Hidden money, weaponized disinformation and a dark development

It was a cold night in February, and my car was inching through a rope of ruby taillights spilling across North Sacramento. Rain swept the idling bumpers as my cellphone suddenly lit. I tapped its screen to kill the rumbling in my subwoofers. “Good evening Mr. Anderson,” a cigarette-singed voice boomed into the cab. “We’re conducting a survey tonight of Folsom residents to learn how they feel about their city.” The stranger had an East Coast edge to him. “Can I ask you some questions?”

I took a slug of lukewarm coffee. “Sure.” The man started firing away. What was my opinion of the Folsom City Council? What was my opinion of the Chamber of Commerce? What was my opinion of the direction the city was heading? I gave some half-awake answers. “Now I’d like to ask some questions about Folsom Ranch, commonly known as South of 50,” the stranger continued. That perked me up.

Folsom Ranch, an embattled series of housing developments, is on track to be the largest of its kind in Sacramento County in decades—which means an enormous loss of open space, agricultural land and wildlife habitat. I searched for words to describe the disappearing open range. I said that it mattered in a region already threatened by similar sprawl-swallowed vanishings south of Elk Grove and on the outskirts of Rancho Cordova.

But did it matter? In this murky world of faceless development interests, secretive political pacts and dark money, it can feel like the truth never matters.

I didn’t know it yet, but this anonymous call was part of a proud American tradition of weaponizing misinformation to steer hearts and minds. Karl Rove once showed that “phone surveys” could manipulate racist voters into thinking of a war hero adopting an orphan as a philanderer hiding “a black love child.” Sacramento’s district attorney recently used phone calls to suggest her political challenger, a longtime homicide prosecutor, was secretly enamored with violent criminals. Now social media has elevated the game. Efforts to discredit a politician on Facebook can spiral into guns blazing inside a family pizza parlor.

That tradition was zeroing in on Folsom; I just didn’t know it yet.

‘If you were to learn…'

Back in the car, the tenor of the stranger’s questions was starting to change.

“If you were to learn that Folsom Ranch, commonly known as South of 50, would have little to no negative effect on the city’s water supply, would that change your opinion of it?” the stranger asked. I stammered a little. Officials at the State Water Resources Control Board continue to warn that the city has no stable water supply for the 11,000 new homes and 23,000 new residents coming with the South of 50 project, especially in severe drought years. “Well, I know what the state experts say,” I shot back.

The stranger was undeterred. “If you were to learn that Folsom Ranch would have no significant impact on traffic in the city, would that change your opinion of it?” he ventured. My eyes drifted into the lagoon of vehicles stalled on Exposition Boulevard. Folsom’s council members had already voted to exempt the South of 50 project from normal traffic standards and were at that moment preparing to downgrade traffic standards for the entire city from a letter-C mandate to a letter-D mandate, which will bring new levels of gridlock over time.

“Where are you getting this information from?” I pressed. The stranger muttered something about “the survey.”

“If you were to learn that Folsom Ranch,” he went on, “is going to preserve a large amount of natural open space, would that change your opinion of it?” I took a hard turn onto Ethan Way, pulling near the front of the Century Arden Theaters. I knew that the South of 50 project was razing 2,600 acres of grasslands and splitting another 1,000 acres into manicured pockets of artifice. The Environmental Council of Sacramento had been raising alarms about what this habitat destruction means for endangered hawks and migratory birds, not to mention Sacramento County’s air quality. I glanced down at the telephone number. It was a Long Island area code.

A teal fluorescence was beaming off the theater’s obelisk, leaving glints of emerald in the dusky rain. I wondered what the purpose of this “survey” really was, and what kind of data one might later claim to extrapolate from it, based on the assumptions impregnating its questions.

I’d soon learn that other Folsom residents had received the same phone call—and no one knew who was behind the calls. The riddle seemed to take on a new intensity a couple months later, when a sponsored story appeared on the homepage of The Sacramento Bee’s website on April 10, 2018. It was anchored between similar-looking (but real) news pieces written by staff reporters, including reports on federal lawsuits, economic trends and historic preservation efforts. The sponsored headline wrapped in all that genuine journalism read, “Folsom residents charting the city’s growth.” Clicking its link, readers found paragraphs of sponsored text sprawling under The Bee’s masthead, prose that trumpeted the virtues of Folsom Ranch, insisting the megalithic development happened via the will of the people rather than the area’s wealthiest real estate magnates. The byline on the sponsored story read, The Folsom Way.

Around the same moment, a Facebook business page materialized for The Folsom Way. From it, an unknown administrator began posting videos that were bolstered by paid “boosts,” Facebook’s way of using its mighty algorithms to insert content directly into the personal feeds of thousands of Folsom residents.

The Folsom Way’s video opens with the assuring voice of a man saying, “It was us, Folsom residents, who took control of the land south of 50.” The Ken Burns-esque narration continues over poignant music as the imagery morphs into aerial drone footage of green, rolling hills—a bird’s-eye view of valley oaks and pastoral spring splendor—and a look down on land that was, at that very moment, being torn to pieces by backhoes and bulldozers.

There was enough dizzying irony here to feel like I was stepping into the pages of a Raymond Chandler novel. I knew from earlier reporting that Johnny wasn’t the only Cash that had moved around Folsom. There had been hidden money in the politics of open-space obliteration. Now there was hidden money in the marketing of it. Who paid for the puzzling survey? Who is The Folsom Way? I was about to learn what kind of anonymity good money can buy. It was enough to keep any puppeteer in the shadows.

Folsom confidential

I sensed a growing tension in the chambers. It was June 26 and Folsom City Hall was filled with people about to watch a showdown: On one side, planning commissioners Kevin Mallory and Aaron Ralls; on the other, Mayor Steve Miklos and Councilwoman Kerry Howell. With the support of fellow commissioner Jennifer Lane, Mallory and Ralls were making an argument that the latest draft of Folsom’s general plan is illegal because it was prepared mainly by out-of-town consultants in violation of the city’s code. If the folks in attendance came to watch the exchange get chippy and confrontational—to see the ballooning blood pressure that’s triggered by development issues in Folsom—then they got what they came for.

I, on the other hand, was scanning the room for suspects in an anonymous info war. There were certainly faces connected to Folsom’s building boom. One of them, the mayor, was getting flustered at that very minute. I glanced at Miklos, the longtime real estate broker who’s served on the council since before Folsom Ranch was a glimmer in the first multimillionaire’s eye. The stranger who’d called me back in February had asked what I thought of him and Folsom’s other longtime incumbents. The stranger definitely asked my opinion of Councilman Roger Gaylord, the underdog reform candidate who’d driven Jeff Starsky from office in 2016. That upset came on the heels of an SN&R article revealing how much money developers associated with Folsom Ranch spent to keep those who’d greenlit their contentious project—Starsky, Howell, Andy Morin and Miklos—safe behind the dais.

Now, as word of the survey spread, some thought the mayor, with all his influence, might know who commissioned it—might have an idea where those persuasive but hoodwinking questions came from. Folsom Utility Commissioner Cyndi Shreve was another resident who was contacted. Shreve was put off by the bizarre slant to the probing.

“It was pretty biased toward the developers,” Shreve recalled. “I told the woman [the assertions] wouldn’t change my mind, because I actually knew some facts about the project.”

February strangers, I thought to myself. A burst of irritation from the mayor steered my eyes up. “Don’t patronize me,” Miklos told one of the commissioners. “Just get to your point.”

Miklos wasn’t running for reelection and wanted to finish the general plan before he rode into the real estate sunset. Later, Miklos would tell me that, not only was he in the dark about who commissioned the phone survey, but he’d also been reached to take it.

“I said, um, did you even look at the number you’re calling?” Miklos remembered. “I wouldn’t even get into it, so I don’t really know what it was like.”

The mayor added that he had no clue who was behind The Folsom Way.

Some people assumed The Folsom Way was a front for the organization linked to a man sitting next to me, Will Kempton. Kempton is the head of economic and business development for the Folsom Chamber of Commerce. An SN&R analysis of campaign finance disclosures revealed that, for at least three years, the chamber acted as a financial conduit between Folsom Ranch developers and local politicians: Builders and landowners tied to the project donated more than $20,000 to the chamber’s political action committee, which in turn spent nearly three times that much to help reelect Miklos, Howell, Starsky and Morin. The PAC spent most of its $54,639 independently, on behalf of the council members, rather than giving it to them—which made the money invisible on individual candidate filings.

Knowing that the chamber never advertised that “dark” cash flow, it wasn’t hard for some people to imagine it operating a shadow entity like The Folsom Way. I chatted a little with Kempton. He was friendly. He later told me he didn’t know who was behind The Folsom Way, but it wasn’t the chamber. Ditto with the survey.

As I sat in the chambers weighing other possibilities, the mayor suddenly sounded exasperated. “You’re word-smithing something that doesn’t exist,” he snapped at the commissioners.

I scanned the room for reactions and paused at former Mayor Bob Holderness. After leaving his elected post, Holderness became a consultant for prominent developers and then spearheaded the campaign for Measure W, the 2004 ballot initiative for the city to annex the land on its southern border, which would be taken over by Folsom Ranch. Today, Holderness represents Westland Capital Partners, a major developer of Folsom Ranch, as well as AKT Development, a major seller of its land.

His jump from elected leader to special-interest contractor was mirrored by former City Manager Martha Lofgren, who helped prepare the South of 50 project on the taxpayers’ dime until 2006, and is now serving as legal counsel for the New Home Company, one of the project’s main developers. But wait, there’s a three-peat! Former city planner Mike McDougall is now a top-ranking manager for Folsom Ranch.

There may not be much fence-jumping around Folsom’s old prison, but there’s been plenty around its City Hall. Holderness started the trend.

Similar to The Folsom Way’s story-weaving in The Bee—and the meditative voice-over work on its sky-soaring Facebook video—Holderness discusses the South of 50 project as if it was approved by locals when they passed Measure W. But that vote for the city to take control of the rolling land’s future, instead of leaving that up to the county, nowhere mentioned 11,000 homes and suburban sprawl. In fact, the measure specifically forbade housing without a new, secured water supply, which remains in doubt.

Did Holderness know who was behind The Folsom Way? Before I could think more about it, he stood up and decided to jump into the kerfuffle unfolding in the chambers. Holderness strolled over to the podium. “I’m frankly disappointed to see that two of our planning commissioners don’t have a good understanding of what their role is in our city government,” he said. “Perhaps they didn’t understand their assignment, and that’s unfortunate.”

Commissioner Mallory, who’d just finished arguing that consultants have too much power in the city, glanced wearily up and replied, “You, sir, are one of the consultants.”

The Kingmaker

Standing under a Spanish arch on 17th Street in Midtown Sacramento, I took a long look at the building past the intersection. It was a bone-white, mission-style bunker with odd Gothic flourishes. Built the year that Al Capone went to prison for tax evasion, the structure was originally the headquarters for the California Automobile Association. It had been a center for old-school lobbying from the very start; and to many, the man working inside it now represents a throwback to the sharpest elbows in that world. As a consultant and lobbyist, he’s generated countless pages of newsprint, with writers calling him “a political demagogue,” “a Svengali-like figure,” “Willie Brown’s Warlord” and “the Puppeteer of City Hall.” Years ago, my own newspaper had simply called him “the Kingmaker.” His name is Richie Ross, and for nearly four decades he’s been a force of nature.

Ross was also my best chance for navigating the information shadows around the South of 50 project.

When the propaganda about “Folsom residents charting the city’s growth” first appeared on The Sacramento Bee’s homepage back in April, most mobile devices only showed its byline as The Folsom Way. However, a few noticed that by clicking on the sponsored story with a PC desktop, a second tag-line appeared under the piece’s video component—Ross Communications. That’s the name of the registered business from which Ross has blurred lobbying lines, made politicians sweat and drained untold barrels of newspaper ink since the Gray Davis administration.

When it came out in 2001 that Congressman Gary Condit was having an affair with a young intern who’d vanished, Richie Ross was the marketing man the ensnared representative turned to. That’s the kind of representation someone advocating for Folsom Ranch felt they needed, the same Richie Ross who allegedly threatened two legislative staffers in the halls of the state Capitol when a vote went sideways; the same Richie Ross who’d inspired a California task force in 2003 on the topic of consultants getting candidates elected and then lobbying those candidates; the same Richie Ross who was fined $165,000 in 2014 for violating laws about putting public officials under personal obligation; and the same Richie Ross who reportedly told a group of Sac State students in 2016 that “cheating is OK.”

The Los Angeles Times wrote of Ross, “You don’t want to be his enemy. You don’t necessarily want to be his friend.” For a development project that claims to have no water issues, no traffic issues and no reason to feel guilty about land loss, Folsom Ranch, by someone’s estimation, needed the biggest gun in town to massage its image.

And given what I’d read about Ross, he could probably facilitate a shell entity like The Folsom Way in his sleep. But I was also aware that if Ross didn’t want me to know something, I probably wouldn’t. Still, I was desperate. Even Bob Holderness, possibly the most-connected consultant in Folsom, with a direct link to South of 50’s biggest developers, had told me he didn’t know anything about the infamous Facebook page. The phone survey? Holderness said he didn’t have a clue.

With Ross evidently serving as a middleman for The Folsom Way, he seemed my best shot for answers. I sent an email requesting an interview. He didn’t respond. No surprise: For a guy who dines with Jerry Brown and has California’s most powerful unions on speed dial, a shopworn field reporter for an alt-weekly newspaper probably ranks pretty low on the radar.

I decided to try to meet him in person.

I approached 1700 L Street and grabbed the handle of its heavy door. It didn’t budge. I heard a sharp, unexpected buzz. The door clicked open. A second later, I was wandering into a vintage showroom. It had the feel of an indoor courtyard flanked by rising, ornate columns. In one corner, the largest American flag I’d ever seen indoors was dropping down like a theater curtain. A woman appeared by some handrails along the gallery above me. I asked for Mr. Ross.

“Do you have an appointment?”

“I tried to email him yesterday,” I said, “but I don’t know if he got it. I just thought I’d swing by.”

“He’s on a conference call right now,” the woman told me.

Before I could speak, I heard footsteps in the corner of the gallery. A face emerged above the railings. Careful eyes. Concrete features. It was the legend himself, a cellphone plastered to one ear, a hard, unreadable expression aiming down at me. I stood waiting. And then he drew back slowly, and the legend faded out of sight. The woman began for the stairs. “Do you want to leave a card?”

Mask off?

A screen of oaks separated the featureless Folsom parking lot from Highway 50’s drone of traffic. Before this year, drivers cruising its lanes would glance one way to see Folsom’s newer business district, a frantic checkerboard of shops, hotels, chain restaurants and open-air malls. But if they looked south they’d catch a glimpse of a much older California dream.

They’d see an open horizon over gently rambling cattle land. It looked Celtic green in the winter. It was a harsh, dry gold in the summer. Unlike most Sacramento suburbs, Folsom had an open vista on the edge of town where people could gaze out at an uncluttered sky. Now that’s changing; and, at this moment, I was approaching the office of the man who’d been hired to defend that change.

Publicist Ian Cornell is the primary spokesman for the Folsom Ranch developments. I asked Cornell for a sit-down interview, so we could discuss the market-rate and affordable housing situation South of 50, as well as strategies that were being used online to control the project’s image. Cornell insisted that I email him a list of written questions ahead of time before he’d consider meeting. I wasn’t going to do that. I reminded him that I’d already outlined the topics of discussion. Cornell declined to speak with me.

I decided to swing by his workplace to see if this was a misunderstanding. That’s partly because the great Richie Ross still hadn’t been in touch. Who could blame him? Ross seems to like talking to reporters, but whoever his apparent client is—whoever The Folsom Way is—obviously doesn’t want their identity revealed. Besides, Ross was busy working on a multimillion dollar campaign to make Eleni Kounalakis the next lieutenant governor. Kounalakis happens to be the daughter of Angelo Tsakopoulos, the developer who’s the driving force behind Folsom Ranch.

So now I was walking through this parking lot looking for Ross’ unknown client, and trying to ferret out the phone survey, guided by an old Roman question: “Cui bono?” Who benefits?

Cornell’s office was a cube of uninspiring stucco and fake-rock columns. I’d heard he was a less foreboding figure than Ross; but, judging purely on offices, I’d already formed an opinion on who had better tastes.

Cornell’s door was locked at 2 p.m. I tried calling from the parking lot. I got put through to his voicemail. Frustrated, I later tried calling Mike McDougall, the Folsom Ranch manager who appears most frequently at City Hall. Voicemail. No return calls all around.

I began to wonder: If Cornell or McDougall knew something about The Folsom Way, maybe they weren’t saying because it was arguably a failure. All those paid boosts that the unknown administrator pulled the trigger on led Facebook’s algorithm to put the page’s video in front of 8,000 target users. Out of that number, only 23 of them had “liked” the post. Some 14 more shared it, but many did so by leaving comments that blasted the page. The Folsom Way’s administrator couldn’t do anything about comments attached to shares, but it did take down negative comments left on the page. That only stirred more intrigue.

“Everybody’s been asking who it is,” Folsom Planning Commissioner Justin Raithel told me. “A site just appearing like that, the comments people leave disappearing, that’s something we haven’t seen before.”

The Folsom Way is also something that hasn’t been seen before by Siva Vaidhyanathan, director for the Center for Media Citizenship and an expert on social concerns around Facebook. Vaidhyanathan told SN&R that someone creating a Facebook business page and then refusing to reveal any information about the business is virtually unheard of.

“In general, a Facebook business page is meant to provide access and accountability,” Vaidhyanathan said. “The only reason I can imagine someone doing something like this is to pump out information without participating in any meaningful conversation.”

And there’s a reason to keep pushing out that information. Even though the current Folsom City Council, with the exception of Gaylord, voted to grant the land entitlements for the South of 50 project, only a few subdivisions have made it into the zoning and permitting process so far. The other developers will have to get the details of their projects approved by a City Council different than the one they funded through campaign contributions. Miklos and Morin will be gone. Starsky was already voted out. Howell faces numerous challengers in November. Someone still needs craftily worded surveys. Someone still needs The Folsom Way.

On a hot July evening I stood near a cattle chute that was lifting off the weeds above White Rock Road. To my back, old iron pens and barbed-wire crosses straddled the incline—a final remnant of the hard-knuckle work that kept the land open for so long. To my front were scraped and scarred hillsides, mounds of barren, broke-open earth that rose over some model homes and a line of cheap-looking, newly planted windbreak trees. And directly across the street, as if staring straight at me, was a large billboard for Folsom Ranch. It featured a monocle-like loop to the side, and I could almost see one half of the “Eyes of T.J. Eckleburg,” that billboard that kept peering over a choked valley of ashes in The Great Gatsby. At least I knew that the South of 50 project would have a more clinical look. But there was still a lot I wasn’t sure of. Would unknown agents keep gawking into our social media lives, dropping motivated hints and misleading whispers on how to feel about our region? Would we still get nighttime calls from February strangers, hinting about “what if” the facts were just a little different? In the coming years, as people fight to save the last of the county’s open space, would we see the rise of entities like The Elk Grove Way? The Cordova Way?

There’s a new reason to “pay no attention to the man behind the curtain.” Now, if the man gets what he wants, he never has to step out of it.