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DHMLLON LAW GROUP KC
HARMEET K. DHILLON (SBN: 207873)
harmeet@dhillonlaw.com
MARK P. MEUSER (SBN: 231335)
mmeuser@dhillonlaw.com
DHILLON LAW GROUP INC.
177 Post Street, Suite 700
San Francisco, California 94108
Telephone: (415) 433-1700
Facsimile: (415) 520-6593
ELECTRONICALLY
FILED
Superior Court of California,
County of San Francisco
01/17/2018
Clerk of the Court
BY: CAROL BALISTRERI
Deputy Clerk
Attorneys for Petitioners Angela Alioto and Angela Alioto for Mayor 2018
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO - UNLIMITED JURISDICTION
ANGELA ALIOTO, an individual; and
ANGELA ALIOTO FOR MAYOR 2018, a
political campaign organization.
Petitioners,
v.
LEEANN PELHAM, in her official capacity as
Executive Director of the San Francisco Ethics
Commission; BEN ROSENFIELD, in his
official capacity as Controller for the City and
County of San Francisco; MARK LENO FOR
MAYOR 2018, a political campaign
organization; and DOES | — 10, inclusive.
Respondents.
Case Number: CGC-18-563628
SUPPLEMENTAL BRIEF IN SUPPORT
OF PETITIONERS’ APPLICATION FOR
EX PARTE RELIEF
Dept.: 302
Date: January 19, 2018
Time: 11:00 a.m.
Action Initiated: January 11, 2018
Trial Date: None set
Supplemental Brief in Support of Petitoners’ Application for Ex Parte Relief Case No. CGC-18-563628Co nN DR nH RB WN
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DHILLON LAW GROUP ne,
IL. INTRODUCTION
This case involves campaign financing for the 2018 San Francisco Mayoral election and the
San Francisco Campaign Finance Reform Ordinance (“Ordinance”). The people of San Francisco, in
order to create a level playing field among candidates, have established a campaign finance plan
whereby credible candidates may raise a limited amount of money from contributors, and the City
will finance the rest of the campaign.
In this case, Mark Leno was running for San Francisco Mayor in 2019, and had established a
2019 campaign committee. Mark Leno has been raising money into that committee. However, with
the unexpected death of Mayor Ed Lee, there is a special election for San Francisco Mayor in 2018. It
appears, based on the filings, that Mark Leno for Mayor 2018 has received substantial campaign
funds from Mark Leno for Mayor 2019. It also appears that Mark Leno for Mayor 2018 is using the
funds from the 2019 campaign committee to qualify for public financing for the 2018 race. Indeed, it
appears that Mark Leno for Mayor 2019 no longer exists.
Pursuant to the Court’s Order on January 12, 2018, Petitioner is filing this Supplemental
Brief. Petitioners renew their request that this Court enter a restraining order preventing Mark Leno
for Mayor 2018 from using any funds raised for any other campaign committee to obtain public
financing for the 2018 mayoral race.
In this Supplemental Brief, Petitioners will illustrate that Mark Leno for Mayor 2019 cannot
transfer its campaign funds to Mark Leno for Mayor 2018, because Mark Leno withdrew his 2019
Mayoral candidacy, and is therefore restricted from doing so by the Ordinance. Petitioners will also
show that Mark Leno for Mayor 2018 is incorrect in its argument that because the funds were raised
in the last 18 months, they qualify for public funding and may be transferred to the Mark Leno for
Mayor 2018 committee. This assertion by Mark Leno for Mayor 2018 is incorrect, both because the
funds were not raised within 18 months of the intended election in November 2019, and because
raising money for the same office in a different election year bars using those funds to qualify for
public funding, as the Ordinance clearly requires. The San Francisco Campaign Finance Reform
Ordinance and the applicable regulations interpreting the Ordinance clearly state that a candidate may
not receive public financing based on funds raised in a campaign for a different office or in a
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DHILLON LAW GROUP We,
campaign for the same office, but from a different election year. The residents of the City of San
Francisco desire to have fair elections. Allowing one candidate to illegally transfer funds to a new
committee in violation of the Ordinance’s rules, and then bootstrap these ineligible funds from a
different election year in order to obtain public financing this year, creates super-candidates that the
Ordinance was trying to avoid.
I. ARGUMENT
A. Mark Leno for Mayor 2019 Cannot Transfer Its Campaign Funds to Mark
Leno for Mayor 2018 Because Mark Leno Withdrew His 2019 Candidacy for
Mayor
On May 4, 2017, Mark Leno became a candidate for the San Francisco 2019 Mayoral race
(See FPPC Form 410 and 501, Exhibit 1 and 2). By July 31, 2017, Mark Leno for Mayor 2019 had)
raised $166,396.98 (See FPPC Form 460, Exhibit 3). After the untimely death of Mayor Ed Lee,
Mark Leno for Mayor 2019 filed an amended FPPC 410 and 501 (See Exhibit 4 & 5). As a result of|
these filings, it appears that Mark Leno for Mayor 2019 no longer exists, and his only campaign
committee is the Mark Leno for Mayor 2018.
On January 5, 2018, Mark Leno for Mayor 2018 filed with the San Francisco Ethics:
Commission its notification that the committee had raised its first $50,000 in contributions, and that!
these funds were raised on or before June 13, 2017 (See Threshold Notice, Exhibit 6).
With the California Political Reform Act of 1974 (“CPRA”), California legislated the core of|
its election laws. Under the CPRA, Cal. Gov. Code Sec. 81009.5(a) allows for local government}
agencies to enact ordinances affecting campaign contributions and expenditures as long as they do
not impose additional or different requirements to those found in Chapter 4 of the CPRA. Thus, as
long as the Ordinance does not impose additional or different requirements, the San Francisco
Ordinance is the controlling law in this case.
1. Mark Leno Withdrew His 2019 Candidacy for Mayor of San Francisco
Sec 1.122(c) of the Ordinance states, “Subject to the restrictions set forth in Subsection (b), at
any time, funds held in a candidate committee's Campaign Contribution Trust Account may be
transferred to any legally constituted committee established by the candidate under the California
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Political Reform Act, California Government Code section 81000 et seq.” It is upon this section of|
the Ordinance that the Mark Leno for Mayor 2018 campaign relies, which would allow the
committees to freely transfer funds.
The Leno campaign’s reliance on Sec. 1.122(c) as a first step toward applying its funds to:
jump to the lead of the line for matching funds is not justified. Sec. 1.122(b)(3) of the Ordinance:
imposes certain limitations on the circumstances under which funds may be transferred between
candidate committees. Sec 1.122(c) explicitly states that transfers may only occur “subject to the
restrictions set forth in Subsection (b)....” Sec. 1.122(b)(3), in turn, substantially limits the uses for
any funds held by a candidate’s committee’s Campaign Contribution Trust Account when a candidate
has withdrawn from the race; these permissible uses of campaign funds do not include the transfer of]
funds to another committee.
Mark Leno, by his amendment of FPPC Form filings, has effectively withdrawn his candidacy
for Mayor of San Francisco in the 2019 General Election. This is evidenced by the fact that Mark
Leno no longer has a single filing with the San Francisco Ethics Commission (“SFEC”) for the 2019
election, having amended ail of his and his committee’s filings to be for the 2018 election instead.
Further, the SFEC lists the active 2019 Mayoral candidates on their website, a list on which Mark
Leno’s name no longer appears (See Exhibit 7). There can be no mistaking that Mark Leno has
withdrawn his candidacy for Mayor of San Francisco in 2019 through his amended filings with the
FPPC and SFEC, in order to run for Mayor in 2018 instead.
Because Mark Leno has withdrawn his name from candidacy for Mayor of San Francisco in
2019 and all of the money raised was specifically for 2019, his committee is subject to the limitations:
detailed under Sec. 1.122(b)(3), which do not provide for the transfer of any campaign funds to
another committee controlled by the candidate. Mark Leno for Mayor 2018 must comply with the
following:
(3) WITHDRAWAL FROM CANDIDACY. If a candidate has
withdrawn his or her candidacy, campaign funds held by that candidate's
committee's Campaign Contribution Trust Account shall be:
(A) returned on a "last in, first out" basis to those persons who have
made said contributions;
(B) donated to the City and County of San Francisco;
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(C) donated to a charitable organization;
(D) used to pay outstanding campaign debts or accrued expenses;
(E) used to pay expenses associated with terminating the committee,
such as bookkeeping, legal fees, preparation of campaign statements,
and audits; or
(F) used for other permissible purposes established by the Ethics
Commission by regulation.
Accordingly, all of the money raised for the Mark Leno for Mayor 2019 campaign is ineligible to be
transferred to the Mark Leno for Mayor 2018 campaign. As a result, the Mark Leno for Mayor 2018
may not use these campaign contributions in the 2018 race, let alone use them to obtain public
financing. Section 1.122(b)(3) provides no grounds for such a transfer of funds, where-as-here the
candidate has withdrawn from the original race.
2. Respondents Wrongly Argue that Mark Leno for Mayor 2018
Properly Redesignated His Candidacy and Committee, Entitling Both
to the Transfer of Funds
Respondents argue that Section 18521 of the FPPC Regulations allows the campaign to
redesignate the funds from the 2019 campaign committee to the 2018 committee. Section 18521 does
allow a candidate to transfer funds when the “1) future election is for the same elective office.” This
argument fails because the 2018 campaign is before the 2019 campaign. Furthermore, the candidate
must “3) amend the Statement of Organization (Form 410),” and, “4) file a new Candidate Intention
Statement (Form 501).” Mark Leno for Mayor 2018 fails to show that the 2018 election is an election
future to the 2019 election. While Mark Leno for Mayor 2018 did file an Amended Form 410, they
never filed a new Candidate Intention Statement (Form 501). Instead, they filed an amended
Candidate Intention Statement. Amending the Form 501 rather than filing a new Form 501 withdrew
all active 2019 filings for Mark Leno’s Mayoral candidacy.
Respondents’ argument further may be disposed of because the Ordinance itself controls who
is entitled to public financing. The FPPC gives broad authority to the City in passing ordinances on
how candidates may transfer funds. As discussed above, because Mark Leno for Mayor 2019
campaign committee has been withdrawn, the Ordinance requires that these contributions be returned
to the contributors, donated to charity, pay outstanding campaign debts, or other similar options, but
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they may not be used for the purpose of funding a new campaign.
B. Respondent Mark Leno for Mayor 2019 Is Incorrect in Arguing that the Fact
the Money Was Raised in the Last 18 Months Allows for the Funds to Be
Transferred
Respondent Mark Leno for Mayor 2018 argues that Ordinance Sec. 1.104 defines a qualified
contribution as “...contributions received within 18 months of an election...” While Petitioner agrees
that the Ordinance permits public financing for contributions made 18 months prior to the election,
this argument fails because it only takes a narrow snapshot of the Ordinance, and does not look at the
Ordinance as a whole.
1. The Contributions Made to the 2019 Committee are not Eligible for
Public Financing Because they Were Made Over 18 Months Prior to
the 2019 Election
At the time that the contributions were received for Mark Leno for Mayor 2019, the
contributions were not received 18 months before the date of the election. The date of the 2019
Mayor election is November 5, 2019. 18 months prior to November 5, 2019 would be May 2018. The
money raised by Mark Leno for Mayor 2019 was never going to qualify for public financing as it was
raised over 18 months prior to the election.
2. The Contributions Made to the 2019 Committee are not Eligible for
Public Financing Since They Were Made to the Same Office, but for a
Different Election Year
Section 1.144(c) of the Ordinance states:
(c) PAYMENTS FOR ELECTION EXPENSES TO CANDIDATES
FOR MAYOR. Candidates for Mayor certified as eligible to receive
public financing for their election campaigns will have access to funds
from the Election Campaign Fund on a first-come, first-served basis
according to the following formula:
(1) Upon qualification the candidate shall receive a one-time payment
of $100,000 from the Election Campaign Fund.
(2) After the initial payment under Subsection (1), for the first
$425,000 in matching contributions raised by the candidate, the
candidate shall receive two dollars from the Election Campaign Fund
for each dollar raised.
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(3) After the payments under Subsection (2), for the next $25,000 in
matching contributions raised by the candidate, the candidate shall
receive one dollar from the Election Campaign Fund for each dollar
raised. If the candidate is the incumbent Mayor, afer the
payments under Subsection (2), for the next $12,500 in matching
contributions raised by the candidate, the candidate shall receive one
dollar from the Election Campaign Fund for each dollar raised.
(4) The maximum amount of public funds a non-incumbent mayoral
candidate may receive is $975,000. The maximum amount of public
funds an incumbent mayoral candidate may receive is $962,500.
The important term as used throughout this section of the Ordinance is “Matching
contributions.” Matching contributions are defined in Section 1.104 as:
"Matching contribution" shall mean a contribution up to $500, made by an
individual, other than the candidate, who is a resident of San Francisco.
Matching contributions shall not include loans, contributions received
more than 18 months before the date of the election, qualifying
contributions or contributions made by the candidate's spouse, registered
domestic partner or dependent child. Matching contributions must also
comply with all requirements of this Chapter. Matching contributions
under $100 that are not made by written instrument must be accompanied
by written documentation sufficient to establish the contributor's name and
address. The Ethics Commission shall set forth, by regulation, the types of
documents sufficient to establish a contributor's name and address for the
purpose of this subsection.
The Ethics Commission has passed further regulations defining “Matching Contributions.” In
its Regulations to Campaign Finance Reform Ordinance San Francisco Campaign and Government
Conduct Code Section 1.100 et seg. dated April 25, 2015, the Ethics Commission has issued
regulations that further define Matching Contributions as:
Regulation 1.104-1: Definition of Matching Contribution; Documents
Sufficient to Establish Contributor’s Residency.
(a) “Matching contribution” shall not include a contribution made to
a candidate to support the candidate’s election to a different office, or
to support the candidate’s election to the same office in a different
election year, where the contribution was unexpended and carried
forward as a contribution to a new campaign.
Mark Leno for Mayor 2019 transfer of campaign contributions to Mark Leno for Mayor 2018
should not be available for matching funds because they were raised in support of a candidate’s
election to the same office in a different election year. These funds were unexpended and are being
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attempted to be carried forward to a new campaign. At the time Mark Leno for Mayor 2019 raised
these funds, there was no San Francisco Mayoral race in 2018. The 2018 race was called subsequent
to the raising of these funds and as such, the Mark Leno for Mayor 2018 is attempting to carry funds
forward to a subsequently called election.
Furthermore, when Mark Leno filed his amended Candidate Intention Statement (See Form
501, Exhibit 5), he explained the reason for the amended form as “Year of Election Amended.” Mark
Leno, under penalty of perjury, has informed the Ethics Commission that his Committee is the same
office, but for a different election year — a situation barred by the highlighted language in the
ordinance above.
As such, the contributions raised by Mark Leno for Mayor 2019 are not eligible for public
financing, because they were not received within 18 months of the election, and they were raised for
the same office but a different election year.
Til. CONCLUSION
For all of the above reasons, Petitioners respectfully requests that this Court issue the
temporary restraining orders and preliminary injunctions requested here and grant attorney’s fees
according to Ordinance Sec. 1.168(b).
Date: January 17, 2018 DHILLON LAW GROUP INC.
Smut L Mle
Harmeet K. Dhillon
Attorneys for Petitioners Angela Alito and
Angela Alito for Mayor 2018
By:
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uedEXHIBIT 6San Francisco Ethics Commission
25 Van Ness, Suite 220
San Francisco, CA 94102
Phone: (415) 252-3100
Fax: (415) 252-3112
Email; ethics.commission@sfgov.org
Web: www.sfethics.org
For SFEC use
E-Filed
01/05/2018
16:55:22
Filing ID:
7580
THRESHOLD:
NOTICE BY MAYOR OR BOARD OF SUPERVISORS CANDIDATES
OF REACHING THRESHOLD(S)
(S.F. Campaign and Governmental Conduct Code § 1.152(a) and 1.152(b))
NOTICE OF REACHING FIRST THRESHOLD:
Each candidate must file this statement with the Ethics Commission within 24 hours of receiving contributions
to be deposited in his or her Campaign Contribution Trust Account, or making expenditures that equal or
exceed $10,000 for Board of Supervisors, or $50,000 for Mayor.
NOTICE OF REACHING SECOND THRESHOLD OR SUPPLEMENTAL NOTICE OF REACHING
ADDITIONAL THRESHOLD:
BOARD OF SUPERVISORS CANDIDATES
MAYORAL CANDIDATES
This form must be filed by all candidates in any
district where at least one candidate is certified as
eligible to receive public funds. By signing this form,
you certify that the information provided in it is
accurate.
(1) File this form within 24 hours of when you:
* receive $100,000 or more (monetary
contributions, loans, in-kind contributions and
public funds); or
¢ spend $100,000 or more (paid and unpaid
expenditures).
(2) Thereafter, file this form within 24 hours of each
time your
© receipts (monetary contributions, loans, in-
kind contributions and public funds); or
© expenditures (paid and unpaid expenditures)
reach an additional $10,000 amount (i.e., when your
receipts or expenditures, whichever comes first, reach
$110,000, $120,000, $130,000, ete,).!
This form must be filed by all candidates in a race for
Mayor where at least one candidate is certified as
eligible to receive public funds. By signing this form,
you certify that the information provided in it is
accurate.
(1) File this form within 24 hours of when you:
¢ receive $1,000,000 or more (monetary
contributions, loans, in-kind contributions and
public funds); or
© spend $1,000,000 or more (paid and unpaid
expenditures).
(2) Thereafter, file this form within 24 hours of each
time your
¢ receipts (monetary contributions, loans, in-
kind contributions and public funds); or
© expenditures (paid and unpaid expenditures)
reach an additional $50,000 amount (i.c., when your
receipts or expenditures, whichever comes first, reach
$1,050,000, $1,100,000, $1,150,000, etc.)
' File this form once for each $10,000 threshold reached. For example, if you file this form to report that your receipts have reached
$140,000, you do not need to file it again when your expenditures reach $140,000, However, if subsequently your expenditures reach
$150,000 and you have not filed a form that your receipts have reached $150,000 you must file this form.
? File this form once for each $50,000 threshold reached, For example, if you file this form to report that your receipts have reached
$1,050,000, you do not need to file it again when your expenditures reach $1,050,000. However, if subsequently your expenditures
reach $1,100,000 and you have not filed a form that your receipts have reached $1,100,000 you must file this form,
Page tof 2 Forms Covered: 152(a)-1,152(a}2, 152(0}1, 15200)2CANDIDATE INFORMATION:
Name of Candidate Office Sought District No. (ifany) | Date of Election
Mark Leno Mayor 06/05/2018
Name of Campaign Committee FPPC ID No.
Mark Leno for Mayor 2018 1396338
NOTICE OF REACHING FIRST THRESHOLD:
Board of Supervisors Candidate $10,000
Threshold
Mayor Candidate $50,000 Threshold
On 21
Enter date
CJ received contributions, or
(J made exp
Preview
Co nN DR nH RB WN 10 ~y DHMLLON LAW GROUP KC HARMEET K. DHILLON (SBN: 207873) harmeet@dhillonlaw.com MARK P. MEUSER (SBN: 231335) mmeuser@dhillonlaw.com DHILLON LAW GROUP INC. 177 Post Street, Suite 700 San Francisco, California 94108 Telephone: (415) 433-1700 Facsimile: (415) 520-6593 ELECTRONICALLY FILED Superior Court of California, County of San Francisco 01/17/2018 Clerk of the Court BY: CAROL BALISTRERI Deputy Clerk Attorneys for Petitioners Angela Alioto and Angela Alioto for Mayor 2018 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO - UNLIMITED JURISDICTION ANGELA ALIOTO, an individual; and ANGELA ALIOTO FOR MAYOR 2018, a political campaign organization. Petitioners, v. LEEANN PELHAM, in her official capacity as Executive Director of the San Francisco Ethics Commission; BEN ROSENFIELD, in his official capacity as Controller for the City and County of San Francisco; MARK LENO FOR MAYOR 2018, a political campaign organization; and DOES | — 10, inclusive. Respondents. Case Number: CGC-18-563628 SUPPLEMENTAL BRIEF IN SUPPORT OF PETITIONERS’ APPLICATION FOR EX PARTE RELIEF Dept.: 302 Date: January 19, 2018 Time: 11:00 a.m. Action Initiated: January 11, 2018 Trial Date: None set Supplemental Brief in Support of Petitoners’ Application for Ex Parte Relief Case No. CGC-18-563628Co nN DR nH RB WN 10 DHILLON LAW GROUP ne, IL. INTRODUCTION This case involves campaign financing for the 2018 San Francisco Mayoral election and the San Francisco Campaign Finance Reform Ordinance (“Ordinance”). The people of San Francisco, in order to create a level playing field among candidates, have established a campaign finance plan whereby credible candidates may raise a limited amount of money from contributors, and the City will finance the rest of the campaign. In this case, Mark Leno was running for San Francisco Mayor in 2019, and had established a 2019 campaign committee. Mark Leno has been raising money into that committee. However, with the unexpected death of Mayor Ed Lee, there is a special election for San Francisco Mayor in 2018. It appears, based on the filings, that Mark Leno for Mayor 2018 has received substantial campaign funds from Mark Leno for Mayor 2019. It also appears that Mark Leno for Mayor 2018 is using the funds from the 2019 campaign committee to qualify for public financing for the 2018 race. Indeed, it appears that Mark Leno for Mayor 2019 no longer exists. Pursuant to the Court’s Order on January 12, 2018, Petitioner is filing this Supplemental Brief. Petitioners renew their request that this Court enter a restraining order preventing Mark Leno for Mayor 2018 from using any funds raised for any other campaign committee to obtain public financing for the 2018 mayoral race. In this Supplemental Brief, Petitioners will illustrate that Mark Leno for Mayor 2019 cannot transfer its campaign funds to Mark Leno for Mayor 2018, because Mark Leno withdrew his 2019 Mayoral candidacy, and is therefore restricted from doing so by the Ordinance. Petitioners will also show that Mark Leno for Mayor 2018 is incorrect in its argument that because the funds were raised in the last 18 months, they qualify for public funding and may be transferred to the Mark Leno for Mayor 2018 committee. This assertion by Mark Leno for Mayor 2018 is incorrect, both because the funds were not raised within 18 months of the intended election in November 2019, and because raising money for the same office in a different election year bars using those funds to qualify for public funding, as the Ordinance clearly requires. The San Francisco Campaign Finance Reform Ordinance and the applicable regulations interpreting the Ordinance clearly state that a candidate may not receive public financing based on funds raised in a campaign for a different office or in a 1 Supplemental Brief in Support of Petitioners’ Application for Ex Parte Relief Case No. CGC-18-563628Co nN DR nH RB WN 10 DHILLON LAW GROUP We, campaign for the same office, but from a different election year. The residents of the City of San Francisco desire to have fair elections. Allowing one candidate to illegally transfer funds to a new committee in violation of the Ordinance’s rules, and then bootstrap these ineligible funds from a different election year in order to obtain public financing this year, creates super-candidates that the Ordinance was trying to avoid. I. ARGUMENT A. Mark Leno for Mayor 2019 Cannot Transfer Its Campaign Funds to Mark Leno for Mayor 2018 Because Mark Leno Withdrew His 2019 Candidacy for Mayor On May 4, 2017, Mark Leno became a candidate for the San Francisco 2019 Mayoral race (See FPPC Form 410 and 501, Exhibit 1 and 2). By July 31, 2017, Mark Leno for Mayor 2019 had) raised $166,396.98 (See FPPC Form 460, Exhibit 3). After the untimely death of Mayor Ed Lee, Mark Leno for Mayor 2019 filed an amended FPPC 410 and 501 (See Exhibit 4 & 5). As a result of| these filings, it appears that Mark Leno for Mayor 2019 no longer exists, and his only campaign committee is the Mark Leno for Mayor 2018. On January 5, 2018, Mark Leno for Mayor 2018 filed with the San Francisco Ethics: Commission its notification that the committee had raised its first $50,000 in contributions, and that! these funds were raised on or before June 13, 2017 (See Threshold Notice, Exhibit 6). With the California Political Reform Act of 1974 (“CPRA”), California legislated the core of| its election laws. Under the CPRA, Cal. Gov. Code Sec. 81009.5(a) allows for local government} agencies to enact ordinances affecting campaign contributions and expenditures as long as they do not impose additional or different requirements to those found in Chapter 4 of the CPRA. Thus, as long as the Ordinance does not impose additional or different requirements, the San Francisco Ordinance is the controlling law in this case. 1. Mark Leno Withdrew His 2019 Candidacy for Mayor of San Francisco Sec 1.122(c) of the Ordinance states, “Subject to the restrictions set forth in Subsection (b), at any time, funds held in a candidate committee's Campaign Contribution Trust Account may be transferred to any legally constituted committee established by the candidate under the California 2 Supplemental Brief in Support of Petitioners’ Application for Ex Parte Relief Case No. CGC-18-563628Co nN DR nH RB WN 10 DHILLON LAW GROUP We, Political Reform Act, California Government Code section 81000 et seq.” It is upon this section of| the Ordinance that the Mark Leno for Mayor 2018 campaign relies, which would allow the committees to freely transfer funds. The Leno campaign’s reliance on Sec. 1.122(c) as a first step toward applying its funds to: jump to the lead of the line for matching funds is not justified. Sec. 1.122(b)(3) of the Ordinance: imposes certain limitations on the circumstances under which funds may be transferred between candidate committees. Sec 1.122(c) explicitly states that transfers may only occur “subject to the restrictions set forth in Subsection (b)....” Sec. 1.122(b)(3), in turn, substantially limits the uses for any funds held by a candidate’s committee’s Campaign Contribution Trust Account when a candidate has withdrawn from the race; these permissible uses of campaign funds do not include the transfer of] funds to another committee. Mark Leno, by his amendment of FPPC Form filings, has effectively withdrawn his candidacy for Mayor of San Francisco in the 2019 General Election. This is evidenced by the fact that Mark Leno no longer has a single filing with the San Francisco Ethics Commission (“SFEC”) for the 2019 election, having amended ail of his and his committee’s filings to be for the 2018 election instead. Further, the SFEC lists the active 2019 Mayoral candidates on their website, a list on which Mark Leno’s name no longer appears (See Exhibit 7). There can be no mistaking that Mark Leno has withdrawn his candidacy for Mayor of San Francisco in 2019 through his amended filings with the FPPC and SFEC, in order to run for Mayor in 2018 instead. Because Mark Leno has withdrawn his name from candidacy for Mayor of San Francisco in 2019 and all of the money raised was specifically for 2019, his committee is subject to the limitations: detailed under Sec. 1.122(b)(3), which do not provide for the transfer of any campaign funds to another committee controlled by the candidate. Mark Leno for Mayor 2018 must comply with the following: (3) WITHDRAWAL FROM CANDIDACY. If a candidate has withdrawn his or her candidacy, campaign funds held by that candidate's committee's Campaign Contribution Trust Account shall be: (A) returned on a "last in, first out" basis to those persons who have made said contributions; (B) donated to the City and County of San Francisco; 3 Supplemental Brief in Support of Petitioners’ Application for Ex Parte Relief Case No. CGC-18-563628Co nN DR nH RB WN 10 DHILLON LAW GROUP We, (C) donated to a charitable organization; (D) used to pay outstanding campaign debts or accrued expenses; (E) used to pay expenses associated with terminating the committee, such as bookkeeping, legal fees, preparation of campaign statements, and audits; or (F) used for other permissible purposes established by the Ethics Commission by regulation. Accordingly, all of the money raised for the Mark Leno for Mayor 2019 campaign is ineligible to be transferred to the Mark Leno for Mayor 2018 campaign. As a result, the Mark Leno for Mayor 2018 may not use these campaign contributions in the 2018 race, let alone use them to obtain public financing. Section 1.122(b)(3) provides no grounds for such a transfer of funds, where-as-here the candidate has withdrawn from the original race. 2. Respondents Wrongly Argue that Mark Leno for Mayor 2018 Properly Redesignated His Candidacy and Committee, Entitling Both to the Transfer of Funds Respondents argue that Section 18521 of the FPPC Regulations allows the campaign to redesignate the funds from the 2019 campaign committee to the 2018 committee. Section 18521 does allow a candidate to transfer funds when the “1) future election is for the same elective office.” This argument fails because the 2018 campaign is before the 2019 campaign. Furthermore, the candidate must “3) amend the Statement of Organization (Form 410),” and, “4) file a new Candidate Intention Statement (Form 501).” Mark Leno for Mayor 2018 fails to show that the 2018 election is an election future to the 2019 election. While Mark Leno for Mayor 2018 did file an Amended Form 410, they never filed a new Candidate Intention Statement (Form 501). Instead, they filed an amended Candidate Intention Statement. Amending the Form 501 rather than filing a new Form 501 withdrew all active 2019 filings for Mark Leno’s Mayoral candidacy. Respondents’ argument further may be disposed of because the Ordinance itself controls who is entitled to public financing. The FPPC gives broad authority to the City in passing ordinances on how candidates may transfer funds. As discussed above, because Mark Leno for Mayor 2019 campaign committee has been withdrawn, the Ordinance requires that these contributions be returned to the contributors, donated to charity, pay outstanding campaign debts, or other similar options, but 4 Supplemental Brief in Support of Petitioners’ Application for Ex Parte Relief Case No. CGC-18-563628Co nN DR nH RB WN 10 DHILLON LAW GROUP ne, they may not be used for the purpose of funding a new campaign. B. Respondent Mark Leno for Mayor 2019 Is Incorrect in Arguing that the Fact the Money Was Raised in the Last 18 Months Allows for the Funds to Be Transferred Respondent Mark Leno for Mayor 2018 argues that Ordinance Sec. 1.104 defines a qualified contribution as “...contributions received within 18 months of an election...” While Petitioner agrees that the Ordinance permits public financing for contributions made 18 months prior to the election, this argument fails because it only takes a narrow snapshot of the Ordinance, and does not look at the Ordinance as a whole. 1. The Contributions Made to the 2019 Committee are not Eligible for Public Financing Because they Were Made Over 18 Months Prior to the 2019 Election At the time that the contributions were received for Mark Leno for Mayor 2019, the contributions were not received 18 months before the date of the election. The date of the 2019 Mayor election is November 5, 2019. 18 months prior to November 5, 2019 would be May 2018. The money raised by Mark Leno for Mayor 2019 was never going to qualify for public financing as it was raised over 18 months prior to the election. 2. The Contributions Made to the 2019 Committee are not Eligible for Public Financing Since They Were Made to the Same Office, but for a Different Election Year Section 1.144(c) of the Ordinance states: (c) PAYMENTS FOR ELECTION EXPENSES TO CANDIDATES FOR MAYOR. Candidates for Mayor certified as eligible to receive public financing for their election campaigns will have access to funds from the Election Campaign Fund on a first-come, first-served basis according to the following formula: (1) Upon qualification the candidate shall receive a one-time payment of $100,000 from the Election Campaign Fund. (2) After the initial payment under Subsection (1), for the first $425,000 in matching contributions raised by the candidate, the candidate shall receive two dollars from the Election Campaign Fund for each dollar raised. 5 Supplemental Brief in Support of Petitioners’ Application for Ex Parte Relief Case No. CGC-18-563628CON DW RB WN Ve ee eB BP Be Be eB ek SCO MN AA Bw NH = DO 21 DHILLON LAW GROUP We, (3) After the payments under Subsection (2), for the next $25,000 in matching contributions raised by the candidate, the candidate shall receive one dollar from the Election Campaign Fund for each dollar raised. If the candidate is the incumbent Mayor, afer the payments under Subsection (2), for the next $12,500 in matching contributions raised by the candidate, the candidate shall receive one dollar from the Election Campaign Fund for each dollar raised. (4) The maximum amount of public funds a non-incumbent mayoral candidate may receive is $975,000. The maximum amount of public funds an incumbent mayoral candidate may receive is $962,500. The important term as used throughout this section of the Ordinance is “Matching contributions.” Matching contributions are defined in Section 1.104 as: "Matching contribution" shall mean a contribution up to $500, made by an individual, other than the candidate, who is a resident of San Francisco. Matching contributions shall not include loans, contributions received more than 18 months before the date of the election, qualifying contributions or contributions made by the candidate's spouse, registered domestic partner or dependent child. Matching contributions must also comply with all requirements of this Chapter. Matching contributions under $100 that are not made by written instrument must be accompanied by written documentation sufficient to establish the contributor's name and address. The Ethics Commission shall set forth, by regulation, the types of documents sufficient to establish a contributor's name and address for the purpose of this subsection. The Ethics Commission has passed further regulations defining “Matching Contributions.” In its Regulations to Campaign Finance Reform Ordinance San Francisco Campaign and Government Conduct Code Section 1.100 et seg. dated April 25, 2015, the Ethics Commission has issued regulations that further define Matching Contributions as: Regulation 1.104-1: Definition of Matching Contribution; Documents Sufficient to Establish Contributor’s Residency. (a) “Matching contribution” shall not include a contribution made to a candidate to support the candidate’s election to a different office, or to support the candidate’s election to the same office in a different election year, where the contribution was unexpended and carried forward as a contribution to a new campaign. Mark Leno for Mayor 2019 transfer of campaign contributions to Mark Leno for Mayor 2018 should not be available for matching funds because they were raised in support of a candidate’s election to the same office in a different election year. These funds were unexpended and are being 6 Supplemental Brief in Support of Petitioners’ Application for Ex Parte Relief Case No. CGC-18-563628Co nN DR nH RB WN 10 DHILLON LAW GROUP ic attempted to be carried forward to a new campaign. At the time Mark Leno for Mayor 2019 raised these funds, there was no San Francisco Mayoral race in 2018. The 2018 race was called subsequent to the raising of these funds and as such, the Mark Leno for Mayor 2018 is attempting to carry funds forward to a subsequently called election. Furthermore, when Mark Leno filed his amended Candidate Intention Statement (See Form 501, Exhibit 5), he explained the reason for the amended form as “Year of Election Amended.” Mark Leno, under penalty of perjury, has informed the Ethics Commission that his Committee is the same office, but for a different election year — a situation barred by the highlighted language in the ordinance above. As such, the contributions raised by Mark Leno for Mayor 2019 are not eligible for public financing, because they were not received within 18 months of the election, and they were raised for the same office but a different election year. Til. CONCLUSION For all of the above reasons, Petitioners respectfully requests that this Court issue the temporary restraining orders and preliminary injunctions requested here and grant attorney’s fees according to Ordinance Sec. 1.168(b). Date: January 17, 2018 DHILLON LAW GROUP INC. Smut L Mle Harmeet K. 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BYIWN AONSOY 2 vOLYS vo oosjuely Wes 3003 aiz auvis AUD SSHUGGY ABBULS woo dnosbjebajueusney@osenbl cae oves-L36 (Sip) wey ous] ‘revorde) TWAS USENAN SNOHETAL SALAVO (const amprt Wz BEN) BLYCIGNYO JO SYN iuoeuuojuy ayepipues “| papuauiy UoRDe|y jo uea, “MHA! WsUpUaluy Px] MIE] seu yoyo Ser ahee dures 210 JuUaWezES uoHUayY] 92] uedEXHIBIT 6San Francisco Ethics Commission 25 Van Ness, Suite 220 San Francisco, CA 94102 Phone: (415) 252-3100 Fax: (415) 252-3112 Email; ethics.commission@sfgov.org Web: www.sfethics.org For SFEC use E-Filed 01/05/2018 16:55:22 Filing ID: 7580 THRESHOLD: NOTICE BY MAYOR OR BOARD OF SUPERVISORS CANDIDATES OF REACHING THRESHOLD(S) (S.F. Campaign and Governmental Conduct Code § 1.152(a) and 1.152(b)) NOTICE OF REACHING FIRST THRESHOLD: Each candidate must file this statement with the Ethics Commission within 24 hours of receiving contributions to be deposited in his or her Campaign Contribution Trust Account, or making expenditures that equal or exceed $10,000 for Board of Supervisors, or $50,000 for Mayor. NOTICE OF REACHING SECOND THRESHOLD OR SUPPLEMENTAL NOTICE OF REACHING ADDITIONAL THRESHOLD: BOARD OF SUPERVISORS CANDIDATES MAYORAL CANDIDATES This form must be filed by all candidates in any district where at least one candidate is certified as eligible to receive public funds. By signing this form, you certify that the information provided in it is accurate. (1) File this form within 24 hours of when you: * receive $100,000 or more (monetary contributions, loans, in-kind contributions and public funds); or ¢ spend $100,000 or more (paid and unpaid expenditures). (2) Thereafter, file this form within 24 hours of each time your © receipts (monetary contributions, loans, in- kind contributions and public funds); or © expenditures (paid and unpaid expenditures) reach an additional $10,000 amount (i.e., when your receipts or expenditures, whichever comes first, reach $110,000, $120,000, $130,000, ete,).! This form must be filed by all candidates in a race for Mayor where at least one candidate is certified as eligible to receive public funds. By signing this form, you certify that the information provided in it is accurate. (1) File this form within 24 hours of when you: ¢ receive $1,000,000 or more (monetary contributions, loans, in-kind contributions and public funds); or © spend $1,000,000 or more (paid and unpaid expenditures). (2) Thereafter, file this form within 24 hours of each time your ¢ receipts (monetary contributions, loans, in- kind contributions and public funds); or © expenditures (paid and unpaid expenditures) reach an additional $50,000 amount (i.c., when your receipts or expenditures, whichever comes first, reach $1,050,000, $1,100,000, $1,150,000, etc.) ' File this form once for each $10,000 threshold reached. For example, if you file this form to report that your receipts have reached $140,000, you do not need to file it again when your expenditures reach $140,000, However, if subsequently your expenditures reach $150,000 and you have not filed a form that your receipts have reached $150,000 you must file this form. ? File this form once for each $50,000 threshold reached, For example, if you file this form to report that your receipts have reached $1,050,000, you do not need to file it again when your expenditures reach $1,050,000. However, if subsequently your expenditures reach $1,100,000 and you have not filed a form that your receipts have reached $1,100,000 you must file this form, Page tof 2 Forms Covered: 152(a)-1,152(a}2, 152(0}1, 15200)2CANDIDATE INFORMATION: Name of Candidate Office Sought District No. (ifany) | Date of Election Mark Leno Mayor 06/05/2018 Name of Campaign Committee FPPC ID No. Mark Leno for Mayor 2018 1396338 NOTICE OF REACHING FIRST THRESHOLD: Board of Supervisors Candidate $10,000 Threshold Mayor Candidate $50,000 Threshold On 21 Enter date CJ received contributions, or (J made exp