In a means, it’s a narrative as previous as time: ultra-wealthy figures pouring a flood of cash into metropolis politics in an effort to form the best way it’s run.

Nonetheless, the political-influence machine that tech billionaires and enterprise capitalists have lately inbuilt San Francisco stands out for its measurement and ambition. A brand new evaluation of marketing campaign filings, non-profit information and political contributions by the Guardian and Mission Native reveals the extent of this community, which is utilizing its monetary and organizational muscle to push the famously progressive metropolis into adopting insurance policies which can be more durable on crime and homelessness, and extra favorable to enterprise and housing development.

Prior to now six years, outstanding tech and enterprise capital leaders – together with the hedge fund supervisor William Oberndorf, the billionaire investor Michael Moritz, the cryptocurrency booster Chris Larsen, the PayPal co-founder David Sacks, the Y Combinator CEO, Garry Tan, and the Pantheon CEO, Zachary Rosen – have invested at the very least $5.7m into reshaping San Francisco’s insurance policies, based on the evaluation of public knowledge. As a result of not all of their donations are publicly disclosed, the sum of their contributions could also be far greater.

In a solidly Democratic metropolis, they’ve joined forces with conventional enterprise and actual property elites in an effort to oust a few of its most progressive leaders and undo its most progressive insurance policies.

To attain these targets, they’ve created a unfastened community of interlocking non-profits, darkish cash teams and political motion committees – a framework colloquially often called a “gray cash” community – that enables them to obscure the true scale of their involvement in San Francisco’s municipal politics.

David Sacks in San Francisco in 2016. {Photograph}: Beck Diefenbach/Reuters

The three main teams on this community – NeighborsSF, TogetherSF and GrowSF – have pulled in additional than $26m in contributions since 2020, based on marketing campaign finance and tax information, greater than $21m of which they’ve spent on varied political points.

“They’re utilizing a number of layers of organizations to cover the sources of their cash, and to cover how a lot they’re spending,” mentioned Jim Stearns, a political marketing consultant with a long time of expertise in San Francisco politics and a critic of the teams.

“This can be a $20bn hostile takeover of San Francisco by folks with vested actual property and tech pursuits, and who don’t need anybody else deciding how town is run,” he mentioned, referring to the mixed wealth of probably the most prolific new donors.

Community diagram of headshots

Billionaires’ growing involvement

In its storied historical past, San Francisco has all the time seen tycoons search affect over metropolis enterprise. Within the 2010s, the tech investor Ron Conway performed a vital function within the election of the mayor Ed Lee and was a significant factor within the ascent of the present mayor, London Breed, after Lee died in workplace in 2017 . However the entry of a libertarian billionaire class into native politics is new, mentioned political operatives and individuals who have been focused by them. So are the huge quantities of wealth created in the newest tech growth that these figures can faucet into.

The San Francisco mayor, London Breed, in 2019. {Photograph}: Eric Risberg/AP

Political observers hint the newcomers’ involvement to 2018, when a particular election introduced Breed to energy. Their engagement grew as progressive candidates received quite a lot of slim however shocking victories in 2019, together with the district lawyer workplace and several other seats in San Francisco’s legislative physique, the board of supervisors. However, these observers say, their political participation actually intensified throughout the pandemic, when frustrations over rising seen homelessness, a pointy improve in petty crime and fentanyl-related overdose deaths, and an financial downturn within the metropolis boiled over.

“There’s a rising sense … that town’s progressive political class has failed its residents,” Moritz, the billionaire investor and a former journalist, wrote in a Could 2023 function for the Monetary Instances. “On-line discourse about San Francisco’s ‘doom loop’, a downward financial and social spiral that turns into irreversible, feels much less like hyperbole by the day. Even for a metropolis that has all the time managed to rebuild after flattening monetary and geological shocks, San Francisco – emptier, deadlier, extra politically dysfunctional – appears nearer to the brink than ever.”

The priorities of those deep-pocketed figures have different. Oberndorf, the hedge fund supervisor, had been a long-time constitution faculty advocate and main Republican celebration donor. Larsen, the crypto investor, has been a robust backer of increasing police ranks and surveillance capabilities. Tan, the Y Combinator CEO, has pushed for enterprise insurance policies favorable to crypto, synthetic intelligence and autonomous vehicles.

Broadly, although, they keep that San Francisco wants a more durable strategy to homelessness and drug issues, a extra punitive strategy to crime, and a local weather extra pleasant to enterprise and housing development. Some have referred to as for centralizing extra energy within the workplace of the mayor.

In previous years, a number of of those operatives have arrange organizations to advance coverage on these points – non-profit organizations, so-called darkish cash teams, political motion committees and even media retailers.

Tents line a sidewalk on Golden Gate Avenue in San Francisco in 2020. {Photograph}: Jeff Chiu/AP

Dogged reporting by Bay Space retailers has beforehand uncovered a few of the cash flowing into these teams. However their construction makes it troublesome to simply uncover all sources of donations. Political motion committees, or Pacs, are required to call their main donors. However the so-called darkish cash teams, that are technically civic leagues or social welfare teams, have been shaped beneath the 501(c)4 part of the tax code, and should not have to reveal donors or political contributions. For the reason that 2010 supreme courtroom ruling Residents United v Federal Election Fee relaxed regulation round political donations, 501(c)4 teams have exponentially elevated their involvement in political donations, to the tune of at the very least $1bn by 2019 nationwide, based on ProPublica reporting.

Nonetheless, the Guardian and Mission Native’s evaluation of economic information reveals a number of of the organisations donating cash to at least one one other, and several other teams sharing personnel, addresses and donors. And it reveals the sheer monetary deluge they’re spending forward of the 2024 elections.

Sophisticated contributions

Among the many most outstanding and resourced teams on this community is Neighbors for a Higher San Francisco Advocacy, which was based by Oberndorf, and an affiliated 501(c)4 began by the longtime San Francisco actual property lobbyist Mary Jung, amongst others. Oberndorf sits on the board of administrators of the darkish cash group.

NeighborsSF says it’s dedicated to enhancing public security, public training and high quality of life within the metropolis, backing what it calls “pragmatic” and “accountable” teams and candidates. The group has funded publicity campaigns for reasonable candidates and bankrolled different 501(c)4s working to advance associated points.

NeighborsSF has been primarily funded by a handful of extraordinarily rich donors from the tech and actual property worlds. Marketing campaign contribution knowledge from the San Francisco Ethics Fee and state election disclosures present that Oberndorf has poured greater than $900,000 through the years into the 501(c)4s. The group’s greatest donor, Kilroy Realty, a southern California-based agency with main holdings in downtown workplace property and extremely desired parcels within the South of Market district, has given $1.2m since 2020. The dynastic actual property investor Brandon Shorenstein has contributed $899,000 via his household’s actual property agency. Larsen has donated at the very least $300,000. Moritz donated $300,000 in 2020 alone.

The Kilroy Realty chief government, John Kilroy, in San Francisco in 2017. {Photograph}: Liz Hafalia/San Francisco Chronicle through Getty Photographs

Moritz is without doubt one of the most outstanding gamers in reshaping San Francisco. Since 2020, he has donated greater than $336m in the direction of varied causes within the metropolis, each social and political, based on a current Bloomberg report.

Along with his contributions to NeighborsSF, Moritz seeded $3m for TogetherSF Motion, a 501(c)4 that’s most famously identified for a flashy, sarcastic poster marketing campaign decrying town’s fentanyl disaster and campaigns for increasing the facility of the mayor. The group has an affiliated non-profit, TogetherSF, that serves as a volunteering hub. In accordance with incorporation filings with the state of California, Moritz occupies key positions with each organizations, which additionally share personnel with NeighborsSF. Moritz has additionally sunk $10m into the San Francisco Normal, a startup information publication within the metropolis run by Griffin Gaffney, a co-founder of TogetherSF.

The third huge participant is GrowSF, a darkish cash group run by Sachin Agarwal, an alum of Apple, Twitter and Lyft, and Steven Buss, previously of Google and Amazon. Tan is a member of its board. GrowSF has a number of affiliated Pacs and says it endorses “widespread sense” candidates as an alternative choice to “far-left” elected officers.

Marketing campaign contribution filings present that main donors embody Agarwal’s father, Aditya Agarwal, in addition to Larsen ($100,000), Tan ($25,000) and Pantheon’s Rosen, a tech investor who launched the controversial pro-market-rate improvement group YIMBY California. GrowSF has obtained tens of 1000’s of {dollars} from NeighborsSF through the years, based on federal tax filings.

Observe the cash

By way of various alliances, the teams have exerted their affect on debates that go to the guts of San Francisco coverage. Among the many first was the February 2022 recall of three members of the San Francisco faculty board, whom voters ousted from workplace over frustrations with the gradual reopening of district faculties throughout the pandemic, a controversial proposal to rename faculty websites, racially charged tweets by one of many members, and adjustments to the testing necessities for admission to town’s solely selective tutorial public highschool, Lowell.

The marketing campaign to unseat the members raised greater than $2m, greater than 20 instances the $86,000 the college board members gathered to struggle off the problem, based on marketing campaign contribution filings.

The billionaire constitution faculty backer Arthur Rock was the one largest donor to the SFUSD recollects, giving $500,000. However NeighborsSF Advocacy got here in a detailed second, directing $488,800 into political motion committees supporting the recall effort.

Separate from NeighborsSF, state disclosures present, Sacks gave $75,000 to Pacs supporting the college board recall, and the Y Combinator founding associate Jessica Livingston donated $45,000. Tan, Agarwal and Buss respectively gave $25,000, $10,000 and $5,000 to a cluster of political motion committees bankrolling the college board recall efforts for every particular board member.

NeighborsSF was additionally key to the profitable recall of the progressive district lawyer Chesa Boudin in 2022. A former deputy public defender and the son of convicted “new left” militants, Boudin was elected DA in 2019 on a promise to scale back mass incarceration and police misconduct. The pushback towards his insurance policies was quick.

Over 15 months, Boudin’s opponents raised $7.2m for the marketing campaign supporting his ouster, greater than twice the $2.7m collected by the anti-recall effort, marketing campaign finance knowledge compiled by Mission Native has proven.

Chesa Boudin, then a deputy public defender, checks his watch between courtrooms in San Francisco in 2019. {Photograph}: Lea Suzuki/San Francisco Chronicle through Getty Photographs

Most of those donations have been channelled via NeighborsSF. The group contributed $4m of the $7.2m raised by the marketing campaign, Mission Native reporting established, with the California Affiliation of Realtors coming in a distant second at $458,000 in donations.

State marketing campaign finance information additionally present a $68,000 contribution to the recall marketing campaign by GrowSF’s political motion committee.

There have been different victories. In 2022, GrowSF backed the profitable candidacy of Joel Engardio, a former SF Weekly workers author and former GrowSF management member, for supervisor via its Pac. GrowSF contributed greater than $92,000 in assist of Engardio’s marketing campaign, per state marketing campaign finance knowledge. Since being elected, Engardio has promoted insurance policies together with elevated police staffing, harsh penalties for narcotics offenses, constructing market-rate housing and sweeps of homeless camps.

The Pac additionally spent at the very least $15,400 supporting the marketing campaign of Matt Dorsey, a former head of communications on the San Francisco police division, for a full time period as supervisor. And it spent at the very least $15,569 supporting Brooke Jenkins, Boudin’s successor and a supporter of the recall marketing campaign, when she ran for re-election.

It’s a “longer-term, widespread, deliberate technique”, mentioned Aaron Peskin, the progressive president of San Francisco’s board of supervisors. “They’re propping up innumerable 501(c)4s which can be doing every thing from mounting political assault campaigns to infiltrating dozens of long-term neighborhood teams … Why would you say no if somebody knocked in your door to arrange Saturday neighborhood cleanups?”

In the direction of 2024

With key successes beneath its belt, this community is gearing as much as play a serious function within the 2024 elections, which is able to decide management of the San Francisco board of supervisors and the Democratic county central committee.

GrowSF is among the many predominant drivers behind aggressive efforts to oust two progressive supervisors: Dean Preston, who represents the Haight, Hayes Valley and the Tenderloin districts, and Connie Chan, whose district contains the Inside and Outer Richmond neighborhoods.

The group has arrange separate “Dump Dean” and “Clear Out Connie” Pacs concentrating on the supervisors. GrowSF has raised at the very least $300,000 for its anti-Preston marketing campaign, which has run assault adverts falsely accusing him of opposing inexpensive housing. Larsen, Tan and quite a lot of Y Combinator companions all have donated to GrowSF’s effort, based on San Francisco ethics fee marketing campaign finance knowledge.

Supervisor Dean Preston in metropolis corridor in San Francisco on 5 December 2023. {Photograph}: Tayfun Coskun/Anadolu through Getty Photographs

Tan, who is understood for his large Twitter blocklist and lately confronted ire for wishing a gradual demise upon progressive supervisors on the platform, has personally pledged $50,000 to oust Preston. He’s publicly soliciting extra donations.

Along with the board of supervisors races, GrowSF is backing a slate of reasonable Democrats operating to interchange progressives on the Democratic county central committee, which makes endorsements for the Democratic celebration. A number of of those reasonable candidates are additionally operating for supervisor, and whereas contributions to the supervisorial race are capped, there’s no restrict to donations for the DCCC.

The moderates have collectively raised about $1.16m, about 4 instances as a lot because the progressive candidates.

In mild of the bruising nationwide political panorama in 2024, San Francisco’s proverbial “knife struggle in a phone sales space” could appear inconsequential. However the political community erected with the help of libertarian tech cash has already demonstrated its energy to sit back San Francisco’s progressive politics. Up to now, not one progressive candidate has thrown their hat within the ring to problem London Breed.

Peskin, who has lengthy been eyed as a possible mayoral candidate, advised Politico in January that the tech cash backing reasonable candidates has made it onerous for progressives to struggle again. It was one purpose, he mentioned, why he’s leaning towards stepping into the race.

The success of those political campaigns in one of many US’s most progressive cities might encourage comparable efforts in cities across the nation, Peskin warned.

“There’s a way by these guys that they’re the tip of the spear,” he mentioned. “In case you can tackle liberal/progressive thought in politics in San Francisco, you are able to do it anyplace.”

This story was revealed in collaboration with Mission Native, an impartial San Francisco non-profit information website



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