Did property owners group violate election laws? Hearing has been set

Berkeley commissioners will hold a hearing to determine if a Berkeley property owners group violated campaign finance reporting laws. Photo: Miriam Stahl

One year after the contentious 2016 elections and nine months since a complaint was filed, the Berkeley Fair Campaign Practices Commission will hold a hearing on charges that a group representing Berkeley property owners violated campaign finance laws.

This latest development tops months of consideration by the Berkeley Fair Campaign Practices Commission (FCPC), the City Council-appointed commission charged with watchdogging city election campaign finances under the Berkeley Election Reform Act or BERA.

And it follows years of acrimonious political history between the Berkeley Property Owners Association, its political and legal committees, and tenant’s rights advocates.

The hearing, which does not have a date yet,  was called by the FCPC last month, after rejecting other avenues for dealing with the alleged violations.


At issue are two 2016 campaign expenditures of $9,450 each by the Berkeley Rental Housing Coalition’s Independent Expenditure Committee Supporting Nate Wollman and Judy Hunt, then candidates for the Rent Stabilization Board. The coalition is a political arm of the Berkeley Property Owners Association.

Hunt, an incumbent, was defeated, as was Wollman. (Hunt has since been appointed to the Board of Library Trustees.) Months later, in January 2017, Rob Wrenn, a former Berkeley planning commissioner and co-founder of the Berkeley Progressive Alliance, complained to the FCPC that some expenses for things such as campaign paraphernalia including signs and fliers weren’t disclosed within 24 hours as legally required. The matter first came before the commission in March.

The property owners association didn’t dispute the claim. The law firm it hired to manage its campaign finances, Sutton Law, took responsibility for the failing, according to Krista Gulbransen, the association’s interim executive director. She called it a “clerical” error.

“The firm made the mistake, and they’ve made countless depositions on how they mistakenly didn’t file the financial report during the required period for the campaign,” Gulbransen said. “They manage hundreds and hundreds of filings. Of all the hundreds, they missed this one.”

Sutton Law retroactively completed the required filing at the end of January, a few weeks after the complaint surfaced.


Penalties not violations at issue

What’s at issue, however, are the penalties or consequences for the violations, as well as how this is decided.

Under Berkeley’s election law, the secretary of the FCPC investigates complaints, bringing them to the commission when determined to have validity.

The FCPC has a choice of actions once it’s decided there’s probable cause of a violation, a determination the commission made in this case in April. They range from dismissing the violation, to further investigation, to a negotiated settlement, to a public hearing.

The commission also has a choice of penalties if violations are upheld, from taking no action to requiring the correct reporting to assessing fines of up to $1,000 per violation or up to the amount of the undisclosed expenditure (whichever is greater), in this case, $9,450 per violation.

At its October meeting, the commission voted 7-2 for a public hearing, with some members saying this is the best way to get a full review of the lingering matter.


This came after the commission rejected a draft agreement in April, outlined by then-City Attorney Zach Cowan, that called for an $890 fine —and after the commission voted in July to direct the secretary to enter an agreement for the maximum fine of $18,900.

The decision for a hearing pleased tenant advocates but disappointed the property owner’s committee.

“The Berkeley Tenants Union is glad to see the commission has finally taken the first step and scheduled a hearing after the repeated, bad-faith stalling tactics by the Berkeley Property Owners Association,” said Matthew Lewis, a representative of the group.

The Tenants Union is calling for the maximum fine, or $18,900. “If campaign finance laws are not enforced with real consequences, then they are useless,” Lewis said.

The property owners had pressed for a negotiated settlement by a subcommittee. In a negotiated settlement, the outcome is public, but the discussions are private.

In a letter to the FCPC chairman before the October meeting, James Sutton of the Sutton Law Firm asked for the negotiated settlement, claiming, in part, that the impassioned climate of previous meetings on the matter affected the commission’s ability to be impartial, as required by law.

“It has become clear that politics and personal biases have made it impossible for the commission to hear the matter in a fair and impartial manner,” Sutton wrote.

“The political fervor at the public meetings have made them an inappropriate venue to produce a reasonable settlement. Appointing a negotiating subcommittee would make it much likely that the commission can consider the facts, comparable cases and appropriate procedures and penalties in a way that leads to a reasonable resolution and which protects the Committees due rights process.”

The letter, which was included in the agenda material for the October meeting, went on to accuse the FCPC of several due process and procedural violations, including holding private conversations with protestors, permitting protestors to chant prejudicial slogans, using unsubstantiated disparaging terms to describe housing association members and more.

Nick Sanders, the Sutton Law attorney representing the Berkeley Rental Housing Coalition, said the maximum fine is unwarranted and that a public hearing is a waste of public money, requiring extra staff time.

“I can tell you that we have been cooperating in good faith with the Commission for eight months and I have personally attended five meetings to answer questions and provide information. From the beginning, we have been clear that we would like to pay a fine and settle the matter,” he wrote in an email. “We are disappointed that the Commission has decided to reject the City Attorney’s recommendations and proceed to hearing.”

Winding through the vetting process 

Since March, the matter has been on the FCPC agenda at each meeting.

In April, the FCPC approved probable cause of violations and considered the agreement proposed by Cowan. The next month it asked staff to provide more information. In July, the FCPC voted on the stipulated agreement with the maximum possible fine of $18,900. In September, Sutton Law responded with its letter asking for a negotiated settlement. Then last month, the FCPC voted for a hearing.

This isn’t the first time the FCPC has considered complaints against groups connected to the property owners association.

In 2013, the FCPC fined a committee backing pro-landlord candidates for the way it administered funds, reaching a stipulated agreement. The then-president of the Berkeley Property Owners Association was a backer of the committee.

And separately last year, the state Fair Political Practices Commission said it was investigating allegations that the Berkeley Rental Housing Coalition had violated financial disclosure requirements in campaigning for the defeated Measure DD to raise business tax on rents. Lewis was the one who made the complaint.  The investigation is still continuing, said Jay Wierenga, communications director for the FPPC.

Voters approved U1, a competing measure calling for a greater tax increase on rents.