2020’S Harvest Of Campaign Finance Reporting Violations

There’s an abundance of campaign financial reporting violations in 2020 and they’re being abetted with seeming disregard by the City’s chief elections officer, City Clerk Hosam Haggag.

These violations aren’t a matter of putting the wrong date on a form. They attack the fundamental principles underlying government ethics and campaign disclosure laws.

And they carry serious penalties. The Fair Political Practices Commission (FPPC) can levy penalties up to $5,000 for each violation. Higher penalties can be imposed through criminal and civil actions.

PACs and Candidates

First up is a newcomer to Santa Clara politics, Silicon Valley MEPS Issues PAC, Sponsored by Mechanical, Electrical, Plumbing and Sprinkler Fitting Organizations. 

MEPS is run by Josue Garcia, a former head of the South Bay Labor Coalition, and its main business is CEQA “greenmail” complaints; one of which was lodged against the Agrihood project and evaporated as soon as the developer signed a union agreement.

MEPS racked up a laundry list of violations in a single mailer attacking District 1 candidate Harbir Bhatia.

First, the mailer had no FPPC committee identification. Next, MEPS didn’t file reports of any kind in Santa Clara before Oct. 15. The mailer arrived in mailboxes Oct. 10, but MEPS didn’t file its required 24-hour expenditure report (Form 496) due within 24 hours of incurring the expense. It hasn’t filed any summary of donations and spending (Form 460).

Why this matters: Without an FPPC number and a 24-hour spending report, it’s hard to identify who the mailer came from because there are thousands of committees with similar names in California and often committees change their names.

Without a report of donations and spending, it’s impossible to know where the PAC’s money comes from — it could be dark money or from foreign entities — and how much money it has in the bank.

Garcia has appeared before the Council attesting to “labor problems” at Levi’s Stadium, for which he can’t provide evidence or even a specific description.

In 2017, he lobbied the City Council to force the stadium security company to unionize, something that is completely illegal, but Mayor Lisa Gillmor nonetheless told the subcontractor that she would like to see a union agreement.

The next reporting violator is Gillmor’s longtime ally the developer-financed Santa Clara Police Association PAC, which, until this year, was the all-time big spender in City politics.

The PAC, which has been operating in Santa Clara for decades, didn’t file its July through September financial summary. It also sent a mailer around Oct. 22 without the mandatory FPPC ID number [FPPC missing].

Since 2018, the police PAC conducted at least two push polls for ballot measures —within weeks of elections — that have never been reported.

Why this matters: There’s no transparency into where this group is getting its money and where money is being spent.

By not providing summaries of donations or expenditures, the full amount being collected and spent is concealed. And it goes without saying that unreported campaign activities hide important information from voters that they are legally entitled to.

Next, some residents of District 6 found candidate Robert Mezzetti’s campaign flyers attached to their mailboxes. By federal law, mailboxes are exclusively for receiving postage-paid U.S. mail and “only authorized U.S. Postal Service delivery personnel” are allowed to place items in or on a mailbox. (about.usps.com).

Why it matters: Although the USPS isn’t likely to prosecute Mezzetti (or Gillmor, who accompanied him Sunday afternoon distributing the flyers), the candidate is an attorney with a professional obligation to follow the law, as well as a potential City official who also shares that professional obligation.

It sets a cavalier example — that breaking some laws is OK — and undermines the City’s claims of high ethical standards.

Finally, candidate Bob O’Keefe has raised $4,000, with donations over $99 from15 individuals and donations from the California Apartment Association and the Firefighters union PAC. He loaned his campaign $4,250. It appears that the Post Office returned the Firefighters’ donation*, which they replaced in October. O’Keefe spent $3,700 on campaign materials and Facebook ads.

When Informing Becomes Campaigning 

Public agencies are prohibited from advocacy because people judge official agency communications differently than political campaign pieces. Using public money for campaigning is misappropriation of public funds, a felony punishable by up to four years in state prison and a fine of up to $10,000.

The City has distributed three official print and online publications that appear to violate FPPC rules: 1) the special mailer to residents on litigation, 2) a public statement about an HR software purchase, and 3) charts published on the City website by City Clerk Haggag.

Communication doesn’t have to encourage people to vote a certain way to be advocacy, according to the FPPC. The question is: is this communication outside an agency’s normal pattern, timing and style? Is the language inflammatory or slanted?

Santa Clara’s recent communications check off these boxes.

  1. The City’s 49ers litigation mailer [city litigation mailer 2020 1, city litigation mailer 2020 2] was the result of special City Council action, taken on Oct. 1 after team owner Jed York donated the first $250,000 to a PAC opposing Gillmor’s Council candidate slate.

The Council openly discussed its desire for the full color, glossy tri-fold to go out before the election — it arrived Oct. 11. Councilmember Karen Hardy told The Weekly, “It was apparent to me that they were trying to use City resources to sway an election.”

Why this matters:  It used loaded and inflammatory language — “49ers Goals: Hide Spending” “self-dealing,” “secret,” “they want to spend public money” but “we want restore public trust.” No evidence is presented to support any of the broad claims.

This isn’t normal communication for City Hall. To anyone’s knowledge, Santa Clara has never published a litigation summary. The piece doesn’t discuss any other litigation the City’s involved in, including Santa Clara’s most visible recent litigation: the voting rights lawsuit and continuing appeal of the judge’s ruling.

  1. The public statement about purchasing HR software [city public statement about software 2020] for Levi’s Stadium is another peculiar City communication. Routine back office software purchases haven’t merited public statements in the past.

Why This Matters: This arrived in email inboxes on Oct. 14 following the litigation piece. Virtually nothing besides the title pertains to software.

If, as the City claims, stadium employees aren’t being paid properly, new software to correct that would be a welcome development. Instead, the first paragraph says, “The request is more evidence that the 49ers have not been properly complying…”

This is followed by more inflammatory language: “still committing wage theft,” “not complying with prevailing wage laws,” “not acceptable!”

The 49ers haven’t been charged with or found violating labor laws, but for the last year, Gillmor and City Manager Deanna Santana have insinuated this without providing concrete evidence of 49ers’ wrongdoing.

A version of the City statement, stripped down to the mayor’s inflammatory accusations, appeared on a captive news site controlled by the city’s PR consultant, Sam Singer.

3) Completing the trifecta of odd City Hall communications are a series of charts produced by City Clerk Haggag; again, something unprecedented in City history.

The charts show independent expenditures in favor of each candidate. The order isn’t an impartial alphabetical order. Instead, the data is shown with Gillmor’s candidates first, on the left, with challengers on the right.

Why this matters: Mere numbers make it look like the police PAC’s expenditures are minimal compared to Jed York’s, and work on the perception that because something is small it’s insignificant.

Numbers don’t account for the fact that, for four years, the police PAC has been the political powerhouse in the city with their money from Related, Citation, Prometheus, De Anza Properties (a Gillmor business partner) and the California Apartment Association.

Haggag started charting these numbers only this year, after the police union PAC was outspent. Similar charts for 2016 and 2018 would show the police PAC as the financial powerhouse. The police union PAC spent about $12,000 supporting Haggag in 2018.

There’s nothing stopping elected officials from starting their own PACs, raising money and campaigning. They just have to report it like every other committee.

The FPPC encourages people to report possible public agency violations at AdWatch, http://www.fppc.ca.gov/enforcement/adwatch.html.

 * Correction: We were incorrect about District 5 candidate Bob O’Keefe’s report. The firefighters reported a returned check to O’Keefe’s campaign in its Oct. 22 report,  which also showed it being reissued. We regret the error.

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