The City Council approved new campaign finance rules Tuesday night following concerns that contributions may influence decisions on awarding contracts or land-use entitlements.
The concerns were ignited by a federal investigation into alleged fraud by Advanced Development & Investment Inc. — a low-income housing developer that allegedly had subcontractors give $100,000 to past City Council campaigns on its behalf.
Council members said the new rules will make fundraising more difficult, but the change was the right thing to do in order to restore public trust.
Under the stricter rules, contractors, subcontractors and land entitlement applicants and their subcontractors can’t make campaign contributions for 12 months if their contracts with the city are valued at $25,000 or more. And elected officials also can’t vote on $25,000-plus contracts for 12 months after receiving contributions.
City officials plan to create public reports naming vendors, contractors, subcontractors, applicants seeking entitlements and their subcontractors to cross-reference with campaign donors.
The new rules limit campaign contributions to $1,000 per person per election cycle and cap loans at $5,000, but allow council members to open officeholders accounts capped at $10,000 a year. Money donated to that account can be used on event fees, educational courses and other expenses.
Once an election starts, an incumbent must shut off fundraising for their officeholder account. If they leave office, the leftover cash would go to a nonprofit or be rolled into the city’s General Fund.