Michael Moritz sank millions into losing S.F. races. What happened?

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The mailer went out on Oct. 23: An image of a golden toilet seat with $100 bills swirling in the bowl. “Let’s unclog City Hall,” it read, advertising TogetherSF’s Proposition D — the measure to cut city commissions. “San Francisco’s 130 commissions are flushing our money down the drain.”

Now, $9.5 million later, it’s Prop. D that’s tanking.

The measure — which would have capped the number of city commissions at 65, expanded mayoral hiring and firing power, and restricted police oversight — is losing, 45 to 55 percent, as of the early morning vote totals on Nov. 6. It was, by far, the most well-financed proposition on the Nov. 5 ballot, accounting for 46 percent of the $20.5 million behind November’s 15 local ballot measures.

Meanwhile, Mark Farrell, TogetherSF’s chosen candidate, is mired in fourth place, six points behind the progressive stalwart Aaron Peskin and 36 points behind Daniel Lurie, the expected winner.

TogetherSF’s ad “perfectly describes the campaign they ran,” said Eric Jaye, a longtime campaign strategist who in this cycle worked for a labor-backed campaign backing progressive candidates. “TogetherSF literally flushed millions of dollars down the proverbial toilet.”

The campaigns to pass Prop. D and elect Mark Farrell as mayor, tied together in funding and strategy were, cumulatively, the second-most expensive contests in San Francisco’s November election cycle — about $15 million total, $9.5 million for Prop. D and $5.4 million for Farrell. To win the mayor’s office, Lurie and his supporters spent just $1 million more.

Lurie looks set to prevail, while both Farrell and Prop. D suffered the most humiliating defeats of Election Day. 

“It might be one of the great political debacles in San Francisco history,” said Jim Ross, another campaign strategist, who took out a website lambasting Farrell’s mayoral run. “To come in fourth? And also bring down the ballot measure — the combination of the two things, it’s really extraordinary.”

TogetherSF — the political pressure group that ranked Farrell as its No. 1 choice for mayor, and created and backed the charter reform measure Prop. D — is funded by billionaire venture capitalist Michael Moritz, the chairman of TogetherSF and its chief donor. He put in $3.2 million to Farrell and the measure. 

Moreover, TogetherSF and the Farrell campaign were closely tied: Many of TogetherSF’s leaders, like CEO Kanishka Cheng, are former Farrell City Hall staffers; Farrell’s campaign manager and consultant were former TogetherSF employees; and a text message from a Farrell staffer described TogetherSF’s Cheng as “guiding the ship” on the campaign.

TogetherSF’s Prop. D, in fact, was supposed to to aid Farrell’s election chances. But that alliance quickly ran into ethics issues: The two campaigns commingled expenses, which prompted the Ethics Commission to, on the day before the election, issue a highly unusual $108,000 penalty against Farrell, who acknowledged the misstep.

“You usually set up these ballot measures to help your candidate,” said John Whitehurst, a campaign consultant for several November races. Prop. D, he said, was polling much better than its eventual results and could have gotten 60 percent. 

Then, Farrell began slipping: Precinct-level data shows that Farrell did not have much support beyond his home turf of District 2, and consultants said he ran too far to the right in center-left San Francisco, and was beset by too many ethics issues. Those ethics concerns, said Ross, “matter greatly to white, Democratic homeowners,” Farrell’s base.

And when Farrell went down, he took the measure with him. “If you tell me 15, 16, 25 times, ‘Prop. D is Mark Farrell’s plan,’ well it becomes a referendum on Mark Farrell,” said Jaye. “I came to the conclusion that it was Farrell that sank D,” added Whitehurst. 

Still, the measure at first appeared popular. At least 15 of the candidates running for supervisor backed it. A raft of wealthy donors, like the Gap’s Fisher family and the investor J.P. Conte, joined TogetherSF and Moritz in in putting money behind it, as did the deep-pocketed group Neighbors for a Better San Francisco. 

With help from his friends, Prop. D was the first step in Moritz’s plan to push a more centralized and business-friendly vision of San Francisco: An internal document from TogetherSF describes a multi-year plan to run ballot measures changing the city’s supervisorial elections and reforming its nonprofit contracting, and to continue pushing candidates in future elections.

The loss of the group’s first ballot measure and favored mayoral candidate, political observers said, should augur a change of tack. “They clearly had an agenda that San Francisco didn’t agree with,” said Myrna Melgar, the District 7 supervisor who is currently winning her race for re-election; TogetherSF endorsed her opponent, Matt Boschetto, in the race. 

The roadmap, Melgar said, of “whipping up anger and discontent … that is a way to mobilize people. It is not necessarily a way to build a movement long-term.”

TogetherSF is “not doing the organizing, not doing the communication with voters” that’s required to notch more political wins, said another campaign strategist, who wished to remain anonymous. Their strategy, he said, is “We’ll just throw money at a thing,” but that “didn’t work in the judges races [in March], didn’t work on Prop. D, didn’t work on Mark Farrell, didn’t work on Matt Boschetto [in District 7].”

“Charter reform is hard,” the consultant added, referring to Prop. D. “There’s a path to do it, but where Neighbors and Together have really failed is they’ve stopped doing the hard work, and they just think money is the answer to all things.”

Still, the elections showed that San Franciscans are ready for commission reform: The competing Prop. E to set up a task force to recommend changes in the commissions, created by Peskin, was ahead 52 to 48.

Moritz and TogetherSF did not respond to requests for comment. But, in an email to the San Francisco Standard, the news outlet he funds, for a separate article Moritz wrote: “Two years ago, few would have given a nickel on the odds of having a new mayor, a Board of Supervisors that for the first time in memory is not dominated by ideologues, and the promise of a competent Board of Education. We have all three — and none of this would have happened without the consistent pressure from TogetherSF and Neighbors.”

It’s unclear how Moritz would define an ideologue, but it is also too soon to tell if the Board of Supervisors will flip from progressive control once all of the votes are counted. Three of the races to replace candidates TogetherSF sought to defeat — those in District 1, District 5, and District 11 — are too close to call. Their endorsed candidate, Danny Sauter, is poised to win in District 3, but Melgar is a likely win in District 7, and TogetherSF pick Trevor Chandler looks to lose in District 9.

As to the future of TogetherSF and Moritz, most politicos were unsure — but all said their campaigning style had alienated potential supporters. TogetherSF was aggressive in its attack ads: It endorsed London Breed and Lurie as their No. 2 and No. 3 votes, for example, but spent hundreds of thousands attacking their own endorsed candidates in a bid to shore up Farrell’s support.

“Kanishka burned all her bridges with a lot of people; it wasn’t just me,” said Melgar, the District 7 supervisor, referring to the TogetherSF CEO. “I don’t know where they go next.”

Additional reporting by Kelly Waldron.