As the Los Angeles mayor’s race chugs toward the June 7 election, there is a lot of talk about money. Much of this involves billionaire mall developer Rick Caruso. The guy has the cash to pay for those TV commercials that run incessantly. His holdings include the $100 million yacht, Invictus, which was referenced twice by other candidates in Tuesday’s debate, and which prompted Caruso to remark on stage, “I do have a nice boat.”
Money is important in any election, but it is not definitive. Here are a few things to think about when it comes to cash and the mayor’s race.
1. The Cap Has Been Blown
Mayoral candidates who participate in the city matching funds program agree to spend no more than $3.329 million in the primary. On March 9, the City Ethics Commission, which tracks fundraising and spending, issued a press release stating that Caruso’s “campaign committee has received contributions and made or incurred expenses that exceed the $3,329,000 spending limit.”
This is good for Caruso, in that he has the resources to write himself a fat check. But this also benefits the other four leading contenders, as Caruso blowing the cap means they can spend however much they want and still get matching funds (more on those below). Now U.S. Rep. Karen Bass, City Attorney Mike Feuer, and Councilmembers Kevin de León and Joe Buscaino can fill their coffers to overflowing.
The advantages Caruso’s vast personal wealth provide, include the ability to run those aforementioned TV ads. They’ll never rank in the top 1,000 of Best Campaign TV Ads Ever, but they air so often that they may be making an impression on voters who otherwise know nothing about the upcoming race.
Perhaps even more important is the time advantage the money gives the mall master. Even if other contenders are freed from spending constraints, they still have to raise cash, which is grueling. Candidates regularly spend hours in a room “dialing for dollars,” asking friends and strangers to help. Hitting fundraisers is more efficient, but even then, the maximum someone can give is $1,500. That’s a drop in a billionaire’s bucket.
Caruso not having to fundraise gives him a temporal edge, and perhaps a psychological one, as well.
3. The Match Matters
On Dec. 31, the most recent Ethics Commission fundraising deadline, Bass had pulled in almost $2 million, and had $1.6 million in cash on hand. Feuer, Buscaino and de León had each raised between $969,000 and $1.2 million, but KDL had the most remaining: $1.16 million. Buscaino had $574,000 and Feuer had $527,000.
The numbers have since changed (the next report is due April 28), but another sizable financial stream is coming: matching funds. These have been around since 1993, but the city in 2019 tweaked its allocation formula in the effort to level the proverbial playing field. This year, candidates who demonstrate their viability by securing a sufficient number of small, local donations can unlock $6 for each $1 raised. The math may seem weird, but it’s logical: A $214 donation to a mayoral candidate produces $1,284 in matching funds, bringing the total to $1,498, or just under the individual max.
Matching funds should flow in the coming weeks, and de León, Buscaino, Bass and Feuer all stand to receive more than $1 million in free money.
4. How many mailers?
It is certain that Caruso will outspend his competitors—he might ultimately outspend all of them combined if becoming mayor is that important to him. While every ad and phone bank helps, after a certain level it all becomes gravy—is that 23th slick mailer really going to convince a voter any more than the 16th or 12th did? Heck, some voters get annoyed by candidates seeking to overwhelm them.
Any campaign strategist will tell you that it’s great to have the most money, but what a candidate really needs is enough to run her or his race and communicate effectively with those who go to the polls or mail a ballot. Money matters, but so do strategy, clear communication and an effective game plan.
5. More People, More Money
In addition to the five leading contenders, seven other people have qualified for the ballot. Real estate veteran Mel Wilson had raised $141,000 and PR executive Craig Greiwe had pulled in $116,000. Tech entrepreneur Ramit Varma reported contributions of almost $1.7 million, though that included a loan of $1.5 million. He created a series of radio ads, but it’s not clear how much he’s willing to spend.
Wilson and Greiwe are taking the race seriously, and each has been on stage for at least one forum. But a legit desire to transform L.A. doesn’t mean much without the resources to spread that message and boost name ID. And matching funds will only do so much if your baseline remains low. The two probably need to hit the Powerball lottery, or they’re looking at also-ran status.
6. Tax Wildcard
During Tuesday’s debate, Feuer drew attention for challenging Caruso to release his tax returns. On Wednesday, Feuer made five years of his own returns public.
It’s hard to tell what Caruso’s intentions are—in the moment he said, “I will release everything that I pay in taxes, and believe me, I pay my fair share.” He also indicated he would do so only if the other candidates release their returns. There is no indication of if he will reveal what he pays, or actually share his returns.
The tax gambit could be a blip, or it could pick up momentum and make money, wealth and taxes a real issue in the campaign.
7. Sometimes, the Biggest Loser
Frequently, the best-funded candidate wins a race. This can be due to personal wealth—think Michael Bloomberg becoming mayor of New York City. More often, the affluent and connected donate to the person who emerges as the frontrunner, as everyone wants to support the next leader.
But there have been copious instances where super wealthy or highly funded candidates falter, a reminder that voters are not necessarily swayed by flash. Remember, Meg Whitman spent about $177 million in the 2010 gubernatorial race to Jerry Brown’s $36 million. Brown would go on to serve two terms as governor. Whitman would launch Quibi.
This has happened locally as well. Antonio Villaraigosa outspent Jim Hahn in the 2001 mayor’s race runoff, but Hahn won. In the 2013 City Controller’s race, Dennis Zine outraised Ron Galperin more than two-to-one in the primary; Galperin would triumph in the runoff. Just two years ago, District 4 Councilman David Ryu spent $1.2 million in the primary to the $423,000 dropped by Nithya Raman. Of course, Raman defeated him in the runoff.
Voters can go with the money, or counter to it. But these are powerful reminders that big piles of cash don’t win races—votes do.
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