The San Francisco Ethics Commission has finalized an agreement to fine mayoral candidate Mark Farrell some $108,000 for commingling funds between his campaign committees, a practice that his rivals had long criticized as an end-run around the city’s campaign finance limits.
Farrell and Ethics Commission staff signed a settlement agreement on Oct. 25, and Farrell acknowledged responsibility for the violations and agreed to pay the fine.
“If approved, this case represents the largest penalty issued in the history of the San Francisco Ethics Commission,” wrote Olabisi Matthews, the enforcement director at the Ethics Commission.
The “record penalty,” Matthews wrote, reflected “the serious harm that was done to the public’s right to have timely and accurate information about how campaigns are funded” and “the severity of violating the $500 contribution limit, which is one of the most basic rules that all candidates have to follow.”
While ethics penalties are often leveled years after the infractions, this case was turned around rapidly, with the news going public just one day before the election.
“The Enforcement Division did everything in its power to publicly resolve this case prior to Election Day so that the public would have information about these violations when it matters most,” Matthews wrote.
Paul Melbostad, an attorney and former ethics commissioner, lauded the commission’s quick response. “Finally, the Ethics Commission is taking decisive action in a timely fashion; that makes a difference,” he said.
Farrell, in a statement, attributed the violations to an error, and said he fired his previous campaign attorney over the issue.
“We agreed to a settlement for an accounting error that we corrected and publicly disclosed months ago, and over a disagreement about staff time allocation during the campaign, which led us to terminate our prior legal counsel for this matter,” he said. “As the person responsible for both campaigns, I take full ownership of these issues — this is the kind of accountability I am modeling for my children.”
In the 2024 election cycle, Farrell had two campaign committees: One, for his mayoral run, was subject to the city’s $500 campaign contribution limit. The other, for the Proposition D ballot measure, is not subject to any campaign contribution limits.
The two committees shared $239,099 in expenses, and the ethics commission found that the committees did not adequately refund one another for the expenses. In effect, Farrell’s ballot measure committee was subsidizing his mayoral run, and doing so by accepting contributions over the city’s $500 limit.
“Because Respondent Ballot Measure Committee did not receive full and adequate consideration for the money that it gave to the Mayoral Committee, the excess payments are contributions in violation of City law,” the settlement reads.
According to the commission’s investigation, those excess payments made by Farrell’s proposition committee to his mayoral committee total $93,850.
The settlement notes that in “dozens of emails,” Farrell and his staff emailed donors telling them that Farrell’s ballot measure committee “will greatly benefit both my campaign and the ballot measure itself…contributions have no limits…[t]his would far and away be the most significant way you can impact our campaign.”
Another email read: “If you are interested in further financially supporting Mark, he has opened a ballot measure committee that can accept contributions.”
Farrell’s Prop. D committee has raised a total of $2.5 million, while his campaign committee has raised $1.6 million.
Those payments from the ballot measure committee, between April and September, covered salaries for Mark Farrell for Mayor staffers, rent payments to Farrell’s headquarters, as well as payments for utilities, insurance and snacks.
The Ethics Commission also noted in its report that Farrell’s mayoral campaign did not track the time and resources it dedicated to Proposition D, for which it received these shared expense payments — despite Farrell’s own attorney advising them to do so.
“Campaign Manager Jade Tu and top consultant Margaux Kelly confirmed to investigators that no such tracking was done,” the memo reads.
As noted in Farrell’s statement, his team has since fired the attorney whose advice it did not follow.
This settlement comes one month after former mayors Frank Jordan, Willie Brown and Art Agnos called for Farrell to be criminally investigated for commingling funds between the two committees.
In a statement sent via Farrell’s campaign, Dan Schnur, former chairman of the California Fair Political Practices Commission, criticized the Ethics Commission for releasing information about the settlement immediately before Election Day. “Doing so threatens to create an appearance that the agency is taking sides in a contested election, which is inappropriate and could harm the credibility of the investigative agency,” Schnur wrote.
This is not the first settlement Farrell has agreed to with the ethics commission. In 2016, Farrell paid $25,000 in a settlement for alleged coordination between his 2010 District 2 supervisor campaign committee and an independent committee, which cleared him of any wrongdoing.
The commission itself must agree to the settlement and is set to vote on the decision on Nov. 8 — three days after Election Day.
The $108,000 fine may be a record, but it’s a pittance compared to the amounts raised: “Farrell’s Prop. D committee has raised a total of $2.5 million, while his campaign committee has raised $1.6 million.”
Bad behavior will continue so long as the benefits of misbehavior massively outweigh the penalties.
An inspector general (Prop C) can’t prevent this kind of fraud.
I think that it is pretty lame that this settlement agreement was signed over a week ago but news of it only came out today, the day before the election, and after so many people have already voted.
This whole tale is just sleazy
I wonder if that was part of the ‘agreement’.
Maybe part of an agreement with the outgoing mayor… Maybe, after extorting $108 from owners parking in front of their home, she is now grabbing $108k to enjoy a couple of Rolex with her friends.
Still a big improvement over coming out after the election! I’m happy to see progress.
Bilal Mahmood did the same thing with his DCCC funds and his campaign for supervisor.
Interesting how the Together SF supported candidates do that.
With Together SF it’s a feature not a bug.
There is just something amusing about the idea that Farrell ‘agrees’ to the fine. It really shows how politicians work.
There was an article this morning on another site when they were talking to people who do not vote in the city : with an article like this one, where money is again involved, where corruption is not too far, i totally understand…..
The idea that this was a misunderstanding or “accounting error” when their communications so obviously nudged people to do this to avoid the donation limits is laughable. So in what way, exactly, is Farell “taking full responsibility” when he blamed it on the lawyers and blatently lies that he didn’t realize it was wrong? He sure is modelling SOMETHING for his children.
Wonder what would have happened if he’d disagreed to the fine.
“I sure can pick ’em!” – Ahsha Safaí
Doesn’t surprise me one bit. I was in the room when he did some of his shenanigans. No one wanted to report on what I witnessed is what should be surprising. But nope. It’s incredible that even Aaron Peskin is saying shame on you to Farrell when he was part of the “backroom” deal (deciding vote) that made Farrell mayor for six months. I wonder if the supervior candidates who backed Farrell have anything to say before tomorrow?
Principals in SFUSD and that shelter social worker do shady stuff like this for decades.