Ethics Probe Hangs Over Campaign to Recall Oakland Mayor as It Files Signatures

As the campaign to recall Oakland Mayor Sheng Thao celebrated submitting signatures to put a recall on the ballot, the Oakland agency tasked with enforcing campaign finance laws is investigating how the campaign handles donations.

Oakland United to Recall Sheng Thao, or OUST, submitted 41,530 signatures to the city clerk on Wednesday. Election officials will now review the signatures to verify at least 24,644 — the number required to qualify for an election — match registered Oakland voters. It’s unclear if the recall will qualify and, if so, when an election would be scheduled.

OUST blames Thao for several issues, including the loss of the Oakland A’s, the city missing out on a major grant to combat retail theft and the delay in hiring a police chief. There’s also lingering resentment from Thao’s decision to fire former police chief LeRonne Armstrong in February 2023. After a yearlong search, Floyd Mitchell was hired in March.

“Every day, I fight to create a better, safer Oakland,” Thao said in a statement. “Regardless of the naysayers or negativity, I will continue that fight because the progress we are making makes it all worth it.

“We will not be distracted by the politics of out-of-town billionaires or special interests, and I will continue to work every day for Oakland’s interests.”

In May, Oakland’s Public Ethics Commission opened an investigation into OUST. The commission requested information from OUST but declined to disclose the details of the request.

Simon Russell, the PEC’s enforcement chief, filed a complaint alleging OUST is using Foundational Oakland Unites, a recently formed nonprofit and political action committee, to hide the source of some donations in violation of campaign finance reporting laws.

In the complaint, Russell highlighted an email sent by OUST to its mailing list soliciting donations and offering to keep their source private — an offer that, if carried out, would violate campaign finance reporting laws.

He also pointed to a $215,000 donation from Foundational Oakland Unites to OUST. The timing of payment, arriving right when the campaign filed its paperwork, indicated that the campaign knew of the donations pending arrival, according to Russell. State laws prohibit coordination between PACs and political campaigns.

In his complaint, Russell said four people work for both the OUST and Foundational Oakland Unites, including Seneca Scott, who is also the founder of Foundational Oakland Unites.

The alleged scheme Russell outlined in his complaint is reminiscent of the so-called “gray-money network” being used in San Francisco by tech billionaires and venture capitalists hoping to shift the city’s progressive policies to the right, as reported by the Guardian in February. The PEC complaint boosts claims by critics who believe the effort to recall Thao is taking cues from the moderate political movement gaining traction in San Francisco.

Last week, Brenda Harbin-Forte, OUST principal officer and a former Alameda County Superior Court judge, told KQED the campaign will not comply with records requests from the commission. She said campaign attorneys have sent a letter to the commission challenging the investigation.

“This is a nothing-burger,” she added. “OUST will not be intimidated by a politically motivated investigation by the Oakland PEC.”

Scott, who has made churlish comments about his political opponents in public and online, told KQED he believes Thao is using the PEC to target political opponents, adding that she is also the subject of PEC complaints.

“We’ve accomplished a lot to make it this far, but the job is not done until this incompetent, dishonest mayor is outside of this building and can no longer do harm to this city,” Scott, who ran against Thao in 2022, said outside City Hall on Wednesday.

The decision to open an investigation into OUST’s finances was made by Russell and Nicolas Heidorn, the PEC’s executive director.

Russell confirmed to KQED that Thao is the subject of five investigations stemming from complaints made between 2020 and 2023. Only one — an allegation that Thao inappropriately used city resources as a city council member to support her run for mayor — is active. The other four are on hold.

In a 2023 enforcement report (PDF), Russell wrote that the PEC puts some investigations on hold because it receives more complaints than its investigators can handle at once. Staff chose which investigations to put on hold based on their evaluation of how much the alleged violation impacts the public, how much evidence is available and how much time investigators have already put into the investigation.

The PEC investigation of OUST adds to a growing list of legal troubles nonprofits connected to Scott face. In May, the California Department of Justice issued a cease and desist order to Neighbors Together Oakland, a nonprofit founded by Scott, for not filing with the state as a nonprofit.

Editor’s Note: Because of erroneous information, the Public Ethics Commission’s decision-making process for opening an investigation into OUST’s finances was mischaracterized in an earlier version of the article.