Even Mayoral Races Are Getting Distorted by Big Money in Politics

Introduction

Candidates for federal office are raising increasingly large amounts of money — and this trend is not just confined to the national stage. In his race for office in 2014, sitting San Jose mayor Sam Liccardo alone raised $1.9 million — more than the average successful candidate to the U.S. House of Representatives that year. And while the 2018 election did not reach those astronomical heights in San Jose, it did see all three contested city council seats go to candidates who received the most money, incumbent or otherwise. During the 2018 election cycle, candidates for mayor and city council collectively brought in $1.9 million, according to a MapLight analysis of campaign contributions. Less than 40 percent of this total came from San Jose residents. In addition, of the $744,000 received from residents, 70 percent came from donors giving more than $500.

Money in politics influences who runs for office, who they talk to on their campaigns, who wins, and what policies get enacted — at every level of government. In San Jose, our analysis shows that wealthy donors and special interests play a disproportionate role in elections.

Key Findings:

• Money made a difference. Though there were only three contested races in 2018, in each, the candidate who raised the most money won the election.
• Easy victories still attracted large donors. During a nearly uncontested reelection bid, Mayor Liccardo received $818,000.
• Most money in San Jose elections did not come from San Jose residents. City residents provided just 39 percent of the funds received by candidates during the 2018 election cycle.
• Small donors made up only a small share of fundraising totals. Donors giving $200 or less to candidates provided just 12 percent of all candidate funding.
• Donors from affluent, majority white, and minority Hispanic neighborhoods tended to give more money to candidates. Contributions from majority white, minority Hispanic, and more affluent zip codes were higher, on average, than contributions from majority–minority, majority Hispanic, and lower income zip codes.
• Most money came from high–dollar donors. People giving $500 or more contributed 57 percent of all funds received by candidates — and over 66 percent of the money received by victorious candidates.
• Special interests remained integral to candidates’ fundraising. Contributions from companies, political committees, and other organizations comprised 19 percent of all candidates’ funding and 22 percent of the winning candidates’ donations.

The 2018 Election

The mayor’s seat and five city council positions were up for election in 2018. Following a narrowly contested election in 2014, incumbent mayor Sam Liccardo was easily reelected in 2018, receiving more than 75 percent of the vote in the June primary (thus avoiding a November runoff). Only one of his three opponents, Quangminh Pham, received any financial support — but Pham only garnered 7 percent of the vote. Another opponent, Steve Brown, received 14 percent of the vote, while the remainder went to Tyrone Wade.

Of the five city council districts up for election in 2018, Districts 1 and 3 were completely uncontested, with incumbents Chappie Jones and Raul Peralez reelected without facing any challengers. Magdalena Carrasco easily won reelection against her opponents in District 5, receiving more than 68 percent of the vote in the June primary and avoiding the November runoff. Only two races, Districts 7 and 9, were highly contested and continued to a runoff. District 7 incumbent Tam Nguyen lost his seat to Maya Esparza, in a race too close to call for days after the election. Esparza finally came out ahead by 1,700 votes, unseating Nguyen, who had previously defeated Esparza in 2014 by just 200 votes. District 9 was an open seat due to councilman Don Rocha reaching his term limit. The June primary saw six candidates in this race, each receiving at least 5 percent of the vote. Kalen Gallagher and Pam Foley led the primary neck and neck, separated by just 220 votes. This tight race continued through the November runoff, where Foley edged out Gallagher by just over 500 votes.

Total Contributions

While nearly uncontested in his bid for reelection, Mayor Liccardo still amassed $818,000. The only other mayoral candidate who received campaign contributions was Quangminh Pham, who brought in $57,800. These sums were far lower than the $1.95 million raised by Liccardo in the 2014 election, or the $1.19 million brought in by his 2014 opponent Dave Cortese.

Table 1: Summary of Campaign Contributions

Altogether, the 18 city council candidates running in 2018 brought in just over $1 million. While just three of the five seats were contested — and only two of these races were competitive — the winners of all three contested races did outraise their opponents. The two city council members who were elected in the November runoff raised an average of $163,000, significantly more than the runners–up, who raised an average of $116,000. Carrasco, who secured reelection in June, raised $100,000. While running completely unopposed, the two incumbents in Districts 1 and 3 brought in $41,000 and $85,000 respectively for their campaigns. The remaining 11 city council candidates, who did not proceed past the June primary, raised an average of $22,000.

Sources of Funding

There are four private funding sources that candidates can pursue when raising money for their campaigns: companies and other organizations, unions and political committees, individual donors, and self–funding. Other than personal contributions, contributions from any of these sources were limited to $1,200 to mayoral candidates and $600 to city council candidates per election. Candidates participating in the June primary and the November runoff could receive two contributions at the maximum value from the same donor, since they ran in two elections. Except for three candidates who chose to fully self–finance, all of the 2018 candidates received the majority of their funds from individual donors.

Figure 1: Sources of Funding for San Jose Candidates, 2018

Individual donors contributed $773,000 to city council candidates during the 2018 election, 75 percent of the $1 million those candidates raised overall. Of this amount, $446,000 came from residents of San Jose — just 44 percent of all money received by candidates. A total of $299,000 was contributed by Californians not residing in San Jose, and the remaining $28,000 came from out-of-state donors — 3 percent of city council candidates’ overall funding.

City council candidates raised an additional $127,000 from companies and other organizations — 12 percent of their total receipts. The five winning candidates collectively brought in $86,000 from these entities. Tam Nguyen, the runner-up for District 7, received $34,000, making him the largest recipient of money from companies and organizations of any 2018 city council candidate. On the other hand, the runner-up for District 9, Kalen Gallagher, did not receive any contributions from these donors. The remaining $7,000 contributed by companies and other organizations was spread amongst the other 11 candidates.

A total of $93,000 came from political committees — 9 percent of the funds raised by city council candidates. Political committees heavily favored successful candidates, with $72,000 going to winners and $3,800 to the two runners-up.

Some candidates also self-financed their campaigns. A total of $31,000 came from the candidates themselves, mostly from candidates who did not receive enough support to win in the primary or progress to the November runoff. Winning candidates only contributed a combined $600 towards their candidacies, while the runners-up gave another $2,000 to their own campaigns.

In the mayoral race, incumbent Sam Liccardo also raised most of his funding — 83 percent — from individual donors. Of the $676,000 he secured from individuals, the majority (52 percent) came from people residing outside San Jose, including elsewhere in California ($352,000) and out of state ($27,000). The money he did receive from residents made up just 36 percent of his campaign cash. The rest he raised from companies and other organizations ($132,000) and political committees ($10,000). The only other mayoral candidate who raised any money in 2018 was Quangminh Pham, who relied exclusively on self-financing — all of the $57,800 he raised came from his own personal funds.

In 2014, Liccardo raised more than double the amount he did for his 2018 reelection, but the sources of his fundraising remained constant. Of the $1.95 million he secured in 2014, 86 percent ($1.7 million) came from individuals, 12 percent came from firms and other organizations, and just 1 percent came from political committees. His 2014 opponent, Dave Cortese, relied less heavily on individual donors, with 10 percent of his $1.19 million coming from political committees, 20 percent from companies and other organizations, and 70 percent ($827,000) from individual donors.

More than half of both candidates’ funding from individual donors came from people living outside San Jose, including a combined $103,000 from donors outside California. Liccardo received $814,000 (42 percent of his total funds) from San Jose residents, while Cortese received just $405,000 (34 percent of his total funds) from residents.

Zip Code Analysis

Figure 2: San Jose Zip Codes by Demographics, 2018

Looking at the breakdown of contributions received by zip code allows for comparisons to Census demographic data, illustrating trends about the origins of candidate funding. In the 2018 election, the average contribution from majority-minority zip codes, majority Hispanic zip codes, and zip codes with a median income below the statewide median were all lower than their counterparts (zip codes that were majority white, minority Hispanic, and those with a median income over the statewide median). At a macro level, the more white, less Hispanic, and wealthier zip codes made larger contributions on average than other San Jose zip codes. Even further contrasts emerge when narrowing the scope to closely contested races.

Figure 3: Contributions to 2018 Candidates by Zip Code

2018 City Council — District 7

Figure 4: Contributions to Maya Esparza and Tam Nguyen (District 7)

Isolating campaign contributions to Maya Esparza and Tam Nguyen (winner and runner-up respectively in District 7) illuminates differences in where the two candidates received money from relative to the city council district they sought to represent. While city council districts and zip code borders do not align perfectly, it is clear that Nguyen received more financial support from the east side of District 7, while Esparza received most of her support from the west side. Donors residing in the seven zip codes that overlap, to varying degrees, with the borders of District 7 contributed $21,000 to Esparza’s campaign and $22,000 to Nguyen. The rest of the funds that Esparza and Nguyen received from individual donors, $70,000 and $64,000 respectively, came from people living outside District 7.

2018 City Council — District 9

Figure 5: Contributions to Pam Foley and Kalen Gallagher (District 9)

Looking at the contributions to the winner and runner-up for City Council District 7 (Pam Foley and Kalen Gallagher), there is a clear difference between their donor bases. Zip codes 95124 and 95118 comprise the majority of the area included within District 9. Gallagher received nearly $20,000 from these two zip codes, while Foley raised $5,000 from residents of the same geographic area. The borders of District 9 do not conform strictly to zip codes, and Foley received sizable sums from many zip codes that do overlap with District 9, including more than $38,000 from the 95125 zip code. However, within the two zip codes which are nearly fully contained within District 9, Gallagher raised four times more money from individual donors than Foley.

2014 Mayoral Race

Figure 6: Contributions to Sam Liccardo & Dave Cortese (San Jose Mayor)

The only other closely contested race in our analysis was the 2014 mayoral election. In this election, Liccardo received sizable sums from zip codes in three general regions: downtown San Jose, the west side of the city, and Palo Alto/Menlo Park (outside the city). Dave Cortese received most of his financial support from downtown San Jose and the eastern and southern portions of the city.

Size of Contributions

Figure 7: Total Contributions by Donor Size

Candidates to city council received the plurality of their money (45 percent) from individual donors giving at least $500 across the primary and general elections. Of the $552,000 received by the five winners, 52 percent came from large–dollar contributors — approximately 431 individuals, contributing an average of $672 apiece across the primary and general. Fifty-five donors maxed out their contributions to a single candidate by giving $1,200 over the course of the election cycle — the maximum allowed in San Jose, which has contribution limits of $600 per election for city council races.

In comparison, the two runners-up in the November election brought in 42 percent of their funds from large donors. This $97,500 came from 146 individuals, who gave an average of $668 apiece. 120 of these donors contributed the maximum amount in at least one of the elections. The remaining 11 candidates for city council could trace 32 percent of their contributions to large donors. Approximately 135 individuals supplied $78,000 to these city council hopefuls, averaging $579 per person, with 96 of these donors giving the maximum legal amount.

On the opposite side, winning city council candidates raised less than $57,000 — just 10 percent of their campaign funds — from small donors contributing $200 or less. The two runners-up raised more than $61,000 from small donors — a larger amount than all five winners combined. They received an average small donor contribution of $73, compared to the average small donor contribution of $98 to winning candidates. Small donor contributions also made up a larger proportion (26 percent) of their fundraising. The remaining 11 city council candidates secured $77,000 from small donors, representing 32 percent of their total receipts. They received an average small donor contribution of $80, placing them right between the winning candidates and the runners-up.

Mid-sized donors, those giving between $200 and $500, contributed nearly $47,000 to elected city council members — 8 percent of the money these candidates raised. The two runners-up alone received nearly as much from midsized donors, just under $34,000. This sum represented a larger share of their total funding — 15 percent of their financial support overall. The candidates who did not progress past the June primary collectively took in $31,000, or 13 percent of their fundraising total.

Figure 8: Average Contributions to City Council Candidates by Donor Size

The higher contribution limit for the mayoral race allowed candidates for mayor to secure even more money from large contributors. In 2018, Liccardo brought in $610,000 from individual donors giving at least $500 — more money from large donors than all 18 city council candidates combined. Sixty percent of these donors maxed out their contribution to Liccardo at the $1,200 per election contribution limit.

Including his receipts from the 2014 election, Liccardo has taken more than $2 million from large donors across both elections — 75 percent of all his funding. His 2014 opponent, Dave Cortese, brought in over $593,000 from large individual donors. This only comprised half of his campaign cash, as Cortese relied more extensively on political committees, small donors, and companies and other organizations than his opponent.

Small donors represented a small portion of the contributions Liccardo received in either election. In 2014, he brought in less than $99,000 from small donors — just over 5 percent of his $1.95 million haul. During his 2018 reelection campaign, he received $35,000 from such individuals — less than 5 percent of his funding that year. Cortese brought in slightly more money from small donors, a total of $128,000, or 11 percent of his campaign funds.

Figure 9: Mayoral Contributions by Donor Size

Top Contributors in 2018

Table 2: Top Contributors during the 2018 Election Cycle

By aggregating contributions made by each organization and its employees across all candidates, we can identify the largest contributors in the 2018 election. The top 10 contributors each donated $6,000 or more during the 2018 election cycle. Together these 10 organizations and their employees contributed more than $80,000 (4 percent) of all money received by candidates.

Out of all the money from the top 10 contributors, 88 percent went to Mayor Liccardo and the five elected city council members. The runner-up candidates in Districts 7 and 9 brought in less from the top contributors than any of the successful candidates in contested races — just $700 and $4,300 respectively. The other 11 city council candidates combined received slightly more than $4,400 from these top contributors.

All of the top 10 contributors supported Liccardo’s reelection bid. He received nearly half of all money donated by these companies and their employees: $40,000 in total. The second largest recipient of money from the top 10 contributors was Pam Foley, who was elected to the open seat in District 9. She received a total of $10,800.

This trend continued down through the top 40 contributors, who together donated $224,000. Winning candidates again took in the largest share — 86 percent. Liccardo and Foley continued to be the largest recipients, securing $90,000 and $49,000 respectively from these 40 organizations. In fact, Liccardo raised more than 10 percent of his money from the top 40 contributors. The 13 city council candidates who were not elected received just $31,000 from these 40 contributors.

Figure 10: Money From Top 40 Contributors to 2018 Candidates

Real Estate

Five of the top 10 contributors in 2018, and more than half of the top 40 contributors, were companies operating in the real estate industry. Twenty-four real estate-related firms and their employees contributed nearly $123,000 (combined) to candidates in 2018. They largely favored winning candidates, donating $116,000 towards their campaigns.

Liccardo received the majority of the contributions from the top real estate contributors, collecting over $55,000 for his reelection campaign. Following close behind, Pam Foley received $32,000 from the top real estate contributors, which translated to 18 percent of her total campaign cash. The two candidates who ran unopposed, Jones and Peralez, brought in $8,400 and $10,000 respectively, significant percentages of their smaller fundraising totals.

Comparison to Mayoral Top Contributors in 2014

Table 3: Top Contributors during the 2014 Mayoral Race

In his 2014 race for mayor, Sam Liccardo received more than 10 percent of his funding from the top 40 contributors in that year — a similar proportion to the amount he received from the top 40 in 2018. Cortese also received more than 10 percent of his funding from these top contributors. The top 40 contributors supplied more than $330,000 to Cortese and Liccardo’s coffers.

More than half of the top 40 contributors to the mayoral race worked in the real estate industry; these 22 firms and their employees contributed $163,000 to the 2014 mayoral race — 5 percent of all money raised by the two candidates. Liccardo received the majority of this money, bringing in $110,000, while Cortese received the other $53,000.

Many organizations were top contributors in both 2014 and 2018. Employees of the city of San Jose and Santa Clara county, two of the area’s largest employers, snagged top spots in both years, together contributing $59,000 to the 2014 mayoral race and $20,000 to candidates running in 2018.

The largest subset of repeat top contributors were firms operating in the real estate industry. Employees of Toronto-based Colliers International, Steinberg Hart, The Sobrato Organization, employees of SWENSON, The Arcadia Companies, employees of Salas O’Brien, and employees of Brandenburg, Staedler & Moore all ranked among the largest contributors in both 2014 and 2018.

Employees of Silicon Valley tech giants Cisco Systems, Apple, and Google were also top contributors in both years, together donating $23,000 in the 2014 mayoral race and $14,000 to 2018 candidates for local office. These companies have been involved in major real estate transactions in San Jose in recent years. Other top contributors in both years included San Jose trash and recycling collection company GreenWaste Recovery, as well as employees of Silicon Valley law firm Hopkins & Carley.

Conclusion

Running for political office, even at the local level, is an expensive endeavor. Our analysis shows that San Jose candidates receive a significant portion of their financial support from wealthy donors, corporate contributions, and donations by special interest political committees. Money is not determinative of all election outcomes or political actions, but it is influential, affecting with whom politicians speak, the perspectives they hear, and the positions which they choose to take.

Methodology

Campaign records for the 2018 election were gathered on July 29, 2019 from the most recently amended filings available via San Jose’s public portal. Campaign records for the 2014 election were gathered from PDF files received from the City of San Jose on July 29, 2019. Candidates’ total contributions include monetary and non-monetary contributions received between January 1st of the year before the November election until December 31st of the election year, excluding outstanding loans and miscellaneous increases to cash.

Unique contributors were estimated by grouping contributions by first name, last name, and zip code. All discussions of resident contributors are based on whether a donor had a San Jose address. Discussions of zip code demographics utilized the 2017 American Community Survey estimates of the corresponding zip code tabulation areas. Maps which include contributions by zip codes are based on the outlines of 2010 U.S. census zip code tabulation areas, and outlines of city council districts are provided by the City of San Jose.

Acknowledgments

This report was made possible with support from the Silicon Valley Community Foundation. We would like to thank Working Partnerships USA for providing input on the analysis.