Ethics Commission approves penalty in coordination case involving Labor and Working Families Slate and consultant Daniel Anderson

The San Francisco Ethics Commission on a unanimous 4-0 vote approved a stipulation, decision and order finding that the Labor and Working Families Slate and their consultant, Daniel Anderson, coordinated spending with staff of Supervisor Dean Preston's campaign and that part of the resulting flyer distribution should have been treated as a contribution rather than an independent expenditure.

The finding came after staff explained that text messages between Daniel Anderson and a Preston campaign staff member showed agreement on timing, location and mode of dissemination for printed event materials. "If an independent expenditure funds a communication that benefits a candidate, and it was coordinated with that candidate, then the expenditure is not independent, and it should have been considered a contribution," staff said during the presentation.

Staff told commissioners that respondents paid $6,968 for flyers. Half of that ($3,484) was coded as an independent expenditure. Because the flyers served two Assembly Districts (17 and 19) and because Bilal Mahmood was running for supervisor in District 5 and for the DCCC in District 17, staff concluded that the portion of the distribution targeted to Assembly District 19 could only be interpreted as opposing Mahmood in the supervisor race and therefore fully benefitted the Preston campaign. After additional apportionment, staff calculated $2,613 of spending that benefited the Preston campaign following coordination. With a $500 contribution limit, staff said the respondents exceeded the limit by $2,113; staff also assessed a reporting penalty equal to 15% of the spending ($400), for a total penalty and remedial payment of $2,513 under the proposed stipulation.

Staff emphasized the legal principle behind the sanction: coordinated dissemination that produces a benefit to a candidate must be treated as a contribution and reported accordingly, to prevent circumvention of contribution limits through coordination with groups that fund communications.

Commission discussion focused on the evidence of coordination and on why the Preston campaign itself was not charged. Staff explained they found no evidence that Preston's campaign staff had input into the substantive content of the communication; the coordination related to dissemination and logistics rather than message drafting. Audit staff noted the consultant showed awareness of coordination rules but that the dissemination element appears to have been overlooked. The commission received no public comment on the item.

Chair Tice Finliff moved to adopt staff's recommendation; the motion was seconded and carried on a roll-call vote. The clerk recorded ayes from Chair Tice Finliff, Commissioner Flores Fang, Commissioner Salahi and Commissioner Sy; the motion passed unanimously.

The stipulation resolves alleged violations for (1) a contribution over the local contribution limit and (2) incorrect reporting of the spending as an independent expenditure rather than as a contribution. The order adopted the staff-recommended remedy described above.