Public campaign financing in 2018 reduced influence of large donors, enticed more people to run, report shows

Incumbency and fundraising ability still mattered as the two sitting council members won reelection. However public financing allowed candidates to spend more time talking to constituents.

Kate Harrison supporters Jim Hendry (her husband) and Brenda Balcazar just outside City Hall. Harrison participated in Berkeley’s public campaign financing for her 2018 race. Photo: Pete Rosos

The use of public financing in the 2018 election increased the number of candidates running for the four City Council seats up for grabs, made the races more competitive, reduced the amount of funding from out-of-town, business and political committee donors and prompted more local residents to donate. Small donations became more important than large ones. Public financing also allowed candidates to spend more time talking to potential voters rather than dialing for dollars.

These are some of the conclusions reached in a new report by Maplight on Berkeley’s public campaign financing. Maplight, a non-partisan non-profit group that reveals the influence of money in political campaigns, was also the organization that helped to push for the passage of Measure XI, the Berkeley Fair Elections Act, in 2016. About 65% of Berkeley voters voted for the plan.

“The Berkeley Fair Elections public funding program underwent its first test in the 2018 election,” according to the report. “Our analysis shows that the program effectively met its goals: it empowered candidates to run for office based on the strength of their community support, reduced the influence of special interests in Berkeley elections, and amplified the voices of small donors in the political process. Programs like this set the stage for governments that better represent the interests of the people and democracies in which wealth doesn’t control access to political voice.”

The Fair Elections Act — first implemented in November 2018 — requires mayoral and city council candidates who participate to only accept contributions of $50 or less. (The current maximum is $250.) In exchange, Berkeley matches the contributions six to one. “A $10 donation becomes worth $70 to the candidate; a $50 donation becomes $350,” the report reads.


Candidates who participate cannot take money from businesses or political groups. Donations from people who live outside of Berkeley are not matched.

Candidates can get a maximum of $40,000 in matching donations. The program costs the city about $315,000 in 2018, according to the report. The law requires Berkeley to set aside about $500,000 from the General Fund each year, with a cap on the public financing fund of $2 million.

In 2018, 10 out of 14 city council candidates (71%) participated in public campaign financing. The four who won election to the council — Lori Droste, Kate Harrison, Rigel Robinson, and Rashi Kesarwani — all participated in the program.

“I think this system is deeply revolutionary,” Robinson said at a July City Council meeting where small tweaks to the law were passed. “It makes a candidacy like mine, for example, possible and viable. I told students—who were my primary donors—often that if they could forego a single burrito with guac, that would multiply six-fold into a meaningful contribution to keep our campaign running.”


Harrison agreed.

“I ran once under the regular financing system and once under public financing,” she said at the meeting. “And what that meant to me in the second round was that I was able to talk to voters a lot more. I didn’t have to talk to them about raising money, I got to talk to them about ideas.”

Incumbency still mattered. Both Harrison and Droste were able to raise funds more quickly than other candidates as evidenced by the fact they reached the $40,000 cap in just a few months.

Berkeley City Hall.  Photo: Miriam Stahl

The report’s key findings:

Races were more competitive. There were more viable candidates in each race in 2018 than in earlier years.
Wealthy donors had less of an impact than previously. The amount of money that candidates received directly from donors fell by 50 percent compared to 2016.
The candidates who raised the most won their races.
Contributions from businesses and political campaigns fell. In 2014 and 2016, those groups gave $10,000 to candidates. In 2018, this fell to  $4,500.
Funding from outside Berkeley decreased dramatically. Contributions from those outside city lines were about 10% in 2018 compared to  33% in 2014 and 2016, according to the report. “Contributions from outside California dropped to less than 1.5 percent of all funds in 2018, from nine percent in 2014 and six percent in 2016.”
Donations under $50 increased. They made up 10 percent of direct contributions to candidates in 2018, compared to just three percent in 2014 and 2016.
There were fewer large donations and they mattered less. In 2014, contributions of $250 made up 58 % of candidate funds in 2014, and 64% in 2016. Under public campaign financing, only 15 percent of direct contributions came from individuals writing $250 checks.
More Berkeley residents donated to candidates. More than 1,170 Berkeley residents contributed $50 or more in 2018, compared to just 930 in 2016 and 670 in 2014. “Eighty-six percent of all campaign funds—including direct contributions and matching funds—can be traced to Berkeley residents, compared to just 60 percent in 2014 and 2016,” according to the report.
There were more donors. Compared to the 2014 election (when the same seats were last up for a vote), there were more donors from every zip code in 2018.
It took less work. Candidates had to raise much less money to run an effective campaign. “In 2014, candidates received an average $21,900 each from donors; in 2016, candidates averaged $26,300,” according to the report. “In 2018, candidates raised an average $11,400 directly from donors—nearly a 50 percent drop compared to 2014.”
Less money flowed into the election. In 2014, the 10 candidates for the city council raised $219,400  and in 2016 the 12 candidates raised $315,700, “likely due to increased public interest as a result of four contested city council races and a concurrent mayoral election, according to the report. In 2018, the amount candidates raised fell to $159,000.

Source: Maplight
Source: Maplight

Revisions to the 2016 law made

There were a number of hiccups in the process, however, and the City Council voted unanimously in July to amend the law.

For example, Igor Tregub a rent board commissioner running for the District 1 council seat, could not use public financing because he deposited $100 in the bank to open a campaign account (the bank minimum) when the maximum contribution allowed was $50. That action disqualified him from public financing. Council amended the law in July to permit candidates to contribute $250 to open a bank account but specified those funds would not be eligible for matching funds.

The 2018 process got bogged down because the Fair Political Practices Commission had to approve every application for matching funds. The Council voted to give the authority to approve the matching funds to the city, (the clerk’s office)  turning approval into an administrative process. The entire commission will continue to review the matching funds.

The Council also gave the commission the authority to disregard “inadvertent, minor disqualifying actions by campaign committees,” and to give it “discretion in enforcement of certain Public Financing requirements.”

In the District 8 election, city staff determined that the candidate Mary Kay Lacey had made a misstep. Her husband and campaign manager Stephen made a $50 loan to her campaign and followed it up with a $50 contribution, bringing the total amount of his give to $100. That was above the maximum allowed. Lacey paid back her husband $50 but staff told her it was still illegal to have accepted a $50 loan. Berkeley’s Fair Practices Campaign Commission eventually dismissed its finding that the campaign probably violated election law. However, Lacey and her campaign had to spend time addressing the issue.

Under the revised law, the commission has more flexibility than it had previously and can more easily“forgive” inadvertent missteps.

Droste, who agreed to pay $750 in a stipulated agreement for violating Berkeley’s election law by hosting a party in a vacant storefront and not paying rent for it, commented on the complexity of Berkeley’s election law at the July meeting. (She had contended that the rental would have been permissible under other Berkeley election law).

“Some of us were guinea pigs along the way,” she said. “There were kinks along the way. But it’s a tremendous way to even the playing field.”

Public financing attracts a larger pool of candidates

A number of City Council members praised the public financing endeavor for attracting candidates who might otherwise not be inclined to run for office because of the onus of raising money. The report confirmed those impressions. Ten of the 14 people running for city council office (71%) in 2018 were first-time candidates for the city council, according to the report.

“This was a slightly higher proportion than in previous years; from 2014 to 2017, 15 of 24 candidates (63%) were running for the first time,” said the report.

Mayor Arreguín won’t use public campaign financing in 2020

Berkeley’s next municipal election is November 2020.  Berkeley Mayor Jesse Arreguín has already announced he won’t be participating in public campaign financing, although he supports the law, voted to put it on the ballot and hates spending time raising campaign funds.

“Running a city-wide campaign when you are capped at a specific amount is very challenging,” said Arreguín. “I need to be sure I have the resources to get my message out to the voters. That’s why I chose not to do public financing.”

He pointed out that Berkeley set the maximum donation of $250 in the late 1970s and with inflation, it doesn’t buy much anymore. Each campaign mailer costs between $20,000 and $25,000 he said.

City Councilwoman Sophie Hahn is not planning on using public campaign financing either, according to a recent election-related email she sent out.

Arreguín said Berkeley has passed a number of open government rules in the past few years to ensure transparency in government. Starting in January, all lobbyists will have to register with the city. There is a “revolving door” law in place requiring city employees to wait a year between leaving city employment and lobbying for a business or organization. The council is also looking at creating an ethics commission to oversee election laws and open government ordinances.

“We have open government rules to ensure transparency of the civic process,” he said.

Frances Dinkelspiel is co-founder and executive editor of Berkeleyside. Email: frances@berkeleyside.com.