The city elections office remains convinced that city council candidate Rene Gonzalez did violate small donor election laws when he accepted—and failed to report—a heavily discounted rental rate for a campaign office in downtown Portland offered up by a monied campaign donor.
While Gonzalez urged the city to reconsider its $77,140 fine levied against his campaign earlier this week, Small Donor Elections Director Susan Mottet informed the campaign Thursday that the fine still stands.
"The [Small Donor Elections] program has determined that the initial penalty imposed is justified," wrote Mottet in a letter sent to the campaign Thursday.
Gonzalez had previously argued that accepting a $250 monthly rate for an office rental in downtown Portland that normally goes for a monthly rate of $6,900 was not an in-kind contribution from property owner Jordan Schnitzer. According to Gonzalez, that's because vacancy rates are so high in downtown Portland that the rental would have gone unrented if his campaign hadn't occupied the space, essentially making the space worth $0.
Here's how Mottet responded to that claim:
"The campaign asserts that the fact that the space sat empty for the last two years while advertised at $6,900 monthly rent suggests that the $6,900 per month figure [is] not its fair market value. The City asserts that the fact that the building sat empty for two years rather than the advertised rent being reduced shows that the property owner was unwilling to lease the space to the general public for less than the advertised rent, let alone at the 96.37% discount the campaign is receiving. If a member of the general public cannot lease the space for the same $250 monthly rent that the campaign is leasing the space for, the difference between the rent the campaign pays and the amount the general public could lease the space for is the contribution amount. In this case, $6,900 monthly rent minus $250 monthly rent paid is a $6,650 monthly contribution."
Gonzalez's campaign also accuses Mottet's office of attempting to undermine Gonzalez's campaign for council a month before he challenges City Commissioner Jo Ann Hardesty at the polls.
"This is the city putting its finger on the scales in our election," said Gonzalez campaign manager Shah Smith Tuesday.
The campaign argued that the announcement of the penalty resulted in negative media coverage of Gonzalez's candidacy. Mottet placed that blame squarely on Gonzalez.
"The [Small Donor Elections] program did not proactively reach out to press to alert them of the penalty," she writes. "The widespread press coverage appears largely to be the result of the Rene for Portland campaign sending a press statement out to a broad range of print and TV news outlets."
Mottet also threw out the campaign's complaints that the Multnomah County District Attorney's office pays $0 in monthly rent to lease their office in a county-owned building.
"The Multnomah County District Attorney is not a member of the general public. District Attorneys are elected officials," the letter reads. "What is relevant is only whether the discount is available to the general public at the same rate as what the campaign paid. That a space has been rented to someone who is not a member of the general public for below market rates does not create a loophole in campaign finance law."
The proposed penalty against Gonzalez is $43,890 paid to the city and $33,250 paid to Schnitzer to return the “in-kind contribution.” Mottet did not suggest lessening either of those fines.
Gonzalez's campaign has previously said they plan on appealing the city's penalty in court. Gonzalez has until October 6 to file the appeal. If the campaign chooses to instead pay the fine, they have until October 13 to do so.
The Gonzalez campaign did not respond to the Mercury's request for comment on this decision.