How close is too close in the famously incestuous world of San Francisco politics?
One political operative is testing those boundaries.
Jay Cheng, the executive director of the moderate political action committee Neighbors for a Better San Francisco, apparently spent time earlier this year moonlighting as a recruiter for the mayoral campaign of Mark Farrell.
Text messages shared with The Standard—first reported in a San Francisco Chronicle story on moderate political influence in the city—show that Cheng attempted to facilitate the hiring of a Farrell campaign staffer for a tidy $15,000 a month salary about two weeks after Farrell declared his candidacy.
“The offer is open!” Cheng wrote. “We’ll hold the position for you as long as you need.”
The job never materialized, but the exchange is raising questions about the propriety of such an “offer” and how it squares with laws that bar cooperation between PACs and candidate campaigns. The answers could very well depend on what Cheng meant by the word “we”—was he speaking for Farrell’s campaign or simply for his PAC?
Neighbors does not appear to have spent any funds on the November mayor’s race, but having insider information and access to the Farrell campaign could end up barring the political heavyweight from taking part in one of the most consequential San Francisco mayoral races in years.
Since the beginning of 2022, Neighbors has spent by far the most money of any group on local elections, totaling almost $9 million on everything from the recall of three school board members and former District Attorney Chesa Boudin to supporting and opposing ballot measures.
The group dropped almost $1 million on the March primary and has been funneling hundreds of thousands of dollars into efforts to reform the City Charter with TogetherSF Action, a fellow moderate group led by Cheng’s wife, Kanishka Cheng.
Neighbors and TogetherSF Action have not taken a formal position on the November mayor’s race, but Jay Cheng’s close proximity to the Farrell campaign has left some political observers wondering if the clique might be getting too cozy.
TogetherSF Action has received substantial funding from Michael Moritz, who is also chairman of The Standard.
Farrell’s campaign staff has numerous links to the staff of TogetherSF Action’s nonprofit arm. Kanishka Cheng is a former staffer for Farrell, while his campaign manager, Jade Tu, used to work as chief of staff for the nonprofit. Margaux Kelly, the nonprofit’s chief community officer, took a leave of absence to work on the campaign. Jess Montejano, a former Farrell staffer, serves as campaign spokesperson while his firm, Riff City Strategies, continues to handle communications for TogetherSF Action.
Sean McMorris, an ethics expert at the government transparency nonprofit California Common Cause, said there are many instances in which campaigns and independent committees will engage in “wink and nod coordination” with one another that doesn’t explicitly break ethics rules.
“More often than not, committees know the rules,” McMorris said. “But the seasoned campaign advisors also know the inside game that can be played to circumvent coordination laws.”
Jason McDaniel, a political science professor at San Francisco State University, said that a clear separation between a candidate campaign and a political action committee is important so candidates do not become “an appendage” of corporate, union or nonprofit interests.
“They can talk about issues,” McDaniel said about the separate campaigns. “They can talk about candidates. But it isn’t supposed to be coordinated.”
Jay Cheng said in a text message that he did not provide any services of value to the Farrell campaign and his effort to hire an employee was “not a reportable contribution.”
“Neighbors for a Better San Francisco has not made any decision yet about our involvement in the mayor’s race, and has not made any endorsements in the mayor’s race,” Cheng said.
He compared his effort on behalf of Farrell to previous help he provided in connecting mayoral candidate Daniel Lurie—a nonprofit founder and heir to the Levi’s fortune—to his eventual political consultant, Tyler Law.
However, it should be noted that Cheng’s middleman work in that instance occurred before Lurie had announced he was running for mayor. By the time Cheng was acting as an intermediary for Farrell, the candidate had already raised hundreds of thousands of dollars.
Lurie’s campaign learned of Neighbors’ close relationship with the Farrell campaign after it hired the person Cheng was recruiting, and officials suggested that Farrell’s coordination with Neighbors “crossed a bright red ethical line.”
“We desperately need to turn the page on the City Hall insiders that have allowed a culture of corruption to fester,” Law told The Standard.
Farrell issued a statement saying he was working to gain the support of Neighbors, TogetherSF Action and other moderate-aligned groups “by highlighting our vision and detailed policies to get San Francisco back on track.”
He added, “No one from any of these organizations is working with our campaign, and we will continue to meet with them and answer their questions in an effort to earn their support.”
Neighbors’ clout in San Francisco politics should not be underestimated. The group’s aggressive campaigning on the 2022 recall elections made it an immediate threat to anyone who opposes its political platform.
Mayor London Breed’s campaign declined to comment on Cheng’s assistance to the Farrell campaign.
Supervisor Aaron Peskin, who has attempted to brandish himself as the leading progressive voice in the mayor’s race, said in a text message that he was not concerned with the “shenanigans” of local political groups.
‘I’m focused on fixing our city’s problems and hearing from voters and neighbors on what their priorities are,” Peskin said.
Voters with long memories may recall that a previous Farrell campaign was accused of similar ethical shortcomings.
In 2016, the former supervisor agreed to pay a $25,000 settlement after one of his campaign consultants, Chris Lee, was found to have illegally coordinated with an independent expenditure committee. Farrell was initially hit with a fine of $191,000, but the penalty was significantly reduced.
The state’s Fair Political Practices Commission cleared Farrell of any wrongdoing, saying he was unaware of the illegal coordination, and the Ethics Commission agreed to the lower settlement in a 3-2 vote.