PORTLAND, Ore. — Portland city council candidate Rene Gonzalez is facing $77,140 in fines and penalties for accepting and not reporting a significant discount on campaign office space in downtown Portland.
Gonzalez is running against incumbent commissioner Jo Ann Hardesty in the upcoming November election.
Portland's small donor elections program says the Gonzalez campaign has paid $250 per month for office space that holds a fair market value of $6,900. The program's director, Susan Mottet, wrote that a 96% discount on rent represents an illegal campaign contribution that wouldn't be available to the general public, violating campaign finance laws.
The office space is owned and rented by Schnitzer Properties Management.
Real estate developer Jordan Schnitzer has supported the Gonzalez campaign, donating $250 — the maximum amount allowed for an individual's donation — on May 2, according to campaign finance data.
The lease for the office space at 1010 SW 11th Avenue started on May 1, one day before Schnitzer's donation.
Portland elections officials fined Gonzalez $33,250 for accepting the office space and another $10,640 for failing to report it.
"When you violate the prohibition on large contributions and accept a contribution of $33,000, that goes against the point of the (small donor elections) program to ensure our democracy is strong and healthy and accountable to the people," Mottet said.
Gonzalez is also ordered to reimburse Schnitzer Properties Management an unpaid amount of $33,250.
In a statement response, the Gonzalez campaign said they accepted a significant discount to lease the property because downtown Portland is "in shambles" with "homeless encampments" and "extensive vacancies" in the area.
“We evaluated (Open and Accountable Election) rules when we entered into the lease and strongly disagree that the rent is too low given the dismal state of downtown," wrote Shah Smith, a spokesperson for the campaign. "Landlords are desperate to get any kind of compensation for their space because of the city's failures to address crime and homelessness has made downtown inhospitable to tenants, landlords and visitors."
The Gonzalez campaign paid $540 per month in utilities in addition to the rent, according to statements provided to investigators.
The campaign has until October 4 to appeal the penalties. Smith said a compliance team is reviewing the complaint and the campaign plans to appeal the findings.
The small donor elections commission has only issued two fines in its history, Mottet said: a $5 fine and this $77,140 fine.