The Portland City Auditor on Wednesday reversed its October determination that Rene Gonzalez’s city council campaign violated campaign finance limits by accepting a subsidized $250 monthly rent for over 3,000 square feet of office space and two designated parking spots in downtown Portland owned by campaign supporter and real estate mogul Jordan Schnitzer.
The announcement arrives one month after Judge Joe L. Allen, an Oregon administrative law judge, revoked a $77,000 fine the city issued against Gonzalez’ campaign. In his 18-page opinion on Oct. 27, Allen wrote that the deeply discounted office space did not surpass the fair market value of the property and therefore did not qualify as an unreported campaign contribution.
The city must pay back the tens of thousands of dollars it withheld from Gonzalez, who bested incumbent Commissioner Jo Ann Hardesty in the Nov. 8 race for city council.
In a statement Wednesday, the auditor’s office said Allen’s decision impacted their original determination, saying “the evidence no longer supported allegations of prohibited contributions.”
Prior to the election, Gonzalez’s campaign was hit with back-to-back fines after Portland’s Small Donor Elections program and the auditor’s office investigated complaints into Gonzalez’s acceptance of subsidized rent for the lofty, first-floor office space on Southwest 11th Avenue.
In September, Small Donor Elections program director Susan Mottet alleged that the fair market value of the office and pair of parking spaces was about $6,900 per month – amounting to an unreporting discount of about 96%. Mottet claimed the discount was an illegal in-kind contribution under the city’s public campaign finance program, and ordered Gonzales to pay a fine totaling $77,140. She also later froze about $71,000 in public matching funds for which Gonzalez had already qualified.
The auditor’s office fined Gonzalez’s campaign $5,520 on Oct. 20 after determining the six months of subsidized parking spaces qualified as prohibited in-kind contributions.
The Gonzalez campaign appealed the determination by the Small Donor Elections program, saying the city’s estimate for fair market rental rates was grossly exaggerated based on the state of downtown Portland.
During a day-long hearing on the case, Allen heard from property managers and developers who detailed struggles downtown real estate owners face in renting and leasing property. Allen found that the Gonzalez campaign’s $250 rent was in line with the fair market value of the property, saying “repeated civil unrest, increased homelessness, vagrancy, as well as both personal and property crimes” had weakened the market rate for retail and office space downtown.
The auditor’s office withdrew its determination four days after Allen’s ruling so they could reconsider the evidence, finding that the in-kind parking contributions did not violate campaign finance regulations.
— Catalina Gaitán, cgaitan@oregonian.com, @catalingaitan_
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