VIA HAND AND EMAIL

November 1, 2007

John St. Croix

Executive Director

San Francisco Ethics Commission

25 Van Ness Avenue, Suite 220

San Francisco, California 94102

Re: John Rinaldi Form SFEC-142(c)

Resubmission pursuant to Order of Ethics Commission

Inaccuracies in draft minutes and interpretation of Ethics Commission ruling

Dear Mr. St. Croix:

I write concerning the resubmission of Mr. Rinaldi’s Form SFEC-142(c), as ordered by the Ethics Commission at the hearing on October 15, 2007. I also write in response to your email of October 30, 2007, in which you enclosed draft minutes of the Ethics Commission hearing of October 15, 2007, and in response to statements by your staff as to the interpretation of the ruling by the Ethics Commission on Mr. Rinaldi’s appeal.

Those draft minutes, as they concern the appeal by Mr. Rinaldi, seriously misstate the proceedings of the Ethics Commission. For your edification, I enclose a DVD containing a video of the portion of the Ethics Commission hearing that dealt with the motion passed by the Ethics Commission, as well as a transcript of that video. A review of the video, and the transcript, demonstrates that your draft minutes are not accurate, nor is the interpretation by your staff of what it is to review in Mr. Rinaldi’s resubmission.

Shaista Shaikh of your staff stated to both me and Mr. Rinaldi that the Executive Director’s interpretation of the decision by the Ethics Commission was that only PayPal contributions were to be re-evaluated. In fact, in your draft minutes you state the following:

Commissioner Gusukuma stated that the only argument by Mr. Rinaldi that she believed to be compelling was his additional documentation regarding Paypal contributions. Commissioner Gusukuma stated that, on the issues of sole proprietorships, the Commission has already ruled on that matter in the past. She stated that it is precedent and should be followed. Regarding cash contributions, Commissioner Gusukuma stated that the law is clear and well established. Mr. Gross acknowledged that he understood the Commission’s stance on the cash contributions, noting that the law is clear on that issue. Regarding the typographical errors, Commissioner Gusukuma stated that although she was sympathetic to them, she felt that Mr. Rinaldi should focus his re-submission on the Paypal contributions.

A review of the video of the hearing demonstrates the complete inaccuracy of the minutes your staff prepared. The video, and its transcript, demonstrate that in fact a very different discussion occurred:

COMMISSIONER GUSUKUMA: Just a couple of comments with regard to our overturning the determination of the Executive Director. I’m just going to give you the benefits of my thoughts here. To me, the sole proprietorship issue is a non-starter. Commissioner Harry reminds me that we did take that vote, I think it was last year, where we ruled on this issue, it’s precedent. I think we have to stick to it. With respect to the cash contributions of $100, that also seems to me to be well set and established in the law. So I would focus your energy on the PayPal contributions, where everybody is on board that something that needs to have a second and third and a fourth look at the issue. And certainly the typographic errors issue, I’m very sympathetic to, but just in terms of so you all can focus your energy in this resubmission and if it does comes back to us in a strange way.

TERRY GROSS: I certainly agree on the $100 cash, actual $100 cash.

So, your draft minutes are incorrect when they state: “Commissioner Gusukuma stated that the only argument by Mr. Rinaldi that she believed to be compelling was his additional documentation regarding Paypal contributions. . . . Regarding the typographical errors, Commissioner Gusukuma stated that although she was sympathetic to them, she felt that Mr. Rinaldi should focus his re-submission on the Paypal contributions.”

The video and transcript demonstrate that what Commissioner Gusukuma actually said something very different: she said that “I would focus your energy on the PayPal contributions . . . and certainly the typographic errors issue, I’m very sympathetic to.” There was no statement by Commissioner Gusukuma that that the typographical errors were not to be reviewed or addressed by the Executive Director in the resubmission.1

And in addition, there were two types of contributions that you had initially rejected in your October 1, 2007 denial that fit within my appeal point of “typographical errors” involving cash contributions, and which the Commission said should be focused on: (1) there was the typographical error in which Mr. Rinaldi had incorrectly listed “$100” in the column for “Amount of Contribution,” instead of “$99”; and (2) there were the $99 cash contributions that you rejected as you concluded (incorrectly) that they were $100 cash contributions because there were cross-outs on the contributor forms or donor cards.² Both of these types of $99 cash contributions were discussed by me at the hearing when I was discussing typographic errors, and both of these types of $99 cash contributions are eligible contributions: Mr. Rinaldi has submitted, with his resubmission, evidence in the form of declarations from these contributors, that they in fact gave $99 in cash, not $100, and that your interpretation that the cross-out indicated fraud was incorrect. There is no valid reason for you to not consider these contributions, nor to continue to reject these $99 cash contributions as ineligible.

As you recall, in Mr. Rinaldi’s appeal, there was also an issue that for cash contributions of $100 or more, the Ethics Commission should consider that the first $99.99 as an eligible contribution for purposes of matching funds. I understand that as to that particular issue concerning $100 cash contributions, the Commissioners stated that this would not be revisited. However, contrary to your interpretation, the Commissioners did not state that the $99 cash contributions that you previously rejected because there was a cross-out on the contribution form should not be reviewed.

Moreover, the Ethics Commission did not limit your review of the resubmission in any way, other than to state that the sole proprietorship contribution issue had previously been addressed and was precedent, and that cash contributions of $100 (not of $99) were established by law as being ineligible. So yes, you can rule ineligible any contributions by checks drawn on a sole proprietorship, and you can rule ineligible any contributions in cash of $100 or more. But other than that, I believe your mandate is to review each contribution, and its supporting documentation, anew; and not to reject any contribution simply because it is not a PayPal contribution or did not involve a typographical error.

I trust that you will do so, and in evaluating this resubmission, you will review each contribution anew, and not decide that you simply will not consider the documentation submitted as to certain categories of contributions.

I would also appreciate it if you would send me the name of the matter in which the Commission made a determination that checks drawn on a bank account in the name of a sole proprietorship were ineligible, and provide me a copy of the appeal in that matter, and the minutes of the Commission hearing.

If you need further information, please contact me.

Thank you for your consideration.

Very truly yours,

Terry Gross

TG:mbc

Enclosures (DVD, transcript, St. Croix’s draft minutes)

cc.: Commissioners of the Ethics Commission

John Rinaldi