Repealing Votes with a Side of Fries
Jack Evans, Clyde’s Restaurant Group, and the Burger Money in D.C. Politics
The strange saga of Initiative 77 came to a close last Tuesday, at least for now.
For many voters, it began in the spring when green and blacks signs suddenly appeared in restaurant windows and on streetlights across the city: “Save Our Tips: Vote No on Initiative 77.”
Were tips under attack? It depended on who you asked. Initiative 77 was a ballot measure that would gradually do away with the tipped minimum wage in the District, meaning that tipped workers would now have the same minimum wage as everyone else.
The measure was meant to protect workers from wage theft, but not everyone agreed that it was necessary or even that it actually helped tipped employees — hence the “Save Our Tips” signs. The “Save Our Tips” campaign was chaired by the managing director of Clyde’s Restaurant Group, but many restaurateurs, waiters, and bartenders joined the call. As the election grew closer, Mayor Muriel Bowser and many members of D.C. Council also voiced their opposition to the Initiative.
However, Clyde’s, Bowser, and the D.C. Council have a lot more tying them together than their opinions on Initiative 77. Clyde’s has been a major financial supporter of D.C. politicians — particularly of Ward 2 Councilmember Jack Evans — for well over a decade.
In June, DC voters passed Initiative 77 by a 10 percent margin. But the victory celebrations did not last for long. The very next day, Jack Evans became the first member of the DC Council to publicly support a full repeal of the measure, telling The Washington Post that “it’s really up to the council to act in the best interests of the city.” Over the course of the summer, more councilmembers followed in Evans’ path, and last Tuesday, the Council voted 8–5 in favor the full repeal. Mayor Muriel Bowser has said that she will sign on to the Council’s decision.
The last time the DC Council rejected a ballot initiative was back in 2001. Residents trying to understand why this happened could do worse than to check out Clyde’s. In addition to serving one of the District’s best Caesar salads, Clyde’s Restaurant Group (CRG) stands out among restaurateurs engaged with D.C. politics, and their involvement with D.C. Council stretches back long before Initiative 77 was ever on the table. Regardless of one’s opinion on the Initiative, it is an important case study in the degree of power a single business can hold in D.C. politics today.
Clyde’s Restaurant Group owns and operates twelve restaurants in the DMV, including Old Ebbitt Grill, The Hamilton, and seven Clyde’s Restaurant locations. It is a major player in the District food scene, and includes some of the most successful restaurants in the country: Old Ebbitt Grill was the #5 top-grossing independent restaurant in the United States in 2017, pulling in over $32 million.
It also has a bit of a troubled history with the tipped minimum wage. Under current tipped minimum wage laws, businesses only have to pay workers like waiters, bellhops, and barbacks $3.33 an hour, so long as the employer pays the difference when their weekly wages and tips add up to less than the normal minimum wage. Back in 2010, CRG agreed to settle a class-action lawsuit in which three employees claimed that, along with other charges (like not paying employees for all of their hours worked), CRG failed to pay the money they owed their workers when they made less than minimum wage. This was the form of wage theft proponents of Initiative 77 said the measure was meant to prevent.
A couple of years later, CRG managing director David Moran took over as the chairman of the Restaurant Association of Metropolitan Washington (RAMW), a local foodservice trade organization. Under his leadership, the Restaurant Association has poured considerable resources into the fighting the Initiative. In fact, RAMW actually started the “Save Our Tips” campaign and gave $55,000 to it. Other than the National Restaurant Association, it was the campaign’s largest supporter. But Moran’s involvement was more direct than that: he was also the chair of the “Save Our Tips” campaign. And putting its money behind Moran’s mouth, Clyde’s also donated $16,000 to the opposition campaign.
However, $16,000 is just a fraction of the money Clyde’s Restaurant Group has given to D.C. politicians over the years. Campaign finance records indicate that in the past 15 years, restaurants under CRG have donated over $100,000 to D.C. political candidates. John and Ginger Laytham — CEO and Senior Executive Officer of CRG, respectively — have also given almost $14,000 as private individuals. Combining the Laythams’ donations and those given by CRG restaurants, these contributions include totals of $12,000 given to Bowser’s two mayoral campaigns, $11,800 to Vince Gray, and a donation of the maximum allowed $10,000 to Mayor Bowser’s 2014 inaugural committee. They have given at least $79,000 to current elected officials, and have helped out six of the eight councilmembers who voted to repeal Initiative 77: Gray, Evans, Grosso, Mendelson, McDuffie, and Todd. (Contributions to McDuffie and Todd total to less than $1,000 each).
But by far, the Clyde’s Restaurant Group’s most overwhelming support has gone to Councilmember Jack Evans, in whose Ward Clyde’s’ flagship restaurant is located. Since 2003, CRG restaurants and the Laythams have given at least $38,000 to Evans’ campaigns and constituent fund.
It turns out that giving this much money to a candidate is actually quite difficult. D.C. law sets serious limits on how much any person or business is allowed to give to a single campaign. Total contributions to a mayoral campaign max out at $2,000 per contributor, and for a ward-level Council election, the limit goes down to $500. The Clyde’s Restaurant Group has consistently avoided this, however, by having multiple restaurants each give the maximum legal donation. They have done this during several of Evans’ campaigns, as well when donating to Gray, Bowser, and Grosso.
For instance, when Evans ran for mayor in 2014, nine restaurants under the CRG umbrella each gave him the legal maximum — $2,000 donations came from Old Ebbit Grill, The Hamilton, 1789, and six different Clyde’s locations scattered across the DMV. Clyde’s of Rockville, Clyde’s of Chevy Chase, Clyde’s of Tysons Corner, and Clyde’s of Broadland — the best cheeseburger West of Dulles — all sent checks across state lines. Summed together, this $18,000 from CRG restaurants constituted almost 5 percent of the total money Evans’ campaign received from corporations and businesses.
One might ask why nine restaurants owned by Clyde’s Restaurant Group are allowed to donate much more in total than any business or person can donate on their own. There used to be no restrictions on what affiliated businesses could donate, but that changed with a law that went into effect on February 1, 2015 (CRG restaurants have continued to give multiple maximum contributions to the same campaign through at least June of 2016). Now, the answer is complicated. In fact, D.C. campaign finance laws state that affiliated businesses should be considered as a single entity when it comes to contribution limits. In other words, nine affiliated businesses would only be allowed to give $2,000 combined to a single mayoral campaign. But two businesses are considered affiliated if they are “controlled” by the same entity, and what exactly constitutes “control” is where everything gets tricky.
When businesses donate to a campaign, they are required to declare that no business they are affiliated with has already given enough to make their donation illegal. Of course, there is a process for investigating potential violations. Paul Ryan — Vice President of Policy & Litigation at Common Cause, and not Speaker of the House — says that for the purposes of campaign finance laws, the issue of who controls a business “would be decided initially by the DC Director of Campaign Finance, who has the authority to conduct investigations, including issuing subpoenas.” If the Director finds that affiliated businesses appear to have violated the law, they could then present this to the Elections Board. If the Elections Board agrees that a violation occurred, the Board could then do anything from impose a fine to initiate criminal prosecution.
This is not to say that Clyde’s Restaurant Group violated the law, of course. But it is a reminder that campaign finance restrictions have been all but nominal for some businesses in the District of Columbia. Sometimes, financial influence is limited only by what an organization is willing to spend.
