How fossil fuel execs lobbied black leaders to overturn a California city’s coal ban
Last spring, an unusual meeting took place in Oakland, California, between the NFL star Marshawn Lynch and fossil fuel company executives who are seeking to build a marine terminal that would ship millions of tons of coal through the city each year. According to one of the investors who set up the meeting, its purpose was to discuss using project revenues to fund local charities.
Nothing came of it, but over the past year the coal terminal’s backers have set up dozens of similar gatherings with city officials, pastors, labor leaders, and other influential locals as part of a broader lobbying campaign to overcome opposition to coal, according to documents recently obtained by the Guardian.
Their main objective, according to internal company records made public as part of a recent bankruptcy, is to convince Oakland’s leaders to drop a legal appeal against the project.
If the marine terminal is built, environmentalists fear that dust and diesel emissions from trains – as many as three 100-car trains arriving each day with coal from mines in Utah and other states – will pollute San Francisco Bay area neighborhoods where children already suffer from elevated rates of asthma.
Citing these concerns, in 2016 the Oakland city council voted to ban the storage and handling of coal within city limits, effectively canceling the project unless its developer pledged to exclude fossil fuel commodities. The Oakland Bulk and Oversized Terminal, an Oakland-based company which is spearheading construction of the marine terminal, has declined to make any such pledge.
Instead, OBOT sued the city and in May 2018 a federal judge sided with the company by invalidating the coal ban. The city appealed the judge’s ruling and court hearings are scheduled for November.
Oakland’s legal opposition to coal has been costly for both sides.
Insight Terminal Solutions, a Kentucky-based company led by veteran coal industry executive John Siegel, paid half of OBOT’s legal costs to overturn the city’s coal ban. ITS hopes to lease the terminal from OBOT once it’s built, however, Siegel’s company filed for bankruptcy protection in July.
Siegel and OBOT’s CEO, Phil Tagami, both blamed the city for failing to hand over documents that Insight Terminal Solutions needed to obtain financing.
A side-effect of the bankruptcy is the public release of internal company records, including the coal company’s lobbying activities in Oakland.
The records show that at the same time the coal terminal investors have been battling the city in court, they have also spent tens of thousands on local lobbyists hoping to convince Oakland’s city council to drop its legal opposition.
According to his travel schedule, Siegel has made 15 separate trips to Oakland over the past year to meet privately with city officials. The court filings reveal that in September his company paid $25,000 to sponsor a gala party at an Oakland museum which was attended by politicians and powerful local business leaders. Insight Terminal Solutions also paid an Oakland blogger $5,000 a month to promote the coal terminal on social media.
Finding allies in Oakland’s black community, which has suffered from disproportionate exposure to pollution from the city’s port for decades, has been a key goal of the coal lobbyists.
In a 29 January letter Siegel sent his business partners, he explained his decision to hire “an influential African American lobbyist and businessman”, named Greg McConnell to represent him in Oakland. Siegel wrote that “no matter how compelling I may be, I am still a white outsider and [McConnell] is most decidedly an insider”.
Siegel paid a $15,000 fee to McConnell, plus a $7,500 monthly retainer to set up meetings with “target community activists who, once won over to our side, could help us immensely with various of the city council members”.
One city official who met repeatedly with Siegel and McConnell over the past year was the Oakland city council president, Rebecca Kaplan.
Siegel told the Guardian that his conversations with Kaplan and other city officials were limited to safety features and community benefits, and that they did not discuss the lawsuit between the city and OBOT.
Kaplan said, however, that she has discussed settling the lawsuit with Siegel.
“I have met with them, to discuss their plans in Oakland, including the potential for what it might take to settle the litigation,” Kaplan wrote in an email to the Guardian. “In my discussions with them, I urged them to look into options for commodities other than coal/ petcoke for their proposed bulk shipping terminal.”
A document provided by Insight Terminal Solutions to Kaplan in July, just before she met with the company’s lobbyist Greg McConnell in a private room at a seafood restaurant in Oakland’s Jack London Square, states that “without coal, the terminal cannot be built”, but the company promised only “clean coal” will be handled. The same document claims that the city will see $6m in revenue each year from a wharfage fee plus $5m in contributions to an Oakland Initiatives Fund, which can support charities and health programs.
However, the document states that none of this will be possible without the city and the coal terminal’s backers first settling the lawsuit over the coal ban.
Several documents produced in the bankruptcy case show that Siegel and his partners have recently been in talks with the Japanese utility company JERA in hopes it will agree to purchase millions of tons of coal each year shipped through the Oakland terminal. Another possible client who might invest in the terminal is Oxbow Carbon, an energy company owned by William Koch. And the state of Utah is also still pledging an investment of $50m in state funds in the Oakland project to find an export market for coal mined in several counties.
Tagami and Siegel say their plans include mitigation measures such as covered train cars and domed warehouses to virtually eliminate coal dust
pollution.
One of Siegel’s most recent meetings took place in early October with the west Oakland activist Margaret
Gordon, who founded the West Oakland Environmental Indicators Project in 2004 to advocate for air pollution controls at the Port of Oakland. Among the city’s most influential environmental activists, Gordon supported
Oakland’s coal ban in 2016.
According to a letter written by Siegel and disclosed in the bankruptcy case, Zachary Wasserman, an Oakland attorney and political fundraiser for several council members, told Siegel that “winning over” Margaret Gordon would be key to restarting the coal terminal project. He described Gordon as “an African American woman who apparently has a significant amount of clout”.
Asked this week whether she’s changed her mind about the coal plan and will advocate for a settlement of the lawsuit between the city and the coal terminal developer, Gordon told the Guardian simply, “No coal.”