California billionaires are stepping up their efforts to boost San Jose Mayor Matt Mahan in the race for state governor, rushing into the vacuum left by Eric Swalwell's abrupt exit amid allegations of sexual assault.
Donors including real estate magnate Rick Caruso, Netflix co-founder Reed Hastings and venture capitalist Michael Moritz are pouring millions into Mahan's campaign in a last-ditch effort to revive his struggling bid. Swalwell had held a slim lead in opinion polls over a crowded field of Democrats while Mahan, a darling of Silicon Valley, was languishing in the single digits.
"The race has bust wide open and the best mayors, like San Jose's Matt Mahan, make some of the best governors," Moritz, who's known for his early bets on Google and PayPal, said in an email after sending $1 million to a committee supporting Mahan.
The cash influx reflects the sudden reshaping of the race with less than a month before early voting begins ahead of the June 2 primary. Backing his business-friendly message and opposition to a proposed tax on billionaires, Mahan's donors are seeking to elevate his brand of centrist politics over two other Democrats who lead him in the polls, former Congresswoman Katie Porter and progressive billionaire Tom Steyer.
Mahan and outside committees supporting him have raised more than $26 million, including more than $7.1 million reported on Monday. That gives him more ammunition to flood the airwaves with ads in the nation's most populous state even as Steyer has spent more than $120 million of his own money pitching himself to voters.
The mayor's do-or-die moment follows the spectacular downfall of Swalwell, who dropped out of the race this week and said he would resign from his congressional seat.
A former Swalwell congressional aide told the San Francisco Chronicle he twice sexually assaulted her when she was too intoxicated to consent. A separate CNN report cited four women who described sexual misconduct by Swalwell, including sending unsolicited explicit messages, and new allegations continued this week.
Swalwell previously said he would fight "false allegations" while acknowledging past "mistakes in judgment."
The accusations quickly cost him the support of two influential unions, SEIU California and the California Teachers Association. As labor leaders chart their next move in a race with no clear frontrunner, they're already signaling opposition to Mahan.
"The unifying feature is that everybody agrees Matt Mahan would be a disaster and the people pushing Mahan are the people that want to devalue work," said Lorena Gonzalez, head of the California Federation of Labor Unions, an umbrella group.
Gonzalez's group withdrew support for Swalwell over the weekend while retaining its endorsements of Porter, Steyer and former Los Angeles Mayor Antonio Villaraigosa. If Mahan begins gaining in statewide polls, unions will "make sure people understand who is backing him," Gonzalez said.
Amid the wrangling, two Republicans have garnered significant support despite years of Democratic dominance in state politics.
Steve Hilton, a former Fox News commentator, recently won endorsement from President Donald Trump and leads all candidates in a RealClearPolitics poll average with about 15% support. Riverside County Sheriff Chad Bianco is a few points behind. At a state convention last weekend, Republicans failed to unite behind a single candidate.
In the state's open primary system, the top two finishers advance to the general election in November regardless of party affiliation. That raises the possibility that Hilton and Bianco could win the top spots as the Democratic vote splinters, although some political consultants say that possibility has decreased now that Swalwell is out.
As Mahan's fundraisers rev up the money machine, it remains unclear where Swalwell's financial backers will turn. Uber Technologies Inc., which declined to comment, had given $2 million to an outside committee supporting Swalwell as one of three candidates it supports. Stewart and Lynda Resnick, billionaire owners of agricultural giant the Wonderful Company, also donated to his campaign. They declined to comment through a representative.
Besides Mahan, other low-polling candidates such as Villaraigosa and Xavier Becerra, the former US secretary of health and human services, are pushing for a late surge.
Mahan, 43, has drawn a deep roster of wealthy supporters, including Sergey Brin, the world's fourth-richest person, and Joe Lonsdale, the conservative co-founder of Palantir Technologies Inc. Brin and Lonsdale have also backed Hilton.
But the San Jose mayor remains little known outside the San Francisco Bay Area and has struggled to gain traction despite a media blitz that featured him on The Daily Show with Jon Stewart.
As Mahan's campaign faltered, fundraiser David Crane pitched donors on an escrow account that would be refunded if a $35 million goal wasn't met, the New York Times has reported. Now much of that money has been released early to capitalize on Swalwell's downfall, Crane said.
"Once the Swalwell revelations happened everybody realized it's a new world and the money just started flowing," Crane said.
Hastings, who has a net worth of $7.1 billion according to the Bloomberg Billionaires Index, gave $1 million to California Back to Basics, an independent expenditures committee supporting Mahan, according to a filing Monday. Hastings is on the board of Bloomberg Inc.
Caruso, a real estate developer who considered running for governor, gave the committee $1 million this week and said “more to come.” Caruso also called on other Democrats who are trailing in the polls to quit now.
Mahan “is going to have the capital to get his name out,” Caruso said. “He’s cutting new commercials. A lot of money was raised over the weekend. Coffers are full.”
The committee supporting Mahan also reported six figure donations Monday from Intuit co-founder Scott Cook and his wife, as well as from venture capitalist Brook Byers and real estate investor Ned Spieker.
Matt Rodriguez, who heads the committee, said the coming weeks will be pivotal for Mahan.
“We are going to be hitting voters with as much firepower as anyone other than Steyer,” Rodriguez said. “And we feel very good that this is a whole new ball game.”