San Jose mayor fined over donation transparency lapses

San Jose Mayor Matt Mahan faces a $27,500 fine over breaches of a government transparency law stemming from late disclosures of political donations.

The Fair Political Practices Commission (FPPC), a state body that enforces campaign finance and government ethics rules, assessed the fine after determining Mahan had failed to file timely disclosures of more than $2.3 million in payments made at his request to two nonprofit organizations. Most of the money went to Back to Basics California, an organization with close ties to Mahan that launched two years ago to advance his policy agenda throughout the state.

The FPPC approved the fine — laid out in a recent settlement agreement — during a Thursday hearing.

Commission officials said they determined the regulatory lapses occurred because Mahan’s staff misunderstood filing requirements, noting that the violations came to light because Mahan alerted election authorities about the errors.

“In this case, evidence indicates that Mahan’s violations were not intentional and appear to be the result of negligence,” they wrote in a document laying out the commission’s findings. “Mahan voluntarily filed the late reports without any prompting by media or Enforcement Division inquiries, and has cooperated fully with the FPPC in this matter.”

The document records 38 payments between 2024 and 2026 made at the request of Mahan or a subordinate that he failed to disclose in time to satisfy California political transparency laws. That includes payments from about three dozen donors who collectively contributed $1.9 million to Back to Basics California. The complaint also covers a single payment of $400,000 to Cinequest, the San Jose nonprofit behind the annual film festival of the same name.

Such donations made at the request of an elected official, known as “behested” payments, are tightly controlled under California’s Political Reform Act. While this type of payment often goes to charitable causes and does not typically benefit the politician directly, they are seen as a way to curry favor with political leaders. To provide additional transparency, the act requires elected officials to disclose the payments to the FPPC within 30 days of when donations from a single source surpass $5,000 in a calendar year.

“These dollars helped put on beloved annual events and fund nonprofits doing good work in San Jose — and the public deserves to know exactly where they came from,” Mahan told San José Spotlight. “I trusted a long-time aide to ensure that was the case. As soon as I became aware of the error, I immediately self-reported and have put in place stronger oversight processes to ensure all reporting is done correctly at both the local and state level.”

Added scrutiny 

By the time Mahan filed appropriate disclosures, many of the payments were already more than a year past their filing deadlines. In some cases, Mahan had already disclosed the payments to San Jose under the city’s fundraising disclosure requirements, but he then failed to make the same disclosures with state authorities, according to FPPC officials.

The donations to Back to Basics California generally ranged from $5,000 up to $100,000. The largest expenditure was a $1 million payment from Chris Larsen, the San Francisco billionaire and crypto executive who has emerged as a prolific donor in California politics.

One aspect of the case that has attracted additional scrutiny is the personnel links tying Mahan to Back to Basics California. At the time the behested payments were made to the 501(c)(4) political advocacy nonprofit, several members of Mahan’s staff held decision-making positions within the organization, according to commission officials.

The organization’s founder, Adrian Rafizadeh, is a longtime political associate of Mahan who served as campaign manager for both his 2022 bid for San Jose mayor as well as his unsuccessful run for governor earlier this year.

“This money is essentially going to support one politician’s agenda,” Sean McMorris, transparency, ethics and accountability program manager for good government group Common Cause California, told San José Spotlight. “Even though it’s not going into a campaign account, it’s being funneled into organizations that essentially support and promote his agenda. That’s legal, but I think it’s very different than when you’re saying ‘I’m making a behested payment to the Red Cross.’”

Back to Basics California, a name that echoes Mahan’s oft-repeated “back to basics” campaign slogan, has been viewed as a vehicle to raise the San Jose mayor’s statewide political profile during his preparations to make a run at the governor’s mansion. The gubernatorial bid came to an end in June when Mahan placed sixth in a crowded primary field.

Mahan could have faced even higher penalties. Under state law, the maximum fine for the violations compiled in the settlement document is $80,000, according to the FPPC’s finding. But agency officials settled on lower penalties, indicating the lenience stems from Mahan’s decision to come forward as well as his cooperation with the regulatory body.

The settlement document identifies Mahan’s former chief of staff, Jim Reed, as the worker tasked with filing behested payment reports. Reed departed City Hall in December to lead Back to Basics California. It’s unclear if he is still affiliated with the organization.

Reed said he takes responsibility for the late disclosures.

“This is 100% on me, not the mayor. While we sought to regularly file our behested payment disclosures fully and accurately through the city’s public process, it’s my fault we didn’t disclose the same information to the state,” Reed told San José Spotlight. “It’s a painful and embarrassing lesson learned for me, and I’m sorry that the mayor has to suffer for my mistake.”

Contact Keith Menconi at [email protected] or @KeithMenconi on X.