Months before Greg Tanaka formally declared his intention to run for another term on the Palo Alto City Council, he received a New Year's Eve gift from a group of local developers: campaign contributions totaling $13,000.
The contributions included $3,000 from 1050 Page Mill Road Property LLC, an entity associated with Sand Hill Property Company, and four $2,500 checks from four corporations associated with prominent landowners Thoits Brothers and Sal Giovannotto.
More checks came in two weeks later. Jon Goldman of Premier Properties contributed $2,500 to Tanaka on Jan. 14, while investor Richard Karp contributed $10,000.
The trend accelerated this summer after Tanaka declared his candidacy. After receiving $14,699 in total contributions as of June 30, Tanaka brought in $35,000 between July 29 and Aug. 12. He received $5,000 checks from Brad Ehikian, Charles "Chop" Keenan and John McNellis, all of whom are prominent downtown developers. Michael Powers, a partner in McNellis' real estate firm, contributed an additional $5,000, while developer Roxy Rapp contributed $10,000 to the Tanaka campaign.
On Aug. 12, Tanaka received two more contributions: $2,500 from Ventana Property Services, a property management company, and $1,000 from Christian Hansen, property manager for Wheatley Properties, according to his campaign finance documents.
Support from the developer community isn't new for Tanaka, who has generally been associated with the council's more pro-growth faction. In recent years, he voted to repeal downtown's office cap and he opposed a 2018 citizen initiative that reduced the citywide cap on office and research-and-development growth from 1.7 million square feet to 850,000 square feet by 2030. He has also championed programs to help businesses during the COVID-19 pandemic, including a grant program for small businesses and reduction of utility bills.
At the same time, Tanaka is now facing scrutiny for the December 2019 and January 2020 contributions, which he collected well before his new campaign committee was established. Campaign documents show that all of those contributions were made to the campaign, "Tanaka for Palo Alto City Council in 2016." He didn't file his "Candidate Intention Statement," known as Form 501, until July 11, according to the documents. He filed his Form 460, establishing a reelection committee, the following day.
By law, a candidate is required to file a Form 501 "before soliciting or receiving any contributions (including loans) or expending any funds," according to an election guide put out by the Office of the City Clerk.
"It is the responsibility of candidates and/or committees to be aware of and to file the required campaign disclosure statements in a timely manner," the guide states.
Earlier this month, the Fair Political Practices Committee received an anonymous complaint against Tanaka's campaign, alleging that he had failed to follow the rules when he accepted funding before creating a reelection committee. The complaint claims that Tanaka "has knowingly committed clear violations of law by both receiving illegal monetary contributions and making illegal expenditures from his 2016 campaign committee account months before filing a new 501 Form as legally required."
The complaint claims that the violations in this complaint, combined with his failure in 2017 to disclose numerous contributions from developers (he agreed to pay $733 in fines), demonstrate "persistent attempts to shield the sources and amounts of his campaign contributions from public scrutiny by voters in this current election."
The complaint also points to Tanaka's expenditures in the early months of 2020 as evidence that he was using the contributions to his 2016 campaign to ramp up his reelection effort. Campaign finance documents show that he had spent $2,277 between Jan. 1 and June 30 of this year, with expenditures including ballot fees and fees to Google and NationBuilder, which specializes in campaign software. These expenditures were incurred well before he filed the paperwork for his reelection campaign.
The 2020 expenditures represent a significant increase in campaign spending for Tanaka, according to his filed statements. In 2018 and 2019, his expenditures for each six-month reporting period ranged from $207.57 to $321.97. In the six months prior to the New Year's Eve contributions, Tanaka's campaign had spent $301.15, his filings show.
The only other six-month period in which his campaign had reported significant spending was in the second half of 2017, when its $1,243.70 in expenditures included the $733 fine from the state.
"The one-month accumulation of over $25,000, between December 31, 2019 and January 31, 2020, by Mr. Tanaka's 2016 campaign committee with no nexus to ongoing office-holding expenses, and including expenses such as the voter database that directly correlate to campaign activities clearly implies changes in recipient committee information," the complaint states.
This week, Tanaka disputed the accusations and denied any wrongdoing. State law, he noted, allows campaigns of elected officials to continue to receive contributions after a successful election. The expenditures that his campaign made before July were not associated with his reelection effort but with his regular activities as a council member. This includes his regularly held office hours, during which he broadcasts on Facebook Live.
"That's what we were spending funds on, constituent outreach," Tanaka told this news organization.
When asked about the New Year's Eve contributions, which were made more than six months before he declared his intention to run again, Tanaka said the donations reflected the desire of community members to see him seek another four years on the council.
"There's a lot of people who support me and a lot of people who wanted to encourage me to run," Tanaka said. "I think people wanted to see me continue to serve on the council. There was enough support for me that convinced me to do that."
The FPPC informed Tanaka about the complaint in an Aug. 13 letter and has requested information from him to address the allegations. The agency has not made any determinations about the allegations in the complaint, the letter from the FPPC's Enforcement Division states.
"Upon receipt of your response, we will review the information to determine whether or not to investigate the allegations," the letter from the FPPC's Enforcement Division states.
View the full complaint here.