CounterPoints—What Does AB&I Foundry Want From Oakland City Government? (Part 2)

AB&I operates a steel manufacturing facility on San Leandro Street not far from the Oakland-Alameda County Coliseum complex.

This week, that "appeared" turned into "actual" when the State of California Fair Political Practices Commission (FPPC) announced that it was fining AB&I a total of $100,000 for those violations and two more that I hadn't spotted. The Oakland Public Ethics Commission, which participated with the FPPC in its investigation and issued a joint press release on the findings with the FPPC, is fining AB&I an additional $14,400 for two mayoral campaign violations.

There was no indication that any of the candidates themselves knew that the various campaign contributions were illegal, and the FPPC said the candidates were not a focus of their investigation.

Because AB&I agreed to the decision, the FPPC findings has settled the issue of whether the company's city election contributions were legal. However, this has left open one of the main questions raised in my 2014 column: why was AB&I contributing so much money to City of Oakland candidates in the first place?

Corporations don't give campaign contributions for nothing. However, except for one instance where AB&I melted down weapons confiscated in one of Oakland's gun give-back programs, I couldn't find any instances where the company has bid for city contracts. And while the company's environmental impact is subject to government regulation, that is the responsibility of the Bay Area Air Quality Management District, not by the City of Oakland.

So the mystery remains: what did AB&I want, and what did the company expect to get, from its contributions to City of Oakland candidates?

July 11, 2016

$100,000 fine proposed by FPPC and $14,400 fine imposed by Oakland Ethics Commission after joint probe into spending in Oakland Mayoral and City Council races.

After a joint investigation between the Enforcement Division of the Fair Political Practices Commission (FPPC) and the Oakland Public Ethics Commission, the FPPC today announced a proposed settlement involving illegal contributions in the 2012 and 2014 Oakland city council races, as well as the 2014 Oakland mayoral race, and the Public Ethics Commission announced an approved settlement for multiple violations of Oakland’s contribution limits.

In 2015, proactive efforts by the FPPC Enforcement Division detected a pattern of activity that led to the opening of this case and a joint investigation and prosecution with the Oakland Public Ethics Commission. The investigation looked into potential campaign contribution limit violations and laundered campaign contributions in support of four mayoral and two city council candidates between the 2012 and 2014 elections. The candidates receiving the contributions were not a focus of the investigation.

McWane, Inc., is a large manufacturer of iron water works and plumbing products. One of its divisions, AB&I Foundry, is headquartered in Oakland, California. The FPPC case involves 37 laundered campaign contributions (totaling $23,900) from AB&I through 17 officers/employees (and their spouses) to four Oakland mayoral candidates and two city council candidates from 2012 through 2014, in violation of Government Code section 84301 (20 counts). Of these 17 officers/employees, six contributed to committees in both the 2012 and 2014 election cycles.

The joint investigative team from Oakland Public Ethics Commission and the FPPC found numerous violations of both state and local campaign laws. Making campaign contributions in the name of another is one of the most serious violations of the Political Reform Act as it deceives the public. In this case, the use of 17 individuals to mask the original source of the funds enabled McWane, Inc./AB&I Foundry to circumvent Oakland’s contribution limits.

“We are pleased to present the findings from our joint investigation involving laundered campaign contributions,” said FPPC Chief of Enforcement Galena West. “Working cooperatively with the Oakland Public Ethics Commission allows us to combine our resources and expeditiously prosecute violations.”

The $23,900 in contributions from McWane, Inc./AB&I Foundry were contributed as follows: $6,300 to De La Fuente for City Council 2012, $6,300 to Joe Tuman for Mayor 2014, $2,100 to Desley Brooks [for City Council 2014], $2,100 to Re-Elect Mayor Quan 2014, $2,500 to Parker for Oakland Mayor 2014, and $4,600 to Kaplan for Oakland Mayor 2014.

The proposed settlement will be heard and voted on by FPPC Commissioners at the July 21st meeting. The Oakland Public Ethics Commission imposed a separate $14,400 penalty on McWane, Inc./AB&I Foundry at its July 5th meeting for contributing $6,400 in excess of the Oakland’s contribution limit to two Oakland Mayoral candidates, making the total proposed penalty from both Commissions $114,400.

“AB&I Foundry circumvented the local contribution limit by laundering political contributions, making this case one of the most serious violations of Oakland’s campaign laws,” said Oakland Public Ethics Commission Deputy Director and Chief of Enforcement Milad Dalju. “We appreciate having coordinated with the FPPC on this case, which resulted in the largest PEC penalty to date.”

“The Commission will be vigilant in defending the public’s right to know the true source of funding in any campaign,” said Commission Chair Jodi Remke. “I applaud the diligent work of the Enforcement Division in investigating and prosecuting these cases. I am also extremely pleased with the outstanding cooperation with our partners in Oakland. And with the upcoming elections, I hope it serves as a reminder that we will be monitoring campaigns to make sure public officials and candidates follow the law as expected.”