An unusually strongly worded report from the city’s Ethics Commission condemns the ethical murkiness and inadequate reporting measures regarding the millions of dollars’ worth of tickets and other perks gifted to city departments and doled out to employees, politicians and their guests.
The report, which was quietly released on Sept. 29, outlines the problematic nature of the $1.29 million in tickets disseminated by city departments since 2009. In some cases, third-party vendors are actually contractually mandated to provide the city with loads of free tickets — a longstanding San Francisco tradition the Ethics report bluntly described as “a culture of expectation that is the basis of a pay‐to‐play system.”
Along similar lines, the War Memorial Board of Trustees, which oversees the auditorium building and is populated by some of the city’s wealthiest elites, has received more than $516,000 worth of free performance tickets since 2012.
“Like Rec and Park, War Memorial has embedded the flow of free tickets into their lease agreements with the lessees,” reads the report. Its present pact with the San Francisco Opera Association “requires the Opera to provide 10 tickets for each performance to the department for use by War Memorial trustees. The agreement further specifies the exact seats that must be provided for trustee use.”
At the heart of this ethics report is an examination of the ways around the city’s “restricted source rule.” This policy prevents city officers or employees from directly accepting gifts from an individual or group that has a contract with their department or has recently sought to influence them. But this rule can be sidestepped by presenting tickets or money for a party to a department, which is then disseminated to its intended recipients — and inducing much the same result.
Naturally, ex-Public Works boss and accused federal criminal Mohammed Nuru loomed over this report like Banquo’s ghost. His January, 2020, arrest spurred a number of inward-looking city acts, including this most recent analysis.
Neither he nor his Public Works employees could’ve legally taken gifts and largesse from Recology. But, as both city and federal legal cases have pieced together, this rule was eluded by Recology funneling money through the department and into nonprofits, which Nuru tapped to fund lavish parties for employees, politicians and their guests.
Along similar lines, the War Memorial trustees could not accept gifts — in this case valued at thousands of dollars — from the San Francisco Opera Association. However, they can accept (contractually mandated) free tickets, disseminated through a third party. But the core issue remains: The report notes that the same trustee spearheading the 2015 lease agreement with the Opera received $5,360 worth of opera tickets within the next calendar year.
“This example illustrates the factors that can give rise to an appearance of undue influence and pay‐to‐play when restricted sources provide free event tickets to City officials through a City department,” notes the report. “These concerns are what the restricted source rule was created to prevent.”
The Board of Supervisors also oversees rental rates at War Memorial. And former Supervisor Norman Yee received $1,000 worth of free tickets, while present Supervisor Catherine Stefani received four tickets valued at $762.
Clearly, though, the king of ticket dissemination is the Recreation and Park Department, with much of that coming from the Outside Lands festival. The department has reported it distributed 1,855 Outside Lands tickets between 2015 and 2019 alone, with a value of $431,000.
This is problematic: Outside Lands’ promoter, Another Planet Entertainment, would be considered a restricted donor. But Another Planet is actually required to provide those tickets as part of its agreement with Rec and Park. “If anything,” sums up the report, “requiring free tickets that are provided for the personal use of City officials in a City contract only reinforces the tickets and the benefits they provide are a cost of doing business for City contractors.”
Of the 1,855 tickets Outside Lands demanded and received by Rec and Park, 1,442 (78 percent) were reported as going to City officials, with 1,202 (65 percent) going to officials within Rec and Park.
Another Planet, incidentally, has a contract with the city’s Real Estate Division for exclusive use of Bill Graham Civic Auditorium. The report dryly notes that Real Estate has not put language into its contracts to extract free tickets for shows.
In addition to tickets, the report highlights problematic use of outside funds for city soirees. These include:
- A June, 2019, Planning Department party funded in part by real estate developers Tishman Speyer, One Vassar, and Associate Capital and law firms Rueben, Junius, & Rose, J. Abrams Law PC, and Gibson, Dunn, & Crutcher LLP. Ground Floor Public Affairs and the Residential Builders Association also chipped in. Lobbyists at Rueben, Junius, & Rose reported lobbying seven high level Planning Department employees on the day of the party, and it has not been determined whether this lobbying took place at the party itself.
- Four parties at San Francisco International Airport marking the opening of the new Harvey Milk International Terminal were funded with more than $1 million in private gifts. “Most of this funding came from entities that would likely be restricted sources for Airport officials,” notes the report. Those included Hensel Phelps Construction, which gave $99,000, and holds a $1.1 billion construction contract with SFO.
- The Entertainment Commission, in December, 2019, threw a holiday party in which 86 percent of the funds underwriting the event were provided by entities holding permits granted by the Entertainment Commission.
- The Mayor’s Office, in 2019, gave a holiday party in which the source of $3,800 of the funds could not be accounted for. The ethics report directly likens the behavior of the Mayor’s Office to Nuru: “This arrangement is similar to the DPW holiday parties in that a non‐City organization funded a free holiday party for City officials using money collected from undisclosed private sources. In the case of DPW, the Department of Justice found that the use of the nonprofit intermediaries constituted a deliberate attempt to conceal the true source of the funds (which was Recology) and charged multiple individuals with money laundering. In the case of the Mayor’s holiday party and the nonprofit that paid for it, neither the Mayor’s Office website nor the nonprofit disclosed to the public who the source of the funding was or why the source was not identified.”
The Ethics Commission suggests, among many other remedies, that rules be tightened, and the Balkanized method of both governing and tracking gifts be centralized.