Update: Since posting this article on our website, Santa Clara City Clerk Hosam Haggag has responded via a series of comments below. The Weekly has published a new article examining Haggag’s claims below that he reached out to the three people who filed the dark money complaint against Stand Up for Santa Clara. This new article includes comments in regard to Haggag’s claims.
Back in 2020, City Clerk Hosam Haggag asked residents with “information on political unreported activity in Santa Clara” to please call or email his office. But when three of them complained about unreported spending by Stand Up for Santa Clara — a Haggag supporter — the clerk had nothing to say and, apparently, he’s taking no action.
In September, Council Members Anthony Becker, Raj Chahal and Suds Jain filed complaints with the California Fair Political Practices Commission (FPPC), the IRS and Santa Clara city hall about Stand Up for Santa Clara. The complaints detail $8,000 in unreported spending for online political ads and mailers in the 2022 election and into 2023. In addition to cash, the group also received in-kind donations of web services, printing, postage permits and mailing, as well as donuts for quiz prizes.
The group has claimed to be an IRS 501(c)(3) educational nonprofit, but the IRS shows no records or tax returns. Nor has the group produced an IRS Determination Letter, which is required to claim 501(c)(3) status. (Community benefit organizations are, in any case, strictly prohibited from engaging in political activity and are subject to penalties for doing so.)
The Weekly asked City Clerk Haggag about what action he intended to take on these complaints, twice. His first response was that he would be following up with the city attorney.
“I personally just saw the complaint filed by Council Members Becker, Jain and Park the first time last night in my City email (as I don’t always check my City email daily,” he said. “I have not yet had an opportunity to confer with our City Attorney as Mr. Googins is OOO [Out Of Office], but I’ll be following up with his staff in his absence regarding the merits of the complaint and the City’s response to it.”
After three weeks with no response, The Weekly emailed Haggag again. This time receiving no response.
Against Dark Money Except When He’s For It
Dark money is money spent on political campaigns by organizations that don’t have to report their donors, thereby hiding the source of their money. Often these groups are private LLCs, which are not required to report their income or spending publicly.
Santa Clara’s dark money ordinance (Article X of the city charter) imposes disclosure requirements on “organizations that have historically refused to disclose contributions (‘dark money’).”
These groups are organizations covered by IRS regulations 501(c)(1) through 501 (c)(10), and include trade, religious, educational groups and organizations “operating for purposes other than making contributions or expenditures.” These groups don’t have to report their donors to the IRS if they receive less than $50,000 in donations.
Haggag’s attempts to end dark money in Santa Clara politics began in 2016, when a 501(c)(4) educational nonprofit, BLUPAC, launched a smear campaign against several city council candidates. Former City Clerk Rod Diridon lodged an FPPC complaint against BLUPAC for failing to report expenditures within 24 hours; resulting in a $3,500 fine.
When he became city clerk, Haggag stepped up his efforts — now with city letterhead and digital media.
In February 2020, Haggag accused the 49ers of violating the dark money ordinance and published an 800-word statement on the City’s website, saying:
“As the City’s election official, I recently discovered that San Francisco 49ers’ CEO Jed York and affiliated entities…potentially expended campaign funds, including a sponsored poll in December 2019 designed to influence and affect voters’ decisions to vote against Measure C, but did not report the formation of any political committee to the City until months later. The campaign filing only happened after I, in my official capacity as the elections official, sent these parties a warning letter on Friday, Jan. 31, 2020.”
Haggag also laid out the consequences for the alleged malefactors, which included “prosecution…civil action…recovery of treble damages…cost of litigation…disqualification of an elected official who benefited from the contribution from voting on a matter in which the contributor has a financial interest; and material breach of any contract the violating party may have with the City of Santa Clara or the Santa Clara Stadium Authority and be grounds for termination of said contract.”
He hosted a townhall on dark money in 2020, where he said, “Dark money is when the individuals or organizations that are contributing funds toward influencing a political outcome, do not disclose the origin of those funds.”
“If you want to participate in our local elections…our local campaigns,” he continued, “you have to disclose who you are.”
He also noted that reporting requirements apply to in-kind donations as well.
The current complaints aren’t the first time Haggag has turned a blind eye to dark money when it’s spent by political allies.
In spring of 2018, shortly before the City’s dark money ordinance passed and Haggag was elected as Santa Clara city clerk, he was a leading advocate for a campaign fueled by dark money. Yes on A* received $45,000 from a Texas dark money group, Action Now Initiative LLC, and another $45,000 from ranked choice advocacy group FairVote, which was both funder and advisor to the campaign.
Action Now’s managers are billionaires Laura and John Arnold, and the Laura and John Arnold Foundation are among the leading donors to FairVote. (Opponents of the measure raised $7,800.)
*Measure A was a losing 2018 ballot measure that would have created two at-large council districts in the City, with council members elected using a system called “ranked choice single transferrable vote.”