San Mateo exploring campaign finance reform

Lee supports broad reforms to regulations and wants to see an intentional reform process to reach consensus and bring options back for further action. Lee, who first expressed interest in a discussion about campaign finance reform, wants greater transparency on if donors came from inside or outside city limits and to address the rising costs of City Council campaigns. Ideas included removing city codes and using stricter state laws, limiting nonmonetary contributions, disclosing contributions by donor location, limiting contributions by individuals who own and donate through multiple businesses and voluntary expenditure limits.

“I think it’s “really an exciting opportunity for us as a city to level the playing field and get big money out of politics,” Lee said.

To highlight the increase in campaign spending, City Attorney Shawn Mason presented a graph showing that in 2020, the average amount of money City Council candidates spent dramatically rose since 2015. The contribution total raised for three candidates in 2020 was around $263,000, with the average raised per candidate around $87,000, a city report found. The City Council in 2017 approved an increase to contribution limits for individuals from $250 to $500 and $500 to $1,000 for organizations.

Other public concerns include issues of nonmonetary contributions and contributions by individuals controlling multiple organizations, which includes businesses, Mason said. A person with several businesses can contribute through each business they own, increasing their spending and influence in elections.

Possible loopholes

A public complaint to the city was made during the 2020 campaign questioning limits around an in-kind donation contribution worth $4,922 to Lee of campaign fliers from the Peninsula Law Enforcement Association, a political action committee, Mason said. Because the complaint was about a member of the City Council, the San Mateo County District Attorney’s Office assisted in the investigation, and it concluded all parties acted in good faith and did not require any enforcement action. Nonmonetary contributions are not subject to a limit and include donations of personal services, donation of goods and home or office fundraisers, leading to worries about a loophole. Lee said March 8 that while the contribution was allowable, the municipal code flaw can be exploited, and she supports limits and closing loopholes to nonmonetary contributions and crafting an ordinance on the issue.

“I think it is confusing to the public. It is confusing to the candidate and candidates potentially, and I think it should probably be capped at the same level as our organization and individual max as they are today,” Lee said at the meeting.

Location of donations

She favored having a transparency dashboard and reporting requirement to capture who is donating inside the city and outside the county. It would show the public how money is being used in campaigns. She envisions details about candidate funding, how many independent expenditures there are, information about the total number of donors, the percentage of donors within San Mateo and the percentage within and outside the county.

“In the case of this last election cycle, there was a lot of outside jurisdiction money and outside county jurisdiction money that played a significant role in some of the candidate’s campaigns, and I think there was a real lack of visibility to that,” Lee said.

Mason said a city form posted on the city website could require candidates to prepare a file or form summarizing information about if contributions were made from people from San Mateo or if contributions came from people and organizations outside San Mateo.

Deputy Mayor Bonilla strongly supported Lee’s campaign finance reform to create opportunities and avoid the perception of undue influence in the electoral process. He favored adjustments to city regulations, limits to nonmonetary contributions and individuals, tracking locations through candidates filling out a form and voluntary expenditure limits.

“It’s important here for people to be able to compete for elected office. It’s important for our citizens and voters to be able to fully participate in the process and feel as though their input and their contributions matter and aren’t weighed out by large well-monied interests,” Bonilla said.

Independent expenditures

Councilman Joe Goethals supported campaign contribution regulations and reforms but questioned if the proposals listed would increase the influence of independent expenditures. Independent expenditures are for communications provided to a candidate without their consultation or cooperation. Total independent expenditures for the 2020 race was $74,036, the city said. They cannot be limited, and he believes they are the biggest loophole not being regulated.

“There’s this giant loophole with independent expenditures. It begs the question, are we helping or hurting. I ask that to my colleagues, and I don’t know the answer,” Goethals said.

Lee suggested looking at the city of Mountain View for ways forward on independent expenditures, which has an ordinance on disclosure requirements for the topic.

Unintended consequences?

Councilwoman Diane Papan agreed everyone wants to see less money in campaigns but said it does allow candidates to reach people in the most direct and transparent way. She was worried about potential unintended consequences that could come through the greater influence of third-party money with limits on individual candidates. She advised being careful and thinking about the big picture.

“If we do greater restrictions of what a candidate can raise, it has those unintended consequences as it relates to third-party money, and I think it really exacerbates the power and the influence that third-party money has,” Papan said.

On disclosing donor locations, she expressed concern about unintended consequences and locations being used as a weapon against candidates, which might not always be accurate.

Other interests

Mayor Eric Rodriguez was in favor of most of the reforms suggested.

“I really think they will go a long way towards improving the transparency, the fairness and the integrity of our local elections,” Rodriguez said.

Rodriguez was concerned about money from special interests from third parties brought up by Papen but those interests would have influence no matter what. He thinks the pros of spending limits outweigh the negatives.

Mike Dunham, who ran for Burlingame City Council in 2019, spoke as a member of the public about the importance of campaign limits for local elections.

“If you wanted to tamp down the amount of money you are spending on elections, I would suggested starting there and cutting that limit back down to $250 per person or lower and then peg it to CPI, so you are not worried about it becoming out of date,” Dunham said.

curtis@smdailyjournal.com

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