Interest money

Why is so much special interest money flowing into a San Diego special election?

If you want a vision of California’s political future in 2022, consider San Diego a crystal ball.

On Tuesday, the polls close in one of the most controversial in an unusual wave of special elections prompted by the “great resignation” of state legislators. A South San Diego Assembly seat opened up when progressive Lorena Gonzalez, a one-person factory from state-shaping, headline-grabbing legislation, resigned in January to take the top job in the California Labor Federation, the state branch of the AFL-CIO.

This left a surprising vacancy that organized well-staffed labor groups and business interests – the two political forces that battle for the soul of the California Democratic Party — are eager to fill the candidate of their choice.

So far, the two Democratic candidates, Georgette Gómez and David Alvarez, have raised a total of more than $770,000 in direct contributions.

But even more, more than 1.2 million dollars, was spent by independent spending commissions — groups generally funded by large corporations and unions that are not subject to contribution limits that restrict a candidate’s fundraising efforts.

Where does all the special interest money come from?

In many cases, they are the usual suspects of the California election campaign. But contribution records filed with the state also include a few surprises, including the first sign of an aggressive new election strategy from ride-sharing giant Uber, as well as surprisingly large donations from one towing company in Sacramento.

Gomeza community organizer and former city council president who unsuccessfully ran for Congress in 2020, is the preferred job candidate, including teachers’ unions and the California Nurses Association. González endorsed Gómez at the beginning of February. The state’s largest business groups have fallen behind Alvareza small-business owner who narrowly lost his run for mayor of San Diego in 2014 and shared the city council dais with Gómez.

At first glance, the stakes in Assembly District 80 are minor. The winner only gets the job until the end of the year. There are three candidates in Tuesday’s ballot, the other little-known Republican. If no one receives more than 50% of the votes, a second round of the two best candidates will take place on June 7.

That day, the same three candidates, plus a second Republican, run in the new version of the constituency established by the state redistricting commission. The first two of this primary go in November. The eventual winner gets a full two-year term starting in January 2023.

But the race took on disproportionate proportions. And that’s only partly because the district was recently represented by the state’s best-known labor ally.

“We don’t want a seat held by a champion of workers to end up going to someone who is in the pocket of big business,” said Steve Smith, spokesman for the California Federation of Labor. “But I think if we’re able to keep that seat and win here, I think that sets us up well for a number of other districts where we’ll have the same contrast.”

Unions and business interests are used to battling in Democratic races. For at least two decades, as the state’s Republican Party has fallen into near-political irrelevance, workers and businesses have poured cash into Democratic-leaning districts where the choice isn’t between Republican red and blue democrat, but moderate periwinkle and progressive navy. These are often the the most expensive races in the state.

This year could be more important than most.

“We don’t want a seat held by a champion of workers to end up going to someone who is in the pocket of big business.”

—Steve Smith, spokesperson for the California Labor Federation

A reason: a impressive number of departures announced of the Legislative Assembly as longtime members are pushed out by term limits, step down in the face of unfavorable new district maps, or seek positions higher up the political food chain. All that turnover will leave a 25-member hole in the state’s Democratic caucus. For interest groups concerned with what is happening under the dome of the state Capitol, this presents a rare opportunity to reshape California’s supermajority party and potentially influence state policy for years to come.

Marty Wilson, who leads the campaign operation of the California Chamber of Commerce, called the Assembly race in San Diego an “attractive opportunity” for business interests who would like to see Gonzalez replaced with a friendlier type of Democrat. But he also sees the race as a sort of warm-up scrum.

“It’s a sign of things to come,” he said.

Special interest money is pouring in

So far, both Democrats have amassed six-figure totals in direct donations to their campaign coffers. Gómez has raised nearly $470,000, much of it from his union allies. Alvarez has raised more than $300,000, with significant contributions from medical providers, real estate companies, oil companies and “gig economy” titans. Lincoln Pickard, a retired entrepreneur who is the GOP nominee in the race, reported no contributions.

Even more has been spent by independent spending groups that are not bound by state campaign contribution limits (for a legislative campaign, this represents $4,900 from individuals and $9,700 from committees). Over $670,000 was spent to help Gómez or hurt Alvarez, while around $535,000 was spent to do the opposite.

These committees can spend as much as they want to promote or disparage anyone in the race, as long as they don’t communicate or coordinate with the candidates. In California politics, independent spending tends to play an outsized role in negative campaigns, leaving the candidates themselves with clean hands.

The largest spending committee so far, Nurses and educators for Georgette Gomez for the 2022 Gatheringis largely funded by the California Labor Federation and the Service Employees International Union.

On the other side, Alvarez’s biggest supporter is Keeping Californians Working, a committee funded by a wide variety of business interests. In early March, he received a $250,000 contribution from Uber Innovation’s political action committee.

Uber is no stranger to California politics. In 2020, the company spent nearly $60 million of its corporate cash to promote Proposal 22a successful electoral measure to overthrow a state law authored by Gonzalez which required gig companies to treat their employees as employees, not independent contractors. The company also made direct contributions to candidates.

But Uber Innovation is a new political venture launched last year by the company with the aim of spending more on independent expenses.

The state Chamber of Commerce sponsors two of the other biggest committees driving Alvarez. Records show the two have raised little this year, relying largely on funds received in the last two major election cycles from Uber, Lyft, San Diego-based energy company Sempra and tobacco giant Philip Morris. This year, the two committees received only one contribution, a $15,000 cash injection from Amazon.

The fourth most important spending committee in the race, and certainly the most mysterious, is called San Diego Families Opposing Georgette Gomez. The committee’s major funders are neither families nor San Diego. They understand JobsPAC, one of the commissions affiliated with the chamber; Californians for Jobs and a Strong Economy, another corporate-funded committee and regular campaign funder of moderate Democrats; a self-proclaimed real estate developer in southeast Los Angeles County who was twice fined by state campaign finance monitoring agency while managing committee funds for other Southern California races; and the former mayor of West Covina.

But the biggest contributor to the committee, by far, as first reported Voice of San Diego, is Ramos Towing, a towing company in the eastern outskirts of Sacramento. The company, through its owner Henry Ramos, contributed $49,500 to the anti-Gómez effort.

It is a significant sum. Under state law, if a single donor give more than $50,000 to an independent spending committee, it is required to list that person or business as a “Top Donor” on its campaign materials. Ramos did not respond to phone and email requests for comment.

Gonzalez, the former incumbent, claimed it’s telling that while pro-Gómez spending is easy to identify as coming from organized labor, the funding and political organizing behind San Diego families opposing Georgette Gomez are much more opaque.

“If I was oilmen, landowners, big business and insurance companies, I’d probably be hiding too, because my district isn’t buying this,” she said.