Seattle City Council Races: Why So Much Corporate Money?

Seattle’s city council election this November has seen a record-breaking amount of funds being spent by Independent Expenditure Committees (IEs). Amazon’s $1.5 million contribution to the Seattle Metropolitan Chamber of Commerce IE called Civic Alliance for a Sound Economy (CASE) drew national attention, with Presidential candidates Elizabeth Warren and Bernie Sanders condemning it. But many folks don’t understand how Independent Expenditure Committees influence our democratic process. Let’s take a look.

Normally candidates can receive no more than $500 from a single donor, person or business. If they take public funding through Seattle’s democracy voucher program, then that limit is $250. However, IEs have no limit on how much they can receive and disperse to support or oppose a candidate, as long as that candidate does not have anything to do with the IE. Basically, wealth distorts a fair distribution of verifiable information to the voters. CASE and its allied IEs have mounted such attacks against candidates that are deemed too progressive.

Most of IE money is being spent with the express intent to stop the perceived leftward drift of the council. In the last two council election cycles, not including the 2017 race for just the two at-large positions, IEs have crashed into our local elections in a big way.

A review of data collected by Seattle’s Ethics and Elections Commission for the council elections of 2013 (4 at-large races), 2015 (7 district and 2 at large races), and 2019  (7 district races), show that IE contributions went from less than $4,000 in 2013 (to one candidate), to $494,000 in 2015’s general election (an additional $300,000 spent in the primary), and now, as of Oct 21, about $6 million has been collected by all the IEs with over $600,000 of that still not spent. (All of those unspent funds are in the anti-left IEs.)

Some have argued that both businesses and unions have contributed substantially to IEs to shape the council’s policies. However,  a close review of how the money has been spent, or earmarked for use this November, shows that $4.4 million of the $6 million total is for the Chamber-endorsed candidates, which includes Amazon’s $1.5 million to CASE, the Chamber’s IE.

As of October 21, if you look just at the IE money spent for three progressive candidates, (Lisa Herbold, Andrew Lewis, and Dan Strauss), the amount totals $488,000 with 76% of that going to just one candidate, Andrew Lewis, from the Unite HERE union of culinary and hospitality workers. Councilmember Kshama Sawant has received just $1,000 in IE funds. On the other hand, the Chamber-endorsed candidates, Phil Tavel, Egan Orion, Jim Pugel, Alex Pedersen and Heidi Wills, have received a total of $1,585,700.

But numbers don’t cover the entire story. For instance, in the Andrew Lewis vs Jim Pugel race for District 7 (downtown, Queen Anne, Magnolia), the IEs spent for each candidate, as of October 21,  about an equal amount. However, there are hundreds of thousand of dollars still available to the pro-Pugel IEs to spend on him and other Chamber candidates, while the IEs supporting the progressive candidates appear to have little if any funds left. For instance, in the Herbold versus Tavel race (District 1, West Seattle), IE expenditures for Tavel have been four times greater than IE expenditures supporting Herbold, and Will’s IE support has been 11 times greater than Strauss’s IE support in District 6 (Greater Ballard).

The chart below shows how the IE funds were dispersed as of October 21.

It should also be noted that one of the three union IEs, the FireFighters PAC, has only supported Chamber-endorsed candidates. And on the other side of the ledger there are wealthy individuals such as financier Nick Hanauer, who support progressive candidates through CAPE.

I believe there are two reasons for the rise of IE money flooding into our elections.
One is business backlash, since recent ordinances have clipped the wings of businesses by mandating requirements to address the working conditions of their employees, such as increasing the minimum wage and requiring paid sick leave. In the case of landlords, they have been required to accommodate their tenants’ safety needs or lessen the burden of increasing rental costs. This last focus has resonated with tenants, who are the fastest growing demographic in the city making up 54 percent of all households.

The second reason is that the process of running for council seats has been adjusted to allow a greater range of candidates, notably more women and those with modest means. Partly as a result, the council over the past two decades has passed a number of ordinances that are more responsive and accountable to working families.

I assume that the two major contributors to CASE, Amazon at $1.5 million and Vulcan at $255,000, are most concerned on how future legislation will impact their ability to develop their downtown property and keep their operational costs minimal. However, the largest number of businesses affected by the council’s policies are the hoteliers, restaurateurs, apartment owners/developers, and smaller property developers concerned about keeping their labor costs as low as possible. Associations representing these groups are the next largest contributors to CASE.

Aside from corporations, owners and employees from both Amazon, Vulcan and smaller businesses have made huge contributions to both CASE and People for Seattle, a new IE coalition led by former Councilman Tim Burgess. The resulting combination has produced a formidable political force.

However, a counter political force has also come to the fore through citizen initiatives pushing for electoral reforms. One key component of this counter-movement is led by renters. The law that began a series of other tenant improvements was passing the Rental Registration and Inspection Ordinance  (RRIO) in 2013. It helped ensure that all rental housing in Seattle is safe by requiring mandatory inspections for 250,000 renter households. Property owners helped draft it and council passed it unanimously.

In 2016, the council passed unanimously an ordinance that said renters could not be denied a rental application for counting income from pension, Social Security, unemployment, child support or any other governmental or non-profit subsidy. A report to the city from the Washington Community Action Network helped its passage by showing that 48 percent of individuals who pay for rent with Social Security Disability Insurance or Social Security retirement income said that discrimination prevents them from having successful rental  applications. The following year the council again unanimously voted to create a Renters Commission to provide tenants political power within the city government to address topics ranging from housing affordability and neighborhood rezones to transportation and access to open space.

This year, 2019, the council mandated that all landlords were required to register with RRIO before a landlord issues an eviction notice and that they had to provide information on the rights and resources of tenants with notices to terminate a tenancy and an increase in rent.

A second constituency for reform is the movement to expand employee rights. The first significant push began in 2011 with an 8 to 1 vote (Richard Conlin as the no vote) approving a Paid Sick and Safe Time Ordinance requiring employers operating in Seattle to provide all employees with paid leave to care for themselves or a family member with a physical or mental health condition, medical appointment, or a critical safety issue. Over 190,000 Seattle workers gained this coverage with its passage.

In 2015 Seattle’s Fair Chance Employment Ordinance went into effect which restricts how employers can use conviction and arrest records during the hiring process and course of employment within city limits.

The biggest employee gain also came in 2015. Seattle’s Wage Theft Ordinance went into effect protecting against wage theft by requiring employers to pay all wages and tips owed to employees, provide written notice to employees, and itemize pay information when employees are paid. Getting the most attention was Seattle’s Minimum Wage Ordinance, which began April 1, 2015 and phased in the higher wage of $15 an hour over three to six years depending on the size of the company.

Not as well known to the public, but in the long run as important as any ordinance passed was the council’s creation of the Office of Labor Standards (OLS) in 2014. Its sweeping mission is to advance labor standards through community and business engagement, strategic enforcement, and innovative policy development, with a commitment to race and social justice.

The Secure Scheduling Ordinance, which passed in 2016, established secure scheduling requirements for covered retail and food services establishments, and prescribed remedies and enforcement procedures. The law applies to retail and food services establishments with 500+ employees worldwide, and full service restaurants with 500+ employees and 40+ full-service restaurant locations worldwide.

The Domestic Workers Ordinance of 2018 was one of the last ordinances passed to protect employees. It made Seattle the first U.S. city to have a Domestic Workers Bill of Rights. This law gives minimum-wage, rest-break, and meal-break rights to domestic workers. It is one of the most progressive pieces of legislation that Seattle has adopted, and it was not initiated by city council, but rather it was a result of a direct vote by Seattle residents.

All but one of the above ordinances were passed while there was, and still is, only one lone socialist on the city council, Kshama Sawant.  The Chamber’s CASE and People for Seattle have campaigned against some city council candidates as being under her sway, and consequently are socialist or leaning that way. But for what reason? Likely for passing the above legislation.

When asked on a recent poll the open ended question, “When you think of Seattle city government, who do you think of?” The term liberal came up at only 2 percent. Councilmember Sawant came up at 3 percent. These findings do not point to a conservative backlash. Sawant may have the most name recognition, a status I had for a period of time on the council during my 18 years there. And neither of us, had any sway on the other councilmembers because of that. It takes the hard work of talking to your colleagues and working with constituents. That’s what gets the vote, not achieving high marks in name recognition. 

There is a certain irony that former Councilmember Tim Burgess, who founded and heads up the People for Seattle IE, is opposing candidates based on their too-liberal legislation, although he voted in favor of all of the above pieces of legislation. In fact, all but one of these ordinances passed unanimously by a council that had a majority of members receiving Chamber support in some fashion.

Another reason for the attacks is the fear among the business community that future councilmembers will be even more aggressive in pursuing various kinds of government regulation or taxes to achieve public benefits. That fear was fanned with the passage of two public initiatives, which passed about the time as above pieces of legislation were written and adopted. The initiatives reformed the electoral process to allow for greater participation.

In 2013, with an approval vote of 65 percent,  Seattle voters approved Charter Amendment 19 – Council Districts  which converted 7 of the city council seats to District Elections, leaving just 2 at large or citywide. The first city council elections based on districts were held in 2015.

That same year, 2015, Seattle voters passed Initiative 122, levying a property tax of $3 million per year to fund the Democracy Voucher Program for the next 10 years . It passed with a 63 percent yes vote and began distributing vouchers in 2017.

These two electoral reform initiatives resulted in two historic developments. First, more candidates have surfaced than ever before under at-large council elections. The 2015 elections, the first one that used district elections, resulted in 37 candidates running for the 7 district seats. In the 2019 elections when democracy vouchers were available for district candidates, 54 candidates ran for the 7 district seats. This trend will probably ease off, but certainly there is more incentive to run for an office that can be partially publicly funded and with a limited geographical area to campaign in.

Second, there was the unintended response of drawing more money into the campaigns, most of it from outside the district boundaries and most of it from wealthy individuals or businesses, with smaller amounts from unions. The total amount of money collected by IEs for the council races was $5.9 million, the total amount collected by all the candidate’s personal campaigns was $4.7 million.

Meanwhile, what does polling tell us about the mood of the electorate? The recent Crosscut/Elway poll had the headline: “More than two-thirds of likely voters said they want candidates elected who will take the council in a new direction.” That statement plays into the narrative that the council has gone too far in making changes.  However, a closer look at the survey’s numbers and cross-tabs doesn’t support that conclusion. It all depends on how you slice the pie.

For instance, the response to the question “Overall, how would you rate the job the City Council is doing? Would you say…”  percentages responding for each response were Good, 26 percent, Fair, 40 percent, and Poor, 29 percent.

Crosscut combined Poor and Fair to get a 69 percent Negative position toward the council. But why not include Fair with Good to get 66 percent Positive attitude toward the council? Later in the survey, when asked to choose if the council direction should continue or change, the response was divided between the Negative and Positive, but the Negative again includes all of the Fair responses. Additionally, the assumption that the council needs to change direction could be coming from the Positive folks who want to see more progressive change.

Two other findings identify which groups of Seattle residents are responding positively to the council’s agenda. Close to double the percentage of Renters over Home-Owners believe that the council is doing a good job. Also, a consistent and statistically significant higher percentage of those with income under $50,000 viewed the council as doing a good job than any other income bracket.  Both data points would indicate that the council’s efforts to raise the livability for Seattle residents who are on the lower end of the income scale is being recognized and appreciated.

At the heart of the electorate’s concern is homelessness. The Elway/Crosscut Poll asked those surveyed, “Which of these issues is most important to you as you decide how to vote in the race for city council?” Addressing homelessness came up on top, registering three times higher than housing density and five times higher than reforming the police department. And disapproving the current direction was twice as high as those approving of it.  

It is the unsheltered homeless that cause the most concern, since they are the most visible. According to the 2018 count there are about 4,500 Seattle residents who are unsheltered homeless, which includes living in campers — or about half of one percent of Seattle’s population. Some claim that Seattle’s policies attract many homeless here from out of state to get benefits, but only 4 percent who were out of state residents have lived in King County for less than a year. Rather, economic hardship accounts for 55 percent of those who are currently homeless, which is reported as having lost a job, been evicted or had medical bills.

For a city with the third highest median income in the nation, at $94,000, one would expect that we could figure out how to provide at least shelter for such a small percentage of people. Yet it is that expectation that is being used against the most progressive councilmembers on the city council.

For instance, district one Councilmember Lisa Herbold, who as a legislative assistant to me for 18 years, has probably worked on more legislation than any other councilmember promoting housing for the homeless and fighting displacement of renters and homeowners from becoming homeless. However, we still have homelessness, which leads her current opponent to say, “I don’t see any solutions coming from Lisa … it’s about a city that is failing to step up when it should.” But her opponent and the other business-backed candidates have not proposed how to fund the additional resources to solve the homeless crises. A Downtown Emergency Services Center social worker put it bluntly in a Crosscut article,  “It’s not a question of managing resources, it’s that they don’t exist.”

Council critics argue that city government spending is inefficient in solving these human crises. But they fail to mention the number of new affordable housing units that have been created with an efficient use of public funding. For example, in 2016 the city reported that the 2009 Housing Levy exceeded the goal of providing 1,670 additional units it promised to Seattle voters by adding 2,527 affordable rental units and reinvesting in 400 existing units to keep them affordable to low-income families.

Seattle’s overall population has exploded, growing 20 percent from 2010 to 2018,  and while homelessness has also greatly increased, unsheltered homeless still remains well under 1 percent due to the council’s efforts.  But it does remain, and additional funds are needed to house these folks. The belief that we can solve the problem of housing the homeless without additional public funds is not new. It was used to beat down the council’s proposal to tap a new dedicated revenue stream to provide housing for the homeless -– the head tax.

This per-employee head tax had previously been enacted to pay for transportation needs. It was dropped mostly because its forms were confusing and time consuming for businesses. When it was brought back it was streamlined and projections showed that only the largest 3 percent of Seattle’s businesses would pay the tax, exempting those with under $20 million in taxable gross receipts. Keep in mind that corporate opposition to the new tax was occurring the same time that the federal tax bill passed in December 2017 lowering the corporate tax rate from 35 to 21 percent, a  tax cut of 40 percent.

As the Seattle City Council was unanimously passing a “head tax” ordinance, Amazon became  the lead corporation to finance a referendum to repeal the legislation creating the head tax. The financial impact on Amazon was minimal considering its overall budget. The average salary for Amazon employees in Seattle is $158,851 per year. The head tax was set at $275 per employee a year, which would have amounted to a 0.2 percent increase in their payroll costs.  

Nevertheless, because of its passage, Amazon said all of its construction had been halted and clearly implied that the company’s future growth in Seattle could be seriously reduced unless the head tax was repealed. Then it plopped down $250,000 to provide the lion’s share of funding the referendum campaign. The tactic of writing a large check to get rid of a pesky political policy emerged again this year as Amazon became the largest contributor, by a factor of six, to create a new city council better aligned with its interests.

Shrewdly, the referendum campaign, titled No Tax On Jobs, never publicly attacked those who were homeless but instead attacked the council for not having a plan for solving the homeless crises and for chasing businesses away. Polling showed that about a year before the council’s vote, 66 percent of the public supported an increase in taxes to help the homeless. So, the referendum campaign did not deny the need to help them, but instead attacked the council for failing to meet their needs. After the referendum’s well-funded media campaign began, accompanied by paid signature gatherers to put the referendum on the ballot, public opinion flipped to 55 percent opposing an increase in such a tax.

As a result, the council was told by supporters of the head tax that it would have taken several million dollars to counter the corporate sponsored referendum. Councilmember Herbold framed the tax as an unwinnable fight saying, “The opposition has unlimited resources and … the margin simply is too great to overcome.” She and other councilmembers voted to overturn the tax on big businesses, 7-2.

The main problem the council faced was a lack of trust in how the money would be spent, which is the classic conservative argument against any progressive measure. However, the latest Elway poll shows that the public seems to have drifted back to their original feelings, since it revealed that 56 percent of the public supports a Large Business Tax for developing more affordable housing.

It is difficult to determine what the new council will look like because the Chamber IE  and its allied IEs are immensely outspending the candidates they are trying to defeat. It comes down to the voters deciding whom to vote for, based on what they know about the candidates. Unfortunately, most of their information is being provided by the side with the largest media budget and paid canvassers.

For the first time in Seattle’s council elections, paid canvassers are being used to doorbell for a candidate, rather than rely on committed volunteers. As of two weeks ago, CASE spent a half a million dollars paying for canvassers to support five of its candidates. That amount could easily be doubled before election day, given the hundreds of thousands of dollars CASE and its allies have in the bank ready to be used.

If I was on the council, to allow greater transparency in electioneering, I would introduce legislation that requires all paid canvassers to wear a very visible name tag saying, “I’M A PAID CANVASSER.”  Since this approach would not inhibit free speech, I believe it would be upheld in the courts if challenged.

This election is important, not just for who gets elected but for how the use of wealth, both from individuals and corporations, is distorting our democracy. We can see how it is occurring on the national level, but it has now arrived with a vengeance in local elections.