California politicians visiting Chicago for the Democratic National Committee blew off steam Tuesday night in lavish style: They dined on wagyu beef sliders and sushi and sipped champagne under the green-tinted lights of the Tao nightclub in the River North neighborhood.
California Lt. Governor Eleni Kounalakis and former Chicago Mayor Lori Lighftoot danced with gusto to a performance by the Killers, who played hits like “Mr. Brightside” and “Somebody Told Me.” Minutes before introducing the band, San Francisco Mayor London Breed spoke to the crowd of Democrats, touting her city’s comeback.
“Tonight is a time to talk about everything that San Francisco represents … because, you know, Republicans are trying to turn San Francisco into a bad word,” Breed said.
It was a shining moment for a beleaguered mayor during the highest-profile Democratic gathering of the year. And all of it — the stage from which Breed spoke, the food, the booze, the band — was paid for by billionaire Ripple Labs co-founder Chris Larsen. Now that’s providing the fodder for the latest in a seemingly endless series of ethics accusations in the mayoral race.
Because Larsen is one of Breed’s biggest financial backers, the party may have violated ethics rules, alleges Mark Farrell, the former mayor and supervisor who is running to unseat Breed in November. Larsen showered $400,000 on a committee backing Breed’s reelection bid, “Forward Action SF, Supporting London Breed for Mayor 2024.” Independent campaign committees can raise such large sums of money because they are purportedly independent of the candidates themselves. Candidate committees, by contrast, can raise money only in $500 increments.
Independent committees are barred by law from talking strategy with the candidate. Larsen and Breed chatted at length during Tuesday’s party, though the topic of conversation is not known.
“It should raise eyebrows that Mayor Breed attended a lavish party hosted by and spent hours in a VIP only room talking all night with Chris Larsen, who is the largest contributor to her independent expenditure committee,” Farrell campaign manager Jade Tu said in a statement. “How do voters know and trust that they didn’t talk about her campaign or strategy at all?”
Larsen’s spokesperson declined to comment. Breed’s camp denied the accusation.
“Instead of promoting our city as a wonderful place, Mark Farrell’s entire campaign is centered on his Doom Loop talking points tearing down San Francisco for his own benefit,” Breed campaign spokesperson Joe Arellano said in a statement.
Larsen has spent more than $3.6 million on Democratic causes in San Francisco over the last decade, and $750,000 to support two of Breed’s ballot measures in March.
Paul Melbostad, a former chair of the San Francisco Ethics Commission, said the Chicago party didn’t cross the line. The law specifically makes an exception for appearances — potentially like Breed’s attendance at Larsen’s party — provided there is no discussion about campaign expenditures.
“It was hard to believe there was no discussion between him and London Breed or an agent of her campaign about the benefit of attending this event,” Melbostad said. Still, despite any suspicions, there’s no evidence such a discussion took place.
Sean McMorris of Common Cause, a nonpartisan organization working for government accountability, agreed with Melbostad’s assessment.
But he said federal campaign finance laws allow many actions that could be regarded as suspicious, as a result of the U.S. Supreme Court’s 2010 Citizens United decision, which opened the floodgates for corporations to spend unlimited amounts of money to support candidates.
The law against coordination is broken only in the case of explicit discussions about campaign spending between an independent committee and a candidate or their agent; McMorris said this is a nearly impossible burden of proof.
“Really, coordination is only proved if you have a whistleblower,” McMorris said. “A quid pro quo doesn’t typically happen with a handshake and an explicit ask; it happens with a wink and a nod more often. It happens more subtly. People who are engaged daily in influence peddling, they know the game.”
Accusations of questionable ethics have permeated the San Francisco mayor’s race. Farrell allegedly illegally used $24,000 from a ballot measure committee toward his campaign. Such accusations go back as far as Farrell’s 2010 supervisor campaign, when an opponent, Janet Reilly, accused his campaign of illegally coordinating with another group to send out hit pieces against her. Farrell initially faced a $191,000 fine but was cleared in the matter; his campaign manager took the heat instead.
Larsen also has had his own run-ins with the rules. Ripple Labs was reportedly ordered to pay $125 million in penalties to the U.S. Securities and Exchange Commission this month over improper sales of cryptocurrency. The SEC later dismissed the claims.
Another candidate for San Francisco mayor, Board of Supervisors President Aaron Peskin, blasted Breed for appearing onstage at a Larsen-funded event and for not owning up to her role in creating San Francisco’s “doom loop” narrative.
“At the DNC, Breed said that ‘Republicans are trying to turn San Francisco into a bad word.’ She should look in the mirror and remember that she already did Republicans’ work for them. It was Breed who talked about ‘all the bullshit that has destroyed our city.’ It was Breed who talked about the ‘reign of criminals’ and said ‘Downtown is never coming back,’” Peskin said in a statement.
He added, “Our own mayor turned her back on our city and trash-talked it until her job was on the line. And now she is partying with crypto-billionaires who have been investigated for fraud, pretending it never happened.”