Billionaire-Backed Moderate Political Group Hit With Ethics Fine for 2022 Chesa Boudin Recall

Updated at 1 p.m. 

One of San Francisco’s most powerful political organizing groups is facing a nearly $54,000 fine for ethics violations over a failure to disclose its spending to support the recall of former District Attorney Chesa Boudin.

The city’s Ethics Commission brought the case against Neighbors for a Better San Francisco and Jay Cheng, who leads the billionaire-backed moderate group. The investigation found that Cheng and Neighbors failed to report $100,833 paid to Riff City Strategies, a consulting firm that ran media relations for the 2022 recall against Boudin.

Cheng and Neighbors agreed to pay the fine, according to public documents. Cheng did not respond to requests for comment, but Neighbors members received a memo regarding the ethics violations on Tuesday.

“Since 2022, we have put a number of controls and procedures in place to make sure that no matter how small the expense, such an error does not occur again,” the organization’s board of directors wrote. “In this case, it was less than 5% of our total expenditures to the recall campaign.

“We take our responsibility as public advocates seriously and will continue to hold ourselves to the highest ethical & legal standards in all the work that we do.”

Formed in 2020, Neighbors was one of the biggest spenders in the effort to oust Boudin and has since taken on several other public safety and government reform campaigns. Billionaires, including major Republican donor William Oberndorf and other wealthy Silicon Valley leaders, back the moderate group.

The investigation did not find any wrongdoing against Riff City or its president, Jess Montejano, who is a spokesperson for former supervisor and interim mayor Mark Farrell’s mayoral campaign. Montejano declined to comment for this story. Neighbors endorsed Farrell for mayor.

Farrell’s opponents criticized the violation and the connection to Farrell’s campaign.

“This is further proof that Mark Farrell’s political operation is run by individuals with highly questionable tactics that include campaign slush funds, campaign money laundering, and now, unreported backdoor payments,” Joe Arellano, Mayor London Breed’s campaign spokesperson, said in a statement. “The same individuals in this new ethics violation and fine comprise the entire leadership of Mark Farrell’s mayoral campaign. Mark Farrell likes to tout his business acumen on the campaign trail, but it’s clear he’s more Vito Corleone than Bill Gates.”