Camelot came, now Lost?

Newsom fundraising nosedives 40 percent from 2003

Mayor Gavin Newsom, file photo.
Photo(s) by Luke Thomas

By Joe Lynn

August 6, 2007

Congratulations are in order for Mayor Gavin Newsom as he may be a shoe-in for re-election in November. With Matt Gonzalez stepping out of the potential contenders' ring, Newsom appears to have little significant opposition.

But not all is cheery in Camelot-by-the-Bay.

Newsom's semiannual campaign finance report, filed Tuesday, reveals his fundraising campaign is down by a whopping 40% compared to the record-breaking pace set during the 2003 mayor's race. Back then, Newsom raised an eye-popping $6 million. More specifically, the Newsom campaign raised $1.5 million in the first six months of the 2003 mayor's race. After ten months, that figure swelled to $2.6 million.

This time around, Newsom has raised $900,000 after six months, and only $1.5 million after ten months as shown in the following block chart:

This race has new campaign laws, the effect of which is to limit fundraising to only another ten months. That means this year's mayoral candidates are now at the half-way point. Even if the Newsom campaign were to keep up the current fundraising pace, his full take would likely be around $3 million, 50 percent less than in 2003.

This explains why BOMA and the Committee on Jobs have sued the City to set aside third-party independent expenditure contribution limits. These well-funded political action committees have very likely realized that the Newsom's fundraising advantage over Gonzalez, of over 7 to 1 in 2003, was more likely to melt to 2 to 1 in 2007 if Newsom faced a candidate backed with the City's new public finance program. That's way too much of a level playing field for folks used to hoarding most of the financial oxygen in San Francisco elections.

Newsom's fundraising troubles were predicted here first in February. Changes in the law, a foreshortened fundraising cycle, and unknown effects of Newsom's sex scandal contributed to the foreboding; its methodology turned out to be only 3% off the figures turned in some five months later.

February's analysis turned out to be a good demonstration of the power of San Francisco's groundbreaking electronic filing program. Wonks will have a field day interpreting the data.

What are the various factors causing the decline?

In this cycle, Newsom has the advantage of incumbency. Part of the fundraising decline comes from this year's "Other" contributions (which includes now-banned corporate contributions, and still-allowed contributions from partnerships, trusts, unions, etc). The contributions dropped to $26,000 in the first six months of 2007, compared to $367,000 four years ago. Since overall fundraising was off by 40%, one would expect this figure to be about $220,000. The remaining loss of $200,000, would be attributable to the new ban. Since the overall drop in this reporting period was $600,000 -- $900,000 overall contributions this period vs. $1.5 million last cycle -- that leaves $400,000 in unexplained losses.

What can account for the "missing" $400,000 that the Mayor might have expected to raise?

Other changes in the law, like the foreshortened fundraising period, or the no flim-flam $500 contribution limit this cycle, would not be responsible for the $400,000 drop: their effects don't kick in until after the election. The only explanation is that Camelot has been lost due to the various scandals associated with Newsom.

The sex scandal was just one of them.

Conventional wisdom (primarily advanced by the Newsom campaign itself) misled the Chronicle and the Examiner, who are gravely mistaken in claiming that the scandals would not, or have not, hurt Newsom.

Another piece of conventional wisdom was that the scandals would hurt Newsom more outside of sexually hip San Francisco. That assumption has proven to be false. In fact, about 40% of Newsom's fundraising continues to be from outside San Francisco, as it was in 2003. Conclusion? Newsom turnoff appears to be uniform in and outside San Francisco.

The new campaign report also indicates another weakness in what had been thought to be impenetrable armor. The Mayor's ability to negotiate with his campaign manager, Eric Jaye, has some serious shortcomings. There is no doubt who is the top man in that relationship.

Jaye charged as much as 50% of what was raised in the 2 ½ year post-election effort. When considering the usual rate is 10-15%, Jaye's salary is incontestably exorbitant. This year, with no serious opponent in sight, Jaye has already spent over $700,000 of the $1.5 million raised.

We don't know the terms of Jaye's employment, but most big time consultants have a fee based, in part, on the amount spent. A candidate's expenditures can be a legitimate issue in a campaign, particularly when the candidate's executive negotiating skills are at play. The recent WiFi problems with Earthlink have led some to question whether Newsom is the one we would want negotiating on our behalf.

Newsom Campaign Manager Eric Jaye

At the same time, Jaye deserves congratulations of his own for having such a cooperative press in town willing to hide the fundraising storm warnings spotted here last February. For example, Jaye told the Examiner, while the Six Million Dollar Mayor series was running here, that Newsom's 2007 contributions had reached $350,000 by February 20. In fact, Newsom's campaign report belies that as puffery: the true figure was closer to $230,000.

Jaye had overstated the Mayor's fundraising popularity by 50%. Image counts, just as much as a false reality formed by a complicit, non-critical press.

Newsom appears to have won the battle of 2007, but Camelot's shimmering luster has begun to fade. And though Newsom may enjoy re-election in San Francisco, his prospects for statewide office are beginning to look grim.

Camelot of yore was also lost.

Joe Lynn was the campaign finance officer and office manager of the San Francisco Ethics Commission from 1998 to 2003. From 2003 to 2006, he served as one of the five Ethics Commissioners. The San Francisco Examiner called him “the backbone of the Ethics Commission,” and the Bay Guardian named him “a leading voice for reform.”While on staff, Joe was named SF Government Employee of the Year by the SF Weekly in 2003. Mayor Willie Brown gave him two awards for his mentorship work He also received two commendations from the Board of Supervisors, one initiated by then-Supervisor Gavin Newsom and the other by then-Board President Matt Gonzalez. The Northern California Society of Professional Journalists presented him the James Madison Freedom of Information Award in 2003. He managed the City’s electronic campaign finance program (named best in the country by the Center for Governmental Studies) and the conflict of interest program (named best in the state by the Montclarion). He maintains an active interest in good government laws. Email Joe at joelynn114@hotmail.com

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