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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.

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PACs and Candidates

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

MEPS sent a mailer in early October attacking District 1 candidate Harbir Bhatia. The mailer arrived in mailboxes around Oct. 10, the 24-hour expenditure report (Form 496) within 24 hours of incurring the expense, as required.

Why this matters: Late reporting leaves people in the dark about who’s spending money in elections.

MEPS’ main business appears to be CEQA “greenmail” complaints; one of which was lodged against the Agrihood project and evaporated as soon as the developer signed a union agreement.

Representatives of MEPS met with Mayor Lisa Gillmor in September, according to a calendar entry, and appeared before the Council attesting to “labor problems” at Levi’s Stadium, without evidence or even specific description.

In 2017, MEPS’ former director Josue Garcia 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.

Gillmor’s longtime ally the developer-financed Santa Clara Police Association PAC — until this year the all-time big spender in City politics — has generally steered clear of outright FPPC violations.

But it became less transparent this year by not filing a quarterly financial summary and no longer includes its FPPC ID number on its mass mailers. However, the FPPC strongly recommends transparency over less, and such was the common practice in Santa Clara until this year.

However, 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 the money for the polls came from. As the police PAC gets the money it spends on political campaigns from developers, just stating that the police union PAC sponsored it is misleading.

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.

Corrections: In the original version of this story we were incorrect on several points.

First, we were wrong 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.

An earlier version of this story alleged violations about FPPC reporting by a PAC sending a mailer that attacked candidate Harbir Bhatia. The name on the mailer is “Silicon Valley MEPS PAC Sponsored By Mechanical, Electrical And Plumbing Organizations.”

That’s the entity that sent the mailer and has FPPC ID #1390715. A search on this name returns no hits in the County campaign filings database, but does in the state Cal-Access database. Searching on ID #1390715 retrieves records for the PAC. This PAC filed the 24-hour expenditure reports in Santa Clara.

The entity that reported spending the money is the “Silicon Valley MEPS Issues PAC, Sponsored by Mechanical, Electrical, Plumbing and Sprinkler Fitting Organizations.” This entity’s FPPC ID number is 1385998.

We also incorrectly named Josue Garcia as the current director of MEPS. A representative of MEPS says that Garcia hasn’t worked for the PAC in recent months. MEPS doesn’t appear to have a website and didn’t return our call on Oct. 12 for clarification of this and other points.

Garcia identifies himself as MEPS’ Director on the SPURS.org website.

We apologize for the mistakes.

 

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.

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5 Comments
  1. Jasbir Bhatia 1 month ago
    Reply

    Repeated use of the phrase by the Current council Members ”buying the majority in the council” Is a clear case of defamation and a malicious campaign against these candidates. The council members fully well know the truth that the four new candidates are independent and are not influenced by the 49ers. These candidates have repeatedly declared their independence In public forums. Despite all this information the council members continue their false propaganda to malign them.

  2. Bob O'Keefe 1 month ago
    Reply

    My response to Ms. Schuk’s false and misleading accusation in above article:

    …”Next up, candidate for District 5 Robert O’Keefe didn’t report a donation from the Firefighters union PAC on his Sept. 24 financial report.

    Why this matters: This donation would be hidden from voters except that the Firefighters PAC reported it on their September report.”…

    The reason why I did not report a donation to my campaign from our Firefighters on my Sept 24th, FPPC financial statement is due to the fact that one was not received during this reporting period. Records filed with the FPPC show that the fire union sent a donation to me on 8/30/2020 and that check was returned to them uncashed by the post office, I am not sure of the exact reason. FPPC records filed by the fire union on 10/22/2020 clearly and accurately document this, these records also show that the fire union reissued a new donation check to me which I received on 10/19/2020. This donation is required to be documented on my FPPC filing for the time period of 10/18/through 10/23/2020 which is due to be filed on 10/27/2020.

    To answer Ms. Schuk’s question, why this matters: Ms. Schuk never reached out to me in preparation of her reporting, I would have gladly explained the situation to her and directed her to the public records already filed with the FPPC which clearly documented the facts, instead Ms. Schuk irresponsibly and recklessly published these accusations against me, in fact her reporting accuses me of a crime, intentionally hiding campaign donations in an attempt to deceive is a felony, I strongly take offense to that! I usually do not engage when some one slanders me, I have thick skin and a great reputation in the community, I chalk it up to the old saying “Haters are going to Hate” and just move on. After reading this whole article I could not remain silent, Ms. Schuk was wrong about me and I highly expect that she is wrong about the other instances she has documented in her story.

    Bob O’Keefe

  3. Davy L. 1 month ago
    Reply

    The San Jose Mercury News made the following independent recommendations:
    District 1: Harbir Bhatia
    District 4: Kevin Park
    District 5: Suds Jain
    District 6: Anthony Becker

  4. Hosam Haggag - Santa Clara City Clerk 1 month ago
    Reply

    As the elected City Clerk and the Chief Elections Officer, I was not reached out for comment on any of these. So I’ll respond to the ones I can below:

    1. Any member of the public has the ability to report a violation to the FPPC directly. In fact, any referral to me would simply be passed on to the FPPC by me or my office. The FPPC has the full enforcement and investigatory authority to assess and issue any violations of campaign law. As the local elections office, we can assist in filing these violations but are by no means a roadblock or “approver” of any report by the public. Everybody is empowered to report violations, and they should.
    2. In fact, as a resident I don’t get all the mailers that are sent out to all other residents. Campaigns are not obligated to provide the City or Elections Officer a copy of every piece of literature they produce and distribute as part of their campaigns. So when a campaign violates reporting requirements on a flyer I have no way of knowing it unless someone informs me.
    3. The violation you allege by the Santa Clara Police Association PAC was referred by our office to the FPPC and they confirmed that there was no violation based on the PAC’s activity in that reporting period. Your statements are factually incorrect, and while we did take an active inquiry into the FPPC for this they confirmed there was no violation.
    4. The Firefighters Local 1171 PAC reported a cancelled check on their 2nd pre-election filing campaign committee 460 report. Your allegation against Candidate Robert O’Keefe is factually incorrect.
    5. The FPPC issued a ruling rejecting complaint COM-10062020-02324 and found that the City did not violate the FPPC’s Act of mass mailing political material at the public’s expense. Your statement is factually incorrect.
    6. This is the first election where council candidates are running since I became elected City Clerk in 2018. Simply put, I did not publish charts in 2016 and 2018 because I was not City Clerk at the time. One of my campaign promises was to help educate residents and increase transparency at City Hall. Compiling this campaign financial information in easy-to-digest charts helps serve this purpose. I have been told by many residents that “following the money” using Netfile is difficult and “requires a PhD” to understand. The charts are purely factual and do not show any information beyond what is already in the publicly disclosed campaign filings. I can only hope that other jurisdictions follow my lead in publishing similar reports for their constituents to help educate voters about where and to whom money is being spent.

    Feel free to reach out to me at clerk@santaclaraca.gov or 408-615-2220 if anybody has any more questions.
    If you believe there is a campaign violation and would like to report it, please email elections@santaclaraca.gov or call 408-615-2220. To file a violation directly with the FPPC please visit: http://www.fppc.ca.gov/enforcement/electronic-complaint-system.html

    Thank you,
    Hosam Haggag
    Santa Clara City Clerk and Chief Elections Officer

  5. Tom E. 1 month ago
    Reply

    Ms. Schuk,

    I look forward to your coverage of the fact that Mr. Becker is using THE CITY SEAL in his NextDoor profile. A flagrant violation of campaign law and ethics. He should know better, being his third campaign and all. Maybe he’ll figure it out in whatever district he moves to for the ’20 election.

    If you need help finding his posts, look during the hours of the Planning Commission meeting, when he was posting on NextDoor incessantly. Political postings and campaign promises during a city meeting? Another ethical violation.

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