Developer Bill Gallaher backs Ariel Kelley, emerges as a potential spending force in competitive North Coast Assembly race

One of Sonoma County’s biggest political mega donors has stepped into the already expensive race for the North Coast’s Assembly district seat.

On Feb. 6, developer Bill Gallaher donated $50,000 to a local political action committee supporting Healdsburg council member Ariel Kelley, according to campaign finance filings.

Kelley and her campaign spokesperson both told The Press Democrat on Wednesday they had no prior knowledge Gallaher would begin spending in the race.

“We don’t control, coordinate or communicate with any independent expenditure committees,” Kelley campaign spokeswoman Julia Dreher said in a statement.

The PAC, North Coast Neighbors Supporting Ariel Kelley, began in early January. The first donation was $100,000 donation from Kelley’s sister, Shoshana Ungerleider.

Gallaher and his family have not hesitated to plunge millions of dollars into past political campaigns. And his donation to Kelley’s PAC comes four weeks before the crucial March 5 primary vote in what has become a big-money race to replace outgoing District 2 Assembly member Jim Wood, leaving time for Gallaher to pump far more into the committee backing Kelley if he chooses.

California Democratic Party Chairman Rusty Hicks remains the fundraising leader in the race. Besides his campaign account, statewide industry groups and labor organizations have poured six-figure donations into a PAC supporting him.

“This race right now given this early set of dollars has the potential to really blow through the record books,” Sonoma State University political science professor David McCuan said.

Gallaher’s donation for Kelley marks his first significant return to area politics since a failed campaign to unseat a district attorney cost him considerable goodwill among Sonoma County’s political class.

Gallaher, who is chairman and founder of Poppy Bank and has developed a vast real estate and housing portfolio, could not be reached for comment for this story. Business associates and family members did not respond to voicemails and emails seeking comment.

In 2021, Gallaher spent $1.7 million on an unsuccessful effort to recall former District Attorney Jill Ravitch, after her office brought a civil suit accusing his company of abandoning elderly residents in two Santa Rosa care homes during the 2017 Tubbs Fire. Gallaher’s retirement home company Oakmont Senior Living and its affiliates paid $500,000 to settle the unlawful business practices lawsuit.

Families who sued Oakmont Senior Living and its affiliates eventually settled for an undisclosed sum in August 2018.

Local elected officials rallied behind Ravitch and decried the recall campaign as a vendetta and perversion of the electoral process. Gallaher in turn launched an ad campaign against the county’s elected officials writ large. Fliers landed in voters’ mailboxes saying city council members and county supervisors "blindly follow“ Ravitch, whom the recall campaign sought to label as corrupt.

Featured among the politicians in those attack mailers were both Kelley and Santa Rosa City Council member Chris Rogers, who is also in the race for the Assembly district.

The recall effort failed mightily, with 76% of voters backing Ravitch and allowing her to finish her term.

Gallaher family money has been on the winning side in other political battles. In March 2020, for example, voters rejected an early renewal of the sales tax that funds the Sonoma-Marin Area Rail Transit passenger train. That election, in which nearly 48% of voters rejected the sales tax renewal — which needed a two-thirds yes vote to pass — was seen as a blow to SMART’s efforts to build the rail line out to Healdsburg and Cloverdale that the railroad agency has only in recent years overcome.

Molly Gallaher Flater, Gallaher’s daughter and business partner, almost single-handedly bankrolled the campaign against renewal, spending $1.8 million. Flater stated SMART had failed on its promises to voters when they authorized the quarter-cent sales tax that supports the passenger rail system in 2008.

Gallaher, his relatives and business associates also donated a combined $251,800 to Ted Gaines, a member of the state Board of Equalization, during Gaines’ long-shot bid in the campaign to recall Gov. Gavin Newsom.

Since the Ravitch recall campaign, the Gallaher family had not spent in local political campaigns, or at least not enough to garner public notice, until now.

The family has instead focused on philanthropic causes supporting children and mothers. The Gallahers and their companies were pivotal in constructing the Sonoma County Boys and Girls Club in Roseland, with the family giving millions of dollars and Gallaher companies donating management, architecture and engineering work to the construction project.

Gallaher companies also donated more free work, and the family's bank orchestrated a benevolent loan to help rebuild the Anova Center for Education, a school for autistic children destroyed by the Tubbs Fire.

And the Gallahers saved a 33-year-old residential treatment program for women when they purchased a new building for Santa Rosa’s Athena House in August 2022.

Kelley does not know why Gallaher spent $50,000 to support her, she said. She sits on the Sonoma County Transportation Authority board, and supports SMART’s expansion to Healdsburg.

“I don’t have any connections to him, but given his prior involvement in other political races or ballot initiatives in this region I’m not surprised that he’s trying to weigh in on an election,” Kelley told The Press Democrat.

“If I had to point to anything I would say we’ve disagreed (on past issues),” she said.

Gallaher has perhaps more often found himself on the opposite side of issues from Rogers.

Rogers sits on the board of SMART. He also joined his colleagues on the Santa Rosa City Council in voting for a natural gas ban on new homes that drew a lawsuit from Gallaher and other developers. But Rogers said he didn’t know if the donation to Kelley was aimed at defeating his campaign.

“I’m not going to speculate if (Gallaher) has a personal grudge with me,” he said. “I don’t know the guy at all.”

Rogers has reported a little more than $222,000 raised so far. There is no indication of an outside PAC forming to support him.

“Overcoming other campaign’s big money and their unrestrained spending, it’s a challenge,” Rogers said, “it’s daunting.”

Yurok Tribal Vice Chair Frankie Myers and Mendocino County Supervisor Ted Williams are the other Democrats in the race. Myers has raised a little more than $114,000, and Williams has not reported any money.

On Thursday, it became clear that Rogers is likely not the direct target of the PAC’s spending as ad mailers arrived in the mailbox of voters in Mendocino and Sonoma counties.

Those ads portrayed Hicks in a Los Angeles Dodgers baseball hat and labeled him a carpetbagger from Southern California, interested only in making it to Sacramento.

“He knows little more about our area than a tourist,” the mailer said, refering to the fact that he moved to Arcata in 2021.

Asked by The Press Democrat to respond to the mailer, the Hicks camp focused on the PAC’s donors.

“It’s not surprising that wealthy developer Bill Gallaher is teaming up with oil investors and Councilmember Kelley’s sister to launch hit-pieces from a dark money PAC based in Orange County with consultants from D.C. — that’s straight out of the Big Oil playbook,” said Robin Swanson, a spokesperson for the campaign.

The oil investors line was a reference in part to Chris Hansen, a financier who has contributed $60,000 to the PAC, which on the mailer was renamed “North Coast Neighbors Supporting Ariel Kelley and Opposing Rusty Hicks.” Data provided by the Hicks campaign shows Hansen’s hedge fund, Valiant Capital, holds about $35 million worth of shares in offshore drilling firm Schlumberger.

The PAC’s funders know “Rusty will oppose their efforts to expand a reliance on fossil fuels,” Swanson wrote.

The ad is the first significant negative mailer of the race, and with only four weeks to go, it appears unlikely to be the last.

Because of the demographics of the district, the candidates all believe only one Democrat will emerge from the March primary. That primary winner should face an easy general election against the sole Republican in the race, Del Norte school board trustee Michael Greer.

Rogers expressed optimism that voters would look askance at some of the heavy spending by Hicks and Kelley. “Voters are always skeptical whenever they see big money regardless of where it comes from,” he said, and “I think it’s fair to ask what do donors expect from the candidates they’re giving so much money to?”

With Gallaher’s donation, and a recent $10,000 from Barbara Grassechi, a national Democratic fundraiser who recently hosted Jill Biden’s appearance in Healdsburg, the PAC backing Kelley has raised $195,000 and spent at least $51,000, according to filings.

Her campaign itself has reported raising $466,000. Of that, $150,000 came from Kelley herself.

Hicks has reported raising around $590,000 for his campaign. A political action committee supporting him has reported almost $400,000. Statewide labor organizations are responsible for $145,000 of that total. The California Dental Association gave $150,000 and the California Apartment Association, which represents rental property owners and operators, gave $100,000.

CORRECTION: This story has been updated to note that 48% of voters rejected a SMART sales tax renewal which required a two-thirds vote to pass.

This story has also been updated to include reporting on a campaign mailer that went out in multiple counties today.

You can reach Staff Writer Andrew Graham at 707-526-8667 or andrew.graham@pressdemocrat.com. Follow him on X (Twitter) @AndrewGraham88