ethics laws for City Employees and officials. Our second findings is that persistent vacancies have impacted ethics programs. The department has had a high vacancy rate over the last four years of about 19 , resulting in substantial salary savings in each year. For example, in fiscal year 1920, over 700,000 salary savings. This is in excess of what is already assumed in the budget in terms of salary savings. The departments work order with the department of Human Resources does not provide enough hours to fill all vacancies. And i just want to emphasize that for a department with only 24f. T. E. S, having four t. E. S on average can impact the program. The Investigation Division had at least one vacancy over the period, as did the Audit Division. And ill be talking about some issues in those areas later on. But certainly these vacancies impacted those programs. So a recommendation is really that this department is fully staffed. Even within the hiring freeze, we condition considering these vacancies to be necessarily to fulfill the mandates. Given the small size of the department, even leaving one position vacant can impact ethics programs. Our third findings is discretionary audits of Election Campaign committees are not completed timely. Audits are the many enforcement tool to detect violation of Campaign Finance laws. I just want to point out that right here were looking at the discretionary audiences of Election Campaign committees. The department is also required to conduct mandatory audits of Public Financing audits. However, those are conducted by a private Accounting Firm on behalf of the Ethics Commission. So for the 2016 election cycle, it took the Audit Division approximately 21 months on average to complete these audits. And the last audit wasnt issued until december 2019 and more than three years after the election. Long audit timeline reduce the reliantcy of audit findings for the public. The Investigation Division has to complete an investigation after the audit is completed. We did compare the 2016 election cycle to the 2018 election cycle, as you can see here. At the time of our review, only one audit had been completed. But it did appear as though the department was on track to reduce these audit timelines considerably, in particular they reduced the amount of time to start a given audit from about 14. 4 months in 2016 to 4. 3 months. Or a reduction of ten months. However, we do think that theres still improvements are needed in reducing these timelines. The Ethics Commission is also required to conduct at least one lobbyist audit per year. But to date the Audit Division has not completed a lobbyist audit. We understand theyve reported that this is due to staffing issues. During the time of the review, they had the staff for a very short period of time, as well as workload. But this is sort of a mandate of the department. This reduces the accountability for lobbyists and could result in underreporting of lobbyist activity. Our recommendations in this area are that the executive director further review timelines for discretionary audits of Campaign Committees through enhanced performance monitoring and process documentation. We also recommend that the department establish a lobbyist audit program. Our fourth findings is that investigations of alleged violations are not completed timely. These are completed by the Investigations Division and often originate in a complaint being made to the department. They take more than two years on average to complete investigations of alleged violations of ethic laws, including Campaign Finance laws and other relevant laws under its purview. I just want to note that our review focused on complaints for which investigators determined there was sufficient evidence to open an investigation. That excludes complaints in a preliminary review, perhaps out of scope or lacked sufficient evidence. Timely resolution of ethics investigation is important for promoting Public Confidence and government. Its also important because long delays beginning this investigation can impair case outcomes, as it makes it more difficult to collect evidence. We also found that the division opens more investigations than it can close in a given year. This is due in part to the length of time it takes to conduct those investigations. As well as division vacancies over this period. As i mentioned before, one vacancy over the whole period and they were rarely fully staffed. And then in particular there was a period of time in fiscal year 20162017, where all four investigator positions were vacant. And they had to sort of recover from that time. So we found that between 2017 and 2019, the division opened wise as many investigations as they closed. For example, you can see here that in 2018, that middle the middle bars, they opened 42 cases, that dark blue bar. But only closed 14 cases, which is the light blue bar beside it, which increased the number of prioryear cases from 56 to 84 to the next year. So our recommendations are that the executive director improve the efficiency of investigations, through enhanced training for investigators, also by expanding the fixed penalty program, which allows more routine violations to undergo a streamlined enforcement process and a fixed penalty. The department was in the process of expanding this program. But had not completed it by the time of our audit. Our fifth and final findings area is related to whistleblower protection from retaliation. This is one type of investigation that investigators and Ethics Division complete. The citys whistleblower ordinance protects individuals from retaliation for reporting improper governmental activity. In particular, theyre protected from adverse employment action such as termination or discipline for reporting, for example, misuse of city funds or a violation of conflict of interest laws. These investigations require that investigators stab three things. First of all, that the protected activity occurred. In this case, that the individual either filed a whistleblower complaint or that they participated in an investigation. Second, they must establish that they suffered an adverse employment action, like not being promoted or disciplined. And then, third, they have to establish that that first thing caused the second thing, which is probably the hardest thing to establish. These investigations take more than two and a half years to resolve. , which is a little bit longer than the average time it takes for them to complete most investigations. I just want to emphasize that kind of long delays in starting these investigations can really impair case outcomes, because witness testimony is really key to establishing that causal link between the complaints and then the as verse action. And if youre following up on these investigations, long after the event took place, people might not really be able to remember accurately. Finally, these investigations require specialized training. I want to point out that these are pretty different in nature from most of the investigations that the Ethic Division completes. Because they really require an understanding of Employment Law and Civil Service process, rather than an understanding of ethics laws. So we compared their level of training to that of d. H. R. S equal Employment Opportunity office, because they also handle it retaliation cases. Although the e. E. O. Office is handle them for complaints regarding discrimination and harassment. The investigators received a lot more training on retaliation for the e. E. O. So our recommendation is that the executive director enhance investigator training on whistleblower retaliation cases, as well as reporting on whistleblower retaliation case outcomes to the Ethics Commission, to increase oversight. That concludes my presentation. As we already mentioned, i really want to acknowledge our project staff, ruben, oliver, who did a lot of work on the audit. I want to thank the Ethics Commission for assistance during our audits. Thank you. Im available for questions. Chair mar thank you so much. Thank you for the presentation and your work as well as along with the other folks on the b. L. A. Team on this important audit. You know, colleagues, before we get into questions, i wanted to invite director pelham to offer to allow her to make any remarks or response to the audit findings and the recommendations. Ms. Pelham, are you there . I am. Chair mar yeah. Good afternoon. Good afternoon. My name is Leanne Pelham. Im the executive director of the Ethics Commission, as you mentioned. And i appreciate the opportunity to be here for our commission today. This was an extraordinary opportunity during an extraordinary time, to make sure we, like all city departments, are accountable for our work. The stunning headlines that we continue to see and that the committee has been discussing already this morning, ring only underscoring that its all of our duties to make sure that san franciscans know that they can count on us to do the work that were here to do and do it well and do it effectively, do it with integrity, with utmost skill and utmost effectiveness. And i have often said to staff, both here and when i was working with the city of los angeles Ethics Commission, that audits are our friends. And i think this is an example of that. I would thank the b. L. A. For its work during a particularly stressing time i think for everybody. They started this work in february. And then as you know in midmarch, we all moved and pivoted very quickly to a shelterinplace shutdown. Both of our offices continued to work during that period. And as i said in the response to the audit in my letter with the audit being issued, we really appreciated their professionalism and their objectivity in being able to hang on this really important work during a really difficult time. I just wanted to acknowledge that publicly and thank them for their work. I think the committee well knows that the commission traces its roots back to the mandated vision that the voters established directly for us back in 1993, to practice and promote the highest standards of ethical behavior in government. And each of our five members is appointed by a different elected official. So with that work, they also have a sworn responsibility as members of the Ethics Commission to the public trust and pledge to perform the highest standards of excellence and accountability themselves in government. Thats also true of the staff. Together with all of us, were here making sure, with all of the resources and focus and energy that we can, that our laws within our jurisdiction are strong, that theyre workable in practice. They can be enforced and that our work in if performing those duties is effective and makes a difference in City Government. It is very clear to us that making sure that the laws that we have can be timely, object and independently administered and enforced, as the voters have expected. It is a critical piece of what we do. And that work has over the years demanded a number of adaptability to changing laws and changing politics and changing the circumstances. As Many Organizations do in the course of its 25plusyear history, this organization has evolved. And we have been, since 2016, under my tenure here at the commission, during the past several years have been very focused on making sure that we are being impactful in our work, were committed to Continuous Improvement and that we are going to do the hard work going forward, as we have been to demonstrate progress and real impact. I think inch of what the b. L. A. , the audit showed us was very, very instructive. A number of the instructions in the report spoke to making sure that were transparent in the work that we do to the public and that we do a better job tracking and monitoring our own performance. And we are endeavoring to do that. Part of what weve been work on, since the summer and into the fall, is making sure that each of our performance goals, for each of us as individuals at the commission, establish and root in our work this year, the recommendations of the b. L. A. Report. So that our individual contributions are aligned with the organizational goals that we expect to achieve in the coming year. So thats something that weve been taking to heart. The b. L. A. Staff mentioned we have issued an annual report this year. We issued that in september. The commission is required to approve it. Thats available on our website. But we know thats again a first step. Many of the steps that were addressed in the recommendations of the b. L. A. , primarily spoke to our oversight role. The audit and to enforcement. And they also spoke to the procedures that we use, that govern that work and the need to make sure that we solidify the processes that we have started to put in place and that we see them through to their finish. And that we report out publicly on, as we expect to be doing over the course of the year to the commission and to the public. So a couple of last points i would make briefly, before fielding any questions that you might have for me, on behalf of our commission, one of the key recommendations in the report also spoke to the hiring issue that weve had. We have not been shy about asking for resources that we need. We also know that its important to be responsible for asking for the resources we need, for balancing our aggressiveness and to the larger budget issues. Over the years weve asked for what we believe we need and that we can deliver. But we know that is not enough. We know there has never been a dedicated training, an outreach unit within our commission, for example. And so when we talk about some of the issues that your committee talked about in the last item, or several, theres a great need to be able to support city staff in making sure that they know where the boundaries of our ethical rules are. Thats something we have a lot of work to do as a city. Certainly at the commission, we need resources to do that. Were going to need a focused agenda to do that. But accountability in government is a shared responsibility in the city structurally and otherwise. So were pleased to report we do have the support and the mayors support this summer with the f. Y. 21 budget. We do have funding that was green lighted to enable us to hire in an expedited way, the positions that are vacant. Were at the point of posting five positions within the next couple of weeks. So were looking forward to having people in those seats, doing that work, and really helping to launch this next chapter of our work in the first first part of calendar year 2021. There is no shortage of work for all of us to do on this front. I recognize that. We take it very seriously. We very much appreciate the thoughtfulness that went into the report, the insights that it provided. And the spirit of collaboration that this body has thought to engage with us in to make sure that we are doing the best that we can for the san franciscans who established us and who continue to expect something from their City Government. So ill pause there and im happy to any specific questions you might have from me and happy to continue to report back to you, as we do with the commission, about the progress that we anticipate making. Chair mar thank you so much, director pelham. And for all of the incredibly important work that you and the Ethics Commission staff and the volunteer commissioners do to ensure, you know, strong ethics and compliance with our ethics laws in our city. And really, you know, glad to hear the updates that you shared and also reflected in your letter in response to the b. L. A. Audit that you are in full agreement with all of the recommendations and committed to responding to them and implementing them. And also good to hear the update about the annual report. That was just issued this fall for the first time in a while. So i i just had some questions either to you and also to ms. Malmutt from the b. L. A. s office. Maybe ill start with the findings around the audiences of Campaign Committees and long delay in initiating the important audits of Campaign Committees. I know it was particularly a problem it looks like in the 2016 for the Campaign Committees from 2016. There was some improvement in the 2018 Campaign Committees, the audits of those. So i was wondering if like looking ahead, you know, we just completed another intense campaign here locally with many Campaign Committees and whether you expect that trend, the improvement that we saw in the the audits of the 2018 Campaign Committees to continue with the 2020 campaign committ committees. Yes. Thank you for the question. Were pleased that the progress that the audits team has been able to make from audit year to audit year was acknowledged and demonstrated through this audit report. We know that we can do better and need to do better. The 2018 audit, that were conducted by the external Auditing Organization that we had, have been completed. Theyve now been posted on our website publicly this summer, towards the end of august, early september. So those are now completed. Our auditors, that will be turning now were post the 2020 election, theyre turning to the 2019 required audit. There are two candidates that will need to be required, because they received public funds. Not to get into too much of the weeds. We have also in the past intervening year, the audit team also administering and the Public Financing program for candidates running for city office, for qualified for the programs. So we had this year 16 out of 22 board of supervisors candidates qualify to receive over 3. 3 million in public funds, which is a record. Thats a whole another topic to talk about. The ongoing improvements and success of the Public Financing program. But thats something that our audit team is responsible for. So during the time that our audit staff has been focused on administering those, qualifications, disbursements and reviews, they have not been able to do audit work. So those have been held in advance. Well be starting the 2019 audits this fall. The other thing to note is two other factors affecting this. Weve had tremendous support by our staff or the city staff worker program. Thats impacted both our enforcement and audit programs, because staff requisitioned for longterm assignments. We know thats a give. Thats an important give. It also takes we arent able to proceed as quickly as we would like to on some of that work. We know were in a critical emergency right now. Were grateful to those employees, who have stepped up and responded when they have been requisitioned for that. The other thing that affects our audit program, which i look forward to reporting next year with some changes to you on is, absolutely essential that we fill the audit manager position. We have never, at least in the time ive been here, i dont believe the commission has had a specific dedicated audit manager function. That means that the executive director left supervising the other program and we see findings like we did in the b. L. A. Report, which are unacceptable. There shouldnt be a holdup because the executive director cant get through audit reports timely. So we have an audit manager position that is one of the positions well be filling. And well be posting. And that will be responsible for helping to work with me to make sure we have our lobbying program up and running this year. The auditors did a good job in setting a foundation. That was logjammed with me. So i think this speaks directly to the need of the positions that we have and the positions that well hopefully be filling in the first part of 2021. I hope that answers some of your questions. Chair mar yeah. Yeah. Thank you, director pelhammed good to hear about your plan to hire an audit manager position to deal with the bottleneck that has been with you in moving forward the audits. And i had a question just about the audits of nonpublicly financed campaigns, which are at your discretion, as executive director. And i just wanted to see if you could describe how you use this discretion to, in terms of determining which nonpublicly financed campaigns to conduct audits and in particular im interested in understanding the rationale for the change. My understanding is the change in audit selection criteria, starting with the 2018 election cycle, where you were since then have been limited the audits of these types of campaigns are limited to committees that were not candidate controlled, with over 1 million in reported expenditures. Thank you. Let me clarify. The mandatory audits are required under law for Public Financing candidates. And when i joined the commission, it seems to me that we had the resources to be able to do more audits than just that. That was my experience in los angeles. And so i in 2016 in selecting audiences to be going forward, we created what we called an objective criteria method. What we want to do is to be able to make sure were providing some oversight for committees, for the political money that is raised and spent to effect if an attempt to influence San Francisco voters on other issues as well. It may be ballot measures, where theres a lot of money being spent in that area. We thought it was important to introduce a greater level of oversight and accountability to those campaigns. So the objective criteria standard that we talked about is one before our commission, we brought it to the commission and reported publicly on this standards when we have selected audits that way. And that is something that we try to identify where there may be a Public Interest, where the Public Interest may be greatest because of the volume of money spent on activities. We do not single out, you know, a particular type of campaign or a particular type of issue for audit. Thats something that if there were an issue, it would be an investigation. We are trying to we were trying to broaden the reach of our oversight by conducting audits of those committees. I think in retrospect, given changes in the audit program, that was over ambitious. We were not able to fulfill those audits as quickly as i thought we would have an able to. Thats one of the things going forward, you know to what extents we continue to move forward with discretionary audits and what are the standards for doing that. We want to be transparent and public about what the standards are, so people know this is a fair and objective process. It has to be very, very closely aligned with our resources, particularly in this climate where we have so many issues coming at us that we still have to solidify in terms of our foundational processes and ongoing pandemic issues, which is likely to continue taxing our Staffing Resources. Chair mar thank you. And for clarification, how many audits have you conducted of these sort of nonpublicly financed campaigns, not really like these big money independent expenditure Campaign Committees that, you know, have become increasingly problematic, you know, in our elections. The number that comes to mind is i think its in the 2018 election, i can confirming this. But i think in the 2018 election cycle, we selected it might have been i might be misstating this, by comparison, slightly more than the publicly finance candidates. We had 11 candidates from 2018 that were publicly financed, 14 candidates publicly financed and we had at least that many that were not candidates that were the other committees. So im happy to get that information back to you. I dont want to misstate the numbers. I dont have those in front of me right now. But weve been trying to make sure we extend that oversight to a broader swath of committees, where there is a large amount of money being spent. Im happy to provide a followup to the committee that data each year, so that you can see what we have selected and the basis for it. Chair mar appreciate that. Thank you. Director pelham, i had one final question around the audit findings and turn it over to my colleagues for questions. Its around the lobbyist audits and why, you know, the commission has never conducted a lobbyist audit. I think in looking at page 36 of the report, it states that you have not reviewed the memo from january 2020, nearly a year ago, submitted by the Audit Division, that outlined key considerations for establishing a lobbyist audit program. So i guess, you know, why hasnt this happened . Do you feel a sense of urgency in establishing a process for lobbyist auditing, considering that especially considering that this is a legal requirement that the department has failed to peat so far. Meet so far. Yes. I feel a great sense of urgency. I feel a great sense of responsibility for the failure by our office to have not performed the lobbying audits, as were required to. We are required to select at least one lobbyist for audit each year. The last time the commission did that was in 2015. And at that time, we were unable apparently to complete that audience, that we had selected. And i made the decision in setting up the program and the structure that i did, that we had to focus on completing Campaign Audits at the time. And so that office has not had the lobbying audit has had not the attention it requires. The lobbyist the audit staff did provide the recommendations to me last january, at the end of january. And then we quickly found ourselves in february and march in the pandemic. This is not offered as an excuse. It is offered as a description of the kind of tradeoff that i made during the course of the past year, given the work that we have, given the Staffing Resources weve had to do it. A number of us on the staff wear many hats. Thats a particularly difficult challenge to make sure that we are focusing at all times at 100 on every program that we have. It simply has not been possible. That said it is on my desk and it is in my inbox. And it is on our staff performance goals, including mine, to get that audit up and running this year. So that is where we stand with it. Chair mar thank you. Direct pelham, thats good to hear. Supervisor peskin, did you have some questio questions . Supervisor haney . Supervisor haney no. I didnt have any specific questions. I appreciate your questions and thank you for this audit. And i appreciate, director, your commitment to seeing through these recommendations. And obviously its connected to making sure the staffing is there and the funding is there. And i appreciated your answers to supervisor mars question. Its obviously been a challenging time. And i think i actually worked with some of your staff when i was in Disaster Service worker. I know theyve been deployed in various ways. You havent been fully staffed. I appreciate your work and the work of the b. L. A. In putting forward some really important recommendation. Chair mar great. Actually i did have a few other questions on some of the other findings from the b. L. A. Report. Yeah, just in terms of the investigation. So again i think the key finding, a long time for the investigation. Concerning finding that we are opening more investigations than were closing. Every year. San diego and los angeles and the fppc. Theyre closing and they are closing more investigations than they are opening. So i guess i just wanted to maybe get a little more explanation and, ms. Pelham, about this situation and then also, likewise, the steps that the commission is taking to address this challenge. And i understand, you know, it has been related to staffing. And so i appreciate your report that it looks like youre green bay to be able to move forward and fill the key vacant position. Yes. Thank you for that question. This is a critically, critically important area of our work. And i think again every time all of us read the headlines that we do, we feel like were sitting on a powder keg. Were not getting to issues as timely or effectively as we want to and expect to. At the same time, were an Administrative Enforcement Agency that does not have phone tapping or wiring authority. So, you know, were here i think as an agency to primarily make sure that we have people understand the rules and keep far away from inadvertently or otherwise stepping over the law and breaching the expectations of the law. At the same time, we are an office established by the voters to make sure that when there are violations of the law, that we are doing our best work to detect them timely and to resolve them with the means that we have available to us. All of us are being head accountable for our work. And also that we are find people monetarily through violations or fines that are established in the law. So, you know, over time it is a question of resources without a doubt. When i first came to the commission, there were two staff positions that were dedicated for enforcement. Weve doubled that. Thats essentially not enough. We need to make sure were doing that work, as fully as we can. So were pleased again that we have the ability to hire an investigator position, that we will be posting a Job Description for shortly and looking for, you know, bright, talented, committed people to bring us to the next chapter of our effectiveness and impact for the city. But its also about process. So by that i mean that we need to have the right processes in place, as an agency. And as a city to make sure that were able to do the work that we can. Over the past several years, our commission has revised the enforcement regulations, to make them much more sensible in our view, to make them cleaner and streamlined, to preserve better due process for individuals who might be on the receiving end. Theres a respondent alleged to have violated the law. And thats critical. Those kinds of processes are in place, because we need to make sure the process doesnt get us hung up unnecessarily on process. Separately, weve also in this past year, with the b. L. A. Report noted, the commission has established a sense of prioritization thats also in place now. Thats helping us to better disseminate, distribute and resolve cases resolve cases in ways that make sense for what has come through the door. Making sure were exercising and trusted to exercise our prosecutorial discretion. Its critical. So those are things and tools were putting in place and more recently youll be seeing from us appear coming forward by hopefully by the end of december, before our commission, a streamlined administrative resolution program, which will be used to channel the most routine of matters through that pipeline, so they can be resolved more timely and with less intense resources over our investigative staff. So that we can divert our Vice President elective Staff Resources our investigative Staff Resources with greater investigation and greater work on investigating and reviewing data and documentation and so forth. And evidence. So those are processes that are in place. Thats essential that we have that. I think the other thing that were always looking to, what processes we also need to establish in the city that are going to help ensure we are able to do our best enforcement work. And there are some differences here, for example, than other jurisdictions about how we do our work and that structurally require us to take certain steps. And so thats also something that we need to make sure were working with as well as we can to be resolving cases and investigating those quickly as we can with the resources that we have. So both staffing and resources and process and lastly it, of course, speaks to the ability of the laws as well. Are the laws written in a way that enable us to enforce them. Thats something thats also part of the work that were doing, to make sure when our commission is engaging the public and your offices and trying to shape policy and best way possible, its forefront at our mind. 124 going to be a workable and enforceable solution to the problem that we see. If its not, it risks becoming only window dressing and thats not what any of us are here to spend our time on. Its a multipronged approach and many factors that influence how well we can do enforcement. With the hiring of the staff, the commitment to the training that we expect to see, again resources permitting, our training budget was cut. We know a lot of online resources and partners out there that we can work with. I think were you know, we know that we have better work ahead of us and i look forward to being able to report back to you and the public on that. Chair mar thank you. Thank you for that, director pelham. I just wanted to drill down on this a little bit. I know in many cases a complaint of ethics violations are filed in the heat of campaigns that are happening. And it can be very frustrating to for the complainant to see that. Theres no action or even response from the commission in a timely way. I mean, i think the report states that the ethics complaints take on average six months to initially preliminarily review. And according to the ffpc website, it has a mandate to conduct a preliminary review of all formal complaints within 14 days. And then will inform the complainant how it intends to proceed with the complaint and whether it will open a formal investigation or dismiss it. So i just wanted to ask what more specifically around the initial review and a response to the complainant, what needs to happen to ensure that the Ethics Commission can also do a timely and hopefully 14danish re 14day initial review while the witness complaints are fresh. And would this require legislation or a change to the city charter. And if so, what would need to change . No. To do a preliminary review of a matter, i dont think it requires legislation or charter change. Its instructive to be informed by other practices of other agencies and our peer agencies have. I am extremely hesitant to try and put a guarantee that we will do something within seven days or 14 days. I dont want to over promise in a way we cant deliver. At the same time, we are establishing a process where we have internal round tables, where we review those matters and that they can be reprioritized over time with greater frequency. So i think the goal of being able to get our hands on though the matters, to make sure something is there, not there, move it further down the pipeline, is something thats at the top of our enforcement staff minds. And theyre working in that direction. So i think the issue, as to when we communicate and how we communicate with somebody who might have complained to us, for all agencies that ive been familiar with, this is always one of those very difficult and delicate areas. Were trying to also we want to make sure were balancing appropriate responsiveness to the person thats taken the time to bring a matter to our attention. It speaks to thank you for taking the time. We take every complaint we receive seriously. With the same notion that, as you pointed out, many complaints can often come in during an election cycle. We want to try to make sure were not being used or inadvertently used as a political football. We also have a responsibility to protect reputations of individuals, who may be the subject of an investigation or the subject of some preliminary inquiry. Confirming the way were going about handling those marts South Carolina something those matters has to be handled with an appreciation of confidentiality requirements that we have under the charter. You know, i think can we do a different type of approach to acknowledging complaints and giving some indication of the general process and path that they follow . Absolutely. I think thats something that were always sort of raging, you know, debating in a raging way in our office on a regular basis. But i think that is the goal that were trying to preserve is making sure that we are, you know, responsive and at the same time protective of essentially the innocence of somebody, who simply being reviewed, may not mean that they are actually have violated the law. Were trying to balance those policy there is. Clearly its at the top of our mind to prioritize these matters for a quicker review and will be able to report back on i think progress in that area over the coming year. Chair mar great. Thanks. Thank you, director pelham. I just had final questions about the about the one final area of the b. L. A. Report. The findings around again the long delay in investigating whistleblower complaint, retaliation. Allegations actually maybe my questions are more directed to the b. L. A. Around that. I dont know if you had, director pelham, if you had any further response to that, those findings. Its just taking the Ethics Commission a very long time, to the point where it undermines even the investigation of these allegations of retaliation against whistleblower complainants. Thank you. That is an area that we have am great a heightened sensitivity and concern about. And by that i mean that we know and we are putting practices in place to prioritize our ability to get to those matters sooner than we potentially have. Because we do know that the only way people are going to bring matters to us, if they take seriously our ability to respond timely and to respond fully to those kinds of allegations. And its important that whistleblowers, people who feel that they have been retaliated against, because of bringing forward a complaint or allegation of wrongdoing in the city, that those individuals need to know that they have a place to go. I know they have a place to go in other offices in the city as well. Our office certainly has a role to play in that. The proof will be in the pudding in terms of how people know that theyre being responded to and how quickly theyre being responded to. In those cases we fully appreciate that there are a unique set of circumstances. A unique set of laws that apply to that and the specialty training that the b. L. A. Report highlighted and something were trying to find and secure, to support our staff and onboard new staff as they come in. Those are areas very much on our minds, that we need to do our job and do it in a better way for the city to make sure the people feel comfortable coming forward when they have concerns about wrongdoing. Its critical to be on top of that. Chair mar thank you. Yeah. Just on this topics i did have a question for ms. Malhut and the b. L. A. s office. And, you know, i was just wondering is it common i know you surveyed other cities, ethics, comparable Ethics Commission work. Is it common in other jurisdictions to have the Ethics Commission investigate cases of whistleblower retaliation or, you know, since these cases are grounded more in Employment Law, is it more typical to have them investigated by the department of Human Resources or the Whistleblower Program oversight department. You know, we actually did find that its kind of all over the map. You are correct in that in some cases we did find that they did have their Human Resources conduct these investigations, because, you know, they do relate more to Employment Law and Civil Service processes. I think we also saw in some other jurisdictions that it was handled by maybe the city auditor. And at least one example, i cant remember off the top of my head, its still handled by the Ethics Commission. I think youre right. It is its not necessarily like a neat fit with the Ethics Commission. But theyre not its not the only Ethics Commission that does handle these investigations. Chair mar got it. And, you know, i appreciate the recommendation of additional training for the Ethics Commission staff that handle these particular types of investigations. And also director pelhams commitment to following that recommendation. I was just wondering if you considered recommending an actual jurisdictional change for these kinds of investigations, given that, you know, theyre quite different than the campaign or the other types of investigations that the Ethics Commission does. And if you if you did consider it, i guess i was wondering and interested in knowing why you decided against that recommendation. More of a jurisdictional change. You know, we did think about it. You know, we were looking at i guess the e. E. O. Office, as well as perhaps the controllers office, Whistleblower Program. They do receive the majority of the whistleblower complaints. Although the Ethics Commission could receive some, if they relate to the laws under their purview. We just didnt really have Strong Enough evidence to justify making that switch. 200 it would be a big changed certainly something that could be considered. We didnt really feel like we had a Strong Enough argument to recommend making a change. I dont know if you have anything to add . No. I think thats correct. We had a lot of internal discussion and thought that, you know, one of the things to be looked at is simply implementing the recommendations that we did make, in terms of training, prioritization of these cases and, of course, as always the staffing issue. And that could, in fact, be the answer to the problem, rather than making a more significant recommendation in terms of transferring the function. Chair mar thank you. I dont have the report in front of me. Can you remind me how many of these types of complaints and investigations these are alleged retaliation against whistleblowers. Like how many have happened . You know, i think over the period of our review, which was 2017 to 2019, there were 34 complaints. And i would just say you can, you know, most of those were discussed during a preliminary review. And some lets see. The total of seven resulted in a formal investigation being opened. But an additional eight were still pending, as of the time of our review. Chair mar thank you. Great. I dont have any other questions. I want to thank you. The b. L. A. s office for all of your work on this audit and, of course, to director pelham and the Ethics Commission for all of your incredibly important work. And look forward to, you know, seeing some change some improvements, you know, to the Ethics Commissions work, you know, following the recommendations from the audit. Colleagues, do you have any questions or remarks before we go to Public Comment . Great. All right. Why dont we go to Public Comment on this item. Mr. Clerk, are there any callers on the line . Clerk thank you, mr. Their. Mr. Coup, please let us know if we have any callers that are ready. For those who have already connected to the meeting via phone, press star followed by 3 to speak for the item. For those on hold, continue to wait until prompted to begin. Youll hear a prompt that informs you the line has been unmuted. For those watching our meeting on cable channel 26 or streaming link through sfgovtv. Org, if you wish to speak on this hearing, please call in by following the instructions displaying on the screen. That would be by dialing 415 6550001. When prompted, then by entering the meeting i. D. Of 146 195 2214. Followed by the pound symbol, which youll press twice. Then press star followed by 3 to enter the queue to speak. Mr. Coup, could you connect us to our first caller. Operator mr. Chair, we have no callers in the queue. Chair mar thank you, operations. Public comment is now closed. Colleagues, id like to move that we file this hearing. Clerk on the motion offered by chair mar that the hearing has been moved and heard. Vice chair peskin. Supervisor peskin . Supervisor peskin aye. Clerk member haney. Supervisor haney aye. Clerk chair mar. Chair mar aye. Clerk there are three ayes. Chair mar thank you, mr. Clerk. Can you please call items 1119 for closed session. Clerk agenda item 11. The lawsuit filed by penny mims. Agenda items 1219 are six ordinances and two resolutions settling various lawsuits and unlit gated claims against the city. Members of the public who wish to provide Public Comment on the litigation agenda should call the Public Comment number now. The number is 415 6550001. Enter the meeting id i. D. For todays meeting. Press the pound symbol twice to connect to the meeting. And then press the star key followed by the number three to entear the queue to speak. Please wait until the system indicates youve been unmuted, thats your opportunity to begin your comments on the litigation agenda. Mr. Chair. Chair mar thank you, mr. Clerk. Lets open up Public Comment for these items. Clerk mr. Coup, could you let us know if we have any callers. Operator mr. Chair, we have no callers in the queue. Chair mar great. Thank you. Public comment is now closed. And on the motion to convene in closed session, mr. Clerk, can you please call roll. Clerk on the motion to convene in closed session, vice chair peskin. Supervisor peskin aye. Clerk member haney. Supervisor haney aye. Clerk chair mar. Chair mar aye. Clerk mr. Chair, there are three ayes. Chair mar great. Thank you. Well now convene in 19, 2020 committee meeting. During the closed session deliberations, the committee acted unanimously to recommend all of the litigation items to the board of supervisors for consideration on december 1st. Thank you, mr. Clerk. On the motion to not disclose the closed session discussions, can you please call roll . On the motion that the closed session discussions not be disclosed. Peskin aye. Haney aye. Mar aye. Mr. Chair, there are three ayes. Thank you, mr. Clerk. Is there any further business . There is no further business before the committee. Great, were adjourned. Take care, everyone. This is a meeting of the recreation and Park Commission. Would the secretary please call the roll . [roll call] this is the recreation and Park Commission meeting of november 19, 2020. Please note that due to the covid19 Health Emergency and to protect board members, City Employees and the public, the meeting rooms at city hall are closed. However, commissioners are participating in this meeting remotedly at the same extent as if they were physically present. We ask listeners to turn down
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