Candidates for elected office are not permitted to coordinate with the well-heeled super PACs that back their campaigns. But a recent state ethics complaint alleges that aspiring governor and current mayor of San Jose Matt Mahan has done exactly that.
Mahan illegally discussed “campaign strategy and messaging” with the leaders of several groups that are spending millions to bankroll his bid for California governor, as well as their wealthy donors, according to the complaint, which was filed with the California Fair Political Practices Commission on Thursday. In an email on the same day, the FPPC acknowledged receipt of the complaint.
The complaint accuses Mahan and billionaire PAC donors Michael Moritz and Rick Caruso, among others, of flouting state laws that prohibit “independent expenditure” committees, also known as PACs, from coordinating with candidates.
Moritz is a San Francisco retired venture capitalist heavily involved in Democratic political giving at the local, state and federal levels who in 2021 founded the San Francisco Standard. Caruso is a Los Angeles real estate magnate who has donated to both Republicans and Democrats and ran unsuccessfully for Los Angeles mayor in 2022.
Independent expenditure committees can take in and spend unlimited sums from donors, but cannot work directly with candidates, who are bound by strict donation limits ($78,400 in California for this cycle).
The complaint alleges that Mahan’s campaign and the independent expenditure committee amassing millions of dollars to back him, which is fueled by Silicon Valley money and called California Back to Basics, shared information about campaign timing and strategy.
The pro-Mahan PAC Back to Basics has accumulated more than $15 million as of April 21; Secretary of State filings indicate that Moritz has given $1 million and Caruso $1.5 million.
Messages for Caruso and Moritz were not immediately returned.
“This is a desperate anonymous attack from someone who knows that when voters hear Mayor Matt’s message, it resonates,” said Tasha Dean, Mahan’s campaign spokesperson. “We’re going to keep focusing on what matters to Californians — making sure people can afford to live in the state we all love.”
The FPPC has not yet determined if it will investigate the complaint, and will move ahead or drop the matter after gathering material over the next couple of weeks.
While the complaint was filed anonymously, the man who filed it was Raul Claros, a community organizer and Los Angeles city council candidate. He said the “powerhouse team” behind Mahan “should know better. It’s not like they made a clerical mistake.”
“As a result of Mahan’s brazen communications with Caruso, Moritz and others,” reads the complaint, “the expenditures made by the independent expenditure committee are not and never were independent.”
Mission Local reviewed screenshots of Zoom calls and emails sent to the FPPC as “supporting documents.” Those images indicate that Moritz and Caruso, two top donors to California Back to Basics, participated with Mahan in an April 6 Zoom fundraising call.
The complaint alleges that campaign strategy was discussed during this meeting, and that Mahan’s consultant’s strategy slides were screen-shared.
On the same day that Caruso, Moritz and others participated in Mahan’s April 6 Zoom, the complaint alleges that Back to Basics sent a “State of the Race” memo to its donors.
Under the heading “Advertising Blitz” it stated “Timing is everything in this business and the Mahan campaign has an opportunity for a massive voter contact effort between their organization and Back to Basics. With less than 2 months to go until Election Day, we would expect the Mahan campaign to roll out its paid media program within the week. On our end, Back to Basics just placed another 7-figure buy in the Los Angeles media market …”
The knowledge of where the PAC was buying ads and how much it was spending would be of strategic interest to the campaign.
At Mission Local’s behest, the complaint and its supporting documents were reviewed by a number of lawyers, consultants and other campaign professionals.
While several agreed that the alleged commingling of strategic information among donors with a foot in both the campaign and PAC camps was “a bad look,” the burden of proving illegal coordination would be higher.
“Having the same people in the PAC and on the candidate committee is not, in and of itself, enough to cross the line,” said Jessica Levinson, a law professor at Loyola Marymount University.
“The place where you get closest to a potential question of coordination is the fact you have donors who were on calls where they received information about communications and spending from one committee, and they were on calls with the other committee,” she continued.
But “passive receipt of information is not enough.” For the law to be contravened, Levinson said, it is not sufficient that this information was passed between the committees. Rather, it would have to be used to inform spending and strategy decisions.
The complaint also named David Crane, a Stanford University lecturer and political operative who is the president of Govern for California, a nonprofit founded by Crane to counter “special interest politics.”
The group, which has put $1.5 million behind the pro-Mahan PAC, has been investigated by the state for purportedly violating campaign finance laws; in San Francisco, it engaged in the eyebrow-raising practice of giving multiple $500 donations — the city’s campaign donation limit — to the same candidates through its different state chapters.
Emails sent to Govern for California have not been immediately returned.
Back to Basics is spending heavily to make Mahan, the favorite son of Silicon Valley, a household name and viable candidate. The race to become California governor blew open this month when frontrunner Rep. Eric Swalwell bowed out after several staffers came forward with allegations of sexual assault.
Mahan is polling in the single digits and tech executives in particular are hoping the San Jose mayor will surge. In the wake of Swalwell’s implosion, Mahan’s wealthy backers have gone so far as to promise donors that they would get their money back if the San Jose mayor did not reach a $35 million fundraising goal by Friday, April 17.
Claros, who last week filed the complaint, said he was insulted by alleged rulebreaking coming from wealthy, established entities with no shortage of money, power and influence.
“Those of us who have had to play by these difficult rules for working-class people and the working poor, we feel … like the rules are always stacked up against us,” he said.
“We’re always trying to figure out how to compete and win, and they [Mahan’s donors] already have so much advantage and leverage that this is so unnecessary.”