The cost of running for elected office has skyrocketed in the years since the Supreme Court essentially ruled that political spending and free speech are synonymous with the Citizens United decision.
But here in San Francisco, it’s not just the investor class, labor unions and other special interests that have been picking up the tab. City records show that taxpayers in San Francisco have increasingly been bankrolling the political aspirations of a growing number of candidates in recent years.
San Francisco has spent more than $12.1 million over the last decade to bankroll the campaigns of candidates running for mayor and the Board of Supervisors, according to records held by the San Francisco Ethics Commission.
The goal of San Francisco’s public financing program, which was voted in and launched in 2002, is to level the playing field for candidates without big money connections. Ostensibly, candidates could then focus on running issue-driven campaigns and not be beholden to contributors and special interests. In its first year, the system provided just over $40,000 to supervisor candidates who met a threshold for supporters and money raised or spent.
Since that time the costs have ballooned to a level few would have expected.
The city spent $1.2 million on public matching funds in 2012 and $1.5 million in 2016. In 2018, that amount blew up to nearly $4.2 million, and the city spent more than $3.4 million to prop up individuals’ political campaigns in the 2020 election cycle. So far, the city has spent $950,000 this election cycle.
Ann Ravel, the former chair of the Federal Election Commission and the state’s Fair Political Practices Commission, said that San Francisco’s system deserves credit for encouraging nontraditional candidates to run for office while helping them remain independent of special interests.
But she added, “I’m just kind of stunned at the dollar amounts.”
No one has benefited from this system more often over the last decade than Joel Engardio, a journalist and founder of Stop Crime SF. He is currently campaigning for a seat on the Board of Supervisors for the fourth time in a decade, having lost his previous three races.
Taxpayers have funded Engardio’s dogged political aspirations to the tune of nearly $665,000 over a 10-year period.
“If you see my vote totals, each time I ran, I won more votes,” Engardio told The Standard. “I’m just gaining more support.”
This time, he’s squaring off against incumbent Gordon Mar in the District 4 supervisor race—after the spring redistricting process saw Engardio’s home moved from District 7, where he lost a 2020 election to Supervisor Myrna Melgar. Engardio has taken in $255,000 in taxpayer money for the race while Mar has also used the match-funding method for this election campaign, so far taking in nearly $196,000.
“If corporations are funneling a million dollars into a PAC to elect a supervisor, they expect a return on that investment,” Mar said. “If everyday people, through public financing, are able to fund campaigns to elect grassroots candidates, they expect returns on those investments, too.”
Engardio, to his credit, had more first-place votes than Melgar in 2020 but lost in the ranked-choice vote. Others, however, have utilized the public campaign matching system to far greater success.
The Top 10
Mayor London Breed has been the biggest benefactor of public matching funds in recent years, hauling in more than $1.1 million of taxpayer money to fund her races—almost all of which went toward her 2019 mayoral campaign.
Her challengers in that race, Mark Leno ($975,000) and Jane Kim ($708,000), placed second and third, respectively, when it comes to receiving public campaign financing over the last decade. Engardio came in fourth and Supervisor Dean Preston came in fifth with more than $550,000.
Attempts to interview Breed, Leno and Kim about their use of the public campaign financing system were unsuccessful.
Changes to the system have been made over the years, but the process for matching funding essentially works as follows: Incumbent candidates must raise $15,000 from at least 150 individuals to qualify, while challengers need to raise $10,000 from at least 100 individuals. If a person donates $150 to a candidate, the city will then match that amount up to six times, meaning a candidate could receive $900 from the city plus the original $150, totaling $1,050.
Basically, the rules give small donors a bigger bang for their buck if a candidate qualifies for matching funds. The cap in matching funds is $255,000 for challengers and $250,000 for incumbents.
While it's rare in the Bay Area, San Francisco isn’t the only city to match campaign money for political candidates. New York and Los Angeles also offer qualifying candidates city funds to help run their races, and Seattle has a Democracy Voucher Program in which voters are given the ability to distribute city funds to their preferred candidates. The program costs Seattle residents $3 million per year, or around $8 per homeowner from property taxes, according to Seattle’s voucher program website.
“I think, generally, the idea of public financing is a good one, especially what they’ve done in Seattle,” Ravel said.
Bevan Dufty, a BART director who initially sought matching funds for his successful supervisor race in 2002 before opting not to take public money, said that the city’s program is crucial to reducing the role of special interests.
“The unrestricted flow of money in American politics has reached obscene levels,” Dufty said, adding that the total cost of the program should be seen in the context of a longer period of time. “When you spread it out, to me, it’s reasonable and worthwhile to enable candidates to run for races.”
Outside Money
Just how much the city’s matching of campaign funds reduces the role of outside special interests is debatable. Supervisor candidates who receive matching funds are restricted from spending more than $350,000 total on their campaigns, but they can exceed that amount if the Ethics Commission decides that outside spending is reaching a level that could impact the race.
In 2016, this very scenario played out in unprecedented fashion.
The individual expenditure ceiling (IEC) for the District 1 supervisor race was raised to more than $1 million after the Robert F. Kennedy Democratic Club plunked down a half-million dollars to support Marjan Philhour’s District 1 run. She ended up losing to Sandra Lee Fewer.
“The spirit of our campaign public financing program is well-intentioned, as it ostensibly levels the playing field and makes space for candidates outside the political machine to participate in political discourse with the same size megaphone as more prolific fundraisers,” Philhour said.
In 2016, Neighbors for a Better San Francisco and an aligned committee called SF Workforce Housing Alliance PAC 2020 spent roughly $600,000 in the 2020 supervisor races. The biggest chunks thrown down included $120,000 to oppose Supervisor Connie Chan and nearly $186,000 to defeat Supervisor Dean Preston. Smaller increments went to supporting other candidates, such as Supervisor Ahsha Safai ($4,000) and Philhour ($29,441).
Meanwhile, San Francisco Tenants and Families for Affordable Housing, a group sponsored by community and labor organizations, dropped large chunks of its own in support and opposition of candidates: almost $31,000 to support Chan; nearly $15,000 to support Philhour; $10,000 to oppose Preston’s opponent Vallie Brown in District 5; and $10,000 to oppose Engardio in his District 7 race while also supporting Vilaska Nguyen with $16,000 in spending.
Committee spending on supervisor races this year has been relatively calm to date, with the San Francisco Labor Council tossing in $22,000 to support Supervisor Mar while a moderate-leaning PAC sponsored by Grow SF has reported spending $50,000 this year to oppose Mar’s re-election.
While this spending has been tracked in campaign forms, the city is lagging in its duty to audit all campaigns that receive taxpayer money. The backlog presents serious issues, as candidates have to meet paperwork requirements but there are few requirements when it comes to running an organized and ethical campaign.
“One potential risk of the program is that a spoiler candidate, or a candidate who might not otherwise be able to translate their vision into campaign resources, can run what seems like a viable and well-funded but unsuccessful campaign,” Philhour said. “This can result in tens of thousands of taxpayer dollars going towards campaign services and bookkeeping instead of enriching the political discourse.”
Audit Backlog
Every campaign that receives public matching funds is required to be audited by the San Francisco Ethics Commission. A spokesperson for the agency told The Standard in an email that audits have commenced for only two of the 14 candidates who received matched funds in 2020’s election.
Supervisor Aaron Peskin, who has received nearly $359,000 in public campaign funds over the last decade, putting him in ninth place overall, said the city’s matching system has been successful for the most part. But, he added, that isn’t to say the city is fulfilling its obligations in making sure this taxpayer money is being monitored.
“You would think an Ethics Commission would want to be publicly accountable,” Peskin said. “They don’t even have an audit schedule. It’s mind-boggling.”
Peskin has nearly $40,000 in excess funds from his 2020 campaign, and he said he would like to return this money to the city but the Ethics Commission’s delays in auditing his campaign has given him pause in returning the money.
LeeAnn Pelham, director of The Ethics Commission, told The Standard in an email that her office is in the process of acquiring assistance from external auditors starting in 2023, and the 2020 election review is underway. Auditors started with candidates who received the most public financing and are working their way down.