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Palo Alto City Council member Greg Tanaka, an avid advocate for digital currency, has received a $265,000 boost from a political action committee devoted to cryptocurrency in his bid to unseat Rep. Anna Eshoo in Congress.
DAO for America, a political action committee established to support candidates who advocate for cryptocurrency, made six contributions to Tanaka in May totaling $265,250. The organization’s website states that it is mobilizes voters “in support of candidates who understand the role digital assets can play in leveling the playing field and creating a more equitable society.”
These contributions from DAO for America are classified as independent expenditures and, as such, are not subject to the same limits as direct contributions to Tanaka’s campaign. According to filings with the Federal Election Commission, the committee used the funding for digital advertising, phone and text communication and direct mailings in support of Tanaka.
Tanaka is one of seven candidates looking to unseat Eshoo, who was first elected in 1992 and who enjoys a commanding lead in cash raised over the field, with about $1.48 million in direct contributions from individuals and political action committees, including those affiliated with tech giants Applied Materials, Varian Medical Systems and Lockheed Martin.
The top two vote-getters in the Tuesday primary will advance to the November ballot, regardless of political affiliation. The heavily Democratic district stretches along the coast from Pacifica to northern San Jose and encompasses large sections of San Mateo and Santa Clara counties, including Palo Alto, Mountain View, Woodside, Portola Valley and portions of Menlo Park and Atherton.
In addition to Eshoo and Tanaka, the field includes Democrats Ajwang Rading and Rishi Kumar, Republicans Peter Ohtaki, Benjamin Solomon and Richard Fox, and John Fredrich, an independent.
While Tanaka remains well behind Eshoo when it comes to campaign contributions, the independent expenditures from DAO for America represent more than twice the amount that his campaign has raised in direct contributions. According to federal filings, he has received $119,000 in contributions for his bid to replace Eshoo.
As such, the independent expenditures give him a financial edge over the other two Democrats who are vying to replace Eshoo in District 16. Kumar, who faced Eshoo in the general election two years ago, reported $294,440 in contributions for the current bid. Rading, an attorney who had served on staff of U.S. Sen. Cory Booker, raised $233,339. Both have received nearly all their funding from individual contributions. Rading has reported a total of $500 from committees while Kumar has not received contributions from any committees.
The three Democratic challengers have emphasized different issues during their campaigns. Kumar, a high-tech executive who serves on the Saratoga City Council, is a proponent of term limits in Congress who is not accepting any contributions from political action committees. Rading, who grew up homeless, emphasizes the need to build more affordable housing and switching to all renewable electricity by 2035.
Tanaka, meanwhile, has stood out for his fierce support for cryptocurrency. A tech entrepreneur, he was elected to the Palo Alto council in 2016 and has been a consistent advocate for business interests. He has opposed the city’s moves in recent years to cap office development and he is the only council member who is opposing Palo Alto’s current attempt to institute a business tax.
Earlier this year, Tanaka made a pitch for Palo Alto getting into the cryptocurrency business by establishing its own digital currency. People would be able to get credit for civic activities such as attending council meetings or volunteering. Tanaka said the new currency would protect the city against inflation.
“There’s a whole economy that can develop around these city-specific tokens,” Tanaka said at the council’s February retreat.
Although no one on the council endorsed this idea, Tanaka has continued to espouse his support for cryptocurrency. At an April discussion with Cityroots DAO, a platform for cryptocurrency discussions, Tanaka criticized current legislators and policymakers for their failure to understand the emerging technology.
Cryptocurrency, he argued, “represents financial freedom.”
“It represents sound money,” Tanaka said. “It is a way to allow the general public to truly have wealth.”
Read more primary election news, including information on local races and measures, in our voter guide.
Wasn’t Tanaka fined a few years ago for violating the law in accepting campaign contributions while running for city council?
And for citing people as endorsers who’d merely sent him an email and for planting his signs everywhere without permission.
Cryptocurrency is at best a speculative asset and many think, including myself, a scam. Whose interests is Tanaka representing here?
Pretty bold statement: “It represents sound money,” Tanaka said. “It is a way to allow the general public to truly have wealth.”
Is Tanaka really a Democrat? He sounds like a Libertarian to me.
More reasons to not vote for him. He is a muddled thinker who thinks out loud. In council meetings his comments are often tangential at best. He does not appear to have leadership skills nor be able to rally others effectively to his cause. No doubt he means well and seems kind but in my opinion he is far from the best option for this office. He has not been an effective council member so seeking higher office makes little sense to me.
Another politician being bribed. Don’t vote for politicians who take special interest money. We’re all being screwed – our democracy is being stolen from us.
Since I have watched many council meetings for a decade or more, I can honestly say that during Greg Tanaka’s council meetings to date we haven’t had what to me appears to be a more inarticulate and ineffective person elected to that office.
How Tanaka presents himself to the voters in his very effective media campaigns bears little resemblance to his conduct during council meetings. Because Tanaka knows that few people will actually follow up and watch his performance, or lack thereof, during council meetings.
When Tanaka does occasionally speak, for the most part this tends to be a rambling tangent that completely misses the big picture. When confronted with facts that don’t fit his arguments he tends to follow up by ignoring the new information as if stuck on his original thoughts like an endless loop.
Although since going on the campaign trail this time Tanaka has stepped up his participation somewhat, even when he has little to add.
Crypto is a scam and if the point is for them to be an alternative to gov’t money then why does DAO need to lobby government hopefuls? Crypto is so volatile right now, all the talk about being “stable” or protecting against inflation is just silly.
As for Tanaka’s participation during council meetings, I feel that I have heard him berating city staff for no good reason if they didn’t immediately have an answer to one of his tangential questions – it made me wonder if he was trying to create soundbites for his campaign but I haven’t seen him use any video from meetings yet so maybe he just really is upset that city staff can’t read his mind?
I tried to get any information about DAO for America and only found a company called, mSHIFT which now has an office in Palo Alto.
https://www.americancryptofed.org/team
Not much info on either the CEO or COO. a bit sketch…
Independent Expenditure mailer in his support that I received was from https://www.daoforamerica.com/
Here is DAO for America’s first filing:
https://docquery.fec.gov/pdf/135/202204059495942135/202204059495942135.pdf. Note that it has a local treasurer and address.
Here’s how much it’s raised and from whom: https://www.fec.gov/data/committee/C00811711/?tab=raising . Crypto supporters is a bit of a stretch. It has two funders, a $20k local backer, and a hard to trace corporate entity known as Shrike Holding for over $200K.
Here is the link to its required expenditure filings: https://www.fec.gov/data/committee/C00811711/?tab=filings
@HM Thanks. First link above, however, appears to invalid
@Fred
Hope this works: https://docquery.fec.gov/cgi-bin/forms/C00811711/1578221/
And, all filings: https://www.fec.gov/data/committee/C00811711/?tab=filings
Come on Greg, we all know the dirty little secret that the main purpose of crypto is that is is for money laundering, drug dealing, the dark web, and…….you.
@HM: I mean, the only people I know who DAO for America has supported are Greg Tanaka and Sydney Kamlager, both of whom have come out in support of crytocurrency and a DAO is a “decentralized autonomous organization” where you buy in with crypto – the more crypto you put in, the more of a sway your vote is.
A better title for this article would be “Anonymous Cryptocurrency Group Bankrolls Tanaka’s Campaign”.
Unbelievable.
This is why the local League of Women Voter’s campaign to limit individual donations for City Council elections is fatally flawed. We would lose control of our city to groups like Tanaka’s Shrike Holdings.
Based on these comments I’m guessing Tanaka’s vote count will be very, very small tomorrow, as it should be.
We are so lucky to have Gennady Sheyner writing about local politics. What a treasure he is –
We are lucky to have Gennady.
RE Tanaka – Below is an excerpt from an interview with him. He should never be elected again to anything. Frightening.
“Tanaka paints a utopian picture of a government run on smart contracts, and goes on to remark that with the law executed on the blockchain, the need for judges, juries, and lawyers would be a thing of the past. When asked what would be done for cases in which a human judgment was necessary to make a call, his answer was simple—it would be a job for the DAO.“
Several great articles in New York Times today. One on how bitcoin isn’t really that anonymous or decentralized and in fact was controlled by a very small number of people and one on the danger to the economy from the crypto bubble / Ponzi schemes. While crypto remains some kind of libertarian fantasy it is primarily used for fraud, extortion and illegal purchases.
Resident 1 writes:
“This is why the local League of Women Voter’s campaign to limit individual donations for City Council elections is fatally flawed. We would lose control of our city to groups like Tanaka’s Shrike Holdings.”
As per Citizens United, the Supreme Court’s 2010 decision, there are no controls over how much money outside groups like DAO for America can spend on elections or how much shadowy groups like Shrike, which has given DAO $275K this year to date, can contribute to such outside groups.
What governments can do is to require dislcosure of top contributors on ads paid for by these groups. As Kathy Miller explains, within her excellent posts in the comments section below Shyener’s recent article on the League’s proposals, is that California requires disclosure of those who contribute more then $50K and the League is proposing Palo Alto set a threshold of $2,500. https://www.paloaltoonline.com/news/2022/05/19/is-palo-alto-ready-for-campaign-finance-reform
@Fred: Shrike Holdings has donated more than $200,000 to Tanaka’s California-based campaign but we don’t know who they are. Can you clarify how that dovetails with the $50,000 disclosure limit?
Elections are not about qualifications. Or public service. They are about money. And perks. And grabbing a seat on the gravy train. We voters need to own our part in this. We acknowledge problems at every level of government and then turn around and re-elect incumbents who clearly aren’t getting done the job done. Name recognition is purchased and it works. Berman rode that horse into office. Tanaka is doing the same. He may not succeed this time around, but he’s likely to do much better than one might expect for a person with a lackluster City Council history.
God help us when cryptocurrency scammers start getting involved in funding politics. They should stick to their dodgy garbage and leave those of who live in the REAL world alone. Add criminal, pump and dump Elon Musk to that list. Every business he’s ever started was based upon profiting from ignorant and idealistic “save the world” zealot investors and feel-good useless government subsidies. He’s the “subsidy King” of the USA — totally shameless and ignorantly self-righteous.
With all that money pouring into his campaign you would think Tanaka could afford to teach his volunteers the correct legal placement of lawn signs.
@William Hitchens, And Peter Thiel of Palantir fame. “Inside the New Right, Where Peter Thiel Is Placing His Biggest Bets,” one of many profiles. https://www.vanityfair.com/news/2022/04/inside-the-new-right-where-peter-thiel-is-placing-his-biggest-bets?utm_source=nl&utm_brand=vf&utm_mailing=VF_Hive_042122&utm_medium=email&bxid=5be9eaa024c17c6adf09bb15&cndid=19734703&hasha=6c4d178fba68999471f847058ff07cec&hashb=460c408f6fc317a5bd21607f5f96b2b06f4227c8&hashc=d4e82c61e5f622b8fbb9b40b771cc94c84a36b9aebeeb5f07806238bb2d9d831&esrc=AUTO_MERGE&mbid=mbid%3DCRMVYF012019&source=EDT_VYF_NEWSLETTER_0_HIVE_ZZ&utm_campaign=VF_Hive_042122&utm_term=VYF_Hive
@Resident11 The $50K disclosure threshold for contributors to an outside group on printed campaign-related communications is California State law. Rules for Congressional races are set at the federal level, where I believe there is no threshold for disclosure. LWV is proposing it be $2.5K here for our local races.
@Pat Markevitch: Right, but remember the DAO for America money is outside of his campaign so he cannot direct them how to use it. He has to use his own campaign money to direct his (likely high school) volunteers how to distribute campaign signs.
Fairy tales can be mighty instructive. When I read about crypto currency I am reminded of Hans Christen Andersen’s tale of The Emperor’s New Clothes.
And here’s today’s article from Pulitzer Prize-winning columnist Paul Krugman (New York Times and today’s San Jose Mercury News) entitled “The state of crypto: From the Big Short to the Big Scam”
https://www.mercurynews.com/2022/06/08/krugman-from-the-big-short-to-the-big-scam/
@Online Name – thanks for that article. In the June 3 – 9 SVBJ there is an article about crypto funds setting records. Leading example: Andreessen-Horowitz recently announced raising $4.5B for a new fund focused on cryptocurrency. Both sides cannot be right. I tend to think Krugman has delivered a worthy warning.
Paly 02, I’m aware of how money is to be used in campaigns. It was meant as a sarcastic comment.
@Fred thank you for your patient replies. So you would agree that we shouldn’t do one (limit resident donations) without the other (limit outside/anonymous donations)? If we do the former and not the latter then we effectively cede control of our city, no? (And yes it’s concerning that we seem to be doing this at the federal level.)
City Council is a volunteer position, essentially. While I personally think it should be a paid position so that people who aren’t independently wealthy can serve, too, I also know how much time and flak-taking it involves. Tanaka has taken some principled, informed, non-ideological positions on many local matters, and does not deserve this pile on for the time he has devoted to our community, whether you or I agree with him or not. All politics is local, and few of our local issues fall into easy ruts (no matter how hard some people try to make them).
I disagree with the opinion of the above comment by Citizen. Tanaka is all about money. He was asked by a neighbor why he is running in the primary for Congress. He did not give an answer. This excellent article by Sheyner demonstrates how clueless this council member is about the big picture. He did not attend the vigil for Ukraine held on March 1st in his neighborhood. Perhaps he had a good reason for not attending but I doubt it. He is crying that we in SV are becoming Detroit. He supports the interests of developers and not residents. I do not see him respecting the rule of law when it comes to campaign code or professional etiquette required as demonstrated in the interview held by Bill Johnson. Check out this video from an earlier campaign as his rude will enlighten you. Candidate Tanaka refused to answer simple yes or no questions. In essence I see a self-centured and immature ado who wants to be rich. Last but not least isn’t pressuring the city of Palo Alto to adopt crypto a conflict of interest?
Didn’t he finish 5th? After the two other republicans? Maybe another proof that crypto investments are not a sure bet?
“He did not attend the vigil for Ukraine held on March 1st in his neighborhood.”
@ALB
These criticisms sounds like a mean girl diatribe not a discussion of someone’s work on behalf of our community. Politicians are people which means imperfect. Imperfect means there will always be something to criticize. If we as citizens do not pay attention to what matters and put things into context rather than being distracted by inevitable criticisms or even mistakes, well, we get leaders we deserve. Or who lie better than they lead or work on our behalf.
I haven’t followed local politics lately, so I cannot judge Tanaka myself. All I know is that this discussion has not enlightened things in that regard.
Neighborhood vigils and even protest do very little if power shifts significantly in Congress in November midterm elections nationally, given how GOP leaders haven’t convincingly (or at all) repudiated prior obsequiousness to Ptin. Given the unusually low turnout in the primaries, I would think anyone who actually cares about Ukraine (or effective national governance in a fraught time) would be working on new more effective strategies for turnout in November, including helping Democratic voters understand that being human, i.e. imperfect, isn’t the same as impossibly bad/inept. High Democratic turnout and energy in primaries this spring could have signaled to Ptin that Ukraines’ allies in Congress and the US retaining its role globally would remain past November.
All the talk, protest, and local action on climate change will mean very little if the party of climate deniers take over Congress in November. Given the turnout profile, and how everyone seems to be falling into old habits re working on turnout, there is opportunity to change things. But not if we give too much caché to mean girl/gossip-style politics and decision-making. What is the big picture on what a politician has done?
I’ve been following Greg Tanaka’s track record, or lack thereof, since he was elected to council. The big picture appears to be someone rather narrowly focused on the city budget and, of course, advocating for using tech to solve city problems. Whose contributions to most councils discussions (at least until until very recently) have been quite limited and mostly ineffective in as far as advocating his positions in an effective way that has an impact on the outcome. Not helped by a tendency to repeat himself, although this has also more recently improved somewhat.
However, Greg Tanaka does hold regular office hours and has an impressive staff of interns the public has to go through to make his appointments. During one to one discussions he has a reputation for finding out what issues are of particular interest to his constituents and being a sympathetic listener. Perhaps there is more behind the scenes outreach and follow up not obvious during council meetings. His marketing, especially on social media, is targeted and effective, no doubt informed by his long term subscription to monthly Google analytics information.