Election 2016 campaign lawn signs. Photo: Kelly Owen
The Fair Political Practices Commission will investigate whether the No on Measure U1, Yes on Measure DD gropu violated campaign disclosure laws. The group has spent $790K fighting a huge jump in the business tax on rentals. The group prefers a more modest increase.  Photo: Kelly Owen

The Fair Political Practices Commission has launched an investigation into whether the supporters of Yes on Measure DD may have violated the financial disclosure requirements of the Political Reform Act.

The FPPC mailed a letter Wednesday to the Berkeley Property Owners’ Association and the “Committee for Real Affordable Housing – Yes on Measure DD, No on Measure U1, Sponsored by the Berkeley Property Owners’ Association,” alerting them that an investigation had started.

“At this time we have not made any determination in this matter,” said the letter, signed by Galena West, chief of the enforcement division. “We are simply providing you with this information and will be contacting you again regarding this matter.”

The investigation stems from an Oct. 16 complaint lodged by UC Berkeley’s Progressive Student Alliance. The group contended that the Berkeley Property Owners’ Association listed donations for the Yes on Measure DD and no on Measure U1 campaigns as coming from various LLCs and properties rather than individuals.

For example, one of the larger donations to the Yes on Measure DD effort came from Vero Properties, which is listed as having donated $60,625. Vero Properties is owned by Jay Lakireddy, but his name is not on the campaign disclosure form, said Matthew Lewis, the vice-president of the Progressive Student Alliance.

Dozens of other LLCs with addresses as names also donated to the campaigns but very few individuals were listed. Major donors included Durant Berkeley Partners (Oakland, $28,697), KASA Properties (Berkeley, $25,000), and KLS Associates (Berkeley, $21,567).

Krista C. Gulbransen, the executive director of the Berkeley Rental Housing Coalition, the political arm of the Berkeley Property Owners’ Association dismissed the complaint as a political trick.

“Frivolous FPPC complaints are the oldest trick in the book for campaigns that want to distract voters from the issues,” Gulbransen told Berkeleyside in an email. “In this case, they want to distract from the fact that Measure U1 is a regressive giveaway to big developers.”

The battle between two competing measure on how much to raise the business tax rate on rents is turning into the costliest election contest in Berkeley in 2016. One measure, DD, placed on the ballot by the Berkeley Property Owners’ Association after a signature-gathering campaign, would raise the tax rate from 1.081% to 1.5%. Another measure, U1, placed on the ballot by a unanimous vote of the City Council, would raise the tax rate from 1.081% to 2.88%.

The landlords and property owners backing Measure DD have spent $790,540 so far to defeat Measure U1 and support Measure DD, according to campaign finance statements. As of earlier this week, the group had sent out 12 citywide mailers to voters criticizing the “loopholes” in Measure U1.

That was before two other real estate-related groups made large donations to the campaign. On Oct. 28, Raj Properties based in Hanford, CA. donated $85,000 to the campaign. Waterbury Properties of Berkeley gave $18,000.

Raj Properties owns buildings in Berkeley including 2076 University Ave., 2057 University Ave., and one 2515 Benvenue Ave.

A search of the Secretary of State’s business index did not turn up any current company operating as Raj Properties. However, in 1998 a company by that name was operated by Hanumandla Rajender Reddy, a cardiologist in Hanford.

The Reddy family has various members and collectively they own about 1,000 apartments in Berkeley. Sid Lakireddy is the president of the Berkeley Property Owners Association.

Records detailing philanthropic gifts show that Rajender Raj, and his wife, Jhansi, who was identified as the president of Raj Properties, donated $1 million to support the student health center at the University of California at Merced.

The Yes on Measure U1 group, known as the “Committe for Safe and Affordable Homes to support Measure U1 and Oppose Measure DD” had raised about $71,000 through mid-October, according to campaign finance records.

As election nears, contributions and complaints mount (10.26.16)
Real estate interests spend big to defend rental tax hike (10.12.16)

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Frances Dinkelspiel, Berkeleyside and CItyside co-founder, is a journalist and author. Her first book, Towers of Gold: How One Jewish Immigrant Named Isaias Hellman...