Force multipliers: How one donor network is pushing the envelope on California campaign money

·15 min read

Sift through the campaign contributions to Robert Rivas, the Salinas Democrat angling to become the next speaker of the California Assembly, and a name keeps popping up: Govern For California.

The organization’s statewide chapter gave the maximum $9,800 to Rivas in 2021. So did its Marin chapter, Hollywood chapter, Golden Gate chapter, Palo Alto chapter and four others. In the past 14 months, 16 Govern For California chapters have given him a combined $116,000 — nearly a tenth of everything he’s raised this election cycle.

Over the last two years, Rivas’ 2022 reelection committee has been a top recipient of campaign contributions from the Govern For California network, according to a CalMatters analysis of state campaign finance records. During the same period, financial disclosure forms, lobbying reports and Govern For California emails show that his brother, Rick Rivas, has served as both a political advisor to the statewide organization and as a consultant to Robert Rivas’ campaign.

But Assemblymember Rivas is hardly the only beneficiary of Govern For California spending. In the 2022 election cycle so far, the network has donated more than $3 million to more than 110 candidates across California, the vast majority of the money going to 82 running for the state Senate and Assembly.

Govern For California characterizes its 18 chapters as “force multipliers” that amplify the influence of its donors on state politics and government. The 11-year-old organization — the brainchild of 68-year-old Stanford lecturer David Crane, and funded primarily by a group of Bay Area venture capitalists, tech executives and philanthropists — opposes what it regards as excessive sway of labor unions over state policy.

None of the campaign finance experts CalMatters spoke with said they thought Govern For California was doing anything illegal. But Ann Ravel, former head of the Federal Election Commission and California’s campaign finance agency, said its chapter donation operation was “undemocratic,” albeit similar to the model organized labor unions use.

Some experts also questioned whether it’s a way for its small cadre of wealthy donors to evade contribution caps designed to limit anyone from having outsized influence on state politics.

“Aside from getting around contribution limits, there doesn’t seem to be much reason to go through this extra effort,” said Stan Oklobdzija, a visiting public policy professor at UC Riverside who researches campaign finance. He said he hadn’t seen anything comparable to the Govern For California strategy in the state.

CalMatters reviewed the Govern For California website and other public explanations of its network, analyzed campaign finance records maintained by the Secretary of State’s office, and spoke to people familiar with the organization to understand how it operates.

In April 2020, state campaign finance regulators issued a letter giving Govern For California a green light to establish its network of chapters, each subject to its own campaign contribution limit.

That permission was on condition that “the GFC Statewide Committee and all local chapters are controlled by different individuals, who independently direct and control the entities’ respective contributions,” wrote Dave Bainbridge, general counsel for the Fair Political Practices Commission, which regulates, monitors and enforces state campaign finance laws.

That independence is a murky concept under California campaign finance law.

Crane and Rick Rivas regularly consult with the chairpersons of all 18 chapters; public records and social media accounts show that some are friends and former students of Crane’s. A majority of the funding for the chapters is funneled through a central network committee. Many of those chapters then regularly make identically sized donations to the same candidates on the same days, using the same treasurer and law firm — to 13 candidates in the final two weeks before the June 7 primary. So far in this campaign, 29 candidates have received contributions from at least half of the chapters.

And while Govern For California chapters received contributions from nearly 250 donors this election, state campaign finance records show that nearly two-thirds of all the money raised came from just 20 people — donors who can, and often do, make separate maximum allowable contributions to the same candidates the chapters are supporting.

Through its chapter arrangement, the Govern For California network has been able to expand its fundraising potential 18-fold. Individual donors can give the maximum amount to each chapter, either by making separate contributions or, like 86% of donations as of late July, routing them through a central “Govern For California Network Committee.” There is even a handy button on the Govern For California website that lets a donor max out to each chapter automatically.

The line between organizations working together toward the same goal and those that are simply different branches of the same big-spending entity can be blurry. A spokesperson for the FPPC declined to comment on whether its enforcement division had ever investigated Govern For California.

State election regulators will typically consider a series of questions when making that fine distinction, said Tracey Wigglesworth, a campaign finance and election attorney who spent five and a half years in the FPPC’s enforcement division: Do the different committees have the same officers in charge? Is one committee paying for another’s legal and administrative costs? Do they get their funding from the same source? And are their contributions “made in concert or otherwise coordinated?”

If the answers to these questions are “yes,” the committees might be considered part of the same entity and find themselves capped under a common, combined contribution limit. But, she said, “this analysis depends on the facts of the case.”

In a response to CalMatters, Crane declined to answer more than a dozen specific questions about Govern For California’s structure and political aims, including its backing of Rivas, who has sought to oust and replace Assembly Speaker Anthony Rendon, a Lakewood Democrat.

Instead, Crane replied via email that CalMatters “apparently developed a thesis for a hit piece before contacting us. I don’t know which special interest put you up to it, but it’s not what I ever expected of your organization.”

(Crane and many donors to Govern For California are financial supporters of CalMatters, which retains full authority over editorial content and makes news judgments independent of donor support.)

Crane has strenuously rejected the notion that Govern For California is doing anything unique or remarkable with its campaign finance structure. In recent emails to CalMatters and to Govern For California supporters, he likened the network’s spending to the way that organized labor groups, which have statewide chapters and local affiliates, transfer money to one another and regularly support the same candidates while remaining legally independent of one another.

“As much as we would enjoy pride of authorship, there’s nothing new about our model,” Crane told CalMatters.

“For too long, only special interests organized political activity in Sacramento,” he wrote in a separate message to the Govern For California mailing list. “The only thing that’s new is that, in 2011, someone started organizing for the general interest.”

That goal — to “create a counter-force to the special interests” — is shared among the chapters, which “all have the same objective,” according to Govern For California’s website. While the group funds Democrats and Republicans, business-friendly moderates and progressives, it generally supports charter schools and raises alarms about the state’s pension liabilities to its unionized employees.

In addition to campaign donations, Govern for California spent roughly $259,000 lobbying state lawmakers in the first six months of this year, records show. Among its top priorities: supporting legislation to lengthen the amount of time that teachers would be required to work before getting tenure and to require the state to make school spending data easier to sift through. The group has also opposed measures to ban “foreign-influenced” corporations from making political contributions and a bill that would allow legislative staffers to unionize.

CalMatters spoke to eight campaign finance experts about Govern For California. Five said its chapter donation model represents something new in California electoral politics, and some found it concerning.

It “seems to be contrary to the spirit of the idea of having contribution limitations,” said Ravel, the former elections watchdog, who also received $25,700 from the Govern For California network when she ran for state Senate in 2020. But, she added, “unfortunately that’s the campaign finance system we’ve been handed by the U.S. Supreme Court.”

But Bob Stern, the former president of the Los Angeles-based Center for Governmental Studies and the FPPC’s first general counsel, said he’s “much less concerned” about Govern For California than big-spending committees backed by a single industry or corporation.

He added that there’s a difference between making recommendations to the chairpersons of a committee, and exerting direct control over its political activity.

“It’s free speech,” said Stern. “It’s me coming along recommending that they support a certain candidate. You can’t stop me from making recommendations, as long as I’m not directing them.”

CalMatters tried to contact the chairpersons for all 18 chapters to understand how they operate and their relationship to Crane and Rick Rivas. The majority did not respond and none agreed to be quoted.

Crane, Rick Rivas and Robert Rivas all declined to answer questions about whether they were using the Govern For California network to advance Robert Rivas’ leadership ambitions in the Legislature. A spokesperson for Assembly Speaker Rendon also declined to comment.

A new campaign finance model?

After CalMatters began making inquiries to chapter chairpersons and donors about the Govern For California network, Crane sent an explanation to the mailing list.

“We got the idea from SEIU,” he wrote, referring to the influential Service Employees International Union, which represents 700,000 public- and private-sector workers across 17 local chapters in California.

This election, committees affiliated with SEIU have spent at least $2.9 million in California legislative races, often donating to the same candidates.

Crane’s email highlighted specific contributions this year to an unnamed Assembly candidate from 16 union-sponsored committee

s, including four SEIU locals, and suggested that these committees — representing teachers, California State University faculty, nurses, steelworkers and other employees — were managing their spending in a manner comparable to the Govern For California network. Campaign finance records suggest that the candidate is Elizabeth Alcantar, a Democrat from southeast Los Angeles who failed to make it into the top two for November alongside the Govern For California network-supported Democrat Blanca Pacheco.

The comparison to unions divided the campaign finance experts whom CalMatters interviewed.

Although Ravel, the former FPPC chairperson, said she does not view Govern For California’s chapters as “different than the way the system already operates,” other experts cited potentially critical distinctions.

Union locals have hundreds, if not thousands, of members who elect leaders to represent them in collective bargaining and direct political spending decisions. It is not clear how Govern For California chapter chairpersons are selected, whether the chapters have distinct memberships, or if these committees serve other functions aside from distributing money, a decision ultimately at the hands of the one to four people who lead each chapter.

Unions also tend to draw upon a broader donor base through membership dues, mainly in increments of less than $100, far below individual contribution limits — as opposed to Govern For California’s chapters, which have pulled in 62% of all contributions from just 20 people this election.

“This is totally different than anything I’ve seen before, and it’s very creative. It’s a very creative way to maximize electoral strength,” said Amber Maltbie, an election and campaign finance lawyer with the Los Angeles-based law firm Nossaman LLP.

Oscar Lopez, political director for SEIU California, said its endorsement process involves members from each local affiliate meeting with candidates, asking questions and making recommendations to the state council in a “bottom-up process” that “puts workers in the center of decision-making.” Then, he said, locals can decide whether to contribute to those candidates endorsed by the council.

“Govern For California is like a network of offshore accounts more than anything else. It’s meant to hide from accountability, create confusion in place of transparency, and is directed from the top,” Lopez said in a statement.

Some campaign finance experts made another comparison to Govern For California: Political parties, which have local county committees and clubs that are nominally independent but share money and generally make contributions in accordance with the recommendations of the statewide party.

Unlike Govern For California, however, their leaders are also elected; their spending is subject to different, sometimes stricter, transparency rules; and parties exist to promote a host of electoral and policy causes at the behest of thousands of constituents.

It is not clear, despite their names, that each Govern For California chapter represents a distinct constituency. The statewide, Golden Gate, San Francisco, Common Sense, Bay Area and Marin chapters all have chairpersons who live in San Francisco, according to a list on the Govern For California website. Los Angeles used to have its own local committee, but it was renamed the Sierra Chapter in 2021. Its co-chairpersons are a married couple from Piedmont, a wealthy enclave surrounded by Oakland, voter registration records show.

Though Crane, who serves as co-chairperson of the statewide chapter, declined to be interviewed for this story, he initially agreed to field questions by email.

CalMatters sent him a list of detailed questions, including about how the chapters are formed, why they were organized in this way, how the chapters are governed and whether they have their own individual memberships, who has power to appoint or dismiss its chairpersons, what explained the pattern of same-day contributions by multiple chapters and whether the network was constructed with the goal of enabling repeat donors to support candidates above and beyond what they would be allowed through individual contributions.

Crane did not answer any of those questions.

“GFC is proud of our diverse team of staff, consultants, and over 1,000 members from our network from whom we take advice,” Crane wrote in his email. “GFC is also grateful for the 37 chapter chairs who have stepped up to take independent action to advance the general interest and fight special interests.”

“This will be my last communication with you,” he added.

Countering organized labor

A former economic adviser to Gov. Arnold Schwarzenegger, Crane launched Govern For California to counter what he and his supporters see as the corrosive influence on state politics of campaign contributions from organized labor and other special interests. Crane has long been an outspoken advocate of reducing the state’s multi-billion dollar unfunded liability for public employee retirement, partly by reducing pension and retiree health benefits for state workers.

“They are to me a voice of sanity in understanding the finances of California,” such as unfunded pension liabilities, said Leonard Baker, a partner at the Palo Alto private equity firm Sutter Hill Ventures. He is one of seven financial supporters of Govern For California who made maximum contributions to all of the network’s 18 chapters in both 2021 and 2022 — a total outlay of $291,600.

He said he supports the organization’s advocacy against “the fiscal path that California is on and the degree to which unions, particularly public employee unions, are maximizing their specific short-term interests.”

“I have no issue with special interests trying to maximize their special interests,” Baker, a donor to CalMatters, said in a phone interview. “I have an issue with an imbalance.”

Govern For California first launched into California electoral politics in 2012, when it spent nearly $200,000 to influence a San Fernando Valley Assembly race, supporting Democrat Brian Johnson, a charter school executive director, against another Democrat, Adrin Nazarian. Nazarian won and is retiring from the Assembly this year.

Govern for California previously made independent expenditures, which are not covered by donation and spending limits but cannot be coordinated with a candidate’s campaign. It also bundled contributions from major donors. But in recent years, it established its current network of chapters that contribute directly to candidates.

California campaign finance regulators gave that approach their conditional seal of approval in the “advice letter” from April 2020.

The commission issues advice letters at the request of a political committee or its sponsor. Its conclusions are “based upon the facts given to the FPPC, not as determined by any investigation,” Jay Wierenga, a spokesperson for the commission, explained in an email.

Individual donors are limited in how much they can give to a single candidate in California. These caps vary by the office being sought and the committee receiving the donation. Currently a donor can give a legislative candidate as much as $9,800 per election — $4,900 during the primary and another $4,900 during the general. They can donate $8,100 per calendar year to a general purpose committee, such as a Govern For California chapter.

Because the 18 Govern For California chapters are considered legally independent, a single donor could give as much as $145,800 per year across the entire network.

Independence, as defined by California campaign finance law, does not prevent the chapters from working together closely.

Govern For California chapter chairpersons receive spending recommendations from Crane and Rick Rivas, including in monthly briefings, according to multiple sources involved in the network’s operations. The chapters use the same treasurer, Steven Lucas, a partner at Nielsen Merksamer, one of the state’s most prominent political law firms. Lucas did not respond to an interview request.

The chapters also regularly fund the same campaigns.

This article originally appeared on Salinas Californian: How one donor network is pushing the envelope on California campaign money