Ethics panel looking into Breed campaign
Complaint leads to investigation of small donations
San Francisco Ethics Commission investigators are probing London Breed’s 2018 mayoral bid for possible campaign finance violations, according to documents obtained by The Chronicle.
The alleged violations are tied to a cluster of small campaign donations made by nine people from January to May 2018. Each of the donors was employed by — and had varying degrees of leadership at — companies that secured city contracts that Breed had a role in approving months earlier, in some cases as president of the Board of Supervisors and in others as acting mayor, after the death of Ed Lee.
To prevent “paytoplay” politics, San Francisco officials are not allowed to accept donations from highranking people doing business with the city for a year, even if the official had a perfunctory role in approving
the contract. The oneyear ban, however, took effect this year. The blackout period was shorter — just six months — when Breed was running for mayor last year, the standard her 2018 campaign had to follow.
Jesse Mainardi, Breed’s campaign attorney and a former Ethics Commission deputy director, said her campaign had not heard from the commission about the investigation.
“Our campaign is scrupulous about complying with all campaign finance rules,” Mainardi said. “We have heard nothing from the Ethics Commission on this matter, but if and when we do, we will be happy to work with them. If there’s anything we need to correct, we will correct it immediately.”
Donors also have to comply with that law and could face penalties if the investigation determines that they broke the rules. For Breed and the donors, each violation carries a maximum penalty of $5,000, but investigators can reduce the penalty if the violations, depending on the circumstances, are found to be accidental.
Elected officials are required to notify the Ethics Commission anytime they approve a contract. Those notices are publicly available, and both contributors and candidates are supposed to check them to root out any prohibited donations.
The donation form from Breed’s 2018 campaign asks contributors to certify that they are “not an owner, director, officer, or named subcontractor of any entity that is currently negotiating a contract with the city,” and that they hadn’t received a contract from the city in the past six months.
The investigation stems from a complaint filed in September and could take years to conclude. The Ethics Commission protects the identity of people who file complaints.
Partially redacted documents reviewed by The Chronicle show the probe began at some point this year. Opening an investigation doesn’t automatically suggest violations occurred, but it does indicate that the Ethics Commission’s enforcement division conducted a preliminary review and decided to push ahead with a formal inquiry. The commission declined to comment on an open investigation.
The contractor donation ban applies to a company’s top brass and major investors, like a CEO or chief financial officer, a member of the board of directors and other “principal officers.” How the law applies to contributions made by subcontractors is less clear: Whether the ban applies to the company itself, or the topranking people within it, will probably be a key point of the investigation. Four of the nine donors at issue in the probe were subcontractors on a complex, nearly $40 million contract for engineering and planning services tied to the longrunning effort to bolster the aging seawall along the city’s northern waterfront.
Five donors made contributions of $100 to $500 — the maximum amount — after their contracts were approved by the Board of Supervisors and finally signed by Breed as acting mayor in late December 2017. Some of the donors don’t appear to fit the bill of a top officer expressly prohibited from donating.
A few weeks after Breed signed a resolution approving $15 million in financing for Bridge Housing to build lowincome apartments at 1950 Mission St., Douglas Jones, who identified himself as a director of Bridge Housing from Gardena (Los Angeles County), donated $100. A spokeswoman for Bridge Housing said the organization “has no record of any board member or employee by the name of Douglas Jones.”
Several contractors who made donations said they didn’t recall making the contributions. Some said they were not aware of the thensixmonth ban on contractor donations and were incredulous that Breed’s pro forma role in signing the deals could be problematic.
Theotis Oliphant and Muhammad Nadhiri, managing partners at Axis Development Group, a real estate development firm, donated a combined $1,000 to Breed’s campaign over the course of four months after she signed a resolution approving up to $110 million in bond financing for a 117unit apartment building at 2675 Folsom St., an Axis project.
Oliphant denied any connection between his and Nadhiri’s donations and the contract. Ordinarily, neither tends to scrutinize the officials and candidates he’s asked to donate to, Oliphant said.
“We were probably contacted by some business associate we have, a law firm or a consulting firm that was hosting a fundraiser, and they asked us to write a check, so we did. That’s usually how it plays out,” he said. “There wasn’t this global conspiracy to work with London Breed. She had nothing to do with it.”
Susan Sangiacomo, a real estate investor with Trinity Properties, donated $500 weeks after Breed signed a resolution extending Trinity’s lease of the law library at 1145 Market St. through 2023. Sangiacomo did not respond to requests for comment.
Michael Thiel, a member of the board of directors at nonprofit Swords to Plowshares, also donated $500 less than six months after the approval of a $51 million bond sale to finance a 119unit apartment building for veterans and lowincome families. Swords to Plowshares is one of two organizations operating the joint venture that is developing the project. Thiel could not be reached for comment.
The ethics complaint also details donations of $250 to $500 made by four subcontractors involved in a $39 million contract for engineering and design services tied to the seawall project. Breed voted to approve that contract in September 2017, while she was president of the Board of Supervisors. All of the donations were made less than six months after Breed voted on the contract.
Some of the subcontractors said the law allowed them to contribute within the sixmonth window because the donations came from them personally, not from their companies. The law appears to be unclear on the distinction between a personal donation from a subcontractor and a contribution from the subcontracting company itself.
“It wasn’t a company donation, it was my donation,” said Dwayne Jones, founder and president of RDJ Enterprises, one of the subcontractors on the seawall deal. “I’ve known London Breed for well over 20 years.” His $500 donation, he said, “had nothing to do as a business or politics. It was me supporting someone who I thought would do a good job.”
Rosemary Dilger, then a senior manager at RDJ and a former legislative aide to Breed, donated $250. Dilger, now director of government affairs at Civic Edge Consulting, did not respond to a request for comment.
Kevin Conger, a founding partner of CMG Landscape Architecture, said he didn’t remember making the $250 contribution to Breed but also believed subcontractors were immune from the sixmonth ban on contributions to city officials.
“Obviously I wasn’t aware of the rule,” said Guy Hollins of Hollins Consulting, who donated $500. “I take the law very seriously. If there’s any sort of problem or anything I need to do to correct it, I’ll move forward with that.”
Larry Bush, a cofounder of Friends of Ethics, a watchdog group, said incidents like this one corrode the public’s trust in city government.
“There are some campaigns that let things slip up, but taking money from people who have business before you isn’t just a slipup, it’s a violation,” he said.
“Our campaign is scrupulous about complying with all campaign finance rules. We have heard nothing from the Ethics Commission on this matter, but if and when we do, we will be happy to work with them. If there’s anything we need to correct, we will correct it immediately.” Jesse Mainardi, London Breed’s campaign attorney