Mark Farrell’s mayoral campaign is sharing expenses with a ballot measure committee that he established to support Proposition D, an unusual move that opens up a murky legal area that’s ripe for exploitation and abuse.

San Francisco mayoral candidate Mark Farrell has scooped up some of the city’s most coveted endorsements — including that of the influential firefighters’ union Thursday — by vowing to restore order and safety to the streets and purge City Hall of its corrupting layers of inefficient bureaucracy.

But it’s becoming increasingly clear that for all his talk of law and order, Farrell and his campaign are quite comfortable with aggressively pushing legal limits of their own.

As the Chronicle reported in June, Farrell’s mayoral campaign has taken the unusual step of sharing expenses with a ballot measure committee that Farrell established to support Proposition D, an initiative to cut the city’s unwieldy thicket of commissions. It’s common for candidates to set up ballot measure committees to increase their visibility with voters. But sharing expenses between a candidate committee and a ballot measure committee opens up a murky legal area that’s ripe for exploitation and abuse.

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While donors can give a maximum of $500 to a candidate’s campaign, they can make unlimited contributions to ballot measure committees. By pooling the two pots of funds, Farrell has invited accusations from his political opponents that he’s laundering money — effectively using the ballot measure committee to circumvent contribution limits and funnel money into his mayoral campaign, which would be illegal.

“Everything we do is vetted, approved, and signed off by legal counsel,” Farrell said in a statement. “My opponents are working overtime to drag us in the mud because they are trying to distract voters from their failed leadership and inability to deliver real change for our city.”

Campaign finance is complicated, with a lot of legal gray areas, and accusations of money laundering certainly sound like the kind of hyperbolic reputational slander typical of San Francisco........

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