Is San Francisco a Bellwether for Cryptocurrency Influence on Local Elections?

Updated at noon Dec. 13

San Francisco has emerged as a microcosm of how tech and cryptocurrency leaders are expanding their growing political influence from local to national elections.

The 2024 election saw the city’s most expensive political action committee (PAC), created and funded by billionaire investors, successfully defeat incumbent Supervisor Dean Preston. But other campaigns with big tech money behind them, like efforts to elect a more right-leaning mayor or to unseat progressive Supervisor Connie Chan, fell flat.

The mixed outcomes show the limits of campaign spending in local politics, but political analysts and campaign finance experts say that won’t stop billionaires from trying in San Francisco and, increasingly, in other cities.

“They realize that they have skin in the game even at the local level, and it behooves them to try and have candidates on these city councils or county board of supervisors that are friendly to their policy views,” said Sean McMorris, who leads the transparency, ethics and accountability program at California Common Cause. “You will see it, I believe, in bigger cities where there are more opportunities for special interests to increase their bottom lines.”

Silicon Valley power players have poured money into local elections for decades. But political analysts and grassroots organizers say tech and cryptocurrency billionaires’ spending went even further this past election cycle, which brought in more than $62 million in total donations. Mayor-elect Daniel Lurie raised about $16 million — about half of which was self-funded — making his campaign the most expensive in the city’s history.

Chris Larsen, an early donor for Mayor London Breed who co-founded the cryptocurrency company Ripple Labs, donated more than $1 million to San Francisco races this year, largely into a PAC supporting the mayor created by the Abundance Network, a YIMBY (Yes In My Backyard) political organizing group. Started in San Francisco in 2022, the Abundance Network has expanded to Oakland, Santa Monica and has plans to grow into New York City.

Breed lost her bid for a second term to philanthropist Daniel Lurie, but Larsen’s investments paid off in the local supervisor race for District 5, where he donated $50,000 to a PAC started by GrowSF, another moderate political organizing group working to unseat the board’s sole Democratic Socialist, Dean Preston.

“What was absolutely clear was the huge amount of spending in our race by tech millionaires and billionaires against progressive candidates. That was certainly the case in District 5,” Preston told KQED. “It was much more of just a negative attack disinformation campaign on me rather than propping up a different candidate.”

Political watchdogs digesting this year’s election are seeing similar efforts across the Bay and nation.

Coinbase’s Jesse Pollak helped the Abundance Network raise nearly $500,000 to back a moderate slate of candidates for city council in Oakland.

In California, a Super PAC backed by crypto industry leaders spent nearly $10 million on ads against Katie Porter’s run for Senate. The progressive candidate lost to fellow Democrat Adam Schiff in the March primary.

Nationally, Silicon Valley poured more than $394.1 million into the presidential election this year, according to the Guardian. While most came from Elon Musk supporting Donald Trump, players like Larsen, who donated about $13 million to Vice President Kamala Harris’ campaign, also made a significant contribution.

“Ripple and Coinbase specifically are two cryptocurrency companies spending on the local level and people connected to them directly are pushing big money behind local politics,” said Jeremy Mack, executive director of the Phoenix Project, a nonprofit tracking money and influence in San Francisco politics. “Those two companies also ended up becoming the two biggest backers of nationwide cryptocurrency PACs that spent huge on elections across the country, largely both to unseat progressives and get the Republicans elected.”

The Abundance Network and GrowSF are just a few of the political organizing groups that have sprung up in San Francisco since the pandemic, tapping into some residents’ frustration over the city’s struggles with homelessness, a drug overdose crisis and crime. Others included TogetherSF, backed by tech billionaire Michael Moritz, and Stop Crime SF.

Throughout the 2024 election cycle, tech leaders like Garry Tan, CEO of Y-Combinator and a board member of GrowSF, got directly involved with local political action and messaging. Tan became a prominent critic of Preston on social media, along with Musk, who notably called for the supervisor to be “thrown in prison” on social media platform X.

But tech money alone didn’t sway voters. Nancy Tung, who was elected chair of the San Francisco Democratic Party this spring as part of the board’s shift to a moderate-majority, points to how Supervisor Chan held her seat with big donations from organized labor, defeating efforts from GrowSF and TogetherSF to replace Chan with a moderate Democrat, Marjan Philhour.

“There is big money on both sides,” Tung told KQED’s Political Breakdown. “The misconception is that there is money being spent only on one side. Really what it is, is that voters decide.”

Democrat Bilal Mahmood, who unseated Preston, said the outcome came down to messaging and voters wanting change.

“Money was not the deciding factor of who won or lost in this race,” Mahmood told KQED. “[Preston] lost because his messaging was out of touch with what the district wanted. There’s now people in tech who are involved at the grassroots level, and that’s on both sides as well.”

Big donors themselves did not agree on candidates across the board, another reason why some efforts succeeded and others didn’t in San Francisco, said progressive political consultant Jim Ross.

“When you look at that District 5 race, they were able to use their money to back a new candidate and get people to knock on doors and develop strong messaging that was compelling to people in that district,” Ross said.

But, the rapid emergence of so many political groups at the local level in San Francisco was unique this election, Ross added. “In the past, we had one or two, but it seems like every day there was a new billionaire-backed political action committee.”

McMorris of Common Cause and others say strengthening campaign finance laws could help level the playing field as elections grow expensive and candidates increasingly have to navigate disinformation campaigns from special interest groups.

“Really, the worst lesson tech billionaires will draw from [this election] is that funding massive disinformation campaigns against progressives works,” Preston said. “Progressives will need to be prepared for that and need to battle more on rebutting disinformation early and making sure that allies and progressive donors step up.”

Correction: This story has been updated to reflect the total amount of campaign donations this past election cycle.