With a week to go until the election, The Walt Disney Company’s spending on Anaheim City Council races has blown past the record it set in 2014 and is approaching the $1-million mark, according to the most recent campaign finance filings.
The parent company of Disneyland has funneled more than $900,000 into a complicated network of groups supporting Disney-friendly candidates in four council races and attacking their opponents, according to a Voice of OC review of the campaign finance disclosures.
There is good reason for the heavy campaign spending, which is far more than any other individual or group is committing to the various races. The city is holding its first districts-based election, which has expanded the City Council – and the political turf that the company needs to defend.
Until this year, Disney needed to support, at most, three candidates in any given election (and wage attacks against their opponents) to maintain a friendly majority on the five-member council.
This arrangement worked well for Disneyland as councils in recent decades have approved tax subsidies and infrastructure improvements that benefited the resort to the tune of hundreds of millions of dollars.
But the game changed in 2014, when the city settled a California Voting Rights Act lawsuit brought by the American Civil Liberties Union of Southern California that alleged the at-large electoral system disenfranchised Latinos, who make up 53 percent of Anaheim’s residents.
Under the new district-based system, the council has been expanded to seven seats, including the mayor, who is still elected at-large. This year there are four seats up for election, and a total of 20 candidates running for them.
Disney is backing two incumbents, Jordan Brandman and Lucille Kring, and two others who are vying for newly created seats. They are Steve Chavez Lodge, a politically connected consultant and former Santa Ana police officer who ran for council in 2012 and lost; and Metropolitan Water District Director Steve Faessel, who has also served on the Planning Commission.
Meanwhile, Mayor Tom Tait, who has become a fierce opponent of tax subsidies for Disneyland and other resort district businesses, is endorsing a slate of four candidates who could end the dominance of the Disney-friendly cohort.
Just two of the four candidates backed by Tait would need to win to flip the council: Jose Moreno, a professor and longtime Latino activist; Mark Lopez, the deputy chief of staff for county Supervisor Shawn Nelson; Arturo Ferreras, a Catholic priest who led efforts to pass a ban on short term rental homes; and Denise Barnes, the owner of a local property management company.
Here’s a rundown of Disney’s spending based on the Voice of OC review of campaign disclosures:
- Disney has spent at least $904,000 on 10 different groups that in turn have directed over $1 million into supporting and opposing Anaheim council candidates.
- The Disney-funded groups have spent $865,000, mostly on mailers to voters, supporting Brandman, Kring, Lodge, and Faessel; and $203,000 opposing Moreno, Lopez, Ferreras, and Barnes.
- Disney’s money follows a complicated path — typically flowing from group to group with names like “Orange County Freedom Fund” and “California Taxpayers Association,” before being spent on mailers that bear no trace of Disney’s sponsorship. Often there are three separate committees between Disney money and the attack mailers.
- Most of the Disney spending has flowed through a committee called “Moving Orange County Forward.” And while the company gave $475,000 directly to the group, another $414,000 arrived through a much more circuitous route. Disney gave that money to eight separate committees – like the California Apartment Association PAC and Building Industries of Southern Claifornia PAC – that in turn gave $480,000 to Moving Orange County Forward.
Disney’s Bang for Its Buck
Over the years, Disney’s spending on Anaheim City Council campaigns has paid huge dividends for the company.
In July 2015, less than a year after Disney spent more than $700,000 on the 2014 election, the council majority it helped elect approved what is effectively a 45-year ban on the city’s right to implement taxes on tickets to the Disneyland and California Adventure parks. So-called entertainment taxes are a common way for cities to raise revenue for public safety and community service initiatives.
Then, in July of this year, the council approved a bed-tax subsidy for a luxury hotel the company is planning to build that in the end could be worth more than $200 million, which would make it the largest subsidy in the city’s history.
And it is a rich history. The Orange County Register this week reported that Disney ranked fourth among companies statewide when it comes to receiving government subsidies over the past two decades, according to a study by the nonprofit Good Jobs First. The Register article noted that Anaheim agreed to pay for up to $200 million in infrastructure improvements for California Adventure, which Disney opened in early 2001.
Disney’s investment in local elections makes a lot of business sense, said Rick Hasen a professor of law and political science at the University of California, Irvine School of Law.
“Those with wealth have a greater chance of influencing elections and policy…deciding to spend one million on a local race will get you a lot further than in a national race,” said Hasen, who also writes the popular Election Law Blog.
“A company like Disney is as affected, if not more, by what the city of Anaheim decides to do than certain decisions made by the federal or state government.”
Disneyland Resort spokeswoman Suzi Brown said the various political action committees that receive Disney funding are involved in races across Orange County, not just in Anaheim.
“We believe it is important to Anaheim’s future to support organizations and candidates who support business growth and the continued development of the resort district, which helps to ensure a strong local economy and vibrant community,” Brown said in a statement.
Tait, whose favored candidates have benefited from tens of thousands in campaign contributions from the local conservative mega-donor Howard Ahmanson, said the spending by Disney is not only unprecedented, but reveals a desire on the company’s part to undermine the purpose of district elections.
“The amount of money they are spending is massive and is obviously designed to overwhelm the local neighborhood candidates and their message. I hope the voters see through it,” Tait said.
Disney-supported incumbents Brandman and Kring did not return calls for comment.
Big Spending on Small Elections
Disney is certainly not the only large corporation that spends heavily to buy influence in local elections.
Since the Supreme Court delivered a landmark ruling in 2010 on Citizens United vs. Federal Election Commission, which declared bans on corporate and union spending in elections as an unconstitutional restriction on free speech, outside spending by special interest groups has exploded.
Disney is among an ever-increasing number of wealthy groups and individuals that use gray money, a term for campaign contributions that are transferred from committee to committee before being spent, which obscures their spending.
A 2016 report by the Brennan Center for Justice at the New York University School of Law, “Secret Spending in the States,” found that in six states, gray money increased from 15 percent of all outside spending in 2006 to 60 percent in 2014.
The 2014 city council election in Richmond, California drew national attention after the oil giant Chevron poured $3 million toward electing a slate of candidates who supported its refinery, according to the San Jose Mercury News.
Chevron, the city’s largest employer, also poured money into independent expenditures against three candidates who are hostile to its refinery, which caught fire in 2012 and blanketed the city of 108,000 in toxic smoke.
Chisun Lee, senior counsel at the Brennan Center who tracks campaign spending in state and local elections, said transferring funds to a network of committees means that the name that is ultimately disclosed on ads and mailers as the funder may have little to do with the donor’s cause.
Disney, for example, funded a committee called Hermandad Mexicana PAC, which has spent at least $27,543 in support of Brandman.
While many voters will be familiar with candidates running for President or Congress, such spending can make a big difference in local races where voters don’t have a lot of information, Lee said.
“It’s in those contexts that outside advertising can really have an impact in shaping peoples’ impressions of candidates,” said Lee. “If you have dark money and unlimited outside spending by interests that have a tangible stake, that is a recipe for misinformation.”
But over use of dark money can sometimes backfire on the corporations, especially in places with strong disclosure requirements.
Consider that despite the $3 million Chevron pumped into the Richmond election, the company-backed candidates lost.
Lee said that while the company was able to outspend candidates, campaign disclosure laws – which are stringent in California compared to most other states – mean many voters were at least aware of who was funding the campaign.
“It’s an important lesson for the value of transparency. The voters knew what was behind those messages, they knew what was at stake, and they were able to use their own judgment about which positions they wanted to elect to public office,” said Lee.