Proposition H - Campaign Contribution Limits

What it does

Proposition H expands restrictions in the San Francisco City Charter to make it illegal for an elected official or candidate to accept or request funds from someone who does business with the City, or someone who is negotiating a contract with the City.

Current law regulates contributions from people who have business contracts with the City of San Francisco, the San Francisco Unified School District, the San Francisco Community College District or a state government board on which an appointee of the official serves. The restriction applies to a contractor who gives money to a candidate for local office, a sitting elected official or a political committee that a candidate or official controls. The restriction applies only to those with contracts or series of contracts worth more than $50,000. People covered by the regulations are prohibited from making contributions from the start of negotiations for the contract until six months after the City approves the contract (or six months after the contract is finalized, whichever is longer). Under current law, it is not illegal for a candidate or elected official to solicit the funds from a City contractor.

Prop. H would add to the current law to prohibit candidates and elected official from soliciting or accepting contributions from City contractors. Current law only restricts the contribution from a contractor but does not prohibit the candidate elected official from accepting the money. Under current law the only penalties apply to the contractor, but Prop. H would establish penalties for officials and candidates who accept such contributions.

Prop. H would require candidates or elected officials to determine whether the people from whom they solicit contributions are restricted contractors with the City. Under Prop. H, if the candidate or elected official accepts prohibited contributions, then he or she would be subject to the same penalties as the contractor.

Penalties for violating these donation restrictions include civil and criminal penalties. The criminal penalties for any person who knowingly violates these regulations can be as much as $5,000 in fines and six months in county jail. So far, no one who has broken a campaign-finance law in San Francisco has ever been prosecuted criminally. The civil penalties for violating these rules can be as much as $5,000 per infraction.

In the event that a candidate or elected official accepts such illegal funds from a contractor, Prop. H also would require the candidate or elected official to turn the money over to the Ethics Commission, which would deposit it in the General Fund of the City.

Regular campaign-contribution rules allow an individual who is not a City contractor to donate up to $500 per candidate per campaign.

Why it is on the ballot

The mayor placed this ordinance measure directly onto the ballot using the powers granted to his office under the city charter. Proposition H is the only ordinance on the June ballot that was submitted directly by the mayor.

The Mayor’s Office placed the measure onto the ballot because elected officials have been soliciting contributions to campaigns or ballot committees from firms with City contracts.

Pros

Arguments in favor of this measure:

• The object of efforts to reduce the money in politics is an attempt to ensure that elected officials and governmental bodies make decisions on the merits of the issues before them, without respect to the financial benefits to a specific firm or person that may rest on those decisions. Those with business before the City should not be trying to influence the political process through campaign contributions.
• Prop. H will put the onus on the candidate or elected official to not solicit contributions. Given the large number of boards and commissions in addition to the Board of Supervisors that enter into (the Transportation Authority, the Health Services Board, the Retirement Board) that enter into contracts to buy goods and services.
• There are recent examples of a firm with a contract before the City giving money to a ballot campaign argue that elected officials have solicited this money. That type of activity would be prohibited under this proposition.

Cons

Arguments against this measure:

• This measure complicates the process for running for office and increases the cost of compliance without getting rid of money in politics. Instead of a restriction on the solicitation of money, the measure could have simply changed the reporting requirements to identify who has business before the City and who has a contract in negotiation. Using the court of public opinion to brake questionable contributions instead of turning to a judge would be simpler and could achieve the same outcome.
• This measure is a solution in search of the problem. It is already prohibited for a contractor to give money to elected officials or candidates. This measure does not make any additional contributions illegal, only the solicitation and acceptance of those funds. Further, there is no evidence that many City contractors are providing funding to elected officials or candidates as a way to curry favor. That practice is illegal. If it is indeed a problem, a better solution would be to increase the penalties on City contractors who are found to have violated the rule.
• Prop. H would create violations for even the most diligent of candidates and elected officials. There is almost no possible way to know all the people who have pending contracts with the City or the other affected governmental bodies. While an elected official may be more likely to have this information, because he or she might have reviewed and remember the agendas of meetings for the prior six months, a candidate might have no way to even acquire this information.
• The City does not publish a list of all business with pending or recently approved contracts with the City, the school district, the community college district, and affected state boards and commissions. If the City cannot produce such a list of pending and recently approved contractors, how can we expect a candidate or elected official to follow this law?
• The language of the law has a vague restriction on soliciting contributions from restricted contractors. Does this imply that a candidate or elected official is “soliciting” money from a contractor if he or she unknowingly includes a contractor among the recipients of a mail campaign asking for money, or invites a contractor to attend a house party, or makes a phone call asking for a contribution? The vagueness of the “solicitation ban” makes this measure difficult to comply with.
• This measure continues a narrow view of “contracts” to only apply to those who do “business” with the City through a contract. However, it does not extend the restriction to labor unions who also have “contracts” with the City worth considerably more than $50,000. This omission means that the measure reduces money in politics only from business sources — but does not restrict the role of money in politics overall.

SPUR’s analysis

While we agree that we need to reduce the amount of money in politics, we are concerned about this measure’s unintended consequences. Even the most diligent of candidates or elected officials would find it nearly impossible to comply with this measure. How could every candidate or elected official possibly know all the people negotiating City, state agency, school district or City College contracts? If the goal is to prevent candidates and elected officials from taking such contributions, why doesn’t the City publish the list of contractors itself and make that list available to all candidates and elected officials? If the City cannot produce such a list, then we have no right to expect elected officials and candidates to be able to do so, particularly grassroots candidates with fewer resources.

Further, there is no evidence that the current contractor contribution restriction is insufficient or ineffective.

SPUR’s recommends a “No” vote on Prop. H.