City council candidate Rene Gonzalez may have to pay $77,140 in fines for violating the city’s small donor election laws, according to a letter sent to Gonzalez’s campaign Tuesday. The fine, proposed by city election officials, is the largest in Portland’s Small Donor Elections program history.
Gonzalez’s campaign, which is attempting to unseat incumbent city commissioner Jo Ann Hardesty, has been renting a 3,185 square foot office building in downtown Portland since May. The property, owned by Portland businessman Jordan Schnitzer, is advertised online for $26 per square foot annually, or about $6,900 per month. Gonzalez has been renting the office for $250 per month plus $540 in monthly utilities—a 96 percent discount that has saved the campaign $33,250 on rent since May.
According to Portland elections officials, the deeply discounted rent counts as an illegal $33,250 campaign contribution. Gonzalez’s campaign is part of Portland's Small Donor Elections program, which aims to make city elections more fair by restricting the amount of money that can be donated to a campaign. By joining the program, candidates commit to not accepting donations over $250 from a single donor per election. The city also matches donations of $20 or less through the program, allowing campaigns to turn $20 into $200 and finance their entire campaign using small donors.
Schnitzer is also one of Gonzalez’s top donors, contributing $250 to his campaign—the maximum donation allowed under the program.
Gonzalez’s campaign manager Shah Smith said that they intend to file an appeal with the city over the fine, arguing that, despite the significant discount, the campaign was renting the office space at market rate due to the vast vacancies and “dismal state of downtown” Portland.
"Landlords are desperate to get any kind of compensation for their space because of the city's failures to address crime and homelessness has made downtown inhospitable to tenants, landlords and visitors,” Gonzalez’s campaign said in a statement.
When Gonzalez was first notified of the investigation into the discounted rent by elections officials in August, he also attributed the low rent as a product of the retail market.
“There is substantial office vacancy downtown and tenants are routinely getting multiple months of rent free when signing long-term leases,” Gonzalez wrote. “Because we rented month-to-month, we availed ourselves of lower monthly rent (instead of getting months of free rent).”
In a letter notifying Gonzalez of the penalty, director of the Small Donor Elections program Susan Mottet said that because a 96 percent discount was not advertised or available to other members of the public, it counts as a campaign contribution.
“The City concludes that all 96.37% of the discount is not available to the general public and therefore a contribution that violates program requirements,” Mottet wrote.
The proposed penalty is $43,890 paid to the city and $33,250 paid to Schnitzer to return the “in-kind contribution.”
Gonzalez has until October 4 to either appeal or pay the fine.