A Campaign Finance Vehicle Using Funds from Just one Contributor Has Paid for the Majority of Thao Recall Campaign Expenses; AASEG on Track to Buy 100% of Coliseum Shares from City and A’s

Foundational Oakland Unites Expenditure Committee, a Vehicle for Recall Funds from Just one Contributor

Foundational Oakland Unites [FOU], an independent campaign expenditure committee, has paid the majority of signature gathering bills for the recall of Oakland Mayor Sheng Thao–and received all of its recently reported $605K in contributions from just one person, Philip Dreyfuss, a Bay Area hedge fund manager at Farallon Capital and rental property owner*.

FOU is one of two campaign finance committees dedicated to funding the recall of Sheng Thao. Brenda Harbin-Forte is the ostensible founder and principal for Oakland United to Recall Sheng Thao [aka "OUST"], the primary finance committee that has been publicly associated with the recalls. But FOU has done most of the heavy lifting. On paper, "OUST" raised about $572K by June 30, according to recent reports, but $480K of that amount are contributions and direct in-kind bill payments from FOU using Dreyfuss' money.

"OUST" Would Not Have Raised Enough Funds Without FOU to Cover Intense Signature Gathering

The actual funds raised by "OUST" are a pale shadow of the nearly half a million funneled to the campaign and the payment of its signature gathering costs by Dreyfuss’ through FOU. According to the latest financial reports, FOU paid at least $335K** for Thao recall signature gathering to On the Ground, the signature gathering company that reportedly offered paid gatherers $9 per recall signature. FOU also contributed $130K and loaned $13K of Dreyfuss’ funds to "OUST". FOU's Dreyfuss-funded contributions represent 84% of "OUST's" fund raising and expenditures. "OUST" would have only raised around $88K over six months–and $30K of that from a family of Bay Area investors–without the intervention. That would not have been nearly enough to cover the bill to gather enough qualifying signatures.

FOU Made Only One Other Payment, After the Recall Signatures Qualified

Though FOU is ostensibly the campaign finance arm for Foundational Oakland United, a 501 c 4 organization, the organization itself was only incorporated in December, according to state of California records. There appears to be no public record of FOU’s activity other than starting the independent expenditure committee, which submitted its paperwork in February. FOU's website has only two pages, one listing a four-point set of activities, including rescinding ranked choice voting, and another to give donations.

Though several people have been associated with the organization, only Leonard Raphael, an Oakland resident, remains as a principal on the finance committee. Raphael is also running for the D1 seat, but has raised almost no funds independently, according to his 460 report released the same week. Tanya Boyce, a principal in the 501 c 4, was removed from the list of principals on FOU’s campaign finance committee in documents submitted on July 31, 2024.

No Reports from the Other FOU Donee Committee

According to FOU’s campaign finance report, Dreyfuss’ $605K in donations are the only contributions received by FOU by June 30, the last day of the filing period. On that date, several weeks after the signatures for the Thao recall were turned in, Dreyfuss donated one last contribution of $124.5K to FOU. On the same day, FOU donated the same amount to another committee called Coalition to Reclaim Oakland's Committee to Repeal Ranked Choice Voting“ [sic].

The committee to repeal ranked choice voting is run by Pamela Ferran, according to reports. Ferran is also a recall proponent and the ex-chief of staff for former Mayoral candidate Loren Taylor, who managed and promoted a “slate” campaign for the Democratic Central Committee including Ferran, himself and others. Paperwork to found the anti-RCV committee was submitted in February, about a week after the campaign finance committee for FOU was initiated. Council Member Noel Gallo, who along with Taylor and others organized the submission to the City of an intent to collect signatures for the RCV ballot measure, told the Oaklandside earlier this year that Taylor “pretty much crafted” the intent notice text.

Ferran’s ROV committee has filed no reports since its inception. Though the group filed the intention to collect signatures and it's a primarily formed committee with quarterly reporting requirements, the committee didn’t reach the reporting threshold for campaign donations of $2,000 until July 8th—that was likely the amount contributed by FOU. It’s unclear if the campaign ever collected signatures.

Public Ethics Commission Investigates FOU and "OUST"

FOU and "OUST" are the focus of a current Public Ethics Investigation and the PEC has issued subpoenas for information regarding campaign finances and communications between the two groups. Neither group responded to the subpoenas. In a suit to compel the PEC subpoenas, the PEC alleges a “ pattern which suggests that OUST solicited contributions to itself via Oakland United [FOU] and that Oakland United raised money with the purpose of contributing it to OUST“.

The lawsuit nearly came to an end last week when the presiding judge Julia Spain issued a ruling that found the subpoenas overbroad and unconstitutional. But a day later, Spain abruptly recused herself, withdrew from the case and vacated the ruling, leaving the suit in limbo at the time of this writing.

Dreyfuss is Principal in Price Recall Committee; His Donations Account for One Third of the Total Raised

Dreyfuss is linked to other recall campaigns in the Bay Area. Dreyfuss gave a significant contribution to the recall effort against Chesa Boudin in San Francisco in 2020. But Dreyfuss stepped up his role in the East Bay's anti-progressive recall movement, becoming an on paper principal in the Price recall campaign last year. Dreyfuss was one of three original signatories in the Pamela Price recall campaign finance committee, “SAFE”.

Dreyfuss then left SAFE to co-found an independent expenditure committee for the recall of DA Pamela Price, “Reviving the Bay Area”, which raised the majority of funds used to pay for signature gathering for that effort.

Dreyfuss co-founded and personally contributed $280K and loaned $310K to a campaign committee originally called Reviving the Bay Area [RBA] and later renamed Supporters of Recall Pamela Price. RBA/Supporters played a similar role as FOU, and was responsible for signature gathering payments for the Price recall. RBA/Supporters ultimately raised $1.2 MM, according to its most recent campaign finance report. Dreyfuss’ contributions and loans make up almost half of the total raised by that committee. The committee spent $1.5 MM directly on the recall as of June 30, according to its latest report [some of that is accrued debts, which the campaign owes but has not yet paid].

SAFE, the primary recall finance committee ostensibly run by Carl Chan and Brenda Grisham, have to date failed to post a current finance report, despite being required to do so by July 31. SAFE’s last report which covered the period from January 1 to March 31 reported that the organization had raised about $568K, but almost all of that is payments from Dreyfuss’ committee. SAFE only raised $23K in direct contributions in that report.

Dreyfuss was a co-founder of both Price recall campaign committee funds, but withdrew from the principal committee SAFE, leaving Carl Chan and Brenda Grisham to run it. He then started RBA with local financier Isaac Abid.

Questionable Designations with Different Reporting Requirements

Though both RBA/Supporters and FOU appear to be primarily focused on the recalls, both initially filed as general committees. General committees can raise and spend money for a variety of goals; but a primarily formed committee is focused on supporting or opposing one candidate or measure. A general and primarily formed committee have different reporting requirements this far from an election—primarily-formed committees must report quarterly, while generals only report bi-annually.

The "general" reporting requirements mean that in both cases, a large proportion of signatures in the Price recall, and all of them in the Thao recall, were gathered before the identity of the main financiers of the recalls was publicly known***. Instead, legal requirements on the petition pages and on associated websites showed only the names of the committees funneling the payments. RBA initially followed the rules for a general committee, missing a third-quarter "primary" reporting deadline which would have revealed Dreyfuss as one of the primary funders of RBA and thus, the Price recall effort. In December, after an attorney representing the Pamela Price campaign sent a complaint to the Fair Political Practices Commission [FPPC], RBA was rebranded as Supporters of Recall Pamela Price and its designation changed to primary.

A leaked SAFE campaign document confirmed as authentic by Grisham states clearly that it was the intention of the recall proponents to initiate two separate funding arms–RBA was intended for large donors and was started by Dreyfuss.

In total, between the contributions to FOU and to RBA/Supporters, Dreyfuss has contributed nearly $1 MM to local east bay recalls since 2023, in addition to being the primary initiator on paper of two of the committees.

*Dreyfuss also appears to run at least one LLC with several rental properties in Oakland and elsewhere, along with his spouse. Dreyfuss is on the initial incorporation documentation for Three Steps Properties, LLC.

**Funds paid directly to a contractor on behalf of a campaign finance committee are counted towards the total raised and spent by the committee, but are categorized separately as in-kind contributions.

***by law, the recall petitions must list the name of top financiers of the effort, but the intermediary of the organization allows the organizational name to be listed, not individuals, even when, as in this case, only one person provided the funding for the organization

AASEG on Track to Buy 100% of Coliseum Ownership from City of Oakland & A’s

The City of Oakland signed a Term Sheet on the City's portion of the Coliseum property last Tuesday. Now, one week later, AASEG and the A's have announced that they've also brokered a term sheet, although the details are less clear. The City's deed restriction would guide the requirements on community benefits and affordability on the parcel.

An update at last Tuesday’s Council meeting on the critical sale of the Oakland Coliseum to African American Sports and Entertainment Group [AASEG] had already been upstaged by the day’s news cycle but still provided some additional information about a potential sale. Just days later AASEG also announced it had signed a term sheet with the A’s for their half of the Coliseum property. The pre-sale agreements are a likely indicator that Loop and AASEG can move forward with their deal as outlined in the term sheet published last week, with City budget-critical payments made in time to cover Oakland costs in the fall.

At Tuesday’s meeting, City Administrator Jestin Johnson confirmed that the City has signed a term sheet with AASEG—a commitment to sale requirements, contractual requirements and payment schedules that precedes binding contracts and sales. The term sheet is not, in itself, a Purchase and Sale Agreement [PSA]. The Term Sheet outlines much of what the Thao administration announced in its initial roll out of the deal—deed restrictions requiring 25% affordable housing and community benefits, but for the first time a timeline of payments that would see a little more than half of the funds going to Oakland’s coffers in the 2024-25 fiscal year is enshrined in a contractual document. According to the document, 30 MM will be paid to the city by November in three payments; then one last payment of $33 MM in January.

A Precarious Budget Platformed on a TBA Deal

Thao presented a controversial budget to Council members in June that relied heavily on the potential sale, despite having already missed a deadline to secure the funds that were meant to have balanced a deficit in the 23-24 fiscal year, as well as the 24-25 fiscal year. Despite setbacks, Council President Nikki Fortunato Bas and Dan Kalb expressed confidence that their discussions with city staff, the involved parties in the sale and others that the sale would go through and payments received in FY 24-25.

But even with the sale, which still has not been secured, the City’s credit may be downgraded. The sale remains a high probability outcome, but it's a high-risk bet, given the structural deficit. Bas, as the Council president, presented her budget team’s amendments to the Thao budget, based on the sale—with a stark contingency plan of immediate cuts should the sale fail. The alternative was an austerity budget with cuts beginning almost immediately in the first week of July.

Reid, Ramachandran and Gallo Oppose Budget, but Add Spending to It Anyway

During the budget discussion, CMs Treva Reid, Janani Ramachandran and Noel Gallo vocally opposed the Thao-Bas budget while never actually stating that they supported the austerity alternative. Both Reid and Ramachandran claimed that a better version of the austerity budget could have been arrived at with more time and deliberation had Thao presented it as her budget in May. City staff assured the CMs that no better version of the austerity budget would emerge even with weeks more of deliberation past the budget deadline as Ramachandran had requested [which would cause havoc to the city’s financial systems and itself produce a credit downgrade]. Despite claiming to oppose the budget, however, all three supported amendments to the Thao-Bas budget that required shifting funds to pay for community ambassadors—the transfers included a $300 K reduction to the City’s self-insurance fund, the fund that pays for the City’s insurance for lawsuits. Despite opposing the budget, Reid, Ramachandran and Gallo are relying on the sale for their amendments to come to fruition.

Draft Development Agreement Would Come Before Planning Commission After Property Transfer

During the update Tuesday, a discussion between Kalb, Bas and the City Attorney outlined some more features of the deal. After AASEG takes control of the property in the event of a sale, according to Bas, the developers will be required to bring a draft development agreement to the Planning Commission, where a standard process will be followed, and where, by deed restriction, several other elements, including affordable housing and development and construction requirements outlined in the deed restriction will be memorialized in a plan. That would all happen at some point following the 2026 transfer of the property following the defeasement of the City’s bonds and escrow.

As this publication went to press, OO received unconfirmed reports from knowledgeable sources that AASEG had signed a term sheet with the A’s for the organization’s ownership half of the Coliseum. That was confirmed this morning by the San Francisco Chronicle. Uniting the disparate shares had been seen as a significant hurdle for the deal, but the sale agreement for both is still pending.