September 22, 2014

People in Oakland learned this month what a Texas-based garbage disposal company wanted out of our city. But a question nobody is asking is, what does an Alabama-owned cast iron foundry want from Oakland city government? While I can’t figure out the answer to that question but I know it’s something, because AB&I Foundry regularly pours money into Oakland city government elections, lots of money, the kind of money folks give when they expect something in return.
AB&I is located on San Leandro Street in Deep East Oakland, not far from the Coliseum. If you travel through that area, you’ve probably noticed the patriotic-themed mural stretching along its street wall. The company employs close to 200 workers manufacturing various heavy industrial-use products out of recycled scrap iron. It started out as a locally-owned firm more than a hundred years ago, but that local ownership is long gone, and the company is currently owned by the McWane Inc., a privately held family company out of Birmingham.

McWane bills AB&I as a cast iron production industry leader. It might also characterize the company as a leader in contributions to Oakland city elections.

In 2010, AB&I gave $7,500 to the Coalition For A Safer California Sacramento-based political action committee. Safer California used the money it raised that year to support the Don Perata for mayor campaign.
In 2012, employees of AB&I gave a combined total of $5,600 to Ignacio De La Fuente’s unsuccessful attempt to defeat Rebecca Kaplan for her At-Large Oakland City Council seat.
This year, the folks at AB&I are tripling down on their contributions in the Oakland mayoral election. As of July 1st, AB&I and its employees had given major money to three separate candidates: $4,300 to Rebecca Kaplan, $2,500 to Bryan Parker, and $2,100 to Jean Quan.

If you’re an astute local election observor, you know that Oakland has a $700 limit on individual or company contributions to a single candidate in an election, so you’re probably wondering how AB&I gets around this restriction. I’ll tell you.
Because the $7,500 that benefited Mr. Perata’s 2010 mayoral campaign was funnelled through a state political action committee and not directly to the campaign itself, there was no limit on the amount of money that could be contributed by AB&I. But the 2012 At Large City Council and 2014 mayoral campaign contributions were given directly to the candidate committees themselves, so a more creative way had to be found to get around Oakland’s campaign finance restrictions. AB&I appears to have done that by bundling together contributions by either individual employees or the company itself, none of which contributions, by themselves, go over Oakland’s campaign finance limit but, when put together, come up to a tidy sum.
Why do I contend that this is an organized activity by the company itself, rather than simply a group of employees of a single company who happen, coincidentally, to have backed the same candidates?
It would be possible—though a strain on credulity—to believe that the contributions in the 2012 were initiated by the individual employees themselves, since they all went to one candidate, Mr. De La Fuente.
But the 2014 contributions involve a strategy that is known as “hedging.” It involves big-money donors giving money to more than one candidate in the same race, on the theory that by doing so, they’ll have the ear of whoever wins, regardless of who it is. That kind of strategy is far too sophisticated for AB&I employees to just “happen” to be doing it each on their own, particularly when the company itself is also participating in the strategy.

Like AB&I itself, which gave $700 to Ms. Quan’s campaign and $500 to Ms. Kaplan, some of the company’s employees are doubling up on their contributions.
Zeydi Gutierrez of Castro Valley, for example, who is listed as an AB&I Iron Fitter in one contribution and H.R. Manager in another, gave $700 this year to Ms. Quan and $500 to Mr. Parker.
Engineer Dave Robinson gave $700 to Ms. Kaplan and $500 to Mr. Parker.
Vice President of Marketing Kip Wixson gave to all three candidates: $700 apiece to Ms. Kaplan and Ms. Quan, $500 to Mr. Parker.
If this money is coming voluntarily out of the pockets of the individual employees themselves, this pattern of contributions would be suspicious, but perfectly legal. The suspicion raised is that the employees—at least some of them, below the level of the president and vice presidents—are being coerced by the company into making these contributions, or, on the other hand, they are being reimbursed for them by the company under the table, either in bonuses or cash money. If that were the case, then the AB&I contributions would be breaking the law. I think, under the circumstances, it’s legitimate to ask if that’s the case.

So if, as it certainly appears, all of this campaign contributing is for the benefit of AB&I, what is it that AB&I seeks to get out of these contributions?

As far as I can see, AB&I does business directly with the City of Oakland in only one instance: for years, the company has been melting down weapons confiscated by the Oakland Police Department in criminal investigations. Since Oakland does not appear to charge the company for this scrapped metal, and since the company’s sole purpose and money-making operation is to turn scrap metal into finished products, it would seem that rather than being a “community service,” this service contributes to AB&I’s profit center. So maybe that’s part of it.
AB&I does come under the regulation of the Bay Area Air Quality Management District (BAAQMD), whose board of directors, which consists of various local elected officials, “has the authority to develop and enforce regulations for the control of air pollution” throughout a nine-county district that includes Alameda County. But no Oakland city officials sit on BAAQMD’s board.

If AB&I is seeking something from Oakland for its contributions, are this year’s mayoral candidates in on the deal?

Former California State Senator Don Perata was the master of so-called “pay-to-play” politics, in which developers and businesses traded contributions for city contracts, and Ignacio De La Fuente was a Perata protegé and a pretty good “pay-to-play” player himself. However, there is no evidence to suggest that in the 2014 mayoral race, Ms. Quan, Ms. Kaplan, or Mr. Parker are in that same category with regard to the AB&I contributions, that is, that they’ve made promises to do special favors for AB&I in return for money.
On the other hand, AB&I clearly wants something out of the 2014 Oakland mayoral race. Having backed three separate candidates simultaneously in the same race, the company doesn’t seem to be as much concerned about who it is they are eventually get it from. The question remains, what, and how will that what affect the rest of us in Oakland, positively or negatively?
Perhaps someone smarter than me has the answer. Or maybe there’s another explanation, and I’m wrong about this whole thing, altogether. If there is, I’m sure they’ll let me know.