The world's largest billboard company, in tandem with the Oakland Chamber of Commerce, is exploiting a loophole in state campaign finance law to help Ignacio De La Fuente become Oakland's next mayor.
Over the past year, billboard giant Clear Channel Outdoor and OAKPAC, the chamber's political action committee, have posted giant billboards featuring De La Fuente throughout the city. Some of the signs, which display a large photo of the city council president and the slogan "Ignacio De La Fuente, Moving Oakland Forward," have been up for more than twelve months. One towers over a section of West Oakland smack in the center of Councilwoman Nancy Nadel's district. Nadel, a frequent billboard critic, is one of De La Fuente's leading challengers in the 2006 mayoral race.
Since such billboard ads amount to free political advertising, their sponsors are typically required to reveal how much they paid for them. But a loophole in the law has allowed Clear Channel and OAKPAC to keep the true costs secret.
Clear Channel Outdoor -- a division of radio and TV conglomerate Clear Channel Communications -- has forged a lucrative relationship with OAKPAC and De La Fuente over the past two years. Michael Colbruno, VP of the company's Northern California public affairs division, is also vice chair of OAKPAC's board of directors. OAKPAC's chair is Ana Chrétien, a longtime friend of De La Fuente and one of his top campaign contributors. Chrétien owns ABC Security Service, the private firm that guards Oakland City Hall, the Oakland Airport, and the former Oakland Army Base. These two companies, in turn, are OAKPAC's top donors: Clear Channel has given OAKPAC $13,425 in the past four years, while ABC Security has donated $20,000.
De La Fuente has done right by both companies. He was instrumental in garnering and maintaining ABC's three major public contracts, despite its sometimes shoddy work -- in the hypervigilant days and weeks after 9/11, for instance, Oakland International Airport was cited by federal aviation inspectors after ABC employees guarding its jet-fuel depot were caught sleeping on the job.
The council president cemented his relationship with Clear Channel Outdoor fifteen months ago when he brokered a deal to keep the billboard giant from skipping town. Clear Channel had threatened to leave Oakland if it could not pump up its profits. The point of contention was a 1998 city ordinance banning new billboard construction. De La Fuente struck a compromise that allowed the company to add two giant, high-revenue freeway billboards if it removed 31 smaller, less-profitable ones. The pact also allowed Clear Channel to move into the Shorenstein Building, the city's premier downtown office tower.
Two weeks ago, Colbruno, Chrétien, and the rest of the OAKPAC board unanimously endorsed De La Fuente in his mayoral bid and promised to raise and spend at least $100,000 on his behalf. "It's no secret that I'm the most pro-business person running for mayor," De La Fuente said. "If I were the Chamber of Commerce, I would spend a lot of money trying to defeat Nancy Nadel, too."
The day before the endorsement was announced, Clear Channel agreed to provide free ad space for one of De La Fuente's new initiatives. The high-profile plan, which he dubbed "Operation Shame," is to post the faces of convicted johns on Clear Channel billboards and bus shelters in the Fruitvale district. The proposal is designed to halt a growing prostitution problem on International Boulevard, in the heart of De La Fuente's council territory.
Colbruno and De La Fuente denied that the johns-on-billboards plan is politically motivated. Colbruno said simply that Clear Channel wants "to work with Councilmember De La Fuente and Mayor Brown to help clean up the city." De La Fuente, meanwhile, pointed out that Clear Channel has done pro bono public service work for other public agencies and officials in the past.
But there's no denying it pays to have Clear Channel as a friend. A look at the company's campaign finance disclosures shows that it spent $374,445 in the past two years alone on billboards that urged voters to support a specific candidate or cause.
Last February -- less than three months after the city council approved Clear Channel's billboard swap (only Nadel opposed it) -- twenty giant billboards featuring De La Fuente and Councilman Henry Chang popped up around town. Half the signs read "Ignacio De La Fuente, Moving Oakland Forward" and the rest read "Henry Chang, Moving Oakland Forward." The billboards appeared to be campaign ads for the two, both of whom were up for re-election -- and won -- in the March 2004 primary. The Chang billboards came down a few weeks after the election, Colbruno said, but two of the of De La Fuente signs remain.
It appeared the chamber's PAC had paid for the billboards, because its name was posted prominently on them. At the time, OAKPAC officials told the Oakland Tribune that they bought the billboards to acknowledge the councilmen's leadership in Oakland. But they refused to reveal how much the boards cost, arguing that the information was exempt under state campaign finance law.
Their legal interpretation was partially correct, according to Bob Stern, former general counsel for the state's Fair Political Practices Commission. Because the billboards did not use certain key words, such as "vote for" or "elect," the cost of the ads did not have to be disclosed immediately. FPPC regulations require immediate disclosure only if the ad "taken as a whole, unambiguously urges a particular result in the election."
That rule didn't take OAKPAC completely off the hook, however. The committee was still required to report the total costs of the billboards in its subsequent campaign finance statement. "If they spent the money out of campaign funds, they should have reported it as an expenditure," Stern explained, adding that the committee had to report only the total billboard costs -- not how much it spent individually on Chang and De La Fuente. OAKPAC, in fact, wasn't even required to name the politicians in its finance statements, said Stern, who is now president of the Center for Governmental Studies in Los Angeles.
In its July 2004 disclosure statement, OAKPAC did report that it had spent $5,031 on Clear Channel billboards in the first six months of 2004. Asked whether that number included money spent on De La Fuente, and whether it represented fair market value for twenty billboards, Colbruno replied: "I can't remember."
OAKPAC's campaign treasurer, Mari Lee of Oakland, had a different explanation. Lee, who is also De La Fuente's campaign treasurer, said the $5,031 was not, in fact, the cost for the twenty billboards, but the amount OAKPAC paid to have its name included on them alongside Chang and De La Fuente. Lee said she didn't know how much the billboards actually cost because Clear Channel paid for them.
This, it turns out, is the loophole that allows the true cost of these prominent political ads to remain a mystery: Unlike OAKPAC, Clear Channel is not a political action committee, and because the billboards don't specifically urge voters to elect a certain candidate, Stern explained, the company does not have to reveal how much it spent.
Councilwoman Nadel said she plans to introduce a local ordinance to close that loophole in Oakland. "I'm tired of people trying to hide stuff from the public instead of promoting transparency in government," she said.
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