Palo Alto City Council candidates broke records for total contributions and expenditures. Large cash and nonmonetary contributions played a role. Post-election developer infusions erased debts. The year was 2005, and I wrote about it in this space.
The aftertaste lingered, and in mid-2007, Council members Peter Drekmeier, who set the records, and LaDoris Cordell, who accepted no monetary contribution, called for limitations. Encouraged to pursue, they dutifully returned from committee with voluntary monetary contribution and expenditure caps: $300 and $30,000 respectively. But with the next campaigns in view, all other council members withheld support.
The effort, however, was not in vain, as candidates publicly adopted the limits or stayed relatively close, especially on the expenditure side. A positive norm of self-restraint ran through the 2007, 2009, and 2012 elections.
But in 2014, there were large fissures. Greg Scharff loaned his campaign $60,000, part of $97,000 in total expenditures, which was more than twice the previous record.
In 2016, candidate leanings across the contentious fault line of development could be generally classified as "Slow" or "Pro." At September's end, the Pros (Greg Tanaka, Liz Kniss, Adrian Fine and Don McDougal) led in contributions, topping out at $47,000. They were bolstered, in variation, by personal loan and cash infusions, carryover money from previous campaigns, family and friends, developers, and two $5,000 checks.
But their supporters remained antsy, and when the Chamber of Commerce attacked an unnamed slate of Slows as "anti-business," while also certifying the Pros by name, it initiated a fear-driven chain reaction. Five families of early contributors to two leading Slows responded with an eye-popping total of $61,100 for each of those campaigns (Arthur Keller and Lydia Kou). Supporters of the Pros cried "foul."
But the cash infusion had its downside. Other contributions disappeared, and the two campaigns abdicated the virtuous high ground of small donations and a broadly-financed campaign. In addition, all that money and more was paid to a San Francisco firm for consulting, design and targeted advertising, which strayed into negative campaigning.
Meanwhile the Pros wanted additional funds, knew a willing collective, and reasoned "who's to mind?" if the money was received under the radar or after Election Day. Developer dollars covered new spending, erased candidate debts, and, in one case, created a sizable surplus. But the required year-end disclosures revealed failures: to be forthright during the campaign and to be transparent in financial reporting.
Playing catchup, Pros' expenditures totaled about $85,000 for Tanaka and Fine, $72,000 for Kniss, and $50,000 for McDougal. The Slows' Keller landed at $111,000, a record breaker, and Kou at $90,000.
But Pros, rest assured, this is a game where you have the upper hand, although it delivers with other costs. Slows, you have made your point. Now let's all move on to finally fixing the system.
Most important, we need a limit on total campaign expenditures. By law, participation must be voluntary. Yet with incentives to opt in, such as notification to voters coupled with financial penalties and publication of violation, they can work. Mountain View has had one on the books since 2000. Indexed for inflation, the 2016 voluntary expenditure limit was $24,073.
Curiously, Palo Alto also has one on the books, passed in June 1997, but marked "suspended from enforcement" two years later after a court injunction halted campaign reforms in voter-approved state Proposition 208. The specific issue related to voluntary expenditure limits was resolved by Proposition 34 in 2000, but the city never re-enabled its own rule.
The second must-have is a mandatory limit on total contributions from a single source. Here mandatory limits are legal, and we need them. In 2016, contributions from a single source of over $500 accounted for a striking 75 percent or more of all contributions to two Slows and two Pros (Keller, Kou, Tanaka and McDougal). It was at 58 percent for Fine and 40 percent for Kniss.
In addition to cash, this mandatory limit on contributions must also apply to nonmonetary contributions. They reached well into five figures in 2016 via those who picked up the tab for kickoffs, lawn signs, surveys, literature distributions and design work.
What are the right numbers for Palo Alto expenditure and contribution caps? I leave that open pending more information and council and public discussion. But it is imperative we have an appropriate ordinance well before the next election season. If the council fails to act or its ordinance does not pass public muster, citizens will need to put one on the ballot that does.
There are other areas we also should look at, such as an additional pre-election filing to help reveal more late-stage contributions; restrictions on carrying over debts or a cash surplus to another campaign; and top contributor disclosures on mailings from unknown or out-of-the-area political action committees.
Juxtaposed to the deficiencies above, there are some special things we do in Palo Alto to increase transparency and participation in council elections. We lower the threshold for disclosure of contributor name, location, and occupation to $50 from the $100 in state law. In participation, we have absolutely no financial bar to entry as the city picks up close to $2,000 in county fees. Twenty-five signatures and $25, or 100 signatures and no fee, gets you on the ballot, a 200-word statement in the county's Voter Information Pamphlet, invitation to forum appearances, press coverage, and a big soap box.
Now we need to deliver on the long-overdue issue of contribution and expenditure limits to greatly lessen the potential for corrupting influence when a relative few bankroll election campaigns.
Fred Balin was treasurer of Stewart Carl for Palo Alto City Council 2016 and can be reached at [email protected]