Get SF Weekly Newsletters
Pin It

Stealth Dollars 

Questionable political donations are flowing into the city's most controversial political race

Wednesday, Oct 25 2006
In the weeks before Oct. 6, at least $41,000 oozed quietly, possibly illegally, into the city's most contentious political race, the struggle for the District 6 supervisor's seat, a position currently held by Chris Daly.

It was "soft money," meaning it didn't come directly from any of Daly's challengers, and it poured into a myriad of anti-Daly efforts, including Web sites, signs, polls, mass mailings, and campaign literature, according to the San Francisco Ethics Commission, the city body that watchdogs electoral campaigns and lobbyists.

Though the local media has done some glancing reportage on this spending, by and large the mainstream press corps has failed to comprehend the significance of the various propaganda initiatives: They were done stealth-style and may have transgressed local campaign finance laws, because they weren't reported to the Ethics Commission.

"We take unreported spending seriously," says the commission's executive director, John St. Croix. Penalties for undisclosed spending go "up to $5,000 per violation, and additional penalties that could be up to three times the amount spent."

In other words, some of these Daly-bashers may find themselves mired in legal trouble. But Daly's primary rival, Rob Black, says he figures it's Daly who's looking at sanctions.

Snapshots of our key players: Daly, the controversial, sometimes foul-mouthed populist whose territory covers SOMA, the Tenderloin, and a slice of the Mission, is endorsed by the local Democratic Party as well as unions representing city workers. He began his political career as an advocate for tenants in slum housing. Black, a former campaign lawyer and aide to Supervisor Michaela Alioto-Pier, is endorsed by Mayor Gavin Newsom. He's running on what might be called a Stamp Out Crime and Annoying Panhandlers platform.

At the outset of the race both men agreed to spend no more than $83,000 in exchange for some city-provided campaign funds; each candidate received more than $43,000 in taxpayer dollars. But on Oct. 6, roughly a month before election day, St. Croix and his colleagues concluded that more than $91,000 in soft money had gone into anti-Daly efforts, only about $50,000 of which had been disclosed, and so lifted the spending caps.

That leaves at least $41,000 in secretive spending, although St. Croix says he "has reason to believe it was more than that."

(Additionally, tens of thousands in spending on Black's behalf was reported late, which is also a legal violation. The guilty parties? Soft-money groups established by the San Francisco Police Officers Association and the Building Owners and Managers Association of San Francisco.)

So who are the characters covertly trying to oust Daly?

Daly thinks much of the blame goes to Wade Randlett and SF SOS, a political organization bankrolled by GAP founder Don Fisher, discount brokerage king Charles Schwab, and other corporate figures. "SOS has basically had a yearlong effort to get rid of me," says the Supervisor, adding that Randlett and company have organized anti-Daly house parties, and blasted out a barrage of more than 100 separate e-mail messages ripping on him. Daly says of his foes: "They're trying to buy the District 6 supervisor's seat or at least inflict as much damage on me as possible."

Randlett acknowledges campaigning — and e-mailing — vigorously against Daly, but maintains everything his group has done has been completely legal. "The false allegations," says Randlett, "are that there's some big mail program," orchestrated by SOS, adding that the bulk of SOS' work has been carried out by a team of some 300 volunteers, and any spending has gone through a committee that has filed the requisite documents with Ethics.

Pointing to polling showing Daly down nine points to Black, Randlett says, "We're killing Daly. We're killing him with his own words."

At least one piece of literature, though, accuses the supe of failing to speak up. "Why is Chris Daly suddenly so silent?" reads a glossy one-page mailer issued by a group called Concerned Residents of District 6. "Chris Daly is not normally one to be silent. But on the issue of panhandling in our neighborhoods, he has not uttered a word."

St. Croix says the mailing is one of the possibly illegal activities his staff are looking into — Concerned Residents has not reported its spending to Ethics, nor does it have an office, a Web site, or a phone number.

A little research, though, gives some clues as to who may be behind the front group. The return address on the mailing leads to a mailbox at AIM Mail Center a half-block from the baseball stadium on King Street. AIM owner Merlyn Gill says the box is rented by Ilene Lederman, a former vice president at Charles Schwab & Company.

SF Weekly made numerous phone calls to Lederman and dropped by her condo, but was unable to reach her for comment.

Black insists he doesn't know Lederman and had no idea she might be involved in questionable propagandizing. "I don't want anybody doing anything anonymously on my behalf," he says. "We're following the letter and spirit of the law. We're being very aboveboard."

The flier was physically sent through the mail using bulk-mail permit No. 7259. According to the U.S. Postal Service, that permit belongs to a direct mail house in Salt Lake City, Utah, called Advanced Mailing.

When we contacted Advanced Mailing, the firm wouldn't tell SF Weekly who paid for the mailing.

But Ethics records show San Francisco-based campaign lawyer Jim Sutton paid Advanced Mailing more than $6,600 for "campaign literature and mailings" in 2003. There's no record of anybody else in town hiring Advanced Mailing.

Sutton is currently doing work for the Golden Gate Restaurant Association, which has pumped at least $17,984 into Black's campaign. Sutton, who has a well-documented history of running afoul of campaign finance laws — he was hit with some $240,000 in penalties after failing to reveal $800,000 in campaign spending by utility giant PG&E in 2002 — also happens to be Black's former employer.

Sutton, who's unhappy with this paper's previous coverage of his legal operation, the Sutton Law Firm, tells SF Weekly, "We don't think it's appropriate to comment on anything involving our firm's clients."

On Oct. 18, the Black campaign issued a press release accusing Daly of his own campaign-finance shenanigans, claiming the Daly camp misrepresented key information on its reports to Ethics.

By law, all campaigns must reveal the occupations and employers of their donors. Black says the Daly team broke the law by using generic terms like "businessperson" or "consultant" when listing occupations of 23 donors.

At Ethics, St. Croix is scrutinizing the matter. "Words like 'businessperson' are not specific enough," he says. "'Lobbyist' or 'consultant' may be. It's on a case-by-case basis."

Black would like to see Ethics force Daly "to forfeit the money," and also dogs his foe for taking cash from lobbyists tied to the Rincon Hill condo towers and the redevelopment of Treasure Island.

The candidate also thinks the Daly campaign used sleight of hand to get around the $500 limit on contributions made directly to a campaign, by accepting money from both individuals and the companies they own.

Responding to the allegations, Daly says he'll remedy any possible campaign finance problems. And he claims that "you can add two and two together and see that illegal activity occurred" to the benefit of Black.

Meanwhile, St. Croix is reluctant to put a timeline on either probe — but political observers say any penalties levied by Ethics are likely to come well after Election Day.

About The Author



Subscribe to this thread:

Add a comment

Popular Stories

  1. Most Popular Stories
  2. Stories You Missed
  1. Most Popular


  • clipping at Brava Theater Sept. 11
    Sub Pop recording artists 'clipping.' brought their brand of noise-driven experimental hip hop to the closing night of 2016's San Francisco Electronic Music Fest this past Sunday. The packed Brava Theater hosted an initially seated crowd that ended the night jumping and dancing against the front of the stage. The trio performed a set focused on their recently released Sci-Fi Horror concept album, 'Splendor & Misery', then delved into their dancier and more aggressive back catalogue, and recent single 'Wriggle'. Opening performances included local experimental electronic duo 'Tujurikkuja' and computer music artist 'Madalyn Merkey.'"