UPDATE: Mayoral candidate stays in race and will cap his fundraising in 'spirit of voter-owned elections'
by: L.E. BASKOW, Backed by supporters in his downtown campaign office, businessman Sho Dozono announced at a Monday news conference that he will continue his mayoral run with private funds.

Promising to run a 'positive, issue-oriented campaign,' Portland businessman Sho Dozono said Monday morning that he would stay in the mayor's race.

'The most important issue is the recession that we are already in, and how the candidates will respond to that,' Dozono said, stressing his experience as owner of Azumano Travel in Portland.

Dozono was surrounded by dozens of supporters, employees and family members when he told reporters his decision at his downtown campaign office.

'The Portland mayor's office is the second most important (elected) office in the state next to the governor,' Dozono said. 'I believe it's so important that I do not believe quitting is an option.'

The other major candidate in the race, city Commissioner Sam Adams, said he welcomed Dozono's decision.

'I'm glad he's staying in the race because this is an important debate,' Adams said. 'This is a position with a huge amount of responsibility, and it's important that voters have an opportunity to see the differences between us.'

Last week a state administrative law judge disqualified Dozono from receiving $161,171 in city campaign funds after several opponents, including Adams, challenged his right to receive them. Dozono said he chose not to appeal the ruling because Adams would continue the legal fight, taking up valuable campaign time.

Adams said that Dozono should accept responsibility for the decision and move on. 'The reason he lost the funds was that he violated city campaign laws,' Adams said.

Campaign manager Amie Abbott said Dozono had received about 1,000 phone calls, e-mails and faxes during the weekend urging him to stay in the race. She said some supporters offered to contribute $1,000, $5,000 and even $10,000 to the campaign, but on Tuesday, March 25, Dozono announced he will limit contributions to $500 and will cap his fundraising at $200,000 to "maintain the spirit of voter-owned elections."

Portland pollster Tim Hibbitts thinks Dozono still has an outside chance to win.

'Adams is still the favorite, but Dozono has a chance to make it a competitive race. The challenge now is for Dozono to raise enough money quickly to get his message out,' Hibbitts said.

Although it is too late for Dozono to take his name off the May primary election ballot, he was forced to decided whether to continue waging an active battle after losing his city campaign funds last week.

On Thursday, state Administrative Law Judge David Gerstenfeld decided that Dozono violated program rules by seeing the results of a $27,295 poll on the mayor's race late last year.

When City Auditor Gary Blackmer qualified Dozono for the program, he said the poll did not matter because Dozono was not a candidate when he received the results. But Gerstenfeld disagreed and said the value of the poll violated the program's $12,000 limit on in-kind contributions.

Blackmer's decision had been appealed by three other candidates for mayor, including Adams, who told the Portland Tribune he has spent an estimated $10,000 on legal fees for the appeal. Adams said the challenge was necessary to maintain the integrity of the program.

Although Adams voted for the program, he did not apply for public campaign funds, he said, to avoid the appearance of a conflict of interest.

The ruling has substantially increased the financial hurdles facing the Dozono campaign.

Before Dozono was disqualified from receiving public funds, he held a more than 2-to-1 financial advantage over the Adams campaign. Without the public funds, the situation is reversed.

If the judge had ruled in Dozono's favor, he would have been guaranteed $200,000 in cash for the May primary election, including more than $160,000 in city funds. In comparison, Adams had raised only a little more than $87,000 in cash by late last week.

But when the judge ruled against Dozono, he had raised just under $40,000 in cash - less than half of Adams' total. Even worse for Dozono, he ended last week with around only $25,000 in cash on hand, compared to a cash balance of more than $64,000 for Adams.

On top of that, by being disqualified for the public financing program, Dozono loses its guaranteed 'equalization' payments. Under program rules, if Adams raised more than $200,000, Dozono automatically would have received the difference from the city.

Dozono also would have received city donations equal to any spending for Adams or against Dozono by independent political action committees. Now both guarantees are gone.

The program also would have guaranteed Dozono at least $250,000 in the general election.

Dozono already has demonstrated he has good community support, however. While attempting to qualify for the public campaign finance program, he collected more than 4,000 individual $5 contributions in less than a month - far more than the 1,500 required.

Many of the contributors knew Dozono from his work for Portland schools and the trips he organized to New York after the Sept. 11 attacks and New Orleans after Hurricane Katrina.

'That suggests a lot of support,' Hibbitts said.

But it also appears unlikely that Dozono will be able to raise substantial amounts of money from the business leaders who traditionally donate to city races.

Adams already has received contributions from many of them. They include Portland Business Alliance President and Chief Executive Officer Sandra McDonough; Qwest Oregon President Judy Peppler; automobile dealer Ron Tonkin; hotel magnate Gordon Sondland; developers John Beardsley, Melvin Mark Jr., Tom Moyer and John Russell; and businessman Robert Pamplin Jr., who owns the Portland Tribune and Community Newspapers Inc.

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