The SFEC alleges Farrell took $93,000 from his political action committee in support of Proposition D, and then improperly funneled that cash into his own campaign for mayor, according to the settlement agreement. Legally, a PAC can receive unlimited donations, while campaign committees are limited to receiving individual contributions up to $500.
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Campaign finance laws strictly prohibit resource sharing amongst campaigns and PACs.
"The potential harm in a reversed transaction of this size is that it serves as an interest-free loan to the mayoral committee," the ethics commission wrote in its report.
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In a statement, Farrell took full responsibility, describing the violations as an "accounting error" that was corrected and publicly disclosed several months ago.
"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. As the person responsible for both campaigns, I take full ownership of these issues-this is kind of accountability I am modeling for my children," he said. "I take pride in following the law at all times and setting an example of accountability for my staff."
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Investigators said they also identified emails from Farrell that counter his claim of it being a misunderstanding.
The settlement came just a day before the election, in which a crowded field of candidates are looking to oust incumbent Mayor London Breed. ABC7 News caught up with the top contenders as they made their closing arguments to voters in San Francisco.