Ethics Commission backs new rules to close loopholes for gifts to city departments

The San Francisco Ethics Commission voted unanimously on Oct. 28 to approve staff recommendations aimed at preventing restricted sources from using department gift channels to confer personal benefits on city officials.

Pat Ford, senior policy and legislative affairs counsel, told commissioners the report analyzed how contractors and other restricted sources — most prominently the Recology case tied to the Department of Public Works — funneled money through nonprofits or departmental gift funds to pay for holiday parties, staff appreciation events and tickets that ultimately provided personal benefits. Ford said those practices "undermine the restricted source rule" and create the appearance of pay‑to‑play.

The staff recommendations approved by the commission would: prohibit city officers and employees from acting as intermediaries for restricted‑source gifts when they know or should know of the source; ban officials from accepting gifts from departments or non‑city organizations if those gifts originate from restricted sources; bar restricted sources from passing gifts through intermediaries; forbid non‑city intermediaries from facilitating restricted‑source gifts when they know the ultimate beneficiary; and create a single, standardized disclosure (administered by the Ethics Commission) that would list every city official who personally benefits from a departmental gift.

The recommendations stop short of declaring that every long‑standing departmental practice is unlawful; staff repeatedly said the report sought to document current practices empirically and recommend stronger rules and disclosure to meet the policy goals behind existing ethics laws. The staff also proposed requiring departments to name every employee and official who benefits from a gift so that restricted‑source gift transactions are transparent and enforceable.

Commissioners pressed staff on the standard "knows or has reason to know." Ford said "had reason to know" should be broad enough to require basic due diligence — for example, checking whether an organization is a contractor with that department or a lobbyist — and that a duty of inquiry is reasonable in cases of large gifts or repeated benefits. Commissioners urged staff to pair any new rules with an education and compliance rollout, and to write clear regulatory definitions so enforcement is practical.

Public officials and department representatives also raised practical concerns about trustee and museum oversight. War Memorial and museum representatives said trustees sometimes need assigned seats to exercise oversight of performance venues and that charter provisions create different treatment for certain charitable trust departments. Staff acknowledged those legal differences and said regulations would need to be drafted to accommodate necessary programmatic functions while preventing misuse.

Clerk of the Board Angela Calvillo offered to coordinate technical help: she said the Clerk's office has pursued a centralized legislative/document repository to collect department disclosures and will work to make departmental disclosures easier to find. The commission directed staff to begin drafting ordinance language combining the gifts recommendations with earlier proposals on gifts to individuals; staff said the language will come back to the commission for review and could be pursued with the Board of Supervisors or as a ballot measure.

Vote: The motion to approve staff recommendations passed unanimously by roll call (4–0).