Money and politics - Page 3

Corporations buy influence using big donations and sneaky tactics

But if committees don't report campaign contributions and people fundraise after the election, that could be a de facto way to hide who the contributors are."

And while Sutton has been characterized by many, including the Guardian (see "The Political Puppeteer," 2/2/04), as the dark prince of campaign finance, St. Croix says he doesn't automatically suspect something is wrong just because a campaign has a lot of accrued debt.

"But if people suspect that to be the case and they file a complaint, Ethics investigates," St. Croix said, adding that for him, "really massive accrued funds would be a red flag."

Asked what he meant by massive, St. Croix said, "It depends on the office. You might expect a lot more to accrue in a mayor's race or large campaigns that tend to do a lot of last-minute spending."

As of Oct. 25, Gavin Newsom for Mayor had received $1.1 million and spent $1.3 million, had a cash balance of $457,994 — and was reporting $97,548 in accrued debt, with $46,500 owed to Storefront Political Media, the company run by Newsom's campaign manager, Eric Jaye.

Noting that Ethics' job is "to get people to file on time and chase after those who don't," St. Croix said that those who don't file and are making major expenditures right before an election are the ones who will face the biggest fines. "They could face $5,000 per violation, which could be $5,000 for every contribution that was made to finance a smear campaign and wasn't reported," he said.

The biggest fine the Ethics Commission has ever issued was $100,000 for Sutton's failure to report until after the 2002 election a late $800,000 contribution from PG&E to help defeat a public power measure.

Compared to other years, the amounts of accrued debt in this election may look small, but former Ethics commissioner Joe Lynn points to a disturbing pattern in which Sutton-controlled committees were insolvent before the election, then raised funds later or, as in the case of the Committee on Jobs, magically saw their debts forgiven.

"If I am a candidate running for mayor, like Gavin Newsom, and I personally rake up $100,000 in debt and have a big financial statement, then that means there's a creditor willing to advance me those funds," Lynn said. "But if the debt has been raked up by a ballot measure committee, then who is responsible? Why would vendors spend $10,000 for that committee unless they knew that debt was wired from the get-go?"

But the result is the same: voters don't know who donated to the campaign until after the votes have been cast. A clear historical example of this debt scheme can be seen in the June 2006 No on D Laguna Honda campaign. In its last preelection report, No on D had $59,750 in contributions, $18,664 in expenditures — and $130,224 in debt.

But during the 16 days before the election, No on D suddenly got $110,000 in late contributions from the usual suspects downtown, including $2,500 from Hellman, $15,000 from Turner Construction, $10,000 from Wilsey, $2,000 from the San Francisco Chamber of Commerce, and $2,500 from the Building Owners and Manufacturers Association of San Francisco.

As Lynn explains, campaign finance laws only require disclosure of contributions, not expenditures, made in the 16 days before an election — and only $64,000 worth of the contributions used to pay off No on D's accrued expenses were disclosed, with $10,000 each from the California Pacific Medical Center and Kaiser Permanente trickling in on or after Election Day.

This year campaign finance watchdogs like Lynn note that the Sutton-controlled Yes on H–No on A committee has been hiding its contributors. In its first preelection report, filed Sept.