Will Chamber Even Be Able to Use Thousand Dollar Contributions in Council Race?

Chamber-Debate-060

On Monday, the Vanguard questioned the propriety of an entity, West Yost Associates with multimillion dollar contracts with the city, contributing 1000 dollars to the Chamber PAC’s efforts.  The question now arises, based on the opinion of City Attorney Harriet Steiner, whether this money can even be used for material or efforts in support of a city council candidate or candidates.

When the Chamber PAC was activated and council candidates were endorsed, the Chamber sent out a press release stating, “Preliminary fundraising efforts have successfully raised donations from numerous businesses and individuals. In order to encourage transparency, the Chamber PAC will be releasing weekly financial disclosures of all money raised and spent to local media outlets.”

The release made it clear, “The sole funding source for the Davis Chamber PAC is voluntary contributions by individuals and businesses. No funds from the operating budget of the Davis Chamber of Commerce are used to support Davis Chamber PAC activities.”

Business and individual donations, per internally created guidelines, must not exceed $1,000 per election cycle, the Chamber release said.

When asked about the $1000 contributions, Executive Director Kemble Pope wrote, “Let’s be very clear that the Davis Chamber PAC’s ability to raise and spend money in this manner has absolutely nothing to do with the Citizens United ruling.”

He added, “I won’t purport to know the the history of Political Action Committees in California elections, but I do know that the Davis Chamber PAC has had its current ability to raise and spend money on ballot measures and candidates since 1997.”

“Also, CA state requirements do not limit how much PACs can accept from donors. However, the Davis Chamber PAC has always self-limited the amount that donors can contribute.”

However, Mr. Pope apparently never ran this by the city attorney.

The Vanguard asked the city attorney and city clerk how Davis Code section 12.01.035, which imposes a contribution limitation on persons who make contributions to independent committees that support or oppose candidates, is applied to committees that may support or oppose more than one candidate and also support or oppose ballot measures.

According to City Attorney Harriet Steiner, Section 12.01.035 of the Municipal Code covers “Limitations on contributions by persons to independent committees that support or oppose candidates.

Section A reads: “No person shall make, and no person or committee shall solicit, contributions in excess of one hundred dollars from any person in any single candidacy period for or to a committee which makes independent expenditures of two hundred fifty dollars or more in support of or in opposition to any candidate.”

Section B reads, “No committee which makes independent expenditures of two hundred fifty dollars or more in support of or in opposition to any candidate shall accept any contribution in excess of one hundred dollars from any person in any single candidacy period. (Ord. 1926 § 3; Ord. 2172 § 3, 2005).”

This strongly suggests that any money spent by the Chamber in support of their endorsed candidates must be received in increments of $100 or less.

As stated in the memo that accompanied the adoption of section 12.01.035:  “Section 12.01.035 prohibits any person from contributing more than $100 to a committee (such as a political action committee) that makes independent expenditures of $250 or more in support of or in opposition to any candidate.  It similarly prohibits a committee that makes independent expenditures of $250 or more in support of, or in opposition to, any candidate from accepting any contribution in excess of $100 from any person in any single candidacy period.”

City Attorney Harriet Steiner writes, “In our opinion, if an independent committee is making independent expenditures of $250 or more to support or oppose one or more candidates in the Davis election, that committee may not solicit or accept contributions related to the city council election candidates in excess of $100 from any person (including any corporation or association).”

However, this applies to candidates only.  Ms. Steiner adds: “To the extent that the same independent expenditure committee is also supporting or opposing a ballot measure, contributions related only to the ballot measure are not limited. “

Furthermore, “Similarly, a committee that is making independent expenditures for non-city elections is also not subject to the City’s contribution limitations for the non-city elections.  All committees are also subject to the state Political Reform Act and its implementing regulations. Again, this e mail applies to committees that are soliciting campaign contributions  specifically related to a City election.”

“We have not reviewed the applicability of  section 12.01.035, or any other portion of the Municipal Code, to expenditures by corporations or associations from their general funds.  Nor have we reviewed the  legality of two or more persons or entities forming one independent committee for the purpose of supporting or opposing a candidate for council, using their own funds for any expenditures,” she notes.

Furthermore, she also indicates that they have not reviewed the current City election contribution ordinance in light of the Citizens United case.

But as it currently stands, it appears that the Chamber PAC may not be able to use any of the money collected from companies donating more than $100 for the purposes of supporting city council candidates.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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25 Comments

  1. Kemble Pope

    David, I wish you would have called or emailed before writing this story because I would have willingly shared with you information that we’ve gathered and our plans for the future.

    The Davis ChamberPAC has been in close communication with the Davis City Clerk for the past two months regarding its ability to raise and spend money. We have a good understanding of the complex legal limitations to our activities… well, as good an understanding as possible without hiring a constitutional law expert to be on staff!

    As we have mentioned in almost all of our press releases this year, our efforts began in 1997 and will continue long beyond this June election. Also, we support Measure D in this election. Both of those realities have implications on the amount of money we can spend on communications from now until June that include endorsed candidates (any combination of Frerichs, Souza & Wolk) AND support for Measure D.

    As with our weekly financial postings, we seek to raise the local bar on transparency and electoral ethics. We are running a positive, issues focused campaign that encourages citizens to vote for candidates will do a better job encouraging economic development and protect our high quality of life. All of our communications that full under the purview of local/state election regulations will be discussed at length with the Davis City Clerk prior to execution of those communications to ensure that we are well within the spirit and letter of the law. And obviously, we will follow all regulations regarding the reporting of those communications.

    The Davis ChamberPAC welcomes the community’s input on our activities. Please email us at director@davischamber.com. Our Facebook page is up and running now: [url]www.facebook.com/davischamberpac[/url] . Our website should be live this week: [url]www.davischamberpac.com[/url] . The video of our debate was delivered to DMA yesterday and will be aired soon (schedule to be announced ASAP) and also available online.

    To talk with us in person, please join us this Friday from 5pm to 6:30pm at DeVere’s Irish Pub for our open mixer to discuss our plans to support Measure D.

  2. Mr.Toad

    The Supreme Courts ugly hand reaches all the way down to little Davis. I’ve thought for a long time that the $100 limit was too low and needed to be adjusted for inflation but it seems the slimy politics of big money that has already poisoned the body politic is now infecting every corpus of government all the way down to the municipal level of communities of under 100,000. Will this turn us into a tomato republic. Time will tell.

  3. Kemble Pope

    Sorry if this post is a little off topic, but I think it will give you all a good example of the type of information we want to share with the community. Yesterday, at the Rotary Club of Davis luncheon, City Manager Steve Pinkerton was asked to share his simple definition of “economic development”. He answered, “it’s about ensuring that people who go to work in Davis know that they will have a job tomorrow.” The Davis ChamberPAC disagrees.

    How about we all agree to start with the definition that thousands of people across the globe have contributed to crafting? From http://www.wikipedia.org,

    “Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area. Economic development can also be referred to as the quantitative and qualitative changes in the economy. Such actions can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, environmental sustainability, social inclusion, health, safety, literacy, and other initiatives. Economic development differs from economic growth. Whereas economic development is a policy intervention endeavor with aims of economic and social well-being of people, economic growth is a phenomenon of market productivity and rise in GDP.”

    The Davis ChamberPAC believes that Frerichs, Souza & Wolk are most likely to lead our community towards a more sustainable future with economic development efforts. Please note that each of them individually do not get perfect marks in all of the areas listed above, but taken together they represent our best opportunity to create a better, more economically diverse and more economically sustainable community.

  4. David M. Greenwald

    Kemble: based on my read, it would be better to have separate pots of money, because it appears most of the money you have raised cannot be spent on efforts supporting council candidates.

  5. nprice

    There are many paths to economic development and policies that separately or together help realized such development. But there are many differences among policy experts and ordinary folk about policies…that’s the crux of the matter. The David Chamber of Commerce does not have all the “Right” answers and that’s what the debate is all about…the “how” and the “what”…we don’t all fall in line with Chamber policy…locally or nationally. The local Chamber needs to make clear where they differ from national Chamber policy. The national Chamber lobbies for free trade, deregulation of Wall Street, off-shoring of jobs, big non-renewable carbon-based energy and big pharma.

  6. Kemble Pope

    @nprice – The Davis ChamberPAC and the Davis Chamber of Commerce are not affiliated with the national Chamber or the CalChamber. Our organization is both completely independent AND older than both of those organizations.

    Our policy and position statements focus on local matters, thus we have no position on national/international policies relating to free trade (tariffs and subsidies for imports and exports) or deregulation of Wall Street.

    Off-shoring of jobs? WE WANT TO CREATE MORE JOBS IN DAVIS, preferably high-paying jobs in the clean-tech and high-tech sector through tech transfer from UC Davis.

    Big non-renewable carbon based energy? LIKE OUR COMMUNITY, WE ARE ENVIRONMENTALLY FRIENDLY. We have numerous members from the clean energy sector. I personally nominated Blue Oak Energy for their 2011 City of Davis Business of the Year Award. Also, I served as the Chairperson of our City’s Climate Action Team. SO, please understand that the business community shares the same environmental values as the larger community… we have no differences there.

    Big Pharma? No position.

    So, the “how” and the “what”. We are actively involved on many fronts with the City, County, UC Davis, regional partners, local commissions and interested individuals. I hope that you’ll spend some time with us in a substantive discussion. To get started, check out http://www.dside.org

    And now, please excuse me as I move on to my work day. I won’t be checking the comments here until after 5pm.

  7. David M. Greenwald

    Kemble:

    I want to expand my comment here.

    First, you were asked this question the other day, and neither in that comment nor the one you posted here did you explain that in fact the contributions of more than $100 cannot be used for the council candidates.

    It appears that $6500 of the money that you raised cannot be used on the council campaigns but rather Measure D.

    That was never explained to anyone in your releases or posts.

  8. Rifkin

    [b]Section A reads: “No person shall make, and no person or committee shall solicit, contributions in excess of one hundred dollars from any person in any single candidacy period for or to a committee which makes independent expenditures of two hundred fifty dollars or more in support of or in opposition to any candidate.”[/b]

    How does this apply to the Burchill mailer “in support of Souza and in opposition to Greenwald”?

    Clearly, that was not about a ballot measure. It was explicitly for one candidate and against another. I would imagine such a mailing cost at least $15,000. Yet only three parties (the IBEW, the Op Engineers and the Plumbers & Pipefitters) paid for it. If they put up $5,000 each, does that not violate the ordinance?

    And for argument sake, say it does violate the city’s laws: What is the punishment?

  9. Anne

    @ Rifkin, It appears that both the Chamber and clearly Burchill are in violation of Section A that you posted.

    David, How does the city clerk’s office remedy this? What is the fine or “punishment” for this violation? It’s unfortunate when this type of thing happens because the election is around the corner and there needs to be a quick remedy to inform voters that there was a violation.

  10. JustSaying

    [quote]“Kemble: based on my read, it would be better to have separate pots of money, because it appears most of the money you have raised cannot be spent on efforts supporting council candidates.”[/quote]David, let’s remember just who first jumped to the assumption that all of the Chamber PAC money would be spent on the current election’s three selected candidates.

    Much of what Kemble Pope states today was clear in the earlier [i]Vanguard[/i] story/comments. It’s surprising that the [i]Vanguard[/i] wouldn’t have contacted him as a matter of course for a story that lists him as the major source of past information.

    PS–Who paid Harriet to provide the legal opinion your requested of her?

  11. Kemble Pope

    I couldn’t help myself, I’m back to tamp down the conspiracy theories, innuendos and falsehoods that all too often rear their ugly head in these comments section.

    @Anne – please stop shooting from the hip with inaccurate analysis. The Davis ChamberPAC has done nothing illegal. Our organization was formed to support both candidates AND measures in this election, the November election and many after that. When we release our financial records (weekly) then everyone will be able to satisfy themselves that we’ve spent the money within both the spirit and letter of the law.

    @Don Shor – It would be helpful if you could moderate wildly false allegations like Anne’s. To lump us with the people behind the negative campaign mailer against Sue is both factually incorrect and a nasty attempt at fear mongering against our honest and open efforts.

    @David – Firstly, we have stated over and over again that our renewed efforts will not end with this election AND that we’ll be supporting Measure D. How much clearer can we be? Secondly, your math is incorrect. I trust that you can wait until every Friday from now until after the election to ensure that we are following the law… until then, I hope you and your commenters will refrain from this unworthy habit of painting our efforts as “guilty until proven innocent”.
    [b]
    To everyone else who wants an honest discussion in our community about the importance of economic development, please send your checks (limited to $1,000) to Davis ChamberPAC, 604 Third Street, Davis, CA 95616. Your money will be wisely and legally spent to support economic development and job growth efforts in our community.[/b]

  12. Michael Harrington

    Kemble: your enthusiasm is wonderful. However, I wish you and the PAC would step back, and look at the process of recovering the economic vitality of Davis as a team effort, rather than an “us versus those community-killing progressives.”

    There are many things the City and Chamber and DDBA can do to get the fiscal juices flowing without the rancor.

    For example, did you know that bird watching has more participants than any other sport? And that Davis is right smack under the Pacific Flyway, which is the super highway for birds from Canada to SOuth and Central America?

    You folks read the wonderful column by Jean Jackman in the Davis Enterprise, right?

    For years I have suggested that the City and DDBA and CHamber and UCD pair up to make this area the destination for bird watchers. Hotels, restaurants, etc. Imagine …

    It is far, far bigger than the bike sports events that we do have and love.

    But rather than doing something obvious like setting up Davis as a birwatching destination, and marketing it all over the country, what I see you guys doing is setting up the progressives as straw people for the blame, and continuing to support and elect CC members who are not minding the City’s fiscal store.

    And instead of identifying

  13. Kemble Pope

    @Michael Harrington – Please refrain from putting words in my mouth or attributing words/feelings/desires to anybody or any organization but yourself.

    I am a progressive. I believe in progress. I ride my bike for 95%+ of all my trips. I grow my own vegetables. I have dedicated untold hours of my time to protecting farmland around our community. I believe that we need a secure water future, now. I invest in local businesses by rarely shopping out of town or on the internet. I believe that UC Davis is an underutilized engine of economic development for our community. I believe we should have a balanced city budget with multiple revenue streams and efficient expenditures that capitalize on shared community resources. I want progress. I am a progressive.

    This is not us vs. them, or me vs. you… that may be the way you view our community, but not the way I do.

    If you’d like to craft a plan to make Davis an international hotspot for birdwatchers that brings in much needed tax revenue (while encouraging a VERY large carbon footprint of people flying from all over the world), then by all means, please craft a proposal with action items, timeline and budget. Then, shop it around to see if you can get some support. I’d be happy to read your proposal on behalf of the Chamber of Commerce. Please send it to 604 Third Street, Davis, CA 95616 or email to “director” (at) “davischamber” (dot) “com”.

  14. Don Shor

    Kemble: [i]”It would be helpful if you could moderate wildly false allegations like Anne’s…”[/i]

    I read Anne’s comments differently: that the ChamberPAC (as described by David) and the Burchill piece were both possibly in violation, but not for the same reasons.

  15. E Roberts Musser

    I’m a bit confused here. If West Yost sent the Chamber of Commerce PAC $1,000, and it cannot be used for the purposes of supporting any candidate beyond $250 worth, then where is the “influence peddling”? Are businesses not permitted to donate the legal limit towards candidates of their choice who will support business interests? Should their freedom of speech be suppressed if they are doing business with the city? Or is there some “unwritten rule” that says to attain some notion of the “appearance of propriety” businesses should refrain from exercising any freedom of speech when it comes to local elections? Why does this rule only apply to businesses and not non-profits who benefit from CDBG grant funding? And is it not okay for West Yost to support Measure D and economic development to the tune of $750?

  16. David M. Greenwald

    Elaine:

    “I’m a bit confused here.”

    Agreed.

    “If West Yost sent the Chamber of Commerce PAC $1,000, and it cannot be used for the purposes of supporting any candidate beyond $250 worth, then where is the “influence peddling”?”

    I’m confused as to why you ignore temporal mechanics in expressing your confusion.

    “Are businesses not permitted to donate the legal limit towards candidates of their choice who will support business interests?”

    They are.

    “Should their freedom of speech be suppressed if they are doing business with the city?”

    No

    “Or is there some “unwritten rule” that says to attain some notion of the “appearance of propriety” businesses should refrain from exercising any freedom of speech when it comes to local elections?”

    This finally gets closer to the issue at hand. The question is not whether they may legally do so, the question is whether they should do so. In the end, that is a decision for the voter to make, the candidate to makee, and the business to make. I can only state my opinion on the matter.

    “Why does this rule only apply to businesses and not non-profits who benefit from CDBG grant funding?”

    It applies to anyone.

    “And is it not okay for West Yost to support Measure D and economic development to the tune of $750?”

    We’re back to the concept of okay. In what sense do you mean okay?

  17. David M. Greenwald

    Just to clarify:

    The election code is clear: “No committee which makes independent expenditures of two hundred fifty dollars or more in support of or in opposition to any candidate shall accept any contribution in excess of one hundred dollars from any person in any single candidacy period.”

    They do not state that a committee can take more than $100 for some things and not others, rather that if you intend to support a candidate, you cannot accept more than $100.

    As such:

    1. We do not believe you can co-mingle funds for candidates with funds for Measure D
    2. We do not believe you can simply carry forward funds to another time period as that presents potential problems as well

    As such, right now, I do not believe the way you have set things up is legal under the Davis Municipal code.

  18. E Roberts Musser

    erm: [quote]“Or is there some “unwritten rule” that says to attain some notion of the “appearance of propriety” businesses should refrain from exercising any freedom of speech when it comes to local elections?” [/quote]

    dmg: [quote]This finally gets closer to the issue at hand. The question is not whether they may legally do so, the question is whether they should do so. In the end, that is a decision for the voter to make, the candidate to makee, and the business to make. I can only state my opinion on the matter. [/quote]

    So any entity/person that in any way receives any benefits from the city should not donate anything to anyone’s campaign in a local election? How far do you want to carry this? What if a person receives a child care subsidy from the city? A nonprofit that receives CDBG funding? A business that received redevelopment money for upgrading their site to be handicapped accessible? And the list goes on…

    And isn’t the Vanguard advocating for suppression of free speech based on its own arbitrary determination/standard of “all things right and relevant”?

  19. E Roberts Musser

    [quote]1. We do not believe you can co-mingle funds for candidates with funds for Measure D
    2. We do not believe you can simply carry forward funds to another time period as that presents potential problems as well

    As such, right now, I do not believe the way you have set things up is legal under the Davis Municipal code.[/quote]

    How do you know the Chamber of Commerce PAC is “co-mingling funds for candidates with funds for Measure D”? How do you know that West Yost didn’t earmark their entire $1000 towards Measure D or economic development? Your claim does not seem to comport with what Kemble Pope has been saying, to wit:
    [quote]As we have mentioned in almost all of our press releases this year, our efforts began in 1997 and will continue long beyond this June election. Also, we support Measure D in this election. Both of those realities have implications on the amount of money we can spend on communications from now until June that include endorsed candidates (any combination of Frerichs, Souza & Wolk) AND support for Measure D.

    As with our weekly financial postings, we seek to raise the local bar on transparency and electoral ethics. We are running a positive, issues focused campaign that encourages citizens to vote for candidates will do a better job encouraging economic development and protect our high quality of life. All of our communications that full under the purview of local/state election regulations will be discussed at length with the Davis City Clerk prior to execution of those communications to ensure that we are well within the spirit and letter of the law. And obviously, we will follow all regulations regarding the reporting of those communications. [/quote]

  20. David M. Greenwald

    Elaine: With all due respect, you should be asking versions of those questions to Kemble Pope. He never addressed this issue before I raised it and didn’t address it after it was raised.

  21. E Roberts Musser

    [quote]Elaine: With all due respect, you should be asking versions of those questions to Kemble Pope. He never addressed this issue before I raised it and didn’t address it after it was raised.[/quote]

    In other words you have no idea whether your accusations of co-mingling are true or not? Just throw mud and see if it sticks? Why this extreme bias against the Chamber of Commerce PAC and its political activism?

  22. Kemble Pope

    The Davis ChamberPAC has been very clear in its fundraising efforts that we are raising money for the June 5th, 2012 City Council AND Measure D election AND for community education efforts AND for future efforts not limited to the City of Davis. The Davis ChamberPAC has a long history of supporting DJUSD parcel taxes, which are County election items, and it will continue to do so.

    The City Attorney writes [emphasis added below],

    [quote]In our opinion, if an independent committee is making independent expenditures of $250 or more to support or oppose one or more candidates in the Davis election, that committee may not solicit or accept contributions related to the city council election candidates in excess of $100 from any person (including any corporation or association). [b]To the extent that the same independent expenditure committee is also supporting or opposing a ballot measure, contributions related only to the ballot measure are not limited. Similarly, a committee that is making independent expenditures for non-city elections is also not subject to the City’s contribution limitations for the non-city elections… Again, this e mail applies to committees that are soliciting campaign contributions specifically related to a City election.[/b][/quote]

    There is nothing new or surprising here. We did due diligence months ago with our own research and exhaustive conversations with the City Clerk. I will repeat again, we are operating within the spirit and letter of the regulations.

    When we publish our financials every Friday, everyone will see a full accounting of how we spent the money raised. Until then, you’ll just have to trust our good word.

  23. JustSaying

    David, who are these “we’s”. Are you speaking for Harriet? City staff?

    “1. We do not believe you can co-mingle funds for candidates with funds for Measure D
    2. We do not believe you can simply carry forward funds to another time period as that presents potential problems as well “

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