Rene Gonzalez Faces $77,000 Penalty From City Elections Program for Accepting Deeply Discounted Office Space Downtown

The Small Donor Elections program says the discounted office space constitutes a prohibited contribution.

The city of Portland’s Small Donors Elections program proposes to penalize City Council candidate Rene Gonzalez for accepting heavily discounted office space downtown from Schnitzer Properties Management and failing to report the discount as a contribution.

On Sept. 20, the program’s director, Susan Mottet, issued a penalty notice against Gonzalez’s campaign, citing an allegedly unreported rental agreement between Schnitzer Properties and the campaign in which the campaign paid $250 a month in rent from April through November for 3,185 square feet of office space and two parking spaces.

Mottet wrote in the notice that the rental agreement constitutes a prohibited contribution worth $33,250, which is the difference between the $250 a month the campaign paid and fair market value, which Mottet determined to be $6,900 a month.

Gonzalez faces penalties of $77,000 in total. That includes paying a penalty of $33,250 for the alleged unreported contributions, paying $33,250 back to Schnitzer Properties, and paying $10,640 for failure to report the contributions. Oregon Public Broadcasting first reported the proposed violation.

Shah Smith, campaign manager for Gonzalez, says the campaign has until Sept. 27 to ask the city to reconsider its decision. If that’s rejected, the campaign can then formally appeal the decision.

In a statement, Gonzalez says his campaign did nothing wrong.

“We evaluated [Open and Accountable Elections] rules when we entered into the lease and strongly disagree that the rent is too low given the dismal state of downtown,” Gonzalez says. “Downtown is in shambles because of policies advocated by my opponent, Jo Ann Hardesty—defunding the police and obstructing cleaning up unsanctioned camps. 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.”

Jordan Schnitzer, owner of Schnitzer Properties Management, has contributed the maximum amount to Gonzalez’s campaign already.