State watchdog agency fines Matt Mahan $27,500 for more than $2.3 million in delayed donation disclosures

San Jose Mayor Matt Mahan has agreed to pay a $27,500 fine to state regulators for failing to disclose more than $2.3 million in donations made to nonprofits at his request, according to a settlement agreement released by the Fair Political Practices Commission Friday.

Of those late disclosures, 37 payments totaling almost $1.97 million went to Back to Basics California, a 501(c)(4) advocacy organization where several of Mahan’s staff members “held decision-making roles,” according to the commission’s investigators. Individual payments to the group ranged from $5,000 to $1 million, while another delayed disclosure involved a $400,000 payment to the local arts organization Cinequest. The reporting delays ranged from four months to almost two years.

While the agency found 16 counts of negligence, it determined there was no intentional misconduct or attempt to deceive the public. As a result, Mahan’s penalty is much lower than the $80,000 maximum he could have faced.

“In this case, evidence indicates that Mahan’s violations were not intentional and appear to be the result of negligence,” the commission’s investigators noted. “Although ultimately responsible for the actions of his staff, it appears his staff failed to properly track and disclose the behested payments.”

Legally known as “behested payments,” these are donations made to an organization at the request, suggestion, or solicitation of a public official.

Back to Basics is a San Jose-based organization named after a phrase commonly used by Mahan to describe his governance approach. According to its website, the group is dedicated to “holding our elected leaders accountable every day — so our government is delivering on the basics, like addressing the homelessness crisis, getting smarter about fighting crime, cleaning our streets and creating an economy that works for all of us.”

The fine stems from an investigation that was prompted after Mahan discovered the disclosures were not filed and self-reported them to the Fair Political Practices Commission, the watchdog group overseeing California’s campaign, lobbying and conflict-of-interest laws. State law requires elected officials to report donations of $5,000 or more made at their request within 30 days.

The commission is expected to officially adopt the findings at its Sept. 17 meeting. Although commissioners hold the power to adjust the fine or reject the agreement entirely, such moves are rare.

Mahan blamed the oversight on a former aide who he said failed to submit the filings by the deadline.

“These dollars helped put on beloved annual events and fund nonprofits doing good work in San Jose — and the public deserves to know exactly where they came from,” Mahan said in a statement. “I trusted a longtime aide to ensure that was the case. As soon as I became aware of the error, I immediately self-reported and have put in place stronger oversight processes to ensure all reporting is done correctly at both the local and state level.”

The commission noted that the donations were reported locally to the city of San Jose, but they were not reported to the state.

While Mahan did not explicitly name the staffer, the commission identified Jim Reed, Mahan’s former chief of staff, as the person responsible for tracking and filing behested payment reports at both the local and state levels.

“However, due to staff confusion about the required disclosures, 37 payments made from 2024 to 2026 by approximately three dozen donors to the nonprofit at Mahan’s behest were not disclosed as required by the Act,” the commission said in its findings.

Reed left Mahan’s office as chief of staff last December to lead Back to Basics.

In a statement to this news organization, Reed took accountability for the oversight.

“This is 100% on me, not the mayor. While we sought to regularly file our behested payment disclosures fully and accurately through the city’s public process, it’s my fault we didn’t disclose the same information to the state,” Reed said. “It’s a painful and embarrassing lesson learned for me, and I’m sorry that the Mayor has to suffer for my mistake.”

Mahan ran for governor in the June primary and placed sixth among a crowded field of candidates.

Gov. Gavin Newsom was also fined more than $31,000 by the same commission earlier this year for similar violations related to $5.5 million in donations tied to the Los Angeles wildfires.

This is a developing story. Check back for updates.