Seattle election laws ban contributions to candidate campaigns by major city contractors and by companies that lobby City Hall. Are the mayoral candidates playing by the rules?

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Update: On Oct. 10, after this story was published, Seattle City Light provided documentation showing that the city’s recent payments of about $479,000 to Ash Grove Cement Company consisted exclusively of energy-conservation rebates. The company was not a contractor providing goods or services.

Seattle mayoral candidate Jenny Durkan accepted campaign contributions from two companies that have received more than $250,000 in payments from the city in roughly the past two years.

The contributions from Microsoft and Ash Grove Cement totaled only $1,000, a small percentage of the $685,000 that Durkan has raised.

But at least one was banned under a new Seattle election law that bars candidates from accepting money from major city contractors.

It’s difficult to know for certain which companies are prohibited from donating because the city has yet to develop a definitive list of its major contractors.

Durkan’s campaign refunded the contributions from Microsoft and Ash Grove Cement Monday after The Seattle Times asked about them, according to campaign spokeswoman Stephanie Formas, who said they had been accepted by mistake.

Formas said the contributions weren’t flagged as banned by the Seattle Ethics and Elections Commission. A complaint was filed with the commission late Monday alleging the Microsoft and Ash Grove Cement contributions and three other Durkan contributions to be violations.

The new law is one of several approved by voters in 2015 as part of Initiative 122, also known as Honest Elections Seattle.

Promising to help “get big money out of politics,” the measure’s stated purposes included “banning campaign contributions by city contractors and entities using paid lobbyists.”

The law may be having some effect: Though many Durkan supporters previously backed former Mayor Ed Murray, she’s received fewer campaign contributions from businesses than Murray did in 2013.

Business contributions made up 8 percent of Murray’s war chest in 2013, according to the elections commission and 1 percent of Durkan’s total this year.

Meanwhile, other contributions before the Nov. 7 general election are demonstrating some limits of the Honest Elections Seattle laws.

Durkan has taken money from executives of several companies that are major city contractors, and her opponent, Cary Moon, has taken money from executives at two. Because the contributions are from individuals rather than the companies, they’re probably legal.

Similarly, Durkan has accepted contributions from leaders at companies that have spent more than $5,000 on city lobbyists in approximately the past year.

While an Honest Elections Seattle law bars contributions to candidates from such companies, most or all of Durkan’s contributions from individuals at the companies are likely legal.

The elections-commission complaint filed Monday by Estevan Munoz-Howard, an author of I-122 and a Moon donor, says three contributions to Durkan from companies that employ lobbyists could be considered illegal.

Lastly, leaders at companies with business at City Hall are helping bankroll a pro-Durkan political-action committee (PAC). Unlike contributions to candidates, PAC contributions from such companies aren’t covered by Honest Elections Seattle.

“As mayor, I won’t be obliged to big corporations, City Hall lobbying interests and those with big city contracts,” Moon said.

“It’s not just a question of complying with the letter of the law, it’s about bringing back the highest levels of ethics, trust and transparency to the mayor’s office.”

Though Moon is receiving less support from the business community than Durkan, she has spent more than $111,000 of her own money in the race — about half her campaign’s overall haul.

“Jenny strongly supports the state and Seattle campaign-finance laws. She believes in heightened transparency and accountability in our elections system,” Formas, the Durkan spokeswoman, said in a statement.

“As a lawyer and activist, she fought to ensure that campaigns and political PACs could not hide their donors. The campaign has devoted resources to compliance and is committed to complying fully with Seattle’s strong campaign-finance and disclosure laws,” Formas said.

Law on major contractors

The new law covering major contractors says no candidate “shall knowingly accept any contribution directly or indirectly from any entity or person who in the prior two years has earned or received more than $250,000, under a contractual relationship with the city.”

The elections-commission website has a list of companies that have received significant payments from the city in the past two years.

Not all the companies on the list are contractors, however. Some may have received money from the city for other reasons, and the commission lacks the information to say so, Executive Director Wayne Barnett said.

Durkan accepted a $500 campaign contribution on Sept. 7 from Microsoft, which received payments of about $1.6 million from the city in the two-year period ending Aug. 31, according to the commission list. Microsoft is a city contractor, The Seattle Times has confirmed.

She also accepted a $500 contribution on July 20 from Ash Grove Cement Company, which received payments of about $479,000 during the same period. The Seattle Times has yet to confirm that Ash Grove Cement is a city contractor.

In other instances, Durkan has accepted contributions from leaders at companies that have received more than $250,000 in payments from the city and which are city contractors.

Those include leaders at Microsoft, McKinstry, HNTB Corp., CH2M Hill, CBRE and partners at law firms such as K&L Gates, Savitt Bruce Willey and Davis Wright Tremaine.

The donors range from HNTB’s west division government-relations manager to McKinstry’s chief executive officer to a local senior vice president at CBRE. Together, their contributions account for a few thousand dollars.

Durkan also has accepted money from a vice president and regional counsel at Kaiser Permanente, which is a health insurer for city employees.

Kaiser, along with Group Health, which it acquired this year, has received more than $61 million in payments from the city, according to the commission list.

Moon has accepted money from executives at Forterra NW and Herrera Environmental, which each received more than $250,000 in payments from the city and which are city contractors.

None of Moon’s contributors owns companies doing business with or lobbying the city, she said in her statement.

“As a civic leader, I was proud to help develop and pass Honest Elections, the law limiting big money’s influence on local elections,” Moon said.

“Together, we succeeded in passing limits on corporate money and influence without impeding the First Amendment rights of individual employees to contribute to their favored candidates. Our campaign is supported by hundreds of employees of all kinds of small and large businesses, agencies, and nonprofits.”

Formas noted that about 3,000 supporters have contributed money to Durkan’s campaign.

“She is grateful for the breadth of her support and proud of building a broad coalition of working people, businesses, labor unions, environmentalists and diverse community leaders,” the spokeswoman said.

Writing the law

The authors of I-122 could have attempted to clearly bar principals of companies with major city contracts from making contributions. They decided against that, said Sightline Institute Executive Director Alan Durning, who helped write the initiative.

Instead, the authors banned contributions made by such companies “directly or indirectly,” leaving it to the city to determine what “indirectly” really means, he said.

“There are places where contractor-contribution limits include the principals, the major shareholders, the leaders and managers,” Durning said. “We cast a narrow net.”

Why? Firstly, the authors were anxious about securing voter approval for I-122’s headline provision, a controversial “democracy vouchers” program, he said. They didn’t want the contractor-contribution law to make waves.

Secondly, it would have been challenging for the I-122’s authors to “draw the line” between company leaders and regular employees.

Freedom of political speech could have come into play. Should an office manager be among those banned from contributing? Should a government-relations officer?

Under Seattle election rules, only contributions by people who own 50 percent or more of a company or who have majority voting rights are supposed to be aggregated with contributions by the company.

This winter, two years will have passed since I-122 was approved, meaning the City Council will gain the authority to change the laws.

“The council can do whatever they want,” Durning said, adding, “The Seattle Ethics and Election Commission should write a rule about what ‘indirectly’ means.”

Barnett is less confident.

“We’re operating in an area where the First Amendment is pretty paramount,” the commission’s executive director said. “If we’re going to say an individual can’t give, that should be clearly stated in the law.”

Barnett added, “We’re not policymakers. We’re an administrative agency.”

Lobbyists, PAC money

Seattle’s new law that covers lobbying says no candidate “shall knowingly accept any contribution directly or indirectly from any entity or person who during the past 12 month period has paid $5,000 or more to a lobbyist or lobbying entity for lobbying the city of Seattle.”

None of the more than 20 companies and organizations that spent more than $5,000 on lobbyists in the past year has contributed to Durkan’s campaign directly.

But leaders of at least six — Amazon, Vulcan, Lamar Advertising, Puget Sound Energy, Clise Properties and Starbucks — have given her money. The contributors include Vulcan founder Paul Allen, Starbucks founder Howard Schulz and Alfred Clise of Clise Properties.

Munoz-Howard’s complaint says contributions by Allen, Clise and Washington Hospitality PAC could be considered “indirect” donations because they are majority owners of lobbyist employers City Investors LLC, Clise Properties and Seattle Hospitality for Progress.

While companies that spend heavily on lobbyists are barred from giving, lobbyists themselves aren’t; at least a dozen lobbyists employed by companies and organizations covered by the law have given money to Durkan.

Even before I-122, companies didn’t always contribute directly to candidate campaigns. They often contributed to PACs, which can wield great power in city elections.

Whereas candidates can accept only a few hundred dollars, contributions to PACs are unlimited. And PACs can channel the money to independent-expenditure committees, which buy advertisements, mailers and television time to support or attack candidates.

For example, an independent-expenditure committee bankrolled by the Seattle Metropolitan Chamber of Commerce’s PAC spent about $79,000 in 2015 supporting City Council candidate Rob Johnson. That was more than Johnson’s opponent, Michael Maddux, raised as a candidate.

This year, a pro-Durkan independent-expenditure committee spent about $116,000 leading up to the Aug. 1 primary election, with $86,000 coming from the chamber’s PAC.

Among the companies and organizations giving to the chamber’s PAC this year are more than a dozen that may be barred from giving to Durkan directly due to the new Honest Elections Seattle laws.

They include Amazon, which has given $250,000 to the PAC, CenturyLink, which has given more than $25,000, Vulcan, which has given more than $160,000 and Comcast, which has given $25,000.

Some of the others: AT&T, Airbnb, McDonald’s, Starbucks, Puget Sound Energy, the Washington Retail Association, the Rental Housing Association and Clise Properties.

Correction: An earlier version of this story misstated the amounts of money that CenturyLink and Vulcan have contributed to the Seattle Metropolitan Chamber of Commerce’s PAC.