Silicon Valley Organization’s PAC dissolved in fallout from racist attack ad

Google and San Francisco 49ers are the latest companies to cut ties with the chamber of commerce.

In a stunning move made less than a day before Tuesday’s election, Silicon Valley’s chamber of commerce has dissolved its political action committee amid the fallout from a racist attack ad it had commissioned last week in a San Jose City Council race.

“Today, as first a step toward restoring its 130-year reputation, the Silicon Valley Organization voted to immediately dissolve the SVO PAC, subject to state and local campaign finance laws and reporting requirements,” Terry Downing, a public relations consultant working with the SVO, said in a written statement Monday.

The PAC, which is the campaign arm of Silicon Valley Organization, typically spends hundreds of thousands of dollars on campaigns for business-friendly candidates each election cycle. And in the South Bay, where the SVO PAC and South Bay Labor Council are two of the most influential players in politics, the dissolution of the SVO PAC could significantly alter how future campaigns are run.

The latest announcement from the SVO board comes in the wake of a growing exodus of influential and well-known board members and just days after Silicon Valley Organization CEO Matt Mahood stepped down and the executive board announced it was suspending all campaigning efforts and hiring a third-party investigator to determine how and why the ad was published. The organization said Monday that the results of the investigation will be available on Nov. 10.

The image at the center of the SVO’s turmoil was posted on the organization’s website earlier this week — and promptly taken down after intense public scrutiny — as part of an attack ad funded by its PAC against San Jose District 6 City Council Candidate Jake Tonkel, who is running against Incumbent Dev Davis. The black-and-white image featured a group of Black men in a South African street next to a cloud of tear gas overlain with the words: “Do you really want to sign onto this?”

The SVO said the ad was intended “to demonstrate the consequences of cutting the police budget by 80%,” which the organization falsely claimed Tonkel — a proponent of more robust police reform — favored.

As of Monday, at least a quarter of the SVO board members confirmed to the Mercury News that they had resigned in protest of the image.

The growing list of companies that have dropped their seats on the SVO board and have withdrawn their memberships include Google, Adobe, Cisco, Comcast, PG&E, Kaiser Permanente, the San Francisco 49ers, the San Francisco Giants, the San Jose Sharks, the San Jose Earthquakes, San Jose State University, Lockheed Martin, Texas Instruments, Sand Hill Property Co., Team San Jose, Core Companies, Pivotal Now, SPUR, the California Apartment Association, Good Samaritan Hospital and Regional Medical Center.

According to an SVO board member, the board held a nearly two-hour meeting via Zoom on Monday afternoon to discuss the image, answer questions from board members who wanted more information and discuss the organization’s next steps. During the meeting, one of the board members made a motion to dissolve the PAC. Of the 30 or so board members who took part, nearly a third abstained and only a couple of people voted against it.

The board member, who asked not to be named, voted in support of the dissolution. He said those who abstained or voted against it indicated they needed more information or were worried about losing what they saw as a critical tool to inform voters about how certain candidates could affect their lives and businesses.

Like many people who were involved in the organization and have cut ties in the past week, this board member said it feels like the organization no longer offers the same benefits it did 10 years ago.

“Right now what they represent is not in line with what I’m trying to accomplish as a business owner in the community, let alone how they’re going about doing it, which is just a shame,” the board member stated. “The primary focus of the organization is really the grassroots style community that is a chamber of commerce, not the political action aspect of it.”

Until it gets back to that, the board member said he will join the others who have already resigned.

Although Silicon Valley Organization’s PAC suspended its campaign efforts as part of its damage control from posting a ‘blatantly racist’ image on its website, flyers funded by the political action committee are still showing up in residents’ mailboxes.

The day before word of the racist image started making its round among elected officials, nonprofit leaders and the community, the SVO also put $20,000 into other hit pieces against San Jose council candidates Jake Tonkel and David Cohen.

According to SVO Vice President Madison Nguyen, hundreds of mailers were already at the post office by Oct. 28, the date when the organization announced it was halting all campaign efforts and hiring a third-party investigator to determine the events that led to the image’s posting.

“We couldn’t put a stop to them and it may take a few days to arrive in peoples’ mailboxes,” Nguyen said at a recent press conference.

Despite halting its campaign activities six days before the election, the Silicon Valley Organization PAC spent more than $500,000 on campaign mailers and attack ads in the two races for open seats on the San Jose City Council.

And leaders from across Santa Clara County are now calling on the organization to take the same amount of funding it spends on what they see as unjust attack ads and invest in community organizations that are working to better the community as a whole, especially those that support people of color.

“We are going through a process right now of reconciliation and awakening and to see this happen in a 2020 election in Silicon Valley is really appalling,” state Assemblymember Ash Kalra said at a media event on Monday.

“I think the money that has been spent by the PAC for candidates using racism and racist trope and division, they should find organizations that uplift communities of color and they should invest in those,” he continued.