Back in late March, lefty mayoral candidate Rae Huang’s campaign posted on social media that they had met all of the requirements for receiving matching funds, which are public dollars that can help grassroots candidates compete against establishment candidates, even when they don’t have connections to wealthy donors.
Her campaign posted to social media on March 25 saying they’d “unlocked” those dollars, which come from a pot of public money set aside for candidates for LA city office who seek donations from Los Angeles city residents giving small amounts up to $257. Candidates who want their small donations matched also need to debate other candidates and limit their spending. The Huang campaign celebrated unlocking funds as evidence that their campaign was fueled by “people power.”
“Not only that, we cleared all the qualifications for matching funds on the EARLIEST DAY we could! Some people have stated that this is nearly impossible. However, nothing is impossible for a grassroots campaign,” the post read.
The matching funds program has been touted as a way to focus candidates’ time on the not-so-deep-pocketed. And after it was revamped to give candidates a decently sized war chest to mount a viable campaign, it has resulted in candidates in recent years being able to mount successful campaigns to flip LA city seats from establishment politicians to fresh blood, mostly those with progressive leanings, at City Hall, where elections previous to this had been a sleepy affair. Receiving matching funds itself has also been viewed as a badge honor and a sign of viability.
But with just a week left before polls close for the June 2 primary, those public dollars remain locked away for the Huang campaign, and no checks have been cut to them. Based on public records obtained by The LA Reporter, and interviews, Huang’s campaign staff has yet to qualify for and receive the matching funds that they have been touting, two months after they first announced that they had done it.
Those records and interviews show the campaign has been stuck working through corrections on numerous small dollar donations, which need to be submitted with enough information for Ethics Commission staff to be able to vet those donors as real people living in the city.
Meanwhile, two other candidates in the mayor’s race have already picked up matching funds checks multiple times. Mayor Karen Bass has gotten nearly $1.1 million in matching funds, while Council member Nithya Raman just over a week ago submitted enough small dollar donations to hit the maximum $1.25 million in matching funds she could possibly receive from the city.
With a week left before polls close, it is uncertain if those funds will even arrive before election day, on June 2, for Huang. Her campaign staff told The LA Reporter they are hopeful they will be able to submit enough eligible small dollar donations to qualify for the funds by this week. But observers closely familiar with how the current matching funds program works say it’s incredibly unlikely Huang’s campaign will make it in time.
The campaign's statements over the last couple month about “unlocking” matching funds have, meanwhile, come under heavy criticism, including from those who view those posts as attempts to misrepresent their campaign’s progress. Those criticisms became even more intense after Huang’s campaign made a second post, about a month later on April 25, saying that their campaign had earned more than $504,000 matching fund dollars and describing themselves as being the first campaign to “unlock” matching funds.
Some of the strongest criticisms came from Rob Quan, a respected City Hall watchdog who was closely involved in helping to develop and push for the current matching funds system, which increased the value of the small dollar donations candidates receive to six to one.
Such public financing programs are vulnerable to attacks from powerful officials, fearful of competitive elections, who look for any excuse to dismantle it, according to Quan. And he said it was distasteful for the Huang campaign to mislead the public about how well their campaign was doing, as it can lead to other rewards like receiving endorsements and media coverage, as well as support from would-be donors and voters.
Quan told The LA Reporter that he had initially waited to see if matching funds would come in after the initial post in March. But the post on April 25, which came out soon after Huang’s campaign disclosures revealed poor fundraising numbers, and around $22,000 cash on hand for the campaign, rankled. He took to social media to talk about the Huang campaign’s announcement, saying that the campaign was lying about their campaign’s status.
“I’ve never seen an establishment dem, or literally anyone, blatantly lie to their supporters about the status of their campaign (claiming an infusion of $500k) to cover up for their campaign being out of $, all to try to raise more $,” he wrote.
Quan said the posts by Huang’s campaign have been misleading, to the point that to this day he talks to people who had assumed Huang’s campaign did get the matching funds, and he has had to show them that the funds aren’t on the Ethics Commission website, indicating the campaign doesn’t have those funds.
“The difference between your campaign being broke and having $500,000 is a big fucking deal,” Quan said. “Especially when you're sitting where you are currently in polling. That’s completely misrepresenting the status of the campaign.”
“And to use that to try to get people to support you, to donate to you, is really sheisty,” he added.
Meanwhile, the Huang campaign insists they did not put out those statements in order to lie about their campaign’s fundraising and viability. And their general consultant, Andrew Jiang, says not having those funds has tripped up their campaign in a serious way, because they didn’t have any money available to them to communicate to voters at the end of April, just as vote-by-mail ballots were getting sent out. “It was damaging to the campaign that we didn’t have money at that moment,” Jiang said.
Jiang told The LA Reporter in a Zoom call on Saturday that the initial post had really been made to celebrate reaching their goals, after they had been updating supporters about trying to meet the $77,100 threshold for small donations they needed before they can qualify for the matching funds. The campaign has said that they internally tracked reaching that amount.
Even though the campaign had announced on March 25 that they had unlocked the matching funds, it actually took more than a month, until May 7, for the campaign to be able to submit a claim of $79,288.18, based on public records The LA Reporter obtained. This is just a couple thousand dollars above the $77,100 threshold to qualify, although campaigns expect that a sizable chunk of donations will get rejected by the LA City Ethics Commission and would need to be corrected before being resubmitted. Because the process for accepting donations in most campaigns currently doesn’t allow for campaigns to control some of how donors input their information, there will inevitably be donor-submitted information that need to be corrected.
The LA Reporter also obtained an April 15 email in which the Ethics Commission refused to accept a submission that the campaign’s treasurer had sent in. This was three weeks after Huang’s campaign said they’d met all of the requirements.
The Ethics Commission stated in their email on April 15 to the campaign’s treasurer that, “at this time, we cannot accept this claim. Contributions on a qualification claim must meet or exceed the minimum cumulative threshold amount. LAMC § 49.7.23(C)(1)(a). For a mayoral seat, the minimum cumulative threshold of qualified contributions from individuals residing in the City is $77,100. Please submit a new claim when this requirement has been met.”
The LA Reporter shared this email with the campaign on Saturday. It wasn’t included in a five-page timeline they prepared in response to earlier questions from The LA Reporter. Both Jiang, and their spokesperson Emel Shaikh said they had not seen this email exchange. The LA Reporter also reached out to the treasurer for a response, but did not receive a reply. Jiang said of this April 15 rejection that their campaign had “submitted more than $77,000 to our treasurer and she took out stuff she thought [the Ethics Commission] wouldn’t accept, and submitted the rest of it, and it was not enough.”
Jiang said they had earlier submitted matching fund donations of $90,000, which they thought had $78,000 that was matchable, to their treasurer on April 3. The process, he said, is that the treasurer would flag donations likely to be rejected and exclude those donations from the submission. In late April the campaign finally submitted a large set of donations, but that got kicked back after Ethics told them that some of the donations received through t-shirt sales had to have the cost of the shirts deducted. After they did that, they resubmitted. It was after this that they submitted a claim in early May. That was days after the April 25 social media post about earning more than $504,000 in matching funds.
Based on the campaign’s timeline, they met with the Ethics Commission staff from May 11 until May 13. Jiang said he was working on correcting donations on May 14, when they received the list of rejected donations from the Ethics Commission.
This donation curing process involves reaching out directly to donors and having them submit a statement to correct occupations, which need to be written out a specified way. In some cases, there are misspellings, or unit numbers for apartments are missing, or they do not list an LLC, if they have one, and are self-employed. People who don’t have an LLC still need to submit a declaration before their donation can be accepted.
And some donors submit with a bit of flair. One donor, who also happens to volunteer with their campaign, submitted their occupation as “spy” and their employer as MI-6. In reality, that person works in real estate, Jiang said. To correct that, it would require going back to the donor to ask that they provide a written statement to affirm their real employment information. Other corrections can be made through researching and obtaining backup documentation.
This correction process is laborious, and often grassroots campaigns don’t end up doing them. That’s because many such campaigns had not actually done a campaign with a threshold of $77,000, and could get away with not doing it, according to another campaign lead.
Huang campaign manager Bill Pryzlucki explained that in a council race, there is less emphasis on correcting rejected small dollar donations, because campaigns usually just continue to fundraise for those dollars until they’ve hit their threshold, something that was fairly achievable for many of their campaigns. And the maximum amount of funds they could get is much lower than the $1.25 million for mayoral races, so they end up meeting that ceiling before they even get to the set of donations that need to be rejected.
Pryzlucki told The LA Reporter that it took him a bit before realizing that a mayoral campaign’s matching funds was on a whole different playing field. He said that his spouse works on the campaign of Faizah Malik, who is challenging Traci Park for her 11th Council District seat. Malik had qualified for matching funds earlier than the incumbent, Park, and he said he was feeling insecure about how he was doing with Huang’s campaign, compared to his spouse, before realizing that the threshold for qualifying to receive matching funds for a City Council race was $14,300, roughly five times lower than for a mayoral race.
“What are we doing wrong? What’s wrong with us?” Przylucki remembered asking himself.
He added that there aren’t many experts on doing LA city’s matching funds, and it’s usually something that gets tacked onto treasurers’ many duties. But one of their opponents in the mayor’s race, Raman, has a particularly unusual asset on their campaign — Jamie York, who he called an “LA city ethics beast.”
York, who is listed as a compliance consultant in Raman’s campaign disclosure, is mostly known as president of the Reseda Neighborhood Council, although she has had past experience working on campaigns from years ago. According to Raman’s campaign, York worked on their matching funds submissions including personally handling corrections and curing, including correcting donations even before submitting claims for matching funds.
Meanwhile, Huang’s campaign has mostly tasked people who are currently handling other duties to work on the matching funds. Pryzlucki said he is among several people who are “helping do the cures for Rae’s campaign.” Jiang said Saturday that it might have been easier to have had a dedicated person handle the work. He also said there was an element of underestimating what needed to be done.
Jiang also said only he and one other person on Huang’s campaign have worked on other political campaigns. Everyone else on their small team of about 10 people have not worked on a campaign before and were learning the ropes as they went. He noted many are also not used to the fierce exchanges, that may include hurtful language, that gets hurled during an election. And he noted that things can get more intense during exchanges over the internet.
The delays with Huang receiving matching funds have also been attributed to other factors. Several people on the campaign hinted at disruptions to their overall operations due to life events as contributing to the two month delay in getting their matching funds claim sorted. Shaikh said members of their team have been “tackling personal life things like keeping up with paying rent, and ailing parents.”
“There’s been a mix of human error, and the reality of being a person in the world,” Emel Shaikh said in a phone interview last Wednesday. When she was asked later about assertions that the campaign was lying, including by Quan, Shaikh responded that, “I understand if he feels upset about a program he helped to develop, but his assertion that our campaign is purposefully lying or trying to deceive the public is false and damaging.”
“Our campaign has also received severe pushback, criticism and gatekeeping, not to mention disrespectful and derogatory statements and bad faith arguments on social media, which have escalated considerably in the last few weeks in no small part due to Mr. Quan’s commentary,” Shaikh said.
When asked to respond to Shaikh calling his statements “false and damaging,” Quan responded, “Tell them to sue me. There’s nothing defamatory about the truth.”
Some of the most laborious work that the Huang campaign is doing is taking place fairly late in the game. It was not until May 14 that Jiang and others dove into curing, or correcting, rejected donations, including Pryzlucki’s own $257 donation to Huang’s campaign from last December. Pryzlucki had only just started the process on May 16, of sending in a declaration to the staff’s finance director stating that his full name was actually William, and the name of his consulting company.
That also happened to be around when new polling came out showing that Huang was polling the lowest of the candidates surveyed about. The LA Reporter had followed Huang’s campaign staff and volunteers as they tabled outside the Metro station. As they spoke to people getting off and on Metro buses, they told The LA Reporter that the polling numbers only made them more motivated to get more people who would typically not be engaged in elections to find the time to plug into how their city government could make a difference in their lives.
The matching funds would have built on other things the campaign had been working on, including its social media and digital presence, according to Shaikh, who said they were hoping to “speak to voters, especially those who are disproportionately disengaged from the primary election process altogether.”
“A staggering 70% of Los Angelenos did not vote in the last primary election. We (Rae for LA) have built an incredible digital infrastructure, but not having access to funds we have been counting on has hindered our ability to translate that digital momentum into offline action — but there still remain 10 days [now seven days] in the campaign and we didn’t come this far to give up trying until the last polls close on June 2.”
This statement by Shaikh comes as the campaign has been increasingly under pressure from some who are insisting that Huang drop out of the race. There are worries that reality TV star Spencer Pratt, whose campaign is fueled by Republican dollars, could make the runoff along with the incumbent Mayor Karen Bass, who despite being a Democrat, is herself unpopular among progressives and those who identify with DSA-LA politics. There is some overlap between voters of Raman and Huang, and some who were feeling undecided, had shown up at a meet and greet at a North Hollywood brewery back in early April with the goal of see if it would help them decide on which candidate they wanted to support.
One donor, who said he did not want his name to be in the story, to Huang’s campaign told The LA Reporter that he had actually changed his support to Raman from when he first gave $20 to Huang in early February and when the campaign finally reached out on May 17 to ask him to provide a declaration about his employment as part of corrections they were making in order to qualify the donation for matching funds.
The donor told The LA Reporter in an email that he had since soured on Huang’s campaign, for several reasons, but in no small part because of the fact that the campaign announced they’d gotten funds, but then failed to get them matched many weeks later.
“Lying to people is a huge red flag for me,” he said. “It’s such a weird thing to lie about. Just be honest about the money you raised. Just a little lie like that makes me think, what else are they lying about?”
He also said that the “silence has been pretty loud,” when they have been called out. Speaking more openly about it “would have shown they’re listening to people and they aren’t afraid to admit they were wrong. I think that’s a huge thing. Admitting you made a mistake and learning from it, it’s big for me. I’ve seen a lot of people, when they do it, you’re more likely to give them a second chance, give them the benefit of the doubt.”
Quan told The LA Reporter that his goal hasn’t been to “bully or pester” people, but he takes issue with people threatening the integrity of the matching funds program, as it is incredibly vulnerable to “huge institutional resistance.”
Politicians in power “don't want people to have resources to run against them, and they don't want multiple people to have resources to run against them,” Quan said. “You heard Karen Bass the other week say she would prefer to have no opponent. That's the world these politicians live in. So they don't want grassroots candidates running against them. They don't want to have a system with competitive elections.”
“It was a big challenge” to have gotten LA’s “City Council members to say, ‘Yeah, I would like to have more people running against us and make it easier for them to have well resourced campaigns,” Quan said, rattling off the various incumbent candidates who eventually got ousted by grassroots candidates or left office because of the threat of them who were or could have been helped by matching funds.
“How did that [the new matching funds system] work out for David Ryu, the original champion of matching funds reform?” Quan asked. “We had to get (Mike) Bonin and (Paul) Koretz to do it. How did that work out? Paul Koretz, he lost to Kenneth Mejia because of this program. How did it work out for Gil Cedillo and Mitch O’Farrell? The people in power did not want to see this change, and this is why this is a sensitive issue.”
Quan said that when the current matching funds program was being developed, they were trying to balance things. And one of the things about the mayoral funds is that there was a need to show that a candidate was indeed viable.
“Part of the reason the threshold is so high for mayoral candidates compared to other offices is because we give out a lot more money for our mayoral candidates,” Quan said. “So, yeah, we want to have candidates who demonstrate viability get that money. We have a system that's pretty accessible for council candidates. You're running for mayor, bro.”