Politics Report: Campaign Finance Rocked by New Law

Jim Sutton, an elections attorney in the Bay Area who works with many San Diego clients, says the bulk of his firm’s work over the last several weeks has been dealing with the confusion and profound impacts of a law very few people noticed when the governor signed it last year.

The law shaking up political fundraising: Signed in September 2022, the law, SB 1439, requires elected officials to recuse themselves from votes involving anyone who gave them more than $250 in campaign contributions. Specifically, if, say, a city councilmember got a donation from a developer for $500 and the developer’s project came up for a vote, the councilmember would have to either give back the money (within 30 days of learning that the project was up for a vote) or not vote.

Elected officials have 30 days from when they find out about the pending application or 30 days from when they got the donation to give it back. Again, put another way, if a school board member got a donation from a bond trader and they find out the bond trader has applied to manage the district’s next bond offering to the market, they have 30 days to refund the money.

The implications are widespread and having major consequences on fundraising that has just now heated up as candidates prepare for the June 30 reporting deadline.

“We work with real estate companies, elected officials and consultants across the state and there is complete confusion over the scope of the law and how it applies or what impact it will have on elections next year. Everyone was caught by surprise,” Sutton said.

What happened: The Levine Act, or California Government Code Section 84308, has long prohibited members of boards like planning commissions and the Coastal Commission from voting on contracts or applications if they got more than $250 in donations from the person or company seeking the contract. For many years, California Common Cause has tried to get legislation through that would apply the same standard to actual elected officials. And every year, it has failed.

But last year, sponsored by Sen. Steve Glazer, D-Orinda, the bill just kept quietly advancing through the Legislature. There was no opposition and virtually no discussion. It doesn’t seem like anyone noticed it.

Until now. Just this week, a judge rejected a lawsuit filed by several major special interest groups to stop implementation of it.

“This law protects Californians from the pay-to-play corruption and the appearance of corruption that plagues our cities and counties, and helps to restore faith in our leaders and our government,” said Jonathan Mehta Stein, the executive director of California Common Cause, in a written statement.

One group it doesn’t apply to: Public employee unions and members can still donate to candidates.

The remaining questions: Does it apply to city attorneys? City attorneys do not have a vote on projects or applications and the Fair Political Practices Commission has not yet determined whether the law includes them or not and there are no regulations specifically mentioning them. Brian Maienschein, the assemblyman running for city attorney, has been telling supporters its his impression that the law applies to city attorneys and anyone with business or development projects coming up at the city should not donate.

The implications: Candidates who may have expected significant support from real estate developers or other city contractors will not be able to raise anywhere near the amount of funding they had before. Not only does it cap donations at $250 but that’s aggregate – meaning if the head of a company with a project pending at the City Council donates $200 and the consultant on the same project donates $50, they have hit the cap.

And there seems to be even more confusion across the state. Sutton says some candidates are telling people not to worry and to donate and if a conflict arises, they will refund the money but they want the fundraising totals to be high for now. But if a city council member hears about a project, that’s when the clock starts ticking on a refund requirement. It doesn’t have to be publicly put on an agenda.

That means the refund has to occur almost immediately. The prohibition applies to contributions made 12 months before or 12 months after the vote.

Sutton said he thinks this will lead to major shortfalls in individual fundraising for moderate candidates.

“The governor basically screwed every moderate Democratic supervisor or City Council candidate who relies on real estate money to get elected and did it without any warning,” he said.

“Every trade association or every PAC has started or will soon start to funnel money instead to independent expenditure committees. This is a business opportunity for those consultants and they are the ones who benefit,” he said.

 The New Partisan Lines on Homelessness

San Diego Republicans this week landed on a clear, consistent message in defining their opposition to the region’s consensus approach to homelessness.

“Housing first” is the problem, they said.

Their opposition to the wonky policy term that has for years been debated among bureaucrats, service providers, advocates and elected officials felt notable, though, both because it was so consistent, and because it the term itself became the public-facing message.

“California politicians continue to repeat the decade-long failures of housing first,” wrote Coronado Mayor Richard Bailey, in a press release with the subject line “housing first,” opposing the acquisition of four hotels for $157 million for conversion into permanent homes. “Witnessing the repeated failures of the Housing First approach in San Diego and throughout California is disheartening.”

El Cajon Mayor Bill Wells issued his own press release opposing the joint acquisition by the city and county.

“If the County of San Diego and the State of California wanted to get serious about homelessness, they would admit Housing First has failed and address the root cause,” he wrote.

County Supervisor Jim Desmond voted against the expenditure, which nonetheless passed because his fellow Republican on the board, Supervisor Joel Anderson, supported it.

“For the past decade, the State of California has taken a ‘Housing First’ approach, not requiring substance treatment as a requirement for housing,” Desmond wrote on Twitter this week. “For the past decade, homelessness has exploded in California.”

What is Housing First: The debate over “housing first” is not new, as their statements suggest. Lisa Halverstadt has covered it at Voice for years. The federal government nearly 10 years ago demanded regions abandon funding so-called transitional housing, the dominant model before housing first, sending local governments scrambling. Our largest providers begrudgingly transitioned from transitional housing. Years later, at least one was flatly refusing to change. Father Joe’s in 2016 blamed a budget deficit, which resulted in the closure of a long-running service, on the forced shift.

Transitional housing is, in brief, required things like job training, therapy, addiction treatment or other help before offering permanent housing. Clients often received housing with more privacy than a shelter, but less autonomy than a true home.

Housing first, alternatively, calls for immediately providing permanent housing, to stabilize a homeless person’s life so they can begin to tackle addiction, mental health issues or pursue a job. They do not need to graduate through a series of programs to prove they deserve housing.

What’s new in the Republican messaging isn’t opposition to the principle of housing first. That’s played out for a while now, obviously. But that debate has mostly happened in wonky policy circles between advocates and service providers and bureaucrats.

It even came up often in the last mayoral election, when former Councilwoman Barbara Bry distinguished herself from Mayor Todd Gloria by saying our homeless response needed to target “root causes” – addiction, mental health – and not treat homelessness as a housing problem. Gloria, as many supporters have done often, responded that “housing first” necessarily implies that housing alone is not enough, and services must be part of the solution.

But the simultaneous similarities between Bailey, Wells and Desmond’s talking points stand out because they’re talking directly to the public, and using “housing first” – which despite years of debate remains a technical term that typical residents don’t really need to know – as a shorthand signifier for a misguided, naïve approach to solving the region’s most pressing problem.

• The similarity seemed unlikely to be a coincidence. Ryan Clumpner, a San Diego Housing Commission board member and political consultant, said it isn’t.

“It is clearly being deployed by local Republicans as a political branding exercise,” he said. “It places blame first on the homeless themselves in order to alleviate a public audience of any sense of responsibility, and second on Democratic officeholders in order to gain an advantage in elections.”

The shift and the new order: Republicans, here and nationally, have not always been against the principle. Former Mayor Kevin Faulconer embraced the idea – and former President Donald Trump’s Department of Housing and Urban Development maintained it as a standard for providing funds to combat homelessness.

But Faulconer’s embrace, according to homeless advocates to his left, was never clean. Particular policies he pursued were derided as insufficiently committed to the principle, and too reminiscent of transitional housing. And his push to provide immediate relief by adding hundreds of new shelter beds to provide immediate relief was also attacked as a page out of the transitional housing playbook.

Since then, though, a Democrat has taken over the mayor’s office – yet the push to add dramatically more shelter beds and similar solutions to blunt the problem now, while working to provide housing long-term, remains the explicit policy of the mayor’s office.

Clumpner said it’s indicative of a shift on both sides.

“Republicans supported Housing First at the city and coordinated backlash towards it only began when they held no more seats,” he said. “Mayor Gloria and some other Democrats have landed much closer to Faulconer’s positions, which could be described as a ‘yes and’ approach to Housing First.”

The thing to watch – electorally speaking– is whether policy jargon like “Housing First” can catch on as broad political messaging ahead of the next election cycle.

The whole thing is vaguely reminiscent of the speed with which “critical race theory” went from an academic term to a nightly talking point on cable news. And as with that debate, the rebuttal to the attack has already started to take the form of debating the terminology than defending the spirit of the idea.