S.F. political group that bankrolled DA recall on hook for $54K ethics fine

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Update: On Sept. 27, the Ethics Commission finalized its $53,916 fine against Neighbors for a Better San Francisco and Jay Cheng, and the parties agreed to settle the matter.

The San Francisco Ethics Commission will this week consider levying a $53,916 fine against the powerful political pressure group Neighbors for a Better San Francisco Advocacy and its president, Jay Cheng.

In a negotiated stipulation, both the Ethics Commission and Cheng agreed that the group failed to disclose payments it made to a campaign spokesperson who was working to recall then-District Attorney Chesa Boudin in 2021 and 2022.

Neighbors for a Better San Francisco was behind the campaign to recall Boudin in 2022, and provided the vast majority of the money that was contributed to that effort — $4.7 million out of $7.25 million.

The group, which counts Republican mega-donor William Oberndorf as its chief patron, has since become the largest spender in San Francisco politics active today. It was behind more than $1 of every $10 spent on San Francisco political campaigns from 2020 to April 2024, at least $8.7 million of $80.3 million total, according to a Mission Local review of finance filings.

The potential ethics fine represents just 1.1 percent of Neighbors’ spending on the Boudin recall.

San Francisco’s five appointed ethics commissioners will consider the matter during their Aug. 9 meeting. Commissioners could choose to adopt the staff recommendations, or change the penalty.

The proposed “stipulation, decision and order” involves $187,084 in payments made to Riff City, a public relations firm, and its president, Jess Montejano, who was then acting as a de facto spokesperson for the recall campaign. 

But payments made to Montejano by Neighbors were not disclosed by the group. Neighbors had originally hired Montejano to be its spokesperson, which would not require the group to disclose payments it made to him. But, in fact, he worked directly for the recall campaign, necessitating the financial disclosures under city law.

Montejano, who is now the spokesperson for Mark Farrell’s mayoral campaign, was not accused of any wrongdoing, and cooperated with investigators. DA Brooke Jenkins, who worked on the recall campaign and is named in the settlement, was also not accused of wrongdoing.

Neighbors’ failure to disclose these payments, however, was a violation of San Francisco ethics law, which requires that any expenditures made on behalf of a campaign be clearly labeled on forms submitted to the city and made available to the public. The law ensures that voters can see which consultants are working for candidates for office.

“By paying Riff City to perform personal services of a political nature, Neighbors made political expenditures as defined in state and City law,” the settlement reads. “This is because Riff City Strategies spent more than 10% of its compensated time during several months rendering services for political purposes to the Recall Committee at the request or direction of Neighbors Advocacy.”

It is not the first time Neighbors has found itself in hot water: Its board of directors said earlier this year that it would stay out of the mayor’s race after old allegations of sexual assault against Cheng resurfaced; he has denied those accusations.

The San Francisco Chronicle also reported that Cheng represented himself as a decision-maker on Mark Farrell’s mayoral campaign, leading rivals to question the big-money group’s independence from the campaign. The campaign said there were no official ties.

Montejano’s role on the recall campaign included speaking to reporters, drafting press releases, ironing out talking points, prepping spokespeople and generally coordinating media strategy with Neighbors. That involved working directly with Jenkins, who had recently quit her role as a prosecutor in Boudin’s office and then joined the recall campaign as a spokesperson.

Jenkins has received criticism for her role in the recall because, while describing herself as a volunteer, she accepted a six-figure sum directly from Neighbors’ associated 501(c)(3) nonprofit for purportedly unrelated “consulting” work. The Ethics Commission today revealed that Jenkins was paid a total of $175,770 by the Neighbors 501(c)(3).

The stipulated agreement also notes that Jenkins was reimbursed for “campaign-related activity” by Neighbors for a Better San Francisco Advocacy, which is a 501(c)(4) nonprofit. Previously, Jenkins said that all her work for Neighbors was unrelated to the recall campaign.

She did not disclose those reimbursements. The Ethics Commission stipulation stated that a disclosure would be required if Jenkins had spent more than 10 percent of her paid time on “political activities,” but that “available records do not clearly establish any violations stemming from this activity.”

“The parties acknowledge the importance of record-keeping practices for employees and contractors engaged in political activity,” the stipulation continued.

Jenkins did not immediately respond to requests for comment.

In an email sent to Neighbors’ members, its board of directors wrote that there had been three ethics complaints against the group as a result of the 2022 recall, but that the Ethics Commission had only sustained the one. The group has since made changes internally to prevent another lapse, the board said.

“Since 2022, we have put a number of controls and procedures in place to make sure that no matter how small the expense, such an error does not occur again.”