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DANGER For Americans-Steve Bannons' Past Collusion With TRUMP & For 2024 Election
Inside Tech Billionaires’ Push to Reshape San Francisco Politics: A Hostile Takeover
The Guardian and Mission Local unravel ‘grey money’ network flooding progressive city with conservative cash to oust any Democratic power
The Guardian 12 FEB 2024
From left, cryptocurrency booster Chris Larsen, billionaire investor Michael Moritz and Y Combinator chief executive Garry Tan
People ride their bikes past a homeless encampment along the boardwalk in the Venice neighborhood of Los Angeles
In a way, it’s a story as old as time: ultra-wealthy figures pouring a flood of money into city politics in an effort to shape the way it is run.
Still, the political-influence machine that tech billionaires and venture capitalists have recently built in San Francisco stands out for its size and ambition. A new analysis of campaign filings, non-profit records and political contributions by the Guardian and Mission Local reveals the extent of this network, which is using its financial and organizational muscle to push the famously progressive city into adopting policies that are tougher on crime and homelessness, and more favorable to business and housing construction.
In the past six years, prominent tech and venture capital leaders – including the hedge fund manager William Oberndorf, the billionaire investor Michael Moritz, the cryptocurrency booster Chris Larsen, the PayPal co-founder David Sacks, the Y Combinator CEO, Garry Tan, and the Pantheon CEO, Zachary Rosen – have invested at least $5.7m into reshaping San Francisco’s policies, according to the analysis of public data. Because not all of their donations are publicly disclosed, the sum of their contributions may be far higher.
In a solidly Democratic city, they have joined forces with traditional business and real estate elites in an effort to oust some of its most progressive leaders and undo its most progressive policies
To achieve those goals, they have created a loose network of interlocking non-profits, dark money groups and political action committees – a framework colloquially known as a “grey money” network – that allows them to obscure the true scale of their involvement in San Francisco’s municipal politics.
The three major groups in this network – NeighborsSF, TogetherSF and GrowSF – have pulled in more than $26m in contributions since 2020, according to campaign finance and tax records, more than $21m of which they have spent on various political issues.
“They’re using multiple layers of organizations to hide the sources of their money, and to hide how much they’re spending,” said Jim Stearns, a political consultant with decades of experience in San Francisco politics and a critic of the groups.
“This is a $20bn hostile takeover of San Francisco by people with vested real estate and tech interests, and who don’t want anyone else deciding how the city is run,” he said, referring to the combined wealth of the most prolific new donors.
Dogged reporting by Bay Area outlets has previously exposed some of the money flowing into these groups. But their structure makes it difficult to easily uncover all sources of donations. Political action committees, or Pacs, are required to name their major donors. But the so-called dark money groups, which are technically civic leagues or social welfare groups, were formed under the 501(c)4 section of the tax code, and do not have to disclose donors or political contributions.
Since the 2010 supreme court ruling Citizens United v Federal Election Commission relaxed regulation around political donations, 501(c)4 groups have exponentially increased their involvement in political donations, to the tune of at least $1bn by 2019 nationwide, according to ProPublica reporting.
However, the Guardian and Mission Local’s analysis of financial records shows several of the organisations donating money to one another, and several groups sharing personnel, addresses and donors. And it reveals the sheer financial deluge they are spending ahead of the 2024 elections.
Complicated Contributions
Among the most prominent and resourced groups in this network is Neighbors for a Better San Francisco Advocacy, which was founded by Oberndorf, and an affiliated 501(c)4 started by the longtime San Francisco real estate lobbyist Mary Jung, among others. Oberndorf sits on the board of directors of the dark money group.
NeighborsSF says it is committed to improving public safety, public education and quality of life in the city, backing what it calls “pragmatic” and “responsible” groups and candidates. The group has funded publicity campaigns for moderate candidates and bankrolled other 501(c)4s working to advance related issues.
NeighborsSF has been primarily funded by a handful of extremely wealthy donors from the tech and real estate worlds.
The group’s biggest donor, Kilroy Realty, a southern California-based firm with major holdings in downtown office property and highly desired parcels in the South of Market district, has given $1.2m since 2020. The dynastic real estate investor Brandon Shorenstein has contributed $899,000 through his family’s real estate firm. Larsen has donated at least $300,000. Moritz donated $300,000 in 2020 alone.
It’s a “longer-term, widespread, deliberate strategy”, said Aaron Peskin, the progressive president of San Francisco’s board of supervisors. “They’re propping up innumerable 501(c)4s that are doing everything from mounting political attack campaigns to infiltrating dozens of long-term neighborhood groups … Why would you say no if someone knocked on your door to organize Saturday neighborhood cleanups?”
Towards 2024
With key successes under its belt, this network is gearing up to play a major role in the 2024 elections, which will determine control of the San Francisco board of supervisors and the Democratic county central committee.
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