Yes on A’s Dark Money—and Its Convenient Exclusion From Santa Clara’s Dark Money Ban
If it weren’t for a very convenient loophole in Santa Clara’s new “dark money” prohibition, Better Elections for Santa Clara: Yes on A would be violating City campaign reporting law.
Of the political committee’s $92,000 war chest, $45,000 comes directly from a dark money entity, Action Now Initiative LLC.
The LLC is a non-profit corporation registered in Texas whose top officers are John and Laura Arnold, (according to its registration) whose 501(c)(3) the Laura and John Arnold Foundation and 501(c)(4) fund Maryland-based FairVote.
The Arnold Foundation gave FairVote over $2 million in 2017, according to the Foundation’s tax return. FairVote, in turn, donated $40,000 in cash, staff, services and bill paying to Yes on A.
The Arnolds also run the Action Now Initiative 501(c)(4), which shares offices and directors with the Arnold Foundation and is funded at least in part by donations from the Foundation (shown in the Foundation’s tax returns). In 2016 the Action Now Initiative LLC gave $60,000 to the FairVote Action Fund 501(c)(4) as well as $300,000 to FairVote Minnesota.
LLCs are an increasingly popular dodge for hiding the source of donations because, as private businesses, their tax returns aren’t public—although 501(c)(4)s and certain kinds of 501(c)(3)s can be used to obscure the source of money used to influence policy and elections.
Santa Clara’s dark money prohibition ordinance passed on April 24 and became effective at the end of May. Action Now Initiative LLC’s $45,000 donation to Yes on A was received on April 23.
The law is clear:
“All contributions of One Hundred Dollars ($100) or more to any organization …that makes expenditures that affect or are intended to affect a local Santa Clara election to City office or for or against a local Santa Clara ballot measure shall be reported in the same manner as campaign contributions…”
But conveniently for Yes on A’s ability to bank $45,000 from an opaque LLC: “The changes provided for in this ordinance shall not affect any offense or act committed … before the effective date of this ordinance.”
Related Consultant Jude Barry’s New Side Hustle Launches with 11th Hour Measure A Survey
The Santa Clara Police Officers Association has jumped into the Measure A fight with services from Related Companies’ consultant Jude Barry’s new sideline business (his 4th): the new robo-polling company, Voxloca.** The poll was an independent expenditure by the POA. However, the POA has not reported any expenditures, although the FPPC requires independent expenditures to be reported within 24 hours**
Alert readers report that Voxloca was on the job this week with a text-only push-poll on Measure A that identifies itself as being from either the president of the Santa Clara police union, Alex Torke. The Santa Clara Police Officers Association commissioned the robo-text poll about Measure A that circulated last week, as well as one about the 49ers, Mayor Lisa Gillmor and Council Member Patricia Mahan according to Voxloca’s CTO Ryan Buckley. Buckley declined to state who the company worked with or how he made the connection with the POA. Voxloca’s parent companyToofr—also run by Buckley—sells email marketing services, so maybe he used his list creation service to cold-email the POA.
The poll featured questions like “Are you aware that most Measure A OPPONENTS are not from Santa Clara?” and “Now that you know more will you support or oppose Measure A?”
We hear Barry’s been talking up the new startup at City Hall. But that’s not the only reason we know about it. One giveaway is his new email signature: firstname.lastname@example.org.
Another is this blog post by Voxloca CTO Ryan Buckley:
Voxloca got its first customer recently, a large city in the SF Bay Area running a survey for $3,000. This is my collaboration with a political consultant I got to know from my time interning for (then) Lieutenant Governor John Garamendi. My partner knows the market, knows the customers, and needed a product person to build an SMS-based survey tool.
Barry worked for Garamendi.
If you’re wondering what the police union has to do with this, recall that in 2016 the union PAC operated a money conduit to funnel $85,000 in developer money into independent expenditures for Mayor Gillmor’s slate of candidates.
We suggest that Voxloca refine its poll with another question: “Now that you know Yes on A is taking $45,000 in dark money from Texas will you support or oppose Measure A?”
** Update 6/4/2018 10 a.m.
The Yes on A committee didn’t have anything to do with last week’s rob-text poll, according to Rob Jerdonek, Campaign Committee Chair, ‘Better Elections for Santa Clara: Yes on Measure A. “I am absolutely certain that our campaign committee has no relationship with Jude Barry and has not contracted with Voxloca for any services, nor were we aware of this push poll that was purportedly paid for by us,” he said. Yes on A’ finance reports show no payments to Voxloca nor any donation of its services. The article has been changed to reflect this correction.
The Weekly has asked the POA and Voxloca for comment.
Correction: The previous version of this article said, “The Arnolds also run the Action Now Initiative LLC 501(c)(4)…” It has been edited to read, “The Arnolds also run the Action Now Initiative 501(c)(4)…”