A major real-estate firm contributed $1 million to the America’s Cup Organizing Committee at the behest of Mayor Ed Lee, right around the time it sought city approval to expand a downtown tech office building that was already under construction.
Kilroy Realty, the developer of a 30-story building that will house more than 400,000 square feet of office space for Salesforce.com, won approval in August of 2013 to add an additional six floors to its 350 Mission commercial office space project. That building is one of three in the Transbay area that will house Salesforce.com offices.
Kilroy sent one check for $500,000 to the America’s Cup Organizing Committee on June 24, 2013, and a second one for the same amount on Jan. 31 of this year.
While it’s impossible to say for sure whether the generous gifts had anything to do with the request for approval for a major building expansion, the “behested payment” reports documenting the transactions did draw the attention of the San Francisco Civil Grand Jury, which included them in a report titled “Ethics in the City: Promise, Practice, or Pretense?”
In another example highlighted in the report, Mayor Lee accepted travel funds for a trip to China and Korea last October. Contributors who provided more than $500 apiece for that trip included Uber and Airbnb, both tech-based companies whose businesses stand to be directly impacted by city policies.
Uber has been sparring with the San Francisco International Airport  over its drivers’ unauthorized passenger drop-offs as of late, while Airbnb long skirted its responsibility to pay the city’s hotel tax and is now the subject of legislation  regulating short-term housing rentals. It's interesting that each of these companies felt compelled to donate toward the mayor's travel fund, given the city’s attempts to regulate them.
The Civil Grand Jury report highlights the shortcomings of the San Francisco Ethics Commission, an agency tasked with ensuring that government operations aren’t tainted by conflicts of interest or official misconduct.
Citizen watchdogs of San Francisco government have sought to eliminate pay-to-play politics for years.
Back in 2000, San Francisco voters approved a ballot measure seeking to bar elected officials from accepting campaign donations or gifts from corporations or individuals who had received city contracts or “special benefits.”
Known as Proposition J, that measure sought to eliminate the undue influence of deep-pocketed, well-connected players in local government.
It was popular and won by a landslide: No ballot arguments were registered against it, and the measure won with 82.66 percent of the vote.
Nevertheless, the Civil Grand Jury report noted, Prop. J was “amended out of existence” – through an effort led by none other than the Ethics Commission.
“The Ethics Commission proposed repealing Proposition J at their April 2003 meeting,” the report notes.
That proposal was part of an effort to “recodify conflict of interest laws,” the Civil Grand Jury found. Some laws were amended. Others were tweaked so that amendments could be made in the future, without voter approval.
After winning approval from the Board of Supervisors, that package of legislative changes became Proposition E on the 2003 ballot. “In 2003, voters approved Proposition E that recodified the ethics laws; however, it also had the undisclosed effect of deleting Proposition J language,” the Civil Grand Jury noted. “Thus, the concept of regulating public officials’ relations with those who receive ‘public benefits’ from them (Proposition J's intent) was totally eliminated from San Francisco law.”
The report also takes the Ethics Commission to task for being too lax when it comes to addressing potential conflicts of interest.
It goes so far as to recommend that the agency hand over control of its major enforcement investigations to the Fair Political Practices Commission, a state agency with a more robust team of investigators who might produce better results.
“The Ethics Commission lacks resources to handle major enforcement cases,” the Civil Grand Jury notes. “These include, for example, cases alleging misconduct, conflict of interest, violating campaign finance and lobbying laws, and violating post-employment restrictions.”
The full report can be found here .