Mission Local is publishing a daily campaign report on each of the major candidates in the Mayoral race, rotating a candidate each week through November. This week it’s Mark Farrell. You can find previous reports here.
When it comes to campaign finance, San Francisco mayoral candidate Mark Farrell has a history of flouting regulations or, as in the case of the small business owner nominee on the ballot, testing the boundaries of what is permissible.
The history of the scandal dates back to when Farrell was first elected to the Board of Supervisors in 2010. In 2015, he was hit with what was then the largest ethics fine in city history for illegally coordinating with an independent political committee. In 2016, after he was elected, he used the remainder of his campaign funds to entertain guests on more than 30 occasions.
The questionable behavior continues: In June, he misappropriated funds from a ballot measure committee to his mayoral campaign, the San Francisco Chronicle reported in late June.
While such tactics are common, this one attracted attention because of the huge amount of money involved — $57,415 — and because rival campaigns alleged he was illegally using the money to sponsor the Room 200 election rather than to vote.
Earlier this year, Mr. Farrell’s ties to Together SF, a billionaire-funded political advocacy group, came under intense scrutiny from his opponents, including Mayor London Breed and Board of Supervisors Chairman Aaron Peskin, who withdrew from a mayoral debate hosted by the group.
Ethics experts said all of Farrell’s transactions were loopholes in campaign finance laws.
“This is against the law,” said Quentin Kopp, a political veteran who previously served on the Ethics Commission. “Why have an ethics law and an ordinance that creates an ethics commission?” he asked, if the fines for ignoring the ordinance are minimal.
Kopp described Farrell’s record as “successfully circumventing laws limiting the amount of contributions that can be made to supervisory elections 10 years ago and to this mayoral election.”
“It takes so long to reach a verdict of guilt or innocence that people are gaming the system,” added political consultant David Ho. Regarding the recent allegations, Ho said, “Even if they don’t break the law, they do break the spirit of the law.”
The Farrell campaign has denied any wrongdoing. “Mark has always followed the law when it comes to fundraising and all submitted expenses have been reviewed and approved by legal counsel,” said Jade Too, a Farrell campaign representative.
Mayor Breed has also had ethics issues — for failing to disclose a gift of car repairs from former Public Works Commissioner Mohamed Nuru, who was convicted in a wide-ranging corruption scandal, and for using her position to seek a pardon for her imprisoned brother — but so far no other candidate has committed as many violations as Farrell.
Similarly, Board of Supervisors Chairman Aaron Peskin has also faced fines. In 2019, the Ethics Commission fined Peskin $8,000 for placing misleading ads in two Chinese-language newspapers during his 2015 oversight election, and in 2020, he faced a $500 fine for failing to report donors who contributed to his 2016 campaign.
But Farrell’s offence was the more serious in terms of the fine, and a look at his record shows how slowly offences can be adjudicated.
Timeline of suspected election activity
2010
In 2016, Farrell paid $25,000 to settle allegations of collusion between his 2010 mayoral campaign and an independent political committee called Common Sense Voters. The settlement cleared Farrell of any wrongdoing, which is prohibited. Mayors and mayoral candidates can only accept contributions up to $500, and cannot accept money from corporations.
But while the Independent Expenditure Committee has no restrictions on how much money it can receive or from whom it can receive it, the $500 limit becomes meaningless if the two sides don’t coordinate.
In 2010, Farrell’s opponent, Janet Reilly, filed a complaint alleging that Farrell’s then-campaign manager, Chris Lee, conspired with Common Sense Voters to send mailings to block Farrell’s election in 2010.
Those mailings may have been decisive: Farrell won the election by just 258 votes.
Following Riley’s complaint, Farrell was fined $191,000, the largest amount ever imposed at the time, though city lawyers later advised that the fine should be reduced to $25,000 because the statute of limitations had expired.
In 2015, the FPPC cleared Mr Farrell of any wrongdoing and concluded that he neither knew about nor authorized his campaign manager’s actions, but acknowledged that he was ultimately responsible.
Kopp called the tactics “fraudulent conduct” and expressed frustration that the Ethics Commission reduced the fine. “That’s one of the reasons I resigned from the Ethics Commission,” Kopp said.
2016
As the San Francisco Standard reported this week, Farrell used leftover funds from his 2016 Democratic County Central Committee run to provide more than 30 meals to unnamed guests after he was elected.
He also kept the account open and received several large donations from groups that do business with City Hall during that same period in 2018, including $5,000 from Recology, the city’s waste disposal service provider, and $2,500 from Mayes Oyster House, a Polk Street restaurant.
Just over a week after receiving the Recology payment, Farrell nominated former Recology executive Paul Giusti for re-election to the Treasure Island Development Authority. Giusti was one of the executives caught up in the Nuru corruption scandal. In 2021, Giusti pleaded guilty to funneling hundreds of thousands of dollars to nonprofits controlled by Nuru in return for raising San Francisco residents’ trash fees.
Then, when he became mayor in 2018, Farrell appointed Matt Colvey, one of the owners of May’s Oyster House, to the Small Business Commission.
Farrell’s campaign declined to comment on the matter.
2024
Vote designation
Farrell, a managing director at multimillion-dollar venture capital firm Thayer Ventures, confirmed his candidacy for the November election last month by filing a formal ballot paperwork in which he listed his occupation as “small business owner.”
In public, Farrell often touts his private sector experience and frequently refers to himself as an “investment banker” or “venture capitalist.” He refuses to call himself a “small business owner.” Following Mission Local’s reporting, a group of 14 small business owners objected, saying the designation was “intentionally designed to mislead voters.”
Despite the complaint, the Elections Department subsequently approved Farrell’s designation after he submitted a statement that his company had less than $2 million in revenue, meaning he would likely appear on the ballot as a “small business owner.” The department referenced the federal definition of a small business that it employs: “a business with revenues of $40 million or less and 100 to 1,500 employees.”
Farrell’s campaign declined to comment on the designation, saying it had “nothing to add.”
2024
Expense Pool
While candidate-controlled committees cannot coordinate with the independent expenditures committee, what candidates can do is raise unlimited funds and set up separate committees to support ballot initiatives. Farrell’s campaign has done just that, endorsing TogetherSF’s proposals to reform city commissions and give the mayor more power.
The proposal would effectively cut the city’s 130 committees in half, to 65. Though the measure was only approved earlier this week, Farrell’s committee has already raised nearly $400,000 in support of the measure.
While piggybacking on ballot measures is not uncommon, it is unusual that the Farrell campaign listed $57,415 in joint expenses for both committees as payments to campaign staff. In particular, campaign officials questioned the purported rationale behind the expenses (staff canvassing to rally support for the measure) since the measure did not qualify for the ballot at the time.
Ho, the political consultant, explained that pooling expenses this way would make it much easier for Farrell to cover his campaign costs. If a member of Farrell’s staff making $5,000 a year was paid directly by Farrell, he said, they would have to make 10 monthly donations of $500 each, because of the contribution cap. But what happens when a ballot measure goes through a committee? “Someone like William O’Berndorf could just write me a check and pay me months of my salary,” Ho said.
“How does that not violate the spirit of the law?” Ho asked.
