Who Funded The PACs That Got Two Propositions On Austin's Ballot This November?

Oct 26, 2018

A Californian who attempted a 2016 presidential run. A staffing and finance company with offices in Austin, Dallas, Houston, Seattle and Denver. Men in California and New Jersey. These are some of the funders of political action committees behind two local ballot initiatives – Propositions J and K.

Political action committees are not subject to the same campaign finance requirements as candidates. There are fewer restrictions on how much a donor can contribute, and donors can remain anonymous in many cases. This makes it tricky to figure out who exactly has given money to the PACs behind these propositions.

But here's what KUT has figured out.

J Always Gets To Go First, So Let's Start With Prop K

Two PACS propelled Prop K to the ballot. If passed, the proposition would require the city to hire a third party to conduct an audit of all municipal departments. Supporters say it's a marker of good transparent government. Opponents say that the City of Austin already employs its own auditor and that it would be a waste of money.

To get an item on the ballot in Austin, a group needs to collect at least 20,000 signatures from registered voters – something that's easier to do if you have the money to hire people to get those signatures. 

Prop K supporters were able to do that quickly thanks to a large influx of money. A nonprofit called Austin Civic Fund handed over $137,080 to the Citizens for an Accountable Austin PAC to pay for the petition drive.

RELATED | What Are The Propositions Austin Voters Will Decide On This November? It's An Alphabet Soup.

Michael Searle, the PAC's secretary, would not name the people who gave Austin Civic Fund money for the Prop K petition.

And legally he may not have to. In 2016, Austin amended its campaign finance rules with the hopes of getting PACs to disclose their nonprofit donors. But, according to attorney Fred Lewis, who helped write these rules, they apply only to candidates and initiatives on a ballot. Here, he says, the funding went to the petition, not to the proposition.

The city doesn't see it this way.

“All PACs are subject to the ordinance – regardless of where they are in the process, from circulating a petition to supporting a ballot measure,” city spokesperson David Green wrote in an email. He also clarified that the city cannot force a nonprofit to disclose donors; it can only force a PAC to do so.

So, is there any way to know who’s behind Prop K?

Not really. Austin Civic Fund recently created a website, but there's no contact information on it. According to public records, several people have served on the nonprofit's board since it was created in December 2017, including Christopher Covo, the vice president of a janitorial services company. Covo said by email he did not contribute to Prop K.

There’s also a John Nantz, Kirk Golinghorst and Greg Herring listed as directors of the nonprofit. KUT reached out by email to men with these names in Austin but did not hear back by deadline.

"We could have done a traditional fundraising process, but that wasn't the process we chose to do." - Michael Searle

Covo is listed as a member of Liberty Leadership Council, an initiative of the Texas Public Policy Foundation. The conservative think tank has challenged the city over several laws, including its paid sick leave ordinance.

There’s now a new PAC behind Prop K – Vote Yes on Prop K PAC. The group has raised $23,205, none of it from nonprofits, but still from some interesting sources.

Roque de la Fuente, who attempted a 2016 presidential campaign and has unsuccessfully sought Senate seats in at least nine different states, contributed $1,000 to the PAC. An email to de la Fuente was not returned by deadline. Searle said de la Fuente is a friend of a Prop K supporter. 

A finance and staffing company, vCFO, also paid the PAC $1,000. In an email, an assistant to the company's CEO said only that the CEO was "100% pro Prop K." 

Searle said he recognizes that the petition’s funding has gotten a lot of attention and says it has distracted some people from the proposition's intent.

“This has been a learning process for me,” said Searle, who worked as a staffer for Austin City Council Member Ellen Troxclair. “We could have done a traditional fundraising process, but that wasn’t the process we chose to do.”

Then There's Prop J

There are at least two PACs directly funding Prop J. The item, if approved, would create a waiting period, anywhere from one to three years, before any new comprehensive land-code rewrites could go into effect. It would also require residents to vote on every land-code overhaul, like the now-defunct CodeNEXT.

Proponents argue everyone should get a direct vote on citywide development plans. Opponents say it would unnecessarily delay much-needed changes to the city's land-use code.

RELATED | Prop J Initiative On Development Exposes Rift Among Austin Environmentalists

The IndyAustin PAC has raised just over $60,000 since January, though not all of it is for Prop J.

A third of that money is from a man named “Irving Kessler” with an address in Arizona. (KUT emailed an "Irvin Kessler" in Arizona, but received no response.)

Linda Curtis, who heads up IndyAustin, said the money from Kessler and another large donor based in New Jersey were not used to fund Prop J – but are paying for a petition to put the soccer stadium deal to a vote.

In late 2017, IndyAustin raised a little less than $44,000 for several purposes, including forcing a vote on CodeNEXT.

A communications firm and a billboard company were two of the biggest contributors. Texas Solutions Group donated $12,000 to IndyAustin and loaned it another $5,000. Reagan Advertising donated $5,000. Both companies said they were hoping to get a referendum on digital billboards, which are currently outlawed by city code. But once these rules became part of the city’s land code rewrite, Billy Reagan of Reagan Advertising said he began to support a referendum on CodeNEXT.

IndyAustin also had help from a second PAC financing Prop J, Let Us Vote Austin PAC.

It’s run by Fred Lewis, who has vocally opposed CodeNEXT. Most of the PAC’s money comes from small individual donations or from Save Our City Austin, a PAC that has advocated for protections for single-family neighborhoods.

Lewis said any focus on the money behind Prop J is political. He said that the PAC’s money comes from a mishmash of people with different political backgrounds.

“People [have] attacked it,” he said. “Yes, we have money from conservatives. Yes, we have money from liberals. We have money from people – I don’t know what their politics is.”

This post has been updated with a response from vCFO.