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Political action arm of the Berkeley Property Owners Association to receive the highest fine in modern Berkeley history

In what should be the final chapter of a long controversy, the Berkeley Fair Campaign Practices Commission (BFCPC) plans to vote on a draft stipulation between staff, the City Attorney's office and a campaign funded by some of the Bay Area’s largest landlords. The proposed fine, $18,900.84, is – by a significant margin – the highest penalty issued in the last 10 years, and possibly in Berkeley history.

If approved on Thursday, the fine would be imposed on agents of the Berkeley Rental Housing Coalition (BRHC), the Political Action Campaign arm of the Berkeley Property Owners Association (BPOA). In the November 2016 election, the BRHC supported two candidates – property owner Judy Hunt and property manager Nate Wollman. 

On November 2, 2016, the BRHC committee made two independent expenditures in excess of $1000 – two $9,450.42 independent expenditure for “campaign paraphernalia” in support of each of these two candidates. Despite a Berkeley Municipal Code requirement to file a disclosure form within 24 hours of each of these filings, the committee failed to do so until January 31, 2017, nearly 3 months later. 

On April 20, 2017, the Berkeley Fair Campaign Practices Commission moved to find probable cause that the committee violated the Berkeley Electoral Reform Act, and on July 20, 2017, after conducting a public hearing, it authorized BFCPC staff to enter into a stipulation with the committee’s signatory. 

The motion was welcomed by affordable housing advocate Christine Schwartz, who volunteered on the successful campaign to elect a progressive team of four Rent Board candidates who were opposed by Judy Hunt, Nate Wollman, and the BRHC. 

“Volunteers like myself knocked on doors all over Berkeley, campaigning the right way,” she said. “It felt like a kick in the stomach to – just days before the vote – see these expensive-looking flyers appear on our neighbors’ porches, and have absolutely no clue how much money was just spent against us.” 

Though the Berkeley Electoral Reform Act requires individual contributions to be limited to $250 per candidate per cycle, these limits do not apply to Political Action Committees. The two campaign expenditures, which totaled nearly $20,000, were raised from just 14 LLCs and individuals, all funneled through the BPOA as its intermediary, according to the filing that was submitted on January 31, 2017. Just five funders – Walnut Creek-based Security Engineers, Inc. at $5,000.00, Berkeley-based Waterbury Properties Inc. at $4,349.50, Nick Pappas of Reno, NV at $1,250.00; Berkeley-based 2324 Bancroft LLC at $1000.00; and Reza Yeganeh of Berkeley at $1000.00 – accounted for $12,599.50 of the total expenditure amount. 

The large level of expenditures on the BRHC’s unsuccessful effort to elect two landlord-backed candidates to the Rent Board was dwarfed by at least $892,540 that the BRHC spent in another unsuccessful Berkeley campaign to try to defeat a modest increase in the business license fee of large property owners that will yield several millions of dollars per year in revenue that can be used to create new and rehabilitate existing affordable housing in Berkeley. Though requiring a simple majority, that measure was approved by Berkeley voters with nearly 75% of the vote, while a competing measure that the BRHC placed on the ballot failed by over 70% of the vote. 

A separate California Fair Political Practices Commission complaint was filed against the BRHC’s ballot measure campaign, though its resolution is unclear at this time. However, the BRHC and its associated organizations have a history of violating campaign law. In 2013 the BFCPC issued the second largest fine in Berkeley history against the landlord-backed, so-called Tenants United for Fairness (TUFF) Slate Mailer Organization (SMO), which was created for the 2012 Rent Board election with the financial and organizational backing of the then-president of the BPOA. In that same year, the state FPPC issued a warning letter to the East Bay Rental Housing Association Political Action Committee for failure to disclose an expenditure of $12,000 in support of the TUFF SMO