How to Follow the Money – Peeling the Campaign Spending Onion

Between California’s 1974 Fair Political Practices Act and the 2018 California Disclose Act, state public disclosure laws make it possible to know where money in California politics is coming from. But that doesn’t necessarily mean it’s easy. Here’s a guide to peeling back the onion layers of spending in political campaigns.

The first step in tracking down campaign money is identifying the jurisdiction. All political committees operating in California must be registered with the California Secretary of State. Political Action Committees (PACs) must also report their donations and expenditures.

Political spending and donations in California are reported at the municipal, county and state level depending on the nature of the office or campaign. Jurisdictions that cross municipal boundaries  — for example, school districts — are reported to the county Registrar of Voters.

Direct Donations and Spending by Local Candidates in Local Elections

In general, the rule is that campaign contributions and expenditures must be reported in the jurisdictions where they’re donated and spent, so that’s where to start looking.

If you are looking for spending in a city council campaign the first place to look is that City’s City Clerk’s webpage, usually the city department that oversees campaign and public officials’ disclosures. San Francisco’s and Los Angeles’s ethics commissions oversee political finance in those cities.

Many California cities, counties and public agencies use NetFile or CampaignDocs online systems for campaign filing and reporting, and the city clerk’s webpage is usually the place where you will find the links to the original reports.

At the county level, you’ll typically find these links on the Registrar of Voters website. At the state level, you’ll find campaign finance information at the Secretary of State’s Cal-Access webpage, which provides drill down information extracted from the original reports.

If a jurisdiction doesn’t have an online link, your best bet is to call them and ask how to get copies of the filings you’re interested in — you may have to make public records request.

Another approach is to search on “[city name] campaign finance” because other entities also publish campaign finance reports. For example, the Santa Cruz Sentinel has published campaign finance reports on DocumentCloud.org.

Once you get to the search page, you can search by dates, candidates, donors, committees and elections. It’s better to be broad in your search — simply “Jones” instead of “Bob Jones for Mayor.” If there are filings, you’ll get a list and you can click on the forms you’re interested in.

The Fair Political Practices Commission (FPPC) Form 460 is the one that reports donations and spending for individual candidates, and both donors and recipients must report.

A Form 497 must be filed for certain contributions of $1,000 or more made within 90 days before a state or local election or on the date of the election.

Indirect Spending by Political Committees

Direct donations to candidates, and spending by them, are only the first layers of the campaign spending onion. The inner layers are PAC spending.

PACs can both donate directly to campaigns and make independent expenditures — which are not supposed to be coordinated with candidates’ campaigns — and they aren’t restricted by campaign finance limits. PACs can collect money in one place and spend it in another, and often have separate committees for collecting (recipient committee) and spending (major donor) the money.

PACs can be financed by individual donors, but they are also financed by other PACs — often called “gray money.” This quasi-money laundering obscures the real interests behind the political spending under public interest-sounding names like “Keep California Golden.” But the persevering can follow the breadcrumbs.

For example, searching Cal-Access for Keep California Golden reveals that the PAC got donations from Empowering California. A search on Empowering California shows that it’s financed by Blue Shield of California.

Another more convoluted example of the breadcrumb trail is Citizens For Affordable Housing.

A Search on Citizens for Affordable Housing reveals that the Sacramento–based PAC’s financiers include the California Apartment Association Issues Committee. Researching the Apartment Association’s Issue committee shows that one of the Apartment Association Issues Committee is Santa Cruz Citizens Against Costly Initiatives.

A Cal-Access search doesn’t turn up any donors for the Santa Cruz PAC. The next step is to go back to the City of Santa Cruz website. Santa Cruz doesn’t use a digital campaign reporting system, the city just has a Dropbox with two folders: “Closed Committees” and “Current Forms.”

Since Cal-Access shows the PAC as active, we start by searching the Current folder. There are three PAC folders, none of them titled “Santa Cruz Citizens.” So we look at the first one, titled A Coalition of Santa Cruz Homeowners for 2018. It turns out this is the committee we’re looking for.

Reviewing the 460 forms reveals that the “citizens” are real estate investment companies and realtor groups such as the Chicago-based National Association of Realtors — some of whose funding comes from California Association Of Realtors. The PAC was formed to oppose last year’s rent control ballot initiative and raised $324,000 for that purpose. Its biggest donor is Danville-based Contra Costa Real Estate Investors.

Indirect Spending: Dark Money

There is another type of indirect spending by 501(c) groups like unions, trade associations and social welfare groups that don’t have to report their donors to the IRS.

Dark money donations are given as “grants” to  “education” and “issues” groups that then make donations to political committees. If organizations receive no more than $49,000 in donations, they don’t have to report donors even under the California Disclose Act. Private LLCs are another dodge for hiding sources of campaign money.

In 2016, the San-Francisco-based “education” 501(c) BLUPAC — organized by a former member of the San Francisco police commission, Douglas Chan — collected $49,000 and spent it on negative campaign mailers attacking Lisa Gillmor’s slate of candidates in Santa Clara’s 2016 City Council election. The spending topped $50,000, which to an FPPC.

The PAC nonetheless didn’t disclose its donors — although one of them, the San Francisco police union PAC, reported a $10,000 donation to the group.

Santa Clara political committee Yes on A accepted $47,000 in dark money from the Texas-based dark money Action Now Initiative LLC, to support 2018’s campaign for multi-member Council districts and ranked-choice voting. The check was cashed the day before the City Council, the majority of whose members supported Measure A, passed a “dark money” ordinance, which would have made it illegal.

Useful links for tracking down money in politics

City of Santa Clara Netfile: https://www.santaclaraca.gov/our-city/departments-a-f/city-clerk-s-office/campaign-disclosure-forms-and-filings

City of Sunnyvale Netfile: https://www.sunnyvale.ca.gov/your-government/city-clerk/elections

Santa Clara County Netfile: https://ssl.netfile.com/static/agency/scc/

City of San José CampaignDocs: https://www.sanjoseca.gov/your-government/appointees/city-clerk/elections/2024-elections

Cal-Access: cal-access.sos.ca.gov (state campaign spending)

OpenSecrets.org: www.opensecrets.org (federal campaign spending)

IRS charitable organization tax return search: https://apps.irs.gov/app/eos